Having a Negative Reaction

As Hayek was apt to say, people need to have income to self-determine. He was not averse to guaranteeing each and every individual a minimum income, and while this is not exactly the conservative ideal, it is, however, a reaction to America's penchant for avoiding what de Tocqueville called "the perils of equality."

Although Hayek is a favorite reference of right-wing conservatives, his liberal sentiment confirms a dysfunctional, aristocratic identity that left-wing conservatives react to by ensuring government provides enough income to the lower classes to prevent a depression.

Risk prevention is what Hayek had in mind, but liberals occupy this distributive-policy space with reactionary, risk-avoidance measures that conserve the risk-value (so if you wonder why liberalism doesn't add self-determination, it's because it doesn't intend to make us more equal, but prevent us from demanding it). Policy conforms to, and confirms, the aristocratic identity of the policymakers, "making markets" so that the risk consumed is not the marginal profit.

Instead of ensuring self-determination for the masses, liberalism functions to support the marginal profit (equity values, for example, are again at pre-recessionary levels despite pervasive negative equity in the marketplace). Support at the margin maintains the elite identity of the risk, rendering a distribution of equity that accrues risk-value to the upper class (avoiding "the perils of equality") without increasing the probability of a declining rate of profit. Understand that this is not socialism--it is a reaction to Marxist theory (and that reaction, keep in mind, only serves to confirm it). This is what Marx predicted to be "anti-socialist socialism"--a soft tyranny of upper-class, socio-economic elites distributing enough value to prevent the risk of their own default by acting in their self-interest (which requires venturing perilously closer to equality).

(We have to objectively consider what it means to have a distribution that occurs because too much has been accumulated out of self-interest. Technically, self-interest is not in operation but selfishness is--what Adam Smith warned results in a declining rate of profit and bankrupts the wealth of the nation both morally and monetarily.

Remember that risk avoidance accumulates detriment that eventually presents in a crisis proportion. Avoidance, rather than prevention, ensures the probability of detriment--the inventory of distressed assets to be consolidated and resold at a profit.

We have to consider what that margin of profit actually represents--enlightened self-interest or soft selfishness. Right-wing reactionaries say it is the "soft tyranny" de Tocqueville referred to, which describes what we now call "liberalism.")

A philosophy of selfishness (moral bankruptcy) posing as the utility (the virtue) of self-interest bankrupts the wealth of the nation. It results in negative equity.

Equity values at record levels while the inventory of distressed assets is rising, for example, does not indicate record prosperity, but record disparity.

When the average income buys into equities to save for retirement, it is no coincidence that they lose value when needed (liquidated) to survive (to pay the rent). That is the way capitalism is supposed to work--turning equity into debt (what classical economists referred to as a "subsistence wage"), and as the value of labor tends toward subsistence (which is likely to cause a bad reaction), value earned and saved is turned into risk (a late-order detriment). This risk, understand, is not added, it is government that is added in reaction, which transforms it into gamma risk to keep the detriment (the bad reaction) to at least a subsistence level (negative equity).

The risk-detriment is a fully assumed loss that is technically engineered to distribute by class identity, and when it goes gamma, the unavoidable risk distributes with the force and legitimacy of public authority.

The more savings we have the more self-determined we are, Hayek and Smith would agree, but the more the rate is identified with aristocracy, the more negative the equity and the more reactionary (the more liberal) it becomes.

Our savings rate is negative--that is, the equity share in the capital invested is negative...it avoids "the perils of equality" by ensuring it has a negative reaction.