Management by Objective Identity

We still cling to the legacy of an aristocratic, class identity. Whether it is the liberal behavioralist looking to manage risk right down to every individual, or the conservative looking to maximize freedom and self-interest with an economy-of-scale efficiency, both tend to rely on consolidation of power to achieve a philosophical objective. Technically, however, increasing consolidation to manage risk is a "big" mistake.

Bigger is supposedly better. Operating a successful business on demand, for example, with how big the business grows being the measure of success (by popular demand), it is necessary to organize and control the externalities into stable, routine tasks that reduce the risk (the probability) of detriment, and the best way to do that is to organize large, bureaucratic institutions (that tend to operate on-demand, or by command, rather than by popular demand). Then, if we want (by popular demand) to control the consolidated power of big corporates (and demonstrate at least some measure of self-determination), we also need big government.

Large corporates organize to control the risk (the extent of self-determination) by operating with an objective identified from the top down. This essentially means power is exercised by ownership. So, for example, trivial as it may seem, when employers require drug tests to acquire income (which is required to self-determine), or the government requires testing to receive welfare, employees, and the needy, are effectively being demonstrated as "subjects."

Being subjected to either the "job creators" or government, the value (the fully assumed risk of loss that needs to be demonstrably controlled, and consumed, in even the smallest way) is conserved in historical perspective, and that conserved value is what we typically refer to as "history repeating itself." While the American Revolution, for example, ended being subjected (owned, or consumed on demand) by a controlling, sovereign authority (other than the "self"), the identity still persists by objective. Today that identity is secured in the form of debt (risk the "self" assumes by social contract) and cyclical boom and bust (risk assumed by natural occurrence) in which history is expected to repeat itself.

(Remember that what business analytics refer to as cyclical risk, huge rewards are engineered to derive in equal proportion. The implication is that the detriment is a naturally stochastic oscillation. It is cyclical like the weather, and when the weather is disastrous it is the role of government to provide relief.

The public and private sectors converge to apply the risk, achieving an economy of scale that has the appearance of trying to predict the weather. For example, mortgage debt can be securitized through GSE's. When the debt defaults, due to insufficient income to pay the debt, the government perfects the commercial-paper losses--the failed CDO's--with a bailout. The depreciated value--the short interest, or CDS's--of the collateral obligated to pay the debt is covered with payments transfered directly to the banks in the form of disaster relief and crisis prevention. The reward is then distributed from the top of the income scale down, leaving the lower class with more debt than equity, or insufficient funds to pay the debt, which is the crisis to be prevented. The private sector then claims the detriment is "government sponsored" because, well, it is.

Government is operationalized to take all the risk, which is distributed in the form of austerity measures to pay debt from the bottom up. The fiscal crisis in Europe is the latest example of this fully engineered process that subjects "the little people" to a recurrent demonstration of power that looks ontological, like the weather, because it is organized on such a large scale.)

Public or private, aristocratic power is a measure of organizational size. The bigger it is the more bureaucratic and stratified governance becomes to conserve the stakes (the risk of loss). The more stratified, the more elitist the power structure tends to be to conserve the span of control (the capacity to self-determine) like the king did, unsuccessfully.

Identity of the risk tends to be conserved by objective. After the American Revolution, for example, there was considerable argument over how big "big business" should be because the bigger the firm the more powerful (like the king). Since the objective of the Revolution was government by consent, having businesses so big they can determine success or failure--and thus consolidate the assets (the private property) of power--was considered, by Republicans especially, counter-revolutionary. It would allow an elite class of property owners to determine the identity of "We the People."

After the Declaration of Independence, and the Revolution, The People were left with an objective reality (an identity crisis) that still plagues us today. We have to choose, supposedly, whether we are dependent on government or dependent on a corporate bureaucracy. Both, of course, are identified with elite authority, which means there is a false dichotomy (and a false identity) that struggles to reintegrate, and rather than being resolved, the dichotomy is organized to reinforce the identity.

The identity results in crisis because, instead of being sure the risk proportion is deconsolidated by operation of government authority, which would very simply and effectively define its limit, we tend to identify with organizing the risk in a complex, aristocratic, too-big-to-fail proportion. Power is organized to operate enigmatically, with secret knowledge hidden form everyone but an elite, inner circle who have the natural, "god-given" power of self-determination, while at the same time arguing we all have the power to self-determine. Since organizing with this objective identity tends to dis-integrate, in a very unnatural way, the legitimate coefficiency of risk and reward (which is why, remember, the Revolutionary War was fought), we tend to always be avoiding potential crises in the name of prevention (toggling between a liberal and conservative, objective identity to manage the risk).

What we then have is an overall form of governance that subjects the masses to--and identifies them with, by self-determination--all the economic risk until it accumulates into a political, gamma-risk, crisis proportion. Once that objective obtains (occupying all of the available space), government is needed (organized with the corporate) to bail us "all" out; that is, the greater good naturally converges with self-interest and occupies the space of the common good. Instead of a tragedy of the commons we have then, objectively, a reoccurring tragedy of elite psychoses.

Occupation of all the available, policy space in the gamma dimension is what we refer to as "the general welfare," and keep in mind, being sure that "welfare" is not occupied by the vast majority is "the risk" aristocrats are always organizing to avoid on an ever-larger scale. Class identity is conserved while, at the same time, cleverly claiming it is a product of self-determination verified by class mobility, which maintains a false dichotomy as an objective reality.

Both business and government are organized to conserve the objective identity of the risk, which is operationally organized to produce detriment--the risk to be avoided by means of self-determination. If government is always occupied with saving us from crises, then it is never determined to prevent it by operational objective. Business and government then gets so overwhelmingly big that the concept of limited government has only an aristocratic identity.

Risk is organized into ever-larger, economy-of-scale efficiencies to conserve class identity. Since the crisis of identity--the dis-integrated value--is recurrent, its management is maintained not to avoid it, but to ensure it in priority.

Working with the hypothesis that if we limit the size of government "all" will be well is recurrently disconfirmed (prompting us to throw the toggle switch). No, empirically, increasing the size of corporates always increases the size of government. Without limiting the size of the corporate first, we will not objectively reduce the gamma risk.

Reducing the size of the corporate body will reduce both inflation and unemployment, an objective reality the Federal Reserve, Open Market Committee will always struggle to even approximate.

While adhering to an objective identity that goes back to the founding of our nation will help cure what ails us, we nevertheless find ourselves struggling with the interpretation of that reality. What, exactly, does "limited government" really mean. If, for example, it means the corporate gets bigger, then limited government is a utopian vision.

The bigger the corporate is allowed to get the bigger the need for government to manage the extreme detriment (the accumulated risk). Government, by popular demand, rather than the free market, ironically, is necessary to regulate the risk (like the Great Recession). According to free-market theory, however, popular demand is the only reality that legitimately verifies an objective identity...no secret knowledge is required.

Empirically, it is apparent that government needs to change its objective identity. Instead of operationalizing with big business to cause detriment without risk to the aristocracy, government should be limited to ensuring businesses are small enough to be governed on demand. At our founding, however, those who aspired to an aristocratic identity considered this to be detrimental because it diminishes the power of elite self-determination and subjects it to the non-elite, which (as the king claimed) is a moral hazard.

Detriment, understand, is an objective the aristocracy identifies with the benefit in a too-big-to-fail, economy-of-scale proportion. When Mitt Romney says GM should have been allowed to fail, like in a free market, he forgets to instruct us that GM was deliberately organized to be too big to fail, which defeats the detriment of being subjected to free-market objectives on demand. Romney knows that but, secretly, the private equity firms he worked with operate to profit from the detriment being "too big" causes, not to prevent it.

The bigger you are, the more powerful you are. The bigger, the more capable of organizing, or consolidating, as many people as possible into what is your self-determination.

Self-determination is power, and our founders identified this as an objective reality (self-interest) endowed by divine right to the job creators who, with unsubjected providential power, create value that would not otherwise exist from the capital.

Not admitting to the full, integral value of labor is a critical failure right from the start.

From our founding, aristocratic identity of risk-value, which forgets labor creates value integral to its use, resulted in an accumulated crisis proportion four-score-and-seven years later. Although slavery has been declared unconstitutional, we still struggle with peonage, clinging to a class identity that, while being revolutionary, was founded with an aristocratic objective.

Originally, Hamilton, for example, seeking to conserve the wisdom, wealth, and power of the aristocracy, favored cultivation of a power elite as the natural order (with the elite essentially demanding the consent of the governed), while Jefferson, for example, favored a more pluralistic, deconsolidated organization (with the non-elite demanding the consent of the governors) in the representative form. This philosophical difference technically bifurcated into the liberal and conservative factions that today actively organize our political economy.

As long as we have both liberal and conservative factions always begging the question (which is a fallacy produced by the way the process is technically organized--binomially consolidated), the problem, pathologically, will always be the solution and the solution, ideologically, will always be the problem.

While we continue to struggle with deflationary risk, as the value of the Euro compresses, for example, the "reaction" is to consolidate to keep from adding risk. Since risk cannot be added, but accumulated or distributed, we fail to heed the signs of impending crises.

The Fed, for example, has recently testified another liquidity crisis is soon expected in the form of fiscal instability, which is why it has "swapped" $103 billion for Euros so far. When combined with Bernanke's comments a few days prior that the Fed can't control unemployment, the implication is that there is a causal relationship between sustained unemployment (capital derived at the expense of labor value) and the so-called creative benefit of capital markets organized (consolidated) for impending destruction. It is not the least bit curious, then, that bank stocks moved up on the news of impending fiscal crises considering that they profit form these crises in a too-big-to-fail, gamma-risk proportion.

These crises of liquidity (insufficient funds to pay the debt), you see, are not a random walk, but the result of a business plan that effectively turns the vast majority into peons, working harder and harder for less and less to pay off debt that accumulates at a rate that exceeds income.

Look at how this plays out by objective. The "swap" is organized so that financials will benefit at the expense of labor value, and while conserving the value of the capital is supposed to create labor value, by objective, labor value is expected to be lost.

Value will be derived from labor in the form of austerity measures to stabilize the system, which in turn destabilizes the system. It is pathologically risk-prone in order to be risk-averse, and this stems from an ideological identity, a philosophy of risk, that conserves value--the stakes--in the gamma-risk dimension where it can be easily directed by a technical elite in the interests of an historical aristocracy.

Eventually, the risk becomes so consolidated that a distribution must occur in order to conserve the accumulated value, and since this is a contradiction, not a paradox, the discrepancy historically resolves with an objective, revolutionary dimension.

The risk goes fully gamma--it fully consolidates into a catastrophic, crisis proportion that is derivatively managed in dark markets (with an "invisible hand" that manages risk by objective consolidation rather than a free-market ontology). While fiscal crises are detrimental, they produce a massive capital gain (income that is largely exclusive to class identity) at the expense of labor.

With value being cyclically accumulated (boomed and busted) in ever-larger, historical proportions, and at higher frequency, objective identity (what is being referred to as "class warfare") is being managed by swapping credit for default. (The swap is what Romney, for example, identifies as "creative-destruction," which implies that nature's detriments--the objective reality of fully assumed losses--are best managed with an elite, aristocratic identity, but it is not to be confused with causing the detriment. Instead, private equity--aristocratic wealth and power--is used to create even more wealth from what would otherwise be a dead-weight loss. By organizing the externalities into an economy-of-scale, reality--nature's undirected objective--is managed with an aristocratic identity that, all things considered, produces more value out than put in.) The ontological, "integral" value of labor is credited with debt, which effectively shorts its value (the detriment "derived" by renting back to labor its full value in the form of capital, which is consumed in the form of risk-value, or expected crises).

Instead of credit being distributed, it is consolidated, distributing risk in the form of deflationary, credit-default swaps. While the value derived from the detriment occurs by default, with the appearance of being ontologically derived, the risk is actually being managed by identity.

The predictable result is cyclical psychoses--identity crises in which the aristocracy demonstrates clear, empirical confirmation of its status. Although, keep in mind, this demonstration of power (of identity) objectively operates in dark markets, shammed with the concept of the invisible hand to make the objective (what happens by default) look legitimately undetermined, the outcome is entirely a culpable act of self-determination, which authentically demonstrates power.

Credit-default swaps, for example, are analytically identified as gambling devices to suggest a random, ontological, philosophical legitimacy. Technically, however, their objective use is no gamble.