Maintaining Beta Volatility (Getting More for Less)

Intuitively, the Zen of volatility maintenance is to reduce it. Reducing volatility is beneficial, presumably, because it reduces angst (if that's the objective, anyway). Being unemployed and economically insecure (competing to keep a job to avoid default) as the result of economic instability is, however, the incentive to work more for less.

With a more-for-less identity of the risk, wages and salaries competitively disinflate by objective, expanding the marginal profit and, supposedly, the extent of economic security. There is, however, less income to reduce the supply (what is paid to expand the margin, or pay the economic rent). Rather than a disinflationary effect, the effect is objectively deflationary (falling income against rising prices to expand the margin), producing the risk supposedly being avoided.

Capitalist theory maintains that economic volatility increases the profit margin (it produces risk-value--the creative-destruction that Mitt Romney has described to explain the benefit of private-equity firms). Overproduction (the bust that follows the boom) results in more labor value for less rent, cures shortages, and controls inflation by increasing the amount of rent paid to gain capital.

(Remember that the savings rate for investment requires austerity. Hedge-fund and private-equity firms exact austerity from labor in the form of unemployment because labor is not otherwise thrifty. The detriment exacted is described and explained as a naturally recurrent risk, meaning that the capital accumulated does not cause the detriment, but provides the opportunity to create value--capital--for reinvestment. It only looks like a deliberate expropriation because the risk is being deliberately organized to use the opportunity that naturally derives from the need to surplus value and cure shortages--that is, to reduce volatility.

Paradoxically, being thrifty to surplus value causes the risk to be avoided--what capitalists know is the "opportunity" to get rich and stay rich in zero-sum. If the risk distributes in a 99-1 proportion, however, arguing the benefit is indivisible is patently false--it is a disconfirmed hypothesis, which means government is required to give the outcome the force and legitimacy of indivisible, public authority.)

Increasing the rent in order to ensure the financing to pay it (increasing the risk of default in order to reduce it) is a contradiction. It is not a paradox as capitalist theory describes and explains it because the cost of labor (the rent job creators pay) is declining while the rent job holders pay is increasing. The result (predictably) is a liquidity crisis--the inability to pay the economic rent, which results in default (a declining rate of profit) like in Greece, for example.

In the bust phase of the business cycle, labor pays higher prices and taxes (keep in mind that job creators enjoy tax breaks to create jobs, which leaves labor with higher taxes). Labor's rent increases (literally paying the employer to have a job in the form of taxes) while its income is declining, which according to the theory of capitalism forms the capital that keeps people employed and prices affordable--in other words, it purports to prevent the risk (the detriments of inflation and unemployment) that plagues us on a regular basis.

Not only does labor literally pay the "job creators" to have a job, but then has to give up personal freedom, as well. Drug tests, for example, are increasingly common to get a job. So, not only does labor pay more to rent a job, but must increasingly subordinate the "self" to the image of the job creators because, apparently, they literally think they own the labor they rent. (The subordination is supposedly beneficial, and objectively identified with the noble intentions--the intuitive knowledge--of elite authority, because the masses are too ignorant to know how to productively organize and manage themselves without being structured into the risk--the zeitgeist--that creates the quantum value called "capital"). Keep in mind that this sense of ownership is the direct result of increasing the supply of labor in an economy-of-scale, quantum proportion. It is a function of organizational size and influence, which takes the form of higher taxes and rising prices--detriments that, remember, the accumulation of capital in an economy-of-scale proportion is supposed to prevent, and capitalists conveniently blame on government.

Not only does labor have to bear up to the angst of a declining income and certain unemployment to afford an accumulation of capital that is postulated to prevent it, but it then has to subordinate the image of its "self" (its "objective identity," as Ayn Rand describes it) to both big business and big government. So, where's the freedom?

According to capitalism, freedom is maximized by curing shortages, for example. We are not slavishly bound to the dictates of nature if we intelligently organize to manage (or pre-dict) risk in an economy-of-scale proportion, which as we know all too well results in inflation (rising prices) and unemployment (declining consumer income). Instead, by intelligent design, labor is naturally subordinated to the job creators (which according to Rand is its objective identity) who create volatility (the conditions for boom and bust) to manage "the risk," which under these conditions is highly retributive and predictably unstable.

According to capitalism, volatility forms the capital to expand the pie (by default) from which employment and economic security derives, but (paradoxically?) we cannot have economic security without maintaining its insecurity. We cannot have certainty without maintaining the volatility (the certain uncertainty) that, intuitively, we want to avoid.

(The paradox intuitively appears less as a puzzle than just being totally crazy...and that's because it is!

Causing the risk in order to avoid it is just insane! It is full-blown psychosis, and in order to manage the psychosis we have people like Eric Cantor acting to manage the risk and Randly confirm the psychoses of our objective reality.

Supposedly, representing the special interests of the job creators first--getting more for less--indivisibly represents us all...it is the objective reality to which we all aspire. Representing the interests of the job creators is sure to trickle down to reduce the angst we rely on to create it, and if this seems counter-intuitive, then you do not have the level of understanding required to be among the best and the brightest who manage the risk. This is not, however, a function of the best and the brightest, but who is the most psychotic, which is then described as, "we get the government we deserve.")

We are living (empirically verifying) the practical result of maintaining beta volatility. We get more capital accumulated for less economic rent. What it costs to derive the accumulated value and create wealth for the "job creators" is reduced by default, which creates plenty of labor in oversupply to serve the wealth up while the cost goes down (verifying the objective of getting more for less). The result is an expanding service economy in which the vast majority of consumers rely on debt to pay the rent. (What we then have is an economy designed for servitude, creeping ever closer to representing ownership of your "self" by means of default. Requiring, for example, being tested for controlled substances whether employed or unemployed is nothing but fascism masquerading as public health and welfare--it is full blown psychosis of people who, by classified exemption, will be fully intoxicated with the right of self-determination by default.) What we have is a demonstration of value in which the job creators get what they want to provide less of what the market needs (the income) to sustain it, rather than the market providing the job creators with what they need (the profit) to provide consumers what they want on demand.

The cost of deriving the accumulation is effectively zero. Entities that are too-big-to-fail are expanding the economy at an effective zero rate of interest. The objective, in other words, is not economic expansion, but volatility. Expansion and contraction maintains the accumulation without risk of retribution because the vast majority are immediately preoccupied with reducing the angst of an uncertain future (and remember, the Commodity Futures Trade Modernization Act, for example, is supposed to be reducing the volatility, and the angst, that plagues us by, paradoxically, causing it).

Managing the retributive value is a function of complex, monetary and fiscal policies and programs. The risk becomes so entangled within this space that it requires a high level of expertise to manage it. These high priests manage the surplus value that occupies ninety-nine percent of us with angst--the quantum value to be retributed and thus to be managed without risk. "The risk," however, as we know, can not be avoided, but it can be transferred to the future, which makes volatility all but uncertain.

Managing retributive value (political risk in the gamma dimension) is fundamental economics. It is a function of price relative to quality--economic rent (the price you pay for economic participation) relative to the quality of life (the amount of angst to be reduced or retributed, which is otherwise political risk divisibly managed in the alpha dimension by means of direct accountability that truly--objectively--represents everyone's self-interest).

In a free-market economy, risk is directly presented rather than indirectly represented. The ambitions of elite authority are directly subordinated to the risk, which provides the incentive for productive innovation (economic growth and employment) to make a profit instead of representing an insubordination with value that is politically retributive. Rather than being preoccupied with class warfare, for example, status is positioned to be fully occupied with the ambition of productive innovation and the full employment required to get there.

Without a free-market legitimacy (the productive incentive, and less need for government, that comes with direct accountability), we go to the high priests to manage the risk and reduce the angst, divining, through intelligent design, an objective reality from a universe of infinite probability.

Price (what we pay, or the value to be retributed, like "getting the government we deserve") is essentially relative to the risk (how intelligently it is managed by organizational design).

Getting more for less is highly improbable, not without a lot of retributive value, anyway, which then has to be managed.

When we innovate with labor-saving technology, for example, we don't really get more for less. More labor was put into the technology to produce more savings which is transformed into the quantum called "more capital accumulated." If the value accumulated does not distribute to reduce the rent by the same value, a crisis ensues to correct for, or retribute, the missing value--the economy is unstable, or volatile.

Retributive value is the "dark matter" of our political-economic universe. It is value managed in dark markets where it is quantified and emotionally charged with angst, which then becomes the visible risk to be consumed by position--occupying the space that intersects with the risk at any particular time.