Probability and Imperative

Determining what policies and programs fit our objectives is, as Paul Ryan points out, an intellectual endeavor. Much of that consideration is an ethical enquiry with a technical correlation that has probable value.

For example, the drought of 2012 is a detriment force majeure. The reduced supply increases prices and big profits will be made in the form of capital gains by "making the market more efficient" (RTV's like credit-default swaps and a panoply of other futures-contract devices that raise consumer prices and maintain a deflationary trend). Considering that the benefit is derived from the detriment (with added price increases reducing already beleaguered incomes supported by "headline risk" that efficiently destroys demand), we have to consider the moral value of turning the misery of others into the personal wealth of a small class called "the one percent."

Romney and Ryan argue that the value added from making markets more efficient (application of efficient-markets theory that allows risk to be accumulated and distributed in dark markets) is created from the destruction. What would otherwise be a dead-weight loss is managed into a capital gain that serves to peacefully distribute the scarcity (the risk of probable panic and civil disorder occupying "the headlines") with an on-demand, free-market legitimacy. So, technically, what is the value of the risk here?

Technically, the probability that an extreme drought will occur is 100%. The probability it will happen at any particular time is random, however, depending upon the capacity to read the signs that predict the event. Knowing that the detriment will occur with the prospect of profiting from it has moral value, and the knowledge of the probable detriment, keep in mind, appears in the technical oscillators that financiers use to quantify the probability of the risk.

The risk of loss is fully assumed. That is, the value (the financial reward) derived from the risk is equally imperative. So, Ayn Rand explains, for example, the risk-reward (the economic solution on demand) is devoid of moral value (it is purely ontological) because the cause and the effect is equally imperative (a rationale with which big bankers and their lawyers do whole heartedly agree, having a sense of complete objectivity that has, you see, the equivalent force, or legitimacy, of moral authority). This so-called "objective" valuation misprices the risk proportion.

When retirees see prices going up while the interest paid on their savings is going down (a reality achieved by technical objective), regardless of the technical reasons (the objective reality), the solution is politically motivated (positively charged with the legitimate force of a moral imperative that is evermore probable). While risk is not being added, dismissing the political risk as objectively irrational is to technically misprice the risk proportion to the reward.

Risk becomes disproportionate to reward because RTV's do not reduce risk. Instead, the risk accumulates into a political dimension--the gamma-risk dimension in which the probability is imperative.

Technical pursuit of objective reality misprices risk when it is ontologically assumed to be legitimately distributed with the reward when it has been actuarially avoided by objective. When the reward is quantumly gained in zero-sum, using RTV's, for example, the expected detriment is force majeure--it is categorically imperative, and if this imperative value is ignored, or avoided, the risk-value is mispriced and presents in a panic proportion.

Mispricing risk results in beta-risk volatility (remember, risk is not added but transformed) that eventually goes gamma (demanding a political resolution). The market is "made" to appear technically unpredictable--random and chaotic.

Up is down, down is up so that the "rational" (categorically imperative) thing to do is to make the market more efficient to achieve low entropic value with moral authority.

It is important to understand that the appearance of randomness exculpates the risk (see, for example, the force-majeure rationale regulators used to free MF Global executives of criminal liability). This legal limit to liability (premised on the ontology of large, complex, organizational technologies that the marketplace demands to be competitive) substitutes for the logic of collective action in the marketplace.

Stability is traded for instability to stabilize the risk, which is an insanity (a criminal insanity) that can only happen by decree. Ad-hoc rationality on demand that is relatively valued is traded for post-hoc rationales on command (by administrative-judicial decree) that have absolute value with the force and legitimacy of public authority.

When the marketplace is not "made" (consolidated) to be so-called "more efficient" but is allowed to operate unconsolidated, the risk is directly priced with empirical, imperative value that achieves verifiable accountability with moral authority.