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.

Exculpation of the Risk

When considering the "objective reality" of capitalism, keep in mind that the pathos of private equity (in spite of objective reality) does not subscribe to labor value being integral to the profit margin.

Capitalists readily admit that they are not in business to create jobs. The prime objective of the self (what determines our fundamental, objective reality) is to make a profit, and trying to deny the self of this natural right--keeping the full measure of its achievement for yourself, like Adam Smith said--is cause for high anxiety and revolutionary sentiment.

According to capitalism, the value of labor is derived--it is organized--from the accumulation of capital. Hence, anything that encumbers the accumulation of capital (like the risk government adds) predictably deprives labor of value. It is then the job of private equity firms, for example, to re-create (reorganize to innovate) value from the destruction (the dis-integrated relationship) of labor value derived from capital (the value to be exculpated, typically with government intervention).

The reward for working to derive value, remember, is the profit--value created that would not otherwise exist--and when combined with the risk of loss yields an added margin called the return on capital investment, or a marginal profit, often referred to as "working" capital used to add more labor value. So, for example, when both liberals and conservatives agreed to expand home ownership at the margin, they reasoned that the marginal profit would add the marginal product--the labor value--necessary to pay the mortgages.

Capital, however, was put to work in dark markets using "risk-transfer vehicles." RTV's, remember, are the innovation that repeal of Glass-Steagill promised to produce, allowing the financial sector to freely enterprise--consolidate--toward general prosperity. These innovative, risk-avoidance, financial "products" created a marginal profit by starving labor of added value, effectively positioning labor to take all the risk, leaving private equity with all the reward.

Since the profit margin is based on the amount of risk taken, reaping the reward without risk is illegitimate--it is racketeering.

Disguised as free marketeers, "gangster capitalists" do not just predict outcomes, they cause them. They determine outcomes with the intent to cause harm, and the only risk left is the risk of retribution. The exculpatory claim here is that capitalism predicts nature by organizing its otherwise high-anxiety, undetermined risk, and so encumbering the free enterprise of capital increases anxiety and the risk of civil disorder.

To protect themselves from the risk of retribution, these criminals must engage in a moral narrative that exculpates the risk-value, typically arguing that prosecution deprives the talent (the psychotic intent, the selfishness, that they refer to as self-interest) needed to put capital to work. (In order to conserve the philosophy of selfishness as the moral imperative--as the prime objective--government is then used to conserve the status quo. Conserving the inherent risk in order to avoid it, which is extremely psychotic, is referred to as maintaining civil order, or reducing probable panic, by bailing out industries and markets designed to be, in everyone's self-interest, too big to fail.)

Organizing the capital for expanded home ownership resulted in massive unemployment and foreclosure. It was rigged to yield a marginal profit by causing detriment, meaning that the reward was had not by taking risk, but by making risk--making the market for its conspicuous, class-consumption. (The consumption is conspicuous because it defines--it gives objective identity--to who occupies socio-economic space. Since anybody can occupy this space by organizing risk to make a profit, like Steve Jobs, the risk is generally exculpated. So, for example, it would be a moral hazard to mandate Apple, or any other firm, make its products in the US if it wants to sell them here, or tax away the marginal profit to provide the income to buy its products.)

In the case of the mortgage crisis, instead of adding the income--the labor value--needed to pay mortgages and maintain the net worth of the middle class (if you are shipping jobs off to China, for example), the capital derived from labor (both here and in China) has been, and will be, put to work consolidating these assets into the wealth of the upper class. The added wealth is referred to as "the wealth" that measures the general prosperity "of the nation."

The accumulated wealth, naturally, overflows and generously trickles down. Surplus wealth naturally transforms into capital to provide for the less fortunate. Wealth is provided to the less enterprising who depend on the organizational skill (the capital formation that comes with the desire to make a profit derived from labor) to produce equity.

The objective to consolidate wealth (and the power derived from it) adds value ("equity," or private property that markets determine to be "fairly" valued upon acquisition). Capitalism adds private property...specifically, the private property foreclosed and resold, or that trickles down to "make" markets so that profits are generated to re-add the (fairly determined) value consolidated. Liquidation, then (a contradiction that is euphemistically described as a paradox), provides the liquidity necessary to generate the nation's wealth and the employment--the productive incentive called "labor value"--to sustain it.

Private equity, you see, and "making markets" performs a public service. It provides a public good--the capital that creates jobs. That is, according to the pathos, it derives labor value from capital that would not otherwise exist. Capitalism, rather than being the abomination that deprives labor of its full value, "objectively" provides labor with more value than it would otherwise have.

Instead of being risk prone, capitalism, in reality, Ayn Rand would say, for example, is objectively risk averse. Since liberals do not have the depth of understanding (the secret knowledge--the pathos of the unseen hand that exacts fairness) to realize the benefit private equity provides, they mistakenly try to add capital through stimulus programs.

Liberals do not understand that by exacting economic rent from existing businesses we add (with the invisible hand) the stimulus value needed for sustainable, economic growth. By mistaking economic rent for detriment, liberals do not understand that the profit paid to form the capital (the rent), with debt acquired from the discount window at near-zero rates like private equity, hedge-fund firms, and the proprietary desks of big banks do, adds all the value we need to repair the damage of government intervention.

The profit paid to gain capital should not be taxed or regulated if we are to enjoy its fullest benefit. Instead of making big banks pay down home equity values from profits made on money borrowed at near-zero rates, for example, the market should be allowed to freely enterprise.

Private equity, "acting" in self-interest, should be allowed to freely demonstrate its power to provide liquidity (which was paid by homeowners in the form of economic rent). Private equity will solve the liquidity problem by buying up millions of homes in foreclosure whose value was essentially destroyed by RTV's and the proverbially postulated, providential hand of economy-of-scale firms invisibly operating in dark markets. Liberals, however, according to right-wing reactionaries, do not understand that beneficial value is (paradoxically) created from the destruction (the detriment) if they do not "react" by intervening in the marketplace.

(It is important to understand that given a consolidated marketplace the "invisible hand" simply refers to a lack of transparency and participation, and again, this is a contradiction--a liability--that must be exculpated by fraudulently claiming it is a paradox to be tolerated. Given an unconsolidated, free-market, organizational ontology, however, the "invisible hand" effectively acts, rather than reacts, to limit the need for government intervention.

That a free market really works if we ensure it in priority rather than supporting a too-big-to-fail ontology as a given, objective reality is the secret knowledge that capitalists don't want us to know. Capitalists don't want a free market because, without deconsolidation, arguing for limited government renders an invisible hand that visibly "ex-acts" detriment, which demonstrates who has the power to self-determine, or who consumes the detriment "ex-actively."

If allowed, by objective, to operate without a genuinely free market, the detriment that capitalists exact demands government react with intervention. Not only does it exculpate the risk-value, but consolidation results in welfare, which includes bailing out wealthy bankers, subsidizing corporate conglomerates that pay out healthy dividends, providing doctors with a very healthy fee for service, and health insurance premiums by government mandate, just to name a few.)

The secret knowledge--the reactionary pathology--is that fiscal stimulus does not add value, it adds risk, and so, according to the psychopathic predators of private equity, liberals--and their ignorant constituents--mistakenly think that capitalism deprives value when it really derives it. Not that this is wrong...capitalism does derive value that would not otherwise exist, but it is falsely derivative value that naturally tends to re-integration and causes the angst--the crises, the gamma risk--that capitalists falsely claim is added risk.

The mistake of liberalism, right-wing reactionaries contend, is the source of our anxiety, not capitalism, because it adds risk, but as we know, risk cannot be added. Risk, however, can be liberally reacted to. It can be transformed to accumulate and distribute so that the retributive value is never so high that the risk and the reward does not fully reintegrate (or converge). Labor value is conserved as a false derivative of capital formation and risk is kept consolidated in a predictable, too-big-to-fail, crisis (or gamma-risk) proportion that is always being re-acted to.

(Reactionary politics, in other words, does not allow the risk and reward to converge in the gamma dimension where the value derived from the risk is otherwise exculpated with the force and legitimacy of public authority. Acting to deconsolidate the risk in this dimension will reduce the divergence, and thus the need for government that is otherwise reacted to as added risk.)

When government authority reacts, then, to the accumulation of labor value as integral to the value of capital by retributing the value in the form of welfare (or warfare, perhaps, including class warfare, like we have now, for example), the wealth that we call private equity is there to reap the profits of the distribution. The derivative value is maintained in historical perspective and private equity then claims it is operating--deriving value--by predicting the outcome.

Exculpated by exemplum, capitalists argue that the objective is to add value by reducing risk, not immorally adding risk, and causing angst, like liberal "socialists" do.

While private equity and hedge funds may profit from the errors of liberals by predicting the outcome, capitalism, conservatives claim, does not manage capital to cause detriment by objective, and indict their critics are too "intellectually lazy" to understand the benefit it objectively provides. The detriment is really an intended benefit, but most of us just aren't smart enough to get it, and so the gangsters claim they are prone to being unjustly victimized, prosecuted, for doing the right thing.

Enterprising capitalists do not "make" a profit by "making"--or determining--markets, but by organizing it to reduce the risk, which predictably yields a profit. Never mind, however, that the risk reduction they refer to "makes" for a consolidated marketplace. Instead of reducing it, risk shifts to anyone that is, anxiously, not too-big-to-fail (which makes for the ninety-nine percent).

Always arguing for, and maintaining, an economy-of-scale efficiency of markets does not reduce risk. Instead, it keeps risk in occupation of the policy space.

Being constantly preoccupied with avoiding risk, rather than taking risk, gives us a sense of objective identity that empowers the elite with the occupation of managing what is considered to be a natural dependency, while at the same time declaring the outcome to be the result of self-determination.

Historical Determinism by Objective

Instead of our economic problems technically correcting (as K and E-Wave theory suggests, for example), we support them with a battery of elite recruits disposed to technically demonstrating an ideological, or philosophical, objective. Although a highly technical civil service has developed to objectively manage risk (existential angst), ideological loyalty still prevails over intellectual prowess which, technically, accounts for most of the risk (the angst).

The reason we don't simply let economic problems cycle into a natural correction as Hayek suggests, for example, but actively manipulate the means to ends like Keyenes suggested, is because we don't want to take the risk that our natural existence is the angst to be prevented. So, we manage the angst by objective, measuring the probable risk ontology with reactive, normative values that tend to an ideological bias that confirms the angst of our natural existence.

The Fed, for example, has at this point declared that its objective to maximize employment is technically impossible. Monetary policy, it says, does not determine the rate of employment (the extent of economic angst), but it does determine, with near-zero rates, if economy-of-scale financials (organized to avoid risk and reduce economic angst) fail or not.

Federal Reserve programs do little to ensure employment, but by ensuring too-big-to-fail institutions do not fail (essentially providing the liquidity they consolidate), Fed programs are effectively limited to preventing massive unemployment in late order (serving only to reduce the retributive value). By objective, keeping the distributive value of the risk in historical perspective, the accumulation (and the potential for crises that measures the inherent, or integral, value to be retributed) is contained.

Instead of keeping markets open, we see, then, a tendency to keep markets closed in a too-big-to-fail proportion to manage the risk. Instead of the bottom-up, free-market accountability of the prudent regulator that needs only limited government authority, what occupies the policy space is accumulated risk with an unlimited need for government authority. Risk is managed by objective from the top down to prevent even more civil unrest than we have now, but without sacrificing the benefit of unemployment.

(The benefit that unemployment provides is the deflationary risk that turns the equity of the average income into debt, which creates the retributive value that needs to be regulated to keep the value consolidated. Increasing debt to equity--liquidating the assets of the middle class, which requires adding liquidity in the form of debt to buy it back at a profit--consolidates wealth and power and at the same time gives the middle class, especially the unemployed, the "objective" identity of being an unproductive, fiscal liability. Since, however, the business activity that creates and services the debt is measured as GDP, the liability is managed, by objective, as an asset, and that objective identity is the difference between the need for limited and unlimited government authority.)

The Fed, as of the date of this publication, says its technical objective is to prevent liquidity crises, which are highly probable if employment does not dramatically improve (and remember, controlling the angst--the unrest--this causes becomes the objective--the reality--that technically defines the risk, and that valuation technically results in even more consolidation of power, not the deconsolidation we technically need). While the Fed cannot predict economic outcomes, because if it did, it must then admit to rigging the market (and thus a de-ontology), it can nevertheless determine the extent of crises that ontologically derive from free-market activity. If, however, the free market is allowed to consolidate, the Fed acts to support an ontology (a natural, undetermined outcome) that does not exist.

A fraud systematically perpetrates, and although the economy-of-scale efficiency is supposed to reduce risk, it is the cause of general anxiety (and psychoses described as "class warfare") in a too-big-to-fail (gamma-risk) proportion.

(Keep in mind that while ontology refers to a lack of objective--that nature yields predictable outcomes without purpose--economics is a "science" that is largely concerned with management by objective. This does not mean, however, that the "objective reality" of economic outcomes is not ontological. Most of the analysis found on this website is devoted to describing and explaining an ontology of risk that is politically motivated while technically assumed to be derived from natural forces that are undetermined.

Exploiters objectively become philanthropists because, paradoxically, they are naturally thrifty; and the meek, then, naturally inherit the earth because nature, unparadoxically, is objective.)

It is not difficult to see the technical problem here. First of all, predicting the outcome can sham for its deliberate determination. Risk can be managed toward an objective, and then it can be argued that avoiding the risk is the result of predicting it, not managing it (or "making markets") to position it for someone else. In the vernacular of private equity, this is the so-called ontology of "creative-destruction." Investors naturally seek (freely enterprise) to create, or derive, value (the marginal profit) by destroying the integral value of labor put into it (the opportunity to self-determine, or prudently regulate) in the free marketplace.

Markets are made to freely enterprise a marginal profit, and technically, with more than enough historical evidence to support it (the Great Recession and a persistent high rate of unemployment being the latest confirmation), the value created from the risk (the detriment) is risk prone, not averse, by objective.

Unemployment is the objective, and value (risk) is derived from the detriment (the objective). So, when the Fed says its mandate to control the rate of employment is technically impossible, its mandate has been effectively trimmed to fit the objective. (The Fed does not control the banks, the banks control--they own--the Fed by extension in a too-big-to-fail proportion, and thus they own the "Open Market" by committee.) The policy space, then, is fully occupied by an elite authority empowered to privately enterprise the risk that yields the value to be regulated.

We see, then, how the accumulated value is being historically determined by objective. The authority needed to regulate an accumulation of risk-value, that goes back to our founding, is expected to be a function of elite identity, and that identity manages our objective reality (who gets what, when and how) in historical perspective.

Although, since the Revolution, "We" are all equally self-determined, historically, however, we are all predictably determined by our natural ability to manage the risk that, nevertheless, ontologically presents. So, as Alexander Hamilton explained it, for example, it is reasonable for us all to assume the risk will always be managed by objective of elite authority.

According to reactionaries, then, while we can fully expect The Revolution to live long, the result (the value derived from the risk), historically, will always be conserved. What reactionaries don't admit, however, is that the distribution of the value depends on the objective, which could very well be not depending on the so-called "job creators" to predict the outcome with limited liability, but "We the People" determining the outcome with full accountability in the representative form.

Value Conserved in Historical Perspective

A lot of what we refer to as politics today centers on rhetoric that conserves value in historical perspective. It is necessary to maintain the philosophy of risk from which value legitimately derives and occupies policy space over time.

Binomialism, as we have discussed before, is critical to occupying policy space over time. Eventually, however, the philosophy of the risk's legitimate value and the organizational technology that has evolved to control it converges over time to occupy the same space, which essentially conserves the value in historical perspective.

When Newt Gingrich attacks Romney from the left, for example, he is no less right-wing reactionary than he was before. What we see, rather, is the spectrum converging, being compressed to occupy the same space in order to remain reactionary in a binomial fashion. If Gingrich is a socialist then Obama must be farther left than we all thought although the President's policies and programs, at this point in our political-economic history, clearly occupy space to the right of center.

Despite the perennial appearance of a necessary, populist shift of the right to the left, a binomial determination nevertheless conserves value (the stakes) in historical perspective.

Despite the Square Deal, the New Deal, the Civil Rights Act, or the marginal rhetoric of Gingrich, the historical objective does not really change much. The distribution of the total risk proportion largely remains the same. The top one percent organized the Revolution, organized the government, and continues to labor over consolidating value into a revolutionary (reactionary) proportion that, as far as the political-economic elite are concerned, always presents the opportunity (the reaction) to consolidate power even more.

Do we not hear policymakers advocating the practicality of bipartisanship--consolidating the competition--to solve our problems? Yet, at the same time, partisans vote the party line to maintain a philosophy of risk in historical perspective until finally we have a compromise that essentially conserves the risk proportion with distributive value that conserves the problem in the form of a solution. (The stakes, you see, are to prevent the increasing frequency of opportunity--crises--from resulting in a proactive deconsolidation rather than a continuous, reactionary consolidation of power.) As power consolidates with each crisis (which is the incentive for revolutionary change and measures the total risk proportion), institutions are strengthened, technically organized to produce the probable effects that cause the need for consolidated power (what is referred to as an "organizational tautology" in previous articles). Within these institutions is held the organizational memory that conserves, or stores, value in historical perspective, being switched on or off to conserve the stakes over time in a crisis proportion that must be laboriously networked (bureaucratically organized) to maintain.

Back in Adam Smith's day, entrepreneurs did most of the organizational work, which included organizing labor, but laborers worked for the crown who owned the means of production outright or by the extension of debt (the rent). Laborers, including the entrepreneurial class, were royal subjects.

While bankers and merchants organized the externalities to manage risk, the crown took a disproportionate cut because it essentially owned the means of production by divine right. Owning the means in a consolidated, too-big-to-fail proportion essentially meant the sovereign, with the means--the right--to self-determine, was renting the right to expand the pie, like financials do today.

American Revolutionaries considered the distribution--the philosophy--of risk to be unfair, and a new philosophy emerged that converged the risk with the labor value of the reward, which includes the angst of fully assumed loss that transformed into modern organizational technologies that network the externalities to reduce the risk, or the angst. Not only is this the source of mistakenly thinking risk is an added value, but also the source of mistaken analyses that considers value will always derive, or be "pulled," from the technicals regardless of a philosophical predisposition.

Consider, for example, the chart popularly used to show that the distribution of income over the past thirty years has technically favored the top one percent in zero-sum. During that period the policy space has been occupied by both liberals and conservatives in various proportions yet income steadily accumulated at the top, which infers that income naturally distributes to the top whether the policy space is occupied by the left or the right.

(Remember, the random walk of stochastic oscillation--what investors mean when they say past performance does not ensure future performance--is the defense used to shield the top one percent from the fully assumed risk of loss. Determining the risk of liability is not an ideological function...justice is blind because "the risk" is stochastic--it is ontologically derived. Those who walk through successfully by networking the externalities deserve--they have earned--the reward that is inherent--and proportional--to the risk. Since risk-reward is an integral value, it is then illogical, essentially illegal, to claim that risk has been subsequently derived from the reward, and if you do, you are not deprived of opportunity--of upward, class mobility--but "envious" and guilty of waging "class," or ideological, "warfare." So, when private equity firms raid businesses in a feudal fashion, risk is not being derived from the reward but is integral to the network--the systemic risk--labored over to produce value that would not otherwise exist.

Technically, capitalism is a process of "creative destruction." Economic value is not ideologically derived, it is technically derived, organized by the most enterprising among us, which includes organizing for the systemic risk that creates the opportunity to consolidate wealth and power with the legitimacy of being ontologically derived.)

While the technical distribution is stochastically the same independent of ideology, explaining the thirty-year, income chart is ideologically derived, nevertheless. The reactionary meaning of the chart is conserved, binomially, in historical perspective, and the distribution is decidedly leptikurtic with a risk value that peaks negative against a reward that peaks proportionately positive over time and space. The leptikurtic quality is a function of how the risk-reward is organized to technically distribute the quantity of risk over time, which determines occupation--the objective--of the policy space.

When Newt Gingrich says he wants to teach the unemployed how to get a job, for example, what he technically means is that we can attain full employment at the right price. His solution is, technically, classical economics in which the reserve army of labor is expected to bid the cost of labor down to subsistence, or starve. This, of course, gives real, technical meaning to his so-called left-wing position on Bain Capital, for example.

We should not rely on a predatory model like Bain, a reactionary can easily argue, because the classical model, if left alone to freely enterprise, will create more than enough detriment to subject labor to the consolidation of capital.

Since history admits that labor, technically, will starve anyway under classical conditions, right-wing conservatives must ideologically advocate for the technical strength of capitalism. Not only is labor not paid enough to buy what is produced (which, as the unsold supply accumulates, makes it look like capitalism cures shortages), but labor also has to pay rent in the form of debt. If Bain Capital is liquidating businesses to create wealth and not supply, it makes capitalism look like the disease and not the cure.

Debt (the economic rent) is extended to ensure the subsistence of labor (which essentially means you have to rent your job from the capitalist, and you do this when big corporations, for example, are given huge tax breaks to provide jobs). Labor is not likely productive (producing wealth for conspicuous consumption) if starving to death, or neotericly, in historical perspective, collecting welfare.

Ideology is critical for accumulating capital completely at the expense of labor, which distributes risk disproportionate to reward. Despite the extreme assumption of risk inherent to de-integrating risk-reward (the incentive to revolt, or the class warfare that American Revolutionaries essentially engaged to re-integrate the values), capitalism organizes so that labor takes all the systemic risk (all the detriment) with only a subsistence (counterinsurgent) proportion of the reward.

(Keep in mind that big, consolidated corporates consider small businesses to classify as laborers. Systemic risk distributes to small businesses in the same proportion as labor because, by definition, they are not too big to fail. This means they are not so big that they can, or will, cause the failure that consolidates the wealth of the nation, which includes the sweat equity--the labor and the added employment--of the small business person. Keep in mind, as well, that while welfare reduces the amount of systemic risk small business consumes, it tends to blame welfare for causing the risk and not consolidation of wealth and power to which they aspire integration.)

While in historical perspective the effect of capitalism is similar to the gamma accumulation of risk the king presented, according to today's reactionary ideologues, it is, nevertheless, the best of all possible alternatives. Divergence of risk from the reward (what classical economists called "overproduction" and "surplus value"), reactionaries say, cures shortages and thus reduces the primary, historical risk of conflict.

Since they know how to technically organize labor, and use the capital extracted to create the wealth of nations in historic proportion, right-wing conservatives contend redistributing the assumed risk proportion, like liberals do, is dystopic. Antidisestablishment philosophy especially advocates against any reintegration of the assumed risk by a government that ensures its deconsolidation in priority like free-market, limited government liberals say it should be.

Contrary to its free-market ideal, the right-wing establishment dissonantly considers deconsolidation to be anti-free enterprise and anti-private equity. Any government intervention destroys the natural, and thus legitimate, efficiency of markets (consolidated, inequitable, and risk-prone as they may unnaturally appear to be). Government that ensures a free and unconsolidated marketplace unconstitutionally deprives property owners of the natural right to freely use it as they see fit, effectively depriving them of "life, liberty, and the pursuit of happiness," and remember, as Gingrich is apt to point out, "We" are entitled to "pursue" happiness, not attain it, and so wealth and accumulated power can easily be used to prevent it.

According to right-wing conservatives, not allowing capital to freely enterprise and consolidate equity (create wealth from capital by essentially consolidating its labor value, just like the king did) is a moral hazard because it increases the risk of conflict--it causes class warfare. As we know all too well, however, allowing wealth and power to consolidate (by depriving labor of all the value it produces, just like the king did with the bourgeoisie) results in class warfare. ("We" had the American Revolution, for example, and "We the People" have seen the stakes--the accumulated value--conserved over time, technically occupying an empirical policy space in which the stakes are ideologically tested.) Left-wing conservatives then, post hoc, advocate for welfare to reduce the hazard, which prevents consumption of the assumed risk and conserves the value consolidated in historical perspective.

Ideology, working with a moral, or normative, concept of reality, is technically operationalized to ensure the risk of loss is always assumed rather than consumed.

Ideology prevents the Revolution from being extended. It keeps the extension of the rent in historical perspective, valuing it as a benefit (like the king did) when it is a detriment, and risk-averse when it is really risk-prone. The hazard--the welfare that Gingrich and conservatives generally react to as immoral--is ideologically maintained in a gamma proportion, always on the verge of crisis.

Much improved from the way kings managed the fully assumed risk of loss, recurrent economic crises--the constant and cumulative risk of political revolution--is technically organized, binomially, to always assume the risk for future consumption. Systemic risk of default in a too-big-to-fail, economy-of-scale proportion is "swapped" for credit. Labor value, jobs, the value of your home (or the better part of your savings) is held in reserve, and remember, the quantum in reserve (the economic rent, which is paid out in the form of interest) is value released by breaking the bond between risk and reward (remembering that the interest on government bonds is paid with virtually no risk of default, and keep in mind, as well, that the financing used to cause our current economic crisis toward a "jobless recovery" is borrowed at an economy-of-scale, zero-interest, too-big-to-fail rate). Class warfare, you see, indicates probable reintegration, not disintegration, of the values, producing a force that fuses, or converges, practical effect with normative legitimacy.

If the relationship between risk and reward is inverse (with the objective being: the less the risk the more the reward), it is illogical to argue the reward is distributed to whomever takes the risk. No, the risk has diverged from the reward so that, technically, the risk-reward is integral and ontologically legitimate only when it has converged, which is "the risk" capitalism operates to ideologically avoid by keeping the value politically derived in historical perspective.

The analyst has to seriously question whether the technicals are really ontologically derived. When considering, for example, the culpability of today's economic distributions, with glaring inequity, remember, an ontological argument is the rationale--the philosophy--that exculpates the liability--"the risk"--inherent to an accumulation of the reward.

(Look at what happened to the price of natural gas, for example. While the technicals show a steady drop in price when speculators were prosecuted for manipulating the price, reactionaries argue that the drop is the result of added supply, or supply-side economics. Correct--supply was being added at the fraudulently high price and that inventory, along with the risk of loss, fully assumed, continues to accumulate.

Along with the consumption of the accumulated risk, we see the price being technologically pulled down, as well, which is the direct result of accountability, or fully assumed risk that dark markets and economies of scale otherwise avoid and pass to consumers by objective. The price continues to fall, and the benefit, rather than the risk, distributes to consumers with the innovation of LNG plants that came on line well after the price began to fall from its overbought proportion when speculators were looking to profit from the fraudulent price being touted as "fundamental," or ontologically derived.

We see, then, how value is conserved even in a micro case, and the conservation is not necessarily "pulled" into a technical detriment, but is largely dependant on the way the sector space is organized by objective, or occupation.)

If the extension of the rent is purposefully organized, it is virtually impossible to argue the detriment is an unintended consequence without arguing what is essentially a Marxist concept of reality--that the motive to act is technologically pulled or, that is, ontologically governed. Since the reward is governed, or derived, by taking risk, and governance is an essentially political function, there is no need to add government, and if we do, it adds, or organizes, the risk, capitalists contend, that keeps the reward from distributing because it encumbers economic expansion, or productive incentive, like the king did.

(Although too-big-to-fail risk managers, for example, know very well that risk is a constant value that can be organizationally transformed, when confronted with the Volcker Rule, they contend, nevertheless, that the rule creates the risk of default because it reduces liquidity, which is destructive. The implication is that government adds risk by not letting oversized financials reduce it in an economy-of-scale proportion. As previously discussed, however, government, not risk, is added to manage the same amount of risk deliberately organized in a too-big-to-fail proportion. Since that proportion is prone to failure, its organization pushes into and occupies the space of government.

Regulating the oversized, accumulated proportion becomes the occupation--the objective--of government. The public-policy space is occupied to support systemic risk, not avoid it because, remember, systemic risk causes the opportunity to consolidate wealth and power--it creates "risk value."

The value systemic risk creates from the detriment it causes maintains elite power in historical perspective. Notice how value is technically derived from risk that is algorithmically determined and philosophically maintained in historical perspective at the same time, and here we are, at this point, scratching our heads, wondering why we keep making the same mistakes over and over again. It's very simple...being prone to catastrophic risk in order to avoid it is insane!

An economy of scale, you see, shifts all the risk to the consumer. So, yes, risk is increased--big banks report lower profits from proprietary trading, but higher profits from laying off its employees. Proprietary trading, remember, is a means for big banks to take the consumer's savings and invest it to create unemployment, including the people hired to do the investing, which creates wealth for the one percent and explains, along with a more regressive tax code, the kurtosis of the chart since 1999.

You see, then, how this works. When wealth continues to be created from capital by destroying the labor savings of the consumer--investing in dark, complex, financial instruments that transfer risk by causing unemployment--big banks will admit uncategorically that the Volcker Rule "created" the crisis--the risk--that consumes us.)

Confiscatory capitalists, then, acting like the king, cannot be held normatively responsible for what is nature's way of ensuring there are enough risk takers, or "job creators," with ample reward. Proprietary desks at big banks, for example, provide liquidity, and when combined with securitized debt they provide both the ample reward and the incentive (the economic desperation) necessary for labor to be productive at the lowest possible cost. Thus, conservatives contend, consolidation of the financial system (operating without Glass-Steagill) both controls inflation and increases productive incentive as long as government does not interfere with this "natural" process of debt extended to expand the pie (which in historical perspective, as we learn again and again, is nothing but an extension of the rent, like the king did). Trickle-down economics, a philosophy of investment risk that Alexander Hamilton, for example, favored, is supposed to extend prosperity for everyone, but historically, the rent is what extends.

How political governance is organized to derive economic value is a normative consideration. Our founders were consumed with answering the very questions that importune the intellect today.

Since we are still seriously arguing whether government is the problem and not the solution, we are clearly being condemned to making the same technical mistakes over and over again.

While the stakes are technically organized to politically conserve the value (which is the value of making the same mistakes over and over again, which accumulates risk), how the risk is valued is ideologically conserved. How we value risk determines what the stakes are, and its perception is filtered ideologically.

In a binomial, bi-partisan, philosophical fashion, from our founding, "We" are being technically determined by an elitist, aristocratic ideology that conserves value in historical perspective... and so, whether you are a Tea Partier or an Occupier, long live The Revolution!

No Bain, No Pain

According to the Republican Party's front runner, Mitt Romney, private equity firms, like Bain Capital, engage in a process inherent to capitalism called, "creative destruction."

While this has the look and feel of being the Zen of capital formation and distribution, it is a technique for organizing markets so that they consolidate.

The objective is to creatively destroy demand (what causes deflationary risk, or the risk of default). By enterprising to form more capital (consolidate more private property) than distributed, our economy is organized for failure, from which private equity firms "derive" benefit by default.

Using the example of Bain Capital, the sound-bite description of the way capitalism operates is, "whether the firms acquired survive or not, win or lose, Bain profits." So, you see, capital can be organized and enterprised so that it destroys demand without causing a declining rate of profit, which suggests that the risk of loss is avoided. No! The risk of loss is fully assumed.

The risk of loss is gamma (consolidated)--it cannot be avoided.

Creative-destruction suggests that the capital gained has to derive from inflicting pain. Causing harm (by avoiding the risk--the probable detriment--rather than taking it yourself) is a demonstration of power, and as power consolidates, the risk of loss becomes more fully assumed, not less. The Romney camp and the rest of his party are discovering the inevitable, practical effects of the gamma-risk proportion.

Like I have said before, the revolution is just as likely to proceed from the right as from the left (because the risk of loss is fully assumed). As we plod along after the Great Recession, being offered the problem in the form of a solution, we come to discover, more and more, where there is no Bain, there is no pain.

An Organizational Problem

Our continuing financial crisis is the latest example of ignoring what is technically an organizational problem being philosophically maintained.

Consolidation of the governing, policy space, both politically and economically, is technically risk-prone, not risk-averse; and philosophically, organizing to avoid the assumption of risk (or to empirically determine a probable outcome) is what the American Revolution (the age of Enlightenment) was all about.

When empiricism--a philosophy of thinking--emerged not as magic tricks, but a verifiable (risk-averse) means of acquiring knowledge, a revolution occured. This Enlightenment led us into an industrial revolution (the technical application of empirical philosophy), and that revolution continues to converge technical and philosophical aspects of sovereign power (organizing for self-governance, or self-determination) to occupy a singular space.

Philosophically, the political-economic interests that supported the American Revolution were technically interested in creating wealth and keeping it from being confiscated by the sovereign. Technically, they organized to protect their interests with a philosophical foundation that is empirically derived--they declared themselves ("We the People") sovereign. This "Declaration" (this thesis of independence that is the working hypothesis of science) essentially converges the "self" and "governance" into a singular space so that our objectives are easily measured and verifiably attainable, or "self evident."

(Occupy Wall Street protesters don't see a verifiable attainment, for example, and so they intend to occupy the policy space that governs the evidence--the profit and loss--of that attainment.

The protest is both prescriptively and descriptively in the spirit of the American Revolution, and the right-wing reaction is how kings reacted to the Declaration of Independence...with indifference at first, until it became self-evident that sovereignty empirically resides, both technically and philosophically, with "We the People." This, you see, is the gamma-risk dimension where the risk ontology obtains as a quantum singularity but paradoxically attains a pluralistic, teleological expression. The expression is a creative process, intelligently designed, much as our founders originally viewed the empirical value, the ontology, of a government designed by consent, or by "objective" of the governed.)

According to original, American Revolutionary thought, consolidation of power is risk prone. When sovereign power is consolidated into the hands of kings the state naturally operates contrary to our objectives--the risk of loss is fully assumed in priority. (The risk of loss is gamma, but when intelligently organized, or pluralized, in the alpha dimension, the reward fully converges with the risk so that power is both normatively legitimate and technically verifiable).

At the time of the American Revolution the debate naturally centered around the role of government authority. The Revolution revolved around determining who is legally sovereign, or self-determined, which is essentially a question of organizational technique that is philosophically derived.

While dialectical determinists argue that the philosophy of risk is technologically "pulled," consider that at the time of the American Revolution philosophy was more concerned with the risk of losing economic value to the sovereign, value that was essentially derived (organized) from the labor of the bourgeoisie (to fulfill the king's objective reality). This is what Adam Smith was referring to when he declared it is the natural right of the business class to make as much profit as it can, and keep all that it makes, because it labored over it. It was a calculus of profit and loss with the sovereign taking more value than risk assumed because the king was, by his divine, insurmountable, singular nature, too big to fail. He could cover his losses, or cause loss and determine his competition, by merely raising the rent; and if his subjects didn't like it, well, they're just "envious"...sound familiar?

Empirically, however, the (envious) bourgeois class, being Enlightened (and prone to revolution), knew that the king's "nature" (his objective reality) was not verifiably singular, but relied on the wealth that its class created to demonstrate power and maintain status (the status quo). It reasoned then that the wealth created is not the wealth and power of kings alone, but "The Wealth of Nations," which is organized by an entrepreneurial class willing to take risk as long as government does not interfere or try to take its wealth. The objective, then, is to devise a mode of sovereignty that is "hands off," and the best way to do that is "hands on"--by declaring your "self" the sovereign.

Hence, government had to be organized to ensure the right to self-determination, which essentially requires a philosophy of risk that ensures the reward is legitimately derived, and thus legitimately kept and used as the private property of the sovereign. There needs to be a philosophy to support the new, organizational technology from which the value of self-determinism derives--the job of managing risk so that the risk-taker can keep, as Smith said, everything the risk-taker labored to earn, but as Smith said, as well, the risk-taker, like the king, is not a quantum singularity.

The right to private property (the right to sovereign power) is organized today to deprive it of others, which demonstrates power. When private equity firms, like Bain Capital, buy up foreclosed homes, it is called "free enterprise." In other words, the corporate body (the collective person, Bain Capital, for example) is legally sovereign and has the power to determine the self, including the "self" of others like the crown did by extension of the rent.

Extension of the rent (the economic risk that inevitably transforms into political risk) is accomplished by organized consolidation of the capital, which is called free enterprise. So, when private-equity firms, like Bain, buy up distressed assets, they are consolidating industry and markets (the quantum) toward a singularity (political risk they react to as "communist" or "socialist") that overextends the rent and forces assets into distress. While it freely demonstrates (enterprises) the power of the sovereign, it arrogantly forgets what objective reality really looks like and diminishes, like the king, that on which it naturally depends.

The risk-taker is dependent on conserving the natural right of others to self-determine, and as soon as that right (his sovereignty) is not conserved, he no longer, by nature, fully assumes the right in the future, but fully consumes that right by his own self-determination. Not only is it foolishly self-destructive (greedy) to consolidate industry and markets, Smith contends, for example, it is a moral hazard (which the greedy psychopathically describe as "class envy" and "class warfare").

If the objective is to avoid the moral hazard--the fully assumed risk--by ensuring free markets, it is necessary to avoid the problem of a declining rate of profit that classical economists referred to. Remember, "the declining rate of profit" is a demand deficiency due to liquidity crises, like we have now, which results from insufficient income to demand the value of labor put into expanding the pie. This pathology of insufficient income (our recurrent risk of default), as Smith said, is an organizational problem, and while today we support the margin (the risk) by monetizing the debt, the problem, and the solution, remains the same.

Mutual Risk and Occupation of the Policy Space

Ensuring that consumers have integral value (like a free market provides), rather than derivative value, is what capitalism will not do by technical design.

Our being plagued with a "jobless recovery" is no accident. Nor is it the product of a cyclical ontology derived from a natural, stochastic tendency to extract value (capital) for reinvestment.

(Remember that even though capital accumulates with each boom and bust, the cycle is the result of deliberate economic action. Capitalists want us all to believe it is derived from nature--a natural law--but it is really intended to derive detriment by technical design.

The risk of default is more by human, intelligent design than a crap shoot, delimiting the concept of "risk" to "being stuck with the detriment."

The successful capitalist innovates techniques for avoiding "the risk," which means it is left for others to consume by "default"--it's survival of the fittest. The crude, selfish exploits of Homo habilis may be derived from intelligence, but it is not to be confused with the self-interest of the wise man who realizes sticking others with the detriment is but to hoist the "self" on one's own petard.)

While the detriment exacted--the austerity--is supposed to provide a benefit, according to neo-classical economics the benefit is derivative. (In other words, the benefit--the reward--is fully assumed with the risk of loss. Hence the risk and reward are integral components of the derivative process but are considered neo-classically to be the natural, and thus legitimate, outcome that derives over time which, as we know, occupies space. While we typically consider space to be an empty nothingness, this space, understand, is the "quantum" that the quants on Wall Street work with to calculate the risk of loss fully assumed and, remember, occupying this space directs the detriment, positioning "the risk" for consumption. In a free market, the risk is consumed in the alpha dimension--it is calculated by the consumer with the quantity "income," which is value accumulated over time. In the world of Wall Street quants, risk is consumed in the beta dimension. Volatility--cyclical frequency--creates the opportunity to apply the risk, or detriment, which reduces the income, or the quantity, needed to apply risk in the alpha dimension which prudently regulates, or legitimately derives, the outcome. Without fully occupying this space, the consumer--the prudent regulator--is at a loss, and this loss is the quantity of government needed to control the proportion of risk accumulated that I call, "the gamma-risk proportion"). The benefit (which fully assumes the detriment), neo-classically derives from the accumulated capital and the demand for its consumption, not the value of labor input. So, for example, when we hear analysts describe and explain the Euro crisis, it's all about consumers (the populus) needing to undergo austerity. If capital is stuck with the risk, which according to popular analysis reduces its demand for consumption (investment), then we all suffer. Hmmm...doesn't that mean only the popolaccio (the little people) should suffer detriment?

The benefit, you see, is supposed to be mutual (integral). It is supposed to benefit both labor (the physical energy needed to create value, including the intellectual energy and labor-saving property put into it) and capital (the symbolic, highly portable value that seeks the lowest risk at the highest possible return to support its integral value--the labor that adds supply and reduces risk with adequate income, and savings, to demand its consumption). Neoterically, however, risk, rather than being integral to its value, is derived from the reward.

(Keep in mind that philosophers conservatives typically refer to--Hume, Burke, Locke, Adam Smith--classically regard labor as integral value from which capital investment--adding supply, or productivity--is derived. Smith, for example, regarded consolidation of savings derived from the value of labor into the hands of a few people--which became known as "the capital"--to be a moral hazard. In other words, he regarded consolidation of value, like we have now, to not be normal, and Marx certainly did agree with that. Except for Marx, who is credited with giving capitalism a bad name and whose philosophy is identified with the tyranny and oppression he so avidly argued against, these classical philosophers are neoterically cited without regard to the integral value of labor.)

Capitalism is expected to charge the highest possible price at the lowest possible cost, which means there will always be demand insufficient to pay the price. Consequently, we should always expect there will be crises that measure overextension of that marginal product--the inability to demand the supply--as a natural condition for expanding the pie (which in a post-industrial, neo-classical environment is largely a function of labor-saving productivity gains).

Normatively, we should always expect for "the capital" to foreclose on the marginal product. It is normal for the rich to buy it up, providing the liquidity necessary to pay for it, recycling the marginal risk (the unproductive waste--the productivity gained or, that is, derived) into future, accumulated value (the expected value of productive, economic expansion being held in reserve and normatively described as "the paradox of thrift"). Naturally recurrent crises (or the risk of loss fully assumed) always makes us stronger. Without it, capitalists say, paradoxically, we cannot all have the opportunity to share in the prosperity.

The virtue (the normative, moral strength) of recycled marginal risk, understand, is an accumulation marginally excised from labor but neoterically valued as consumer demand. Depriving consumers of the value needed to avoid foreclosure (the risk of default) is the moral hazard to be avoided, not the normative value to be expected.

Instead of providing strength, the cyclical value (the beta) of the marginal risk is really the source of systemic weakness. It is used to command the marketplace enough to determine its direction while, at the same time, claiming it is free and open as long as government does not intervene.

When labor suffers the detriment of capital formation ("the risk" fully assumed), the loss, you see, paradoxically, is not really a loss. It is not necessary for government to intervene and spoil the benefit. When the Great Recession deflated the housing market, for example, and forced millions out of their homes, which hedge funds subsequently bought cheap and are now renting dear to the foreclosed until eventually their homes are sold back to them for a capital gain, there is a net benefit that accrues to consumers as long as government does not try to modify it. Measuring the detriment, you see, according to capitalists, has a late-order benefit that is described as "paradoxical" because it is really a net loss in zero-sum to the vast majority of consumers.

Since, capitalists claim, labor does not have the capacity to understand this paradox, labor erroneously tries to retribute the loss (a liability that is really an asset) by unionizing and engaging in other means of collective action. According to reactionaries, demanding government intervention is the problem and not the solution in a marketplace that is fully assumed to be free and open to anyone willing to take the risk (or as it consolidates more and more with each business cycle, to freely avoid it). The really big error here, however, is that reactionaries claim big government adds risk. No, it adds regulation missing from organizing to avoid the risk; and instead of resisting consolidation of the risk, government regulation tends to support it. Dodd-Frank, for example, is now forcing small banks to merge in order to absorb big, too-big-to-fail compliance costs, which forces them to be "too big to fail." So, here we are, accumulating risk by erroneously trying to avoid it being added. This is not paradoxical, it is, rather, a cognitive deficiency that results from an affective disorder--a full-blown ideological psychosis that fully assumes selfishness is the wisdom that prudently regulates the risk, and then when it doesn't, but goes hog-wild crazy...well, isn't that paradoxical?

(Remember, the "fully assumed risk" is a pre-ordained ontology--it is the gamma risk that catastrophically presents when it is always being avoided. For capital, it is a function of resisting consolidation of labor; for labor, resisting the consolidation of capital. The risk factor is mutual. In both cases, the natural "objective" is to resist the consolidation of power, but in both cases, paradoxically, resisted by its consolidation.)

The measurable error, according to capitalists (which includes consolidated labor that organizes to equally share in the profit margin), is inflation and unemployment, like we have now. "Surplus value" (accumulating risk of a declining rate of profit derived from a rising marginal rate) as classically described is characterized, neo-classically, as a fundamental misattribution, which is a symptom of psychosis--specifically, according to reactionaries, the psychosis of giving up the "self" (selfishness) to the tragedy of the commons.

Acting in self-interest, labor organizes to share in the profits. Since the marginal profit is demanded by earned income (labor value from which the marginal value fundamentally derives), labor does not try to derive value, but to retribute, or reintegrate, the value held in reserve. Bear in mind, the more labor shares in the profit, the more the rate of profit, paradoxically, declines; and remember, a declining rate of profit is what deflation is.

Deflation, remember, is to be resisted at all cost by keeping value held in reserve at the expense of labor (which, as is plain to see, supports the risk by trying to resist it). This is what capitalism is and does--it relies on crises to increase the economic rent. As the cost of labor falls, the cost of living increases, and if we do not bail it out with the value in reserve (the risk to be consumed), we experience general economic crises.

Without the bailout that follows every crisis (in which economic leverage--the rent--exceeds the quantity of currency in circulation, like the trillions of dollars currently occupying dark markets), the full quantity of risk assumed in priority (the gamma risk) will be measurably consumed. Consumption of the overextended value (payment of the extended rent in late order, which capitalism refers to as "needed austerity") reintegrates the derivative value in a crisis (gamma-risk) proportion. This full reintegration of value (in which labor value fully converges with consumer value) is what capitalism must prevent at all cost.

If capitalism does not prevent full consumption of the risk (typically with war and welfare in various proportions, which essentially fits, or measures, the risk proportion), capitalism meets its demise (the convergence occurs). However, full consumption of the gamma risk (by resisting it with austerity measures that serve only to support it) does not necessarily have to take the highly consensual mechanics of a peaceful and prosperous pluralism (a free market) with it.

Supporting the risk by trying to resist it is the "gamma-risk proportion." It is the risk ontology fully assumed in priority. Declaring, for example, "We hold these truths to be self evident..." is to declare, in priority, empirical occupation of the policy space that determines the self; that is, government, in priority, is what allows us to freely choose our objectives, which means "We the People" divisibly define our objective reality based on self-interest.

Our founders made it clear that government, in priority, occupies the space of risk that is fully assumed. This prior assumption of risk was, and still is, based on experience. It was clear then, as it is now, that the sovereign has the power to independently define the objective (and, keep in mind, pursuing an objective gives existential identity, both divisibly and indivisibly, to our "objective" reality). Where there is an objective there is purpose.

Objectively, however, the risk ontology does not care what our ideology is. It assumes nothing--it just "is" (as Ayn Rand described it, for example, "A is A"), which is what it means for it to be a fully assumed quantum (the value to be retributed) that will fully consume us (or reintegrate) if we do not heed the indicators of impending crises.

Understand that our founders intended to empower government with all "the risk" in priority. This "risk," you see, is the fully assumed gamma risk--the angst the kings experience by always having to shift all the detriment to their subjects in order to maintain their status, empowered with self-determination. Today, want-to-be kings operationalize this working, revolutionary hypothesis with conserving consolidation of wealth and power--the essential attributes of self-determination.

Today's power elite consider themselves the keepers of the Revolution and are entrusted with keeping its morals (essentially avoiding "moral hazards," like the power to self-determine from the bottom up) by essentially ensuring a reactionary, binomial, republican form of government ("A" is always A by ensuring that the process is "A" therefore B therefore "A" therefore B...). They must always react ("A" therefore B therefore always objectively "A") to what they consider counter-revolutionary objectives, which are typically characterized as "socialist or communist" tendencies that threaten the natural, Constitutional right of self-determination.

Toggling between "A" and "B" always centers on the size of government, which essentially operates to control the risk proportion, as we previously discussed, in priority. When the risk is off (identifiably "B"), conservatives consider the risk to be "on" (too big) and liberals consider the risk to be in abatement or "off." Being always either on or off, you see, conserves the risk in a crisis proportion--it is risk prone by being operationally risk averse, which is just nuts! It is completely psychotic, but then we have people like Ayn Rand to let us know that being selfishly psycho is not at all abnormal. It is a normative identity in which our concept of good and evil is pathologically delusional.

The only objective, verifiable morality, according to conservatives (which, by process, we have to include the "B" side) is the moral hazard of government being so big that it occupies the power of self-determination--the power of the prudent regulator to occupy his or her own space. Government does not allow, but disallows, ownership of the "self" by occupying its space.

While the occupation is supposed to be mutual, Constitutionally endowed with the consent of the governed, reactionaries are always limiting ownership of the policy space in the representative form. So, you see, while businesses that are too big to fail (which occupies the space of the prudent regulator) are the model of efficiency (capable of demutualizing the risk so that only the non-elite occupy that space), government that is too big in reaction spoils the efficiency.

Government, conservatives argue, referring to Rand's Objectivism, for example, is actually the reactionary element--it wants to go back to when the king (the sovereign power) feudally occupied the space of prudent regulator with the power of self-determination. Government, they argue, reacts to diminish the austerity (the ownership) required to occupy the space of elite status, which according to capitalists is the objective (the productive incentive) that causes economic growth and expands the opportunity to earn wealth and gain power. Government, not big business, then, presents the risk to be consumed.

Even though big business axiomatically operates to increase sales with as few employees as possible (which is a contradiction, not a paradox, because increasing sales requires employment--a distribution, or more ownership of income, not less), the reaction is to always blame the size of government for the fully assumed crisis proportion. "The risk" fully occupies the space of the prudent regulator in the form of austerity in the gamma dimension rather than the income required to consent in the alpha dimension. This is big business occupying the space of the prudent regulator, not government, and keep in mind, this occupation does not "add" risk.

(Keep in mind that a paradox, by nature, resolves. A contradiction, however, derives by objective. A contradiction will not resolve without throwing it out by objective.)

In a consolidated, corporate environment, with a massive government authority to control its extent, risk is being constantly misattributed ("A" therefore "B" therefore "A"...). Constant fundamental attribution error indicates a persistent, organizational pathology, and rather than being addressed as an accumulation of errors, it is deliberately described and explained by the high priests of consolidated capitalism, and routinely believed by the laity, to be added risk.

What is added by corporate consolidation is not risk, but government authority (bureaucratic power) to mange its accumulatively derived (gamma-risk) proportion (a' posteriori). "Government is," then, fallaciously considered, "the problem and not the solution" (post hoc). If we want to create jobs, you see, all we have to do is get government out of the way.

In a neo-classical, high-efficiency, economy-of-scale corporate environment, proponents of consolidation maintain that government does not add integral value. Instead, government adds risk from which derives a failure of expectations and civil unrest.

Occupy Wall Street, for example, conservatives contend, is not a function of economic failure because, remember, systemically influential industries and markets are neo-classically designed so that they are "too big" to fail. (Being "too big" to fail means, unparadoxically, operating with pricing power that subjects the consumer--the prudent regulator--to the producer, unlike a free market, which is why, for example, we need a Consumer Finance Protection Bureau that the corporate says is antithetical to free-market mechanics.)

The economy is deliberately organized (with subjugating pricing power) so that "the best and the brightest money can buy" controls our destiny from the top down (as Alexander Hamilton envisioned it). It is when government (consent of the sovereign) occupies economic space (like the king did) that we can expect failure. So, you see, it stands to reason, conservatives contend, the problem isn't "big business," it's "big government."

(Remember that while Hamiltonians react to consent of the governed as the tyranny--the risk--to be avoided in the interest of the general welfare, the argument relies on there being a free market. There is supposed to be a clearly defined, economic space in which consent--a pure, democratic form of governance by objective that is highly divisible and thus easily measured right down to each and every individual--operates without encumbrance. It is a space fully assumed by the prudent regulator with the full faith and credit of the Federal Government. Thus, for example, we have the Federal Open Market Committee, and thus we must have a free market--the democratic form--because we have it efficiently consolidated and operating by organized committee.)

Reactionaries argue that government gets so big it occupies the space needed to grow the economy (and, as Rand argues, because it tries to operate contrary to our highly divisible, objective, self-interested nature, government naturally limits our liberty, and thus our productivity, which leads to crises). Quite the contrary, however. By consolidating, business gets so big that it occupies the space that we call government, and then government is co-opted, promulgating regulations that support rather than resist the demand for big government--consolidation.

By allowing the consumer to fully occupy the policy space in priority, the objective (our objective reality, as Rand describes it) is redefined in a highly divisible, pluralistic manner that allows for a government that governs least.

As long as the prudent regulator is subjected to the objectives of consolidation, the consumer always occupies the toxic space where risk is dumped (de-mutualized) to presumably protect us from its aversion.