Bloody Shovel 3

We will drown and nobody shall save us

Posts tagged as: economics

Easy peasy economics

So it seems that the European Central Bank found a way to solve the whole sovereign debt crisis. As told before by that insufferable jew , instead of buying government bonds directly, 'monetizing sovereign debt', they are just funelling cheap money (1% interest) to private banks, who then use the money to buy southern government bonds, driving down the yield, but still getting around 4%, which is a handsome profit. So banks are happy, governments are happy, and the ECB gets to keep the euro.

Funny how Yglesias hates the scheme, because it means that by choosing not do funnel the funds, the ECB can pressure governments into do its bidding. And that's 'evil'. Well he seems to forget the governments can choose to have a budget surplus, which would make them free from ECB meddling. But governments having sound finances is beyond good or evil, its unthinkable.

Funny thing is he also said that he 'suspects' the thing will end poorly. What does it mean he 'suspects'? Means he doesn't know shit. Yet he has a massively popular blog on finance. I used to read a lot on economics, and have a good friend who is an authority on Austrian economic theory. Yet each day it passes this idea gets a stronger hold on me: economics is like theology. Some theories are sounder, some are crazier; yet nobody has the damnest idea. All our economic authorities are just trying shit to see what hap...

The Last Frontiers

Larry Ellison, a man of taste and intelligence (see his awesome Japanese house), is alleged to have said: "I used to think, now I just read The Economist". Well I'm sure he didn't say it because of the quality of the writing there. Or because it's always right. Or because their accurate predictions. The Economist is full of crap. But it is the voice of the Establishment. Damn, the Rothschilds own the paper. It doesn't get more ruling class than that.

So what Ellison meant was: "I used to think a lot about how to make good with the Establishment, never knowing what they really wanted. Now I just read the official Establishment paper, The Economist, and follow their orders. See my billions?"

I also used to read The Economist and get outraged at the falsities and general BS I found there. Then I grew up and understood that the Economist isn't descriptive but prescriptive, and also noticed that what they suppor has a tendency to happen. The ruling class that The Economist represents is basically the bankstas/investment types who are constantly searching for yield, manipulating anything on their way. So when The Economist suddenly starts to talk about some country, be alert as the odds are the country will be open for business very soon.

See this news on Mongolia mining boomContinue Reading →

Growth alchemy

Ed West, the journalist with the biggest balls in Europe at this moment, left this piece of wisdom in a recent article of his: The life of a man can be broken up in three stages: Worrying about sex, worrying about money, and worrying about health. It's really a brilliant way of putting it. Well it happens that I just got into the second stage, so I've been thinking.

I am no economist, although I have a fair knowledge of economic theory and the various schools. I don't really know whether Uncle Bernanke will produce hyperinflation, (I think he doesn't even know himself), nor do I know if NGDP targeting is sound or not; as I said I'm no economist. I don't really understand all the graphs and concepts and mechanisms that people talk about in Bloomberg et al., but beyond that I can see a pattern. I'm good at that.

Now we're in the middle of a global recession, with ungodly amounts of debt to be serviced. All economist agree that we need 'growth' to pay for the debt. The disagreements seem to be about how to achieve that 'growth', whether to make structural reforms that allow for more productivity, or to just inflate the currency and pay the debt with the resulting nominal 'growth'. There are merits to both positions. There is also a huge problem to both.

Growth is dead. Everybody knows the Ehrlich-Simon ...

Rothschilds desperate with China

The Economist just opened a new exclusive section for  China, taking China out of their Asian. So China is the new focus country of The Economist, besides the US. Here they explain why the interest: they will use the section to argue for political reform.

Read the whole thing, it's the most disingenuous piece of journalism ever. I'll take some representative quotes:

 But our interest in China lies also in its politics: it is governed by a system that is out of step with global norms.

So dissidents such as Yu Jie, who alleges he was tortured by security agents and has just left China for America, are harassed. Yet that reflex will make the party’s job harder. It needs instead to master the art of letting go.

for China’s rise to continue, the model cannot remain the same. That’s because China, and the world, are changing.

Freeing up the financial system would give consumers more spending power and improve the allocation of capital.

freedom to organise can help, not hinder, the country’s economic rise. Labour unions help industrial peace by discouraging wildcat strikes. Pressure groups can keep a check on corruption. Temples, monasteries, churches and mosques can give prosperous Chinese a motive to help provide welfare. Religious and cultural organisations can offer people meaning to life beyond the insatiable hunger for rapid economic growth.


Smart Flight

A friend of mine accuses me of being a "hedonistic sob" (his words). That's because I eat buckwheat crepes for breakfast, eat out in the weekends, and drink Masala Chai at home. I also watch international movies in a Macbook and own two smartphones.

My salary sucks, but I don't have children, and my woman is low maintenance, which helps. But the biggest factor is that I live in a pleasant neighbourhood, and I don't pay the rent myself. I couldn't afford the rent of where I live right now. But once you take that away, life can be really good with little money. If you can cook (or your woman can) then eating reasonably well at home is cheap. Torrents and ebook readers mean entertainment is cheap, or essentially free. Socializing can be expensive; just cut the booze and meet your friends in their houses.

The root of all misery is rent. And for families, schools. Housing is hideously expensive anywhere in the world, there's no safe haven. It's expensive in North and South Europe, in America, in Asia, wherever you go. It's getting worse in most places, bubbles aside. And schools also are increasingly expensive. That's what makes life hard, what impels people to work long hours in pointless jobs, what forces women to work outside the home and make their families miserable.

Why housing and schools? They have something in common: the value of sharing them with good people. Besides the actual quality of the housing, the aesthetic value it may have, the real val...

QUANGO empire

What pushes Globalisation? Michael Pettis says that Globalisation is caused by inflation. Which is an interesting theory. But I'm not here to talk about economic theory. Let us say in more general terms that Globalisation has two vectors. One is economic; globalisation is pushed by money in search for yield. The other is ideological; globalisation is pushed by a faith in search for converts. Both can work together and add impulse to the process, but they don't always do, and sometimes they work against each other.

I've been blogging for a while about the last addition to the Cathedral's empire, Myanmar. What was until last year an isolationist military regime has in a very short time unconditionally surrendered to the US State Department. The US was ecstatic for having acquired a big vassal with 60 million people in China's backyard. Clinton was there, Petraeus was there, Soros was there. The generals went home, elections were held, press controls abolished, the internet legalised.

I'm presently in the international trade business and I hear and read every day how the hype about Myanmar built up among the business community. Famous Soros disciple Jim Rogers is on the record for his excitement about a new virgin country ready to accept investment dollars. Asia Business ...

Tribes and Jobs

With all the late talk about median wages falling and the rich getting richer, it seems capitalism is becoming unfashionable again. Now I don't define capitalism by any economic or policy parameter. I define capitalism as the system that supports and gives status to business owners. When you see students demonstrating against "capitalism", they aren't arguing against private property. They won't share their precious iPhones, will they? They're cool about people owning stuff. What they don't want is status linked to the amount of property you own. I think this theory applies to the golden age of the labour movement a hundred years ago.

As a non billionaire with little interest in sleeping 4 hours a day and donating millions to sodomy activists to become one, I am naturally inclined to sympathise with the anticapitalists. Not only wages are going down, hours are going up,  and the poor fuckers who can still find a job are caught in a rat race of who is able to outwork others and lick more ass while convincing themselves they love it. It's harsh.

So the push for higher taxes on rich people and higher median wages is understandable, if simplistic. But that's only one part of the picture. As easy as it is to blame everything on business, workers are a handful themsel...

On Immigration

Arnold Kling is a smart fella. He reminds me of those girls who being pretty themselves, always go out to bars bringing a huge fat and ugly friend. They thing they look hot in comparison, and they do. But their friend is so disgusting that no sane man is going to approach anyway.

It seems he realised the problem and he now has a blog of his own. Again there's something girly about it. He says he started the blog because he "missed being part of the blog conversation". But most of his posts are short, dense and controversial, but he rarely responds to comments. So much for "conversation". He's very good though, probably the best economist blogging out there. But there's also something quite unpleasant about the guy. He sounds like me when I'm in a bad mood. Cold and dismissive.

Economics can be defined in many ways but let's say it's the study of the interaction of humanity and natural resources. That is a very important matter, and that's why economists today are held as the high priests of the modern world. They study important stuff. Yet so many of them really don't understand the implications of their discipline. There is a shibboleth to determine whether an economist actually has a smart worldview, or is just another narrow-minded academician. Immigration. Sadly Arnold Kling can't pronounce his palatals.

See his post on immigration. For all his talk on being charitable to...

Demanding work

Foseti asks What to do? i.e. what should we (people who understand that society is going to hell and why) do to prevent/palliate/fight the collapse.

It's a good question. But it's so 2012. Or 2010 maybe. As bad as dysgenics/balkanisation/moral collapse is, the sense of urgency has been totally replaced by the new Big Story. Which is the automation, and the Neo-Luddite panic that is sweeping all over the punditsphere. You know something is Big when Half Sigma just won't shut up about it. The guy really has a good smell for what topics are popular. I guess that being a Jew on NYC will do that for you.

Of course the new automation economy is a bigger news story than The Fall. Everyone can see how automation might affect them personally, so there's a general panic mood floating around. Even Razib had a gloomy post on it.The Fall is a metaphysical concept, it normally happens slowly, and hey we can all think of ways to profit from it. But if Skynet is happening we are all screwed. People are scared, there's talks of Butlerian Jihad around. All of which is justified. Factories are getting robotized, and good software is making many off...


One of the most solid and enlightening findings from modern psychology is the extent to which people are tribal. It does seem that 80% of human behavior is used for social signalling. Most of what we do and say has little rational content, and is mostly intended to signal belonging to a tribe or some subset of it. Even most linguistic behavior, and languages themselves, are little more than badges of tribal membership.

Not to say that's a bad thing; you can't make bricks without clay, evolution works with what's available, and human brains were selected for sociability for a reason. But we happen to live in the post-Enlightenment, and the general assumption is that people are rational. Of course if people were rational they would agree in most issues, yet they don't. That's a priori very hard to understand. The typical answer to the paradox is that some people are evil. Which does explain some of it, but doesn't really solve the problem, in fact it makes it worse by exacerbating conflict.

Everything makes much more sense when you understand that 99% of disagreement is due to people's brains being tribal. The basic model is that people are hard-wired to choose a team, stick in it, and defend it no matter what. In the same way as there is a critical period for language learning (a vast majority of people are physically incapable of properly learning a foreign language after infancy), there probably is also a critical period for tribe-choosing. If you are a lef...


I think people are not getting the point of my last post.

Everyone is putting forward their ideas for the "moron problem" as Jim Donald puts it.

Honestly I don't think that's rocket science. We know what to do. We do what we have been doing for centuries. Ask Gregory Clark for details.

But that's not the thing. Nobody gives a shit about the long term sustainability of society. What people care about is feeling good about themselves.

Now imagine there's a choice between:

1-Being part of a tribe/thede/country in which the low-skilled are put to work in coal mines and worked to death without leaving descendants.

2-Being part of a tribe/thede/country which is so fucking awesome that poverty doesn't exist because we take care of everyone!

Well obviously 2 is a superior choice. And that's because people don't want to see poor people around. They don't want to be reminded of the existence of poverty. Lest their become poor themselves.

What's the point of being rich if there are poor people around in the same country? What's this, India? Not even Indians like India.

And that's why everyone likes the minimum wage.

On shits and fans

Neoreaction is neo because it is new. There has always been a reactionary movement, descendants of De Maistre fiercely opposed to leftism, or modernity in general, but they were based on a defense of the past. In a way, old reactionaries behave in a sort of territorial way. If the past is a foreign country, reactionaries are patriots of that country. The further the culture changes, the more your country becomes a foreign one, and you naturally want to fight the invasion. So old reaction was (is) a sort of tribalism that cut across space-time.

Neoreaction is distinct because it has modern science behind it. It has HBD, which tells us that people are physically and irrevocably different, ergo societies must also be different. It naturally follows that any society that bases itself in denying reality will collapse. But of course neoreaction also feeds on cognitive science, which tells us that peoples brains are wired with dozens of cognitive biases with cloud our thinking. Perhaps the most famous one is confirmation bias, which says that people tend to find more likely to happen the things they want to happen.

Confirmation bias is so pervasive that you can find most people do it every single day, and those on the Dark Enlightenment Community (H/T to Handle) are no stranger to it. In politics, confirmation bias mostly presents itself as prophesies of doom blamed on your enemy. Doom that must surely happen during your lifetime; it's no fun if you aren't there to...


Sorry again for the slow posting, but I've been busy with work et al. It's not only Civ, I swear. I'm a productive member of the community. I don't know quite which one though.

Most of human life can be described using Bell Curves and Pareto distributions. Say blogs and comments. The quality of comments in any given blog is distributed normally, and 20% of the comments have 80% of the insight. The bigger the blog, the more numerous the commenters, the most pronounced this effect is. In any popular blog, most comments are probably garbage. But once in a while there's  marvelous gem that kinda justifies having the blog on the first place.

On Cheap Chalupas, Why are CEOs salaries rising? Comments are mostly divided between "because CEOs are John Galts superior specimens and they deserve the money" libertardians and opponents claiming a conspiracy. But you don't need a conspiracy if you talk sense, like Justin does:

My personal guess is that we are just dealing with ignorance. Back in the day supply lines were short, personal connections were obvious, prices were clear, and you had a dozen other firms to compare CEOs and see what happened if you went with the bargain rate CEO option.

Today, supply chains are deep and nigh unto incomprehensible. Personal connections are vastly more important, but you need to know the right wonks and staf...

Bitcoin and modern government

So Bitcoin has reached one thousand dollars, and suddenly everyone out there is freaking out. Early adopters rejoice, crazy bullshit marketers change their minds, smug bullshit marketers don't, tenured bullshit marketers keep their options open. Everybody's onto it.

It seems that the sudden spike owes a lot to the sudden increase of Chinese people buying into Bitcoin, with Bitcoin China having become the biggest exchange worldwide as of now. Why did this happen? Bitcoin certainly is a godsend for Chinese people who like to save money, but are victims of rampant inflation, and have nowhere to stash their savings beyond real estate, which has fueled a really insane housing bubble, with whole million-strong cities made of crappy apartments being built just to absorb the demand for storage of value. Bitcoin solves the problem and it is also easily transferable, which is also a godsend for China where capital controls make moving money abroad a real hassle.

One, which is prone to think of modern government as a rapacious Leviathan who uses its tremendous power to prey upon their citizens as matter of instinct, would think that the Chinese government must hate Bitcoin and everything it stan...

High Level Entitlement Trap

I wrote recently about the High Level Equilibrium Trap in which China had fallen to in the modern era. Point was that Chinese labor and infrastructure was just efficient enough so that developing new machinery was never worth the trouble. Not to say they didn't invent machines, but they never caught on, in a similar fashion to Classical Europe which we know was full of cool gadgets which the Graeco-Romans just couldn't be bothered to use. Accumulation of capital makes less sense when you're banging Thracian slaves in your Tuscan villa since puberty.

A famous anecdote is that China had automatic spinning wheels for hemp already in the 14th century, but after the introduction of cotton it fell into disuse. The funny thing is that instead of trying to develop something similar for cotton fibers, they just went back to hand spinning and never bothered automatic a process that had been automated for centuries. They just didn't bother. Or in modern parlance, the incentives just weren't there. Also see this story about why firearms never went mainstream in China: their bows were good enough.

This piece of history is universally acknowledged as a bad thing, as machines are good, more productive, and the inability to develop machines is a bad thing, a very bad thing as the subsequent history of China shows. People...


A long standing debate inside the reactosphere is the question about what is driving the push for mass immigration into developed countries. Why would anyone argue for bringing millions of, to use PC speak, low-skilled migrants from Third World countries? Yes they are cheap, but it's well established than in the long run they cost more in externalities than whatever you could save with their cheap labor. Not to speak of criminality, dragging down of school performance and just general tackiness.

The most general, I'd say intuitive theory about why the establishment wants to bring all the poor of the world into rich countries is that they are cheap fucks who want cheap labor to exploit, and use as servants in order to feel classy and superior à la Downton Abbey. Let's call that the Sailer theory, after Steve Sailer's stellar takedown on Mark Zuckerberg's pro-immigration lobby.

I am pretty comfortable following my instincts and blaming the plutocrats for trying to transform rich countries into Brazil in order to enjoy the feudal lord lifestyle. But everytime I'd do so, the whip of neoreaction Vladimir would come by and strongly argue against it. See an example:

The idea of “cheap labor” as a major motivator for the political activity of businessmen is, while not completely irrelevant in practice,...


So the Japanese government has officially announced it's considering bringing 200,000 immigrants per year, in order to stave off demographic decline.

They have announced it as part of the Growth Strategy driving this marvelous thing they call Abenomics.

I don't need to say how misguided this idea that bringing migrants from wherever is going to result in economic growth. It should be obvious that in the civilized world, actual economic growth is impossible. Not gonna happen.

Now some might bring up the old Paul Erhlich/Julian Simon debate on Malthusianism. Julian Simon won that debate, and proceed to write a series of upbeat books exhorting us to have faith on Human Ingenuity.  You see, people always come up with good ideas, and everything turns out ok.

The Erhlich/Simon debate was about resources, with Ehrlich saying they would run out, and Simon saying we'd found more of them. What's funny is that nobody treated Human Ingenuity as a resource. Something that also may be depleted. I haven't read his books, maybe Simon thought better extraction techniques would end up discovering more Human Ingenuity? It's not hard to make the metaphor on education and mining.

Leaving that aside for a moment, if you take human ingenuity as a standard resource, it is clear that it's production has been declining for a while. Just take a look at the birthrates. Even without considering differential birthrates ...

Foragers and Farmers

I found an interesting tweet by a Japanese academic. Robin Hanson might enjoy it.

Let me translate: History shows that when humans moved from foraging into farming, this allowed for people who did not need to engage in hunting (bureaucrats, scholars, warriors, etc.), which vastly expanded the range of human activity.

Nowadays we force professionals to do sales, to participate in long meetings, to type their own reports and other paperwork, which is the same as forcing everybody to engage in hunting. We are going backwards.

Making Virtue out of Necessity

Or, making virtue out of lack of lack of other paths for upward mobility.

The most important topic in social science, the humanities or however you want to call it, is what drives cultural change. Things change, that is obvious enough, and humans have been discussing it since they ever started doing abstract thinking. We understand a lot of change now. Physics tell us why the physical world changes: by obeying the laws of physics. Biology tells us why living things change: through evolution. What we still haven't figured out is why societies change. Cultural change. You can define culture as behaviors inherited through non-genetic means. We still haven't quite figured out the laws of cultural change. It happens they're immensely complicated. We know it has a lot to do with politics. And it happens that the very act of trying to figure culture out is a political statement, so it's hard to get honest inquiry running. The stakes are too high.

But still, I've always been fascinated (I'd say obsessed, but the word is quite abused these days by all sorts of posers) by why different societies do different things; and how people do different things across history. Even the same persons end up having different opinions over time. Of course you could buy the Christian-Enlightenment paradigm and think that they've just earned new information over time. You see, they suddenly realized that gaymarriage is a human right. Or you may take my Darkly Enlightened behaviorist i...

Cost Disease

Cost disease. Why is everything so expensive?

This is the asexual take. This is the sexual take.

Not much to add myself. Just a small observation. Look at the graph:


I wonder what the graph of "female participation" looks like. That would include teachers, administrators, lobbyists, women with influence in the school district, etc.

Methinks that graph would look rather similar to the blue one. Perhaps with some time lag.

This also should apply to the other stuff: healthcare, subway construction, etc. It would be nice to look at the data.

The Economics of Democracy have Stopped Working

Everybody reading this blog may have noticed that I was ecstatic about Trump's election. I was really happy. I went out that night and spent days giggling with a MAGA hat on watching the progressives melt down.

That was of course a tribal feeling. I used to look down on people who behaved like that when their soccer team won. "It's not your team, dumbass, it's just a bunch of overpaid foreigner jocks". But the same way that most middle class men in the West put their identity in sports, I've always put mine in politics, and having Trump, the closest thing in decades to be close to my thinking, win the election to the highest office in the world, was a huge, huge piece of validation. Progressives say that all politics are identity politics. And it's true. Human is a social animal, said Aristotle. And the core of human social behavior is forming identity groups (i.e. tribes) and fight each other. And a guy who appeared to be of my own tribe had won. So of course I was happy.

I was also kinda confused. The core part of neoreaction's theory is that the contemporary political game is rigged so that our tribe just can't win. The game is set up so that the "Cathedral", the power base centered on the US bureaucracy and satellites and it's PR apparatus in the media and universities just control everything. And yet Trump won, with a platform set up by Steve Bannon who is by any accoun...

Acceleration by Yang

Tl;dr. It really is that simple.

Long version:

I’ve never voted. Well, I lie, I voted once. I was 18, and my mother sorta forced me. It also felt like some rite of passage, you know, you grow to 18 and you get to do grown-up stuff like voting, having a voice in the political process. I’ve never been into rituals though, and I felt stupid immediately after putting my vote in the box. I didn’t even like the guy! I thought he was retarded. All of them, really. I still do.

Of course ever time there’s an election people would ask me now and then who I’m gonna vote to. I evolved a series of bunch of canned answers. First one was “Nah they all suck”. Then I read Bryan Caplan’s Myth of the Rational Voter and started saying “one vote doesn’t count anyway”. This triggered huge discussions if there was even a single Boomer at home. “But if everyone thought like you nobody would vote!!”. 

-“Well sure but my not voting doesn’t influence other people’s behavior”.

“But you have to vote, if nobody voted…”

-“It doesn’t follow that if I don’t vote then other people don’t vote”.

“But you have to vote, if everyone did like you”

-"Where on earth are you...


A few weeks ago I had a short exchange with Nick Land on Twitter on the issue of debt.

Debt is a huge issue, a big part of what's wrong with the fabric of modernity, a big factor of what's driving modern civilization into collapse. And yet it has remained largely underdiscussed in these circles. Moldbug, who to the end still remained something of a libertarian, did have a keen interest in finance, and after the great crisis of 2008 made a series of long posts on financial crises and how to design a properly sound banking system. His "favorite topic" he even called it. Well it's certainly not my favorite topic, nor I'm sure it's Mr. Land's, but it's nonetheless a fascinating issue, and more importantly, a critical one.

Again, my approach to all intellectual issues is to think about its history, and the one thing that strikes one when thinking about debt is how easy-going the ancients were about them. Sovereign bankruptcies were routine, and nothing really happened. But most importantly, debt jubilees were *very* common. Mr. Land...

The reactionary tax code

What are we all doing here? By 'here', I mean the internet, by 'we', I mean the sort of person who very kindly reads this blog of mine regularly and/or writes similar stuff in blogs or Twitter or whatever.

My original goal was to understand what is leftism, why leftist people exist and why our societies are decaying by enabling leftism to dominate all the levers of power. After years of writing, years of reading, and years of talking with like-minded gentlemen over the internet, I think I've succeeded at that task. You can read some examples of it in the sidebar as "best posts".

I've also been meeting some readers in person over the last few years, and they all agree that the "analysis phase" of this little movement we've come to call neoreaction is done. Moldbug started the whole thing, asked the right questions, showed how everything we thought we knew was wrong, then he left to build interesting stuff. Nick Land asked another set of right questions, found out nobody dared answer them, and then he left to write horror fiction. I here have done my little part on finishing what I considered was most important: an analysis of the history and the psychology of leftism.

Well, that's done, we know leftists are sociopathic status maximizers who seek groups of people who, for contingent or increasingly genetic reasons, have low status, and thus a great incentive to disturb the political process and create ...