Why The Next Financial Crash Will Be The Last

or, an Outline of Everything I’ve Read on Twitter in 2020 so far

  1. The most basic criticism of capitalism is that it is inexorably tied to growth.
    1. Capitalism is the most efficient way to allocate resources.
    2. Efficiency always favors scale.
    3. Scale favors inequality, because greater extraction of resources is enabled by more underclass, so resources are effectively allocated to create larger and larger underclass, with an elite class almost as byproduct. 
  2. We are now at a scale where resource extraction of some form will break some kind of infrastructure required to maintain growth.
    1. The key types of infrastructure that enable large societies are: finance, energy, water, food, housing, military and policing, politics, and environment.
  3. Of infrastructure types, finance is the most fragile and environment is the most vital. So finance will likely break first, and the environment will probably break last – reserving a healthy respect for the combined odds of an unlikely explosive event in any of the other types.
  4. What we are seeing in 2020 is a large scale demonstration that money isn’t an undeniable law of the universe – it is a social convention that is strong enough to call fact, but weak enough to deny as real. In shorthand, we can label people who both see this and feel this as “radicalized.”
    1. We can call people who act on this as “extremist” – while acknowledging that there are many instances where what is now considered just was first considered extreme.
  5. In the current demonstration of financial fragility, we can already see that the owners of the capitalist system will succeed in maintaining the most efficient allocation of resource to reward scale without destroying the system. 
    1. The underclass will receive the minimum concessions required to continue to reach greater scale for continued extraction of resources.
  6. Scale is now at a level that enables the largest and fastest dissemination of information in all of recorded history. The percentage of radicalized people is a minority, but it is larger both in size and in proportion than it has ever been.
    1. There are many very cool things about the dissemination of information and associated technologies, but these are a side show.
  7. Since information feeds radicalization, there is no way to stop the growth of radicalization other than increasing authoritarianism, which is the only way to decrease the flow of information at this point.
  8. Capitalism will therefore allocate resources to authoritarianism because that maximizes the scale of the underclass required to extract maximum resources.
    1. The underclass will receive only the amount of goods and services required for them to accept the devil’s bargain of surviving for further exploitation under authoritarianism.
  9. The size of the radicalized population is large enough to foretell a kind of civil war in the United States. Capitalism is efficient enough to allocate resources to preventing this war from becoming one of blood, though with a “blood and soil” culture as a potential byproduct of the authoritarianism required to slow radicalization.
  10. The most peaceful outcome to hope for is a slow balkanization of the United States. It’s hard to see that trajectory ending in anything other than states not united – not culturally, politically, economically, or legally.
  11. Hopefully a bloodless war is coming first, even if a bloody war might follow later. Since the financial system is the most fragile of infrastructures required to support capitalism, it should not be surprising to see it collapse first.
  12. The collapse of our financial system has now been demonstrated in periodical financial system shocks going back almost four decades.
    1. This started with the initial petrodollar shock of the ’70s – finance is intertwined with energy extraction, which of course drives environmental exploitation.
  13. The observable cracks in the financial system are so large now that it’s hard to believe that an even larger financial system could possibly survive the next crash, which would be due to come in about another decade.
  14. The real limit is not the size of the cracks but that the efficient allocation of resource required for the masses to accept authoritarianism is becoming increasingly indistinguishable from what authoritarians want people to call socialism.
    1. In other words, the next blowup will only be repairable by allocating even more resources to the underclass, which increases the ability of the underclass to communicate and understand radicalism.
  15. The capitalist system will stop short of allowing socialism to end capitalism. As a last gasp, it will empower authoritarians who would kill people if helpful to maintain capitalism.
    1. These people would be largely but not exclusively radicalized. There will be plenty of collateral damage.
    2. These people would be almost exclusively underclass.
  16. The peaceful Hail Mary to hope for is the rapid advancement of technology that would replace human labor with robots and artificial intelligence.
    1. The excess humans would be placated with limitless entertainment, legalized drugs, and universal basic income.
  17. Despite our best hopes, the most likely outcome is that the next financial shock will be the last, either through failure to scale or a war that necessarily includes the destruction of the financial system, which can theoretically be rebuilt under an authoritarian regime. 
  18. There are really funny jokes about each and every one of the points and subpoints above.
    1. The ones about the subpoints are the funniest ones.
    2. A plurality of the jokes are about sex, which means they are the most obvious ones, but doesn’t mean they’re not the funniest ones.

FAQ

WTF is this?

A few months ago, I decided to radically increase my consumption of Twitter. Reading a constant stream of information, I never really took the time to try to assemble everything I’ve learned into a coherent narrative. Now that we are in Covid-19 shelter-in-place, the combination of a huge amount of free time and a rapid amplification and culmination of every message I’ve read previously compels me to write an outline of everything I’ve read recently.

Do you want to argue about this?

No. This is not an argument. This is an outline of everything I’ve absorbed on Twitter in 2020, in the order of a coherent narrative. I’m aware that there are arguments against every single point. I did not include any of them.

I’m aware that my sources are biased, both in my selection and in their content – that is how Twitter works. I’m aware that there are many omissions. I’m aware that some terminology is clumsy, or confusing, or potentially offensive. I’m aware that there are missing perspectives, and there’s a glaring lack of data or even citation. The lack of citation may seem particularly galling to many people. I’m not interested in arguing about any of this.

Are you aware that you’ve made an error? If I explain it to you, will you fix it?

No – if I was aware of an error, I wouldn’t have made it. If you try to explain something to me, I might listen, but I probably won’t go back and “fix” this outline because there is nothing to fix – it’s an accurate outline of what I’ve read on Twitter. Perhaps if there is another pandemic and that gives me free time instead of killing me, I will include your explanation in another outline. I don’t think I’ll want do do this again during this pandemic. I should probably get off of Twitter.

Are you aware that people smarter than you disagree with you?

Yes.

Do you think you’re original?

There is nothing original here. It is an outline of what I’ve read, which means that someone else said it.

Don’t you think you’re missing something?

No. This is an outline. By definition, it excludes the vast majority of content. It also excludes a huge number of relevant historical events, fascinating theories, and all sources not mentioned frequently in my Twitter feed, which necessarily favors time in recent living memory. 

Whatever it is you think I’m missing: If I’m aware of it, I left it out on purpose. If I’m unaware of it, then I didn’t find out about it or didn’t remember it for this outline anyway.

You don’t even mention the pandemic – don’t you think it’s relevant?

The pandemic is a proximate cause of many points in the outline, and gave me time to write the outline, but is not intrinsically important to the points of the outline. The exact same outline could have occurred in an event of an alien attack, assuming the aliens were defeated. In theory either the pandemic or the aliens would end up making this outline irrelevant, but I did not find that theory interesting enough to outline.

Whoa, you mean like how Adrian Veidt fabricated a fake alien octopus to attack the Earth in the hopes of uniting everyone in peace? Do you think that Elon Musk is like Veidt? Do you think the Chinese regime fabricated the novel coronovirus as a subtle act of war, or even as a devious act of peace, à la Veidt?

I too loved The Watchmen. Sorta, he wishes, and no.

What do you think about this technical solution?

This is an outline of what I’ve read on Twitter, it’s not a problem solving session. In any case, all relevant technical solutions are covered in 6.a., 16, and some of 16.a.

Aren’t 5.a and 8.a the same?

No. 5.a. refers to monetary concessions to the underclass in an attempt to repair a financial shock. Such a repair attempt was just passed by the U.S. Senate, and is a current example of point 5. 8.a. refers to goods and services produced by a capitalist system for the underclass, which even under the authoritarianism noted in point 8, can be relatively comfortable. That is why it’s called a “devil’s bargain.” 16.a. is the best case outcome of the devil’s bargain.

Why are there main points and subpoints?

It just seemed to me that some points were not truly necessary to a coherent narrative, but very helpful to understanding a related point. I put these in as subpoints but maybe could have made them main points or probably could have left them out entirely. 

Also, as mentioned in the outline, subpoints tend to inspire the best humor.

Your jokes aren’t funny. Also, there are many things I don’t like about you. I demand that you explain or prove anything you’ve written. I challenge you. You are worthy of neither attention nor admiration, only my unending scorn.

That is not a question. This is a FAQ, which means Frequently Asked Questions.

Do you believe anything you’re saying here? Does this outline align in any way with your personal beliefs or political positions?

Yes, some of it and somewhat.

So then is this your manifesto?

No. This is an outline of everything I’ve read on Twitter recently, assembled in the order of one coherent narrative. This is my manifesto.

Again, WTF is this?

Again: this is March 2020 and we’re under a shelter-in-place order. There’s not a lot to do.

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