As Faustian culture moves further along the path of civilisation, Spengler predicted that we should start to see a dynamic he called Caesarism in politics. By this he meant the rise of populist demagogues representing the interests of the public against the capitalists and their allies in the public bureaucracy. In the last post, I noted the ascendancy of law over honour in modern society. One of the drivers for this is the benefit that capitalists derive from excessive laws which both further their interests directly if the law is written in their favour and indirectly by creating a large administrative (and therefore financial) barrier to entry which prevents competition in the marketplace. An excess of laws is to the advantage of the capitalist class and the mandarins who administer the laws. This alliance between capitalists and the public bureaucracy is called the “elites” in modern parlance. Thus, the WEF meeting taking place in Davos at the moment includes billionaires, politicians and bureaucrats from various countries.
Caesarism breaks this dynamic. It sees the rise of charismatic rulers who win support from the public by counteracting the power of the elites. The Caesar achieves this by appealing to something higher than law and financial interest. It’s the promise of a return to an honour-based system but not one that has grown up organically in the culture phase of the cycle. Rather, it’s a facsimile of real culture. Trump and his Make America Great Again is a paradigm example of Caesarism. So, in its own way, was the Brexit vote in Britain.
For all kinds of reasons, the appearance of Caesarism in Australia seemed incredibly unlikely prior to corona. And yet corona, probably quite by accident, ended up looking an awful lot like Caesarism. One of the weirder things that I heard right at the start of corona was the phrase “the virus is real but the economy is not.” Setting aside the truth of this statement, it reveals something that is a cornerstone of the drive to Caesarism; namely the denigration of the bourgeois status quo. The economy is not real. This represents a desire: I want society to stand for something more than money. That is what the Caesar promises and he doesn’t mind how he goes about getting it. In Australia during corona, we saw police brutality, radical government intervention in civil society and a complete disregard of the financial ramifications of the measures. This was arguably a textbook example of Caesarism with Victoria’s “Dictator” Dan Andrews leading the way.
It’s one of those ironies of history that corona was a blow to Trump’s populism in the US while in Australia it manifested as exactly the kind of authoritarianism that Trump’s opponents had warned the orange man would enact on the US public. Prior to corona, Australia seemed like the last place you’d expect Caesarism to manifest. Australian politics had been a snoozefest for decades. The only interesting things to happen have been Prime Ministers getting stabbed in the back by their party. Australians are cynical of politicians and this is part of an overall cultural aversion to high achievers known as Tall Poppies Syndrome. The Australian economy also lacks the dynamism of the US which means that the capitalists here have little internal competition and therefore less need to pursue political agendas against each other. The last time we saw the capitalists directly intervene in democracy was when the Gillard government attempted to levy a mining tax. Meanwhile, Australia’s place in the inner circle of the US empire has given a stability to our foreign affairs with just the occasional need to send a small number of soldiers to futile wars overseas. All of these factors mitigate against the need for Caesarism and made the corona response such a surprise.
Now that Caesarism seems back on the agenda in Australia, especially with the prospect of economic upheavels ahead, it’s worth looking at other examples of Caesarism within Australian political history to see if these might give us some clue of how it might manifest here in the years and decades ahead.
The Great Depression was obviously a time of stress on the political system. Australia was still working out its new federal arrangements internally while also being tied to the British Empire financially and politically. Thus, when Britain dropped the gold standard this had a huge deflationary effect on the Australian currency and politicians here had to also drop the gold standard to depreciate the Australian dollar and get exports to rise. Meanwhile, the individual states held significant power which reduced the ability of the federal government to mount a coordinated strategy to deal with the economic problems. To give an idea of how little coordination there was, different states still used different railway gauges at the time meaning trains had to stop at the borders and everybody would get off and walk across to get on a different train to continue the journey.
The then Prime Minister, Stanley Bruce, set out to deal with these issues and one of the outcomes of The Great Depression was greater centralisation of power in the federal government. This process of centralisation has continued ever since and is part of the reason why corona came as such a shock. Australians woke to realise that, not only did state governments still exist, but they could do things like shut the border and prevent you from seeing your family or stop you from travelling more than 5kms from your house. Who knew?
Back in The Depression, states had far more power than they do now and that power meant the ability to challenge the federal government. That’s exactly what New South Wales Premier, Jack Lang, was happy to do and this culminated in a constitutional crisis that saw him eventually removed by the Governor of the State in 1932. In terms of Caesarism, it should be noted that Lang was not challenging the capitalist system. Far from it. In fact, he was advocating for Keynesianism at a time when that was not the dominant economic ideology. Although he would lose the battle at the time, his kind of economic policies would later become the standard way of dealing with economic downturns. We saw this most recently with Prime Minister Kevin Rudd’s helicopter money during the GFC. Corona represents another example. Although we are nearing the end of the Keynesian paradigm now that debt is at levels that are clearly never going to be repaid.
What was relevant about Lang was the extent to which he was prepared to go to achieve his aims. This included using the machinery of state government to defy the federal. At one point, he even withdraw all state money from government bank accounts and stored the cash at the Trades Hall, thereby ensuring the federal government could not get access to it (this is a strategy individuals would do well to consider in the time ahead). After his removal from power, it was noted by government insiders that Lang had even considered placing the Governor under arrest. This could likely have resulted in the Australian army being sent in to take over the state of New South Wales.
It’s this transition from law to brute force, or at least the threat of force, that is a hallmark of Caesarism because the Caesar represents a return of The Warrior archetype against the capitalist. The use of force brings to mind another episode from state politics, one which is relevant to recent global events.
Joh Bjelke-Peterson, aka The Hillbilly Dictator, was certainly a proto-Caesar. In 1971, the South African rugby team was touring Australia at the height of the anti-apartheid protests here. Bjelke-Peterson decided to declare a month-long state of emergency for the sole purpose of quelling the expected protests. That’s right. Justin Trudeau is not the first to think of that tactic. Of course, Bjelke-Peterson’s politics were the opposite of Trudeau’s. The point is not the ends but the means that are available to a potential Caesar and one of them is declaring states of emergency where none exists (of course, there are far more famous and historically important examples of this idea).
Bjelke-Peterson also practiced a tactic of Caesarism that was adopted by the Victorian State Premier during corona i.e. the daily press conference. Bjelke-Peterson referred to it as “feeding the chooks”. The media needs stories and a politician is in a position to give them something easy to write about. Trump did something similar during his presidential run by hijacking the media to ensure that he was the main focus of the daily news, although that was less like feeding the chooks and more like feeding the spawn of Satan.
Bjelke-Peterson was the opponent of another charismatic leader who pushed the boundaries of what the constitution would allow, Gough Whitlam. Whitlam won an election and then convinced the Governor-General to break with convention and swear him and his deputy leader in before the full count of the election had been completed. There followed a two week period called the “duumvirate” where the government consisted of just two men. During this time, Whitlam put into action a host of measures that didn’t require parliamentary approval, thereby acting in a quasi-authoritarian fashion. This was just the beginning of the troubles and he would later join Jack Lang as the only two leaders to be removed by Governors-General in the short history of Australian politics.
The Bjelke-Peterson/Whitlam rivalry was another round in the ongoing battle between the states and the federal government. Whitlam was in favour of radical constitutional reform that would concentrate more power at the federal level while Bjelke-Peterson explicitly campaigned for state rights against the “communism” of federal Labor. Other examples of this were the fact that Western Australia actually voted to secede from the federation in 1933. The only reason the secession didn’t go ahead was because the British government refused to push the matter stating it did not have the legal right to do so. Meanwhile, the issue of secession has arisen several times in Tasmanian politics too.
Mostly the feds have won such battles and usurped power at the hands of the states and yet that trend was reversed during the Scott Morrison Prime Ministership in a fashion that is still very strange and might be Morrison’s most lasting legacy. For both the bushfire emergency and corona, Morrison let the states run the show. On the one hand, this makes sense as the states have responsibility for most of the emergency services response. Yet, during corona, Morrison gave states responsibility for quarantine which was legally a federal duty as well as letting the state Premiers walk all over him at the national cabinet. Morrison could have used those crises in the same way past federal leaders had to increase the powers of the federal government and yet he refused to do so. This cost him politically while also allowing the rise of mini-Caesars at the state level. All of a sudden, state politics is relevant again when for decades it had been the B-grade movie of Australian political life.
This very brief survey gives us an outline of how Caesarism could manifest in the Australian context. It might occur at the state or federal level and, in fact, one may lead to the other. At one point, Bjelke-Peterson was considering a run for Prime Minister. Until now, the constitution has held any would-be Ceasars in check. But it’s not hard to imagine it faltering under more extreme circumstances. There is also the question of constitutional change which is back on the agenda now with a new government. That could open up the system to new vulnerabilities. In short, there is nothing about the Australian system of government that is likely to inhibit Caesarism any more than other countries.
The big question for Caesarism in the Australian context is what values a would-be populist demagogue can invoke to garner support. Trump and Brexit both ran on anti-globalist nationalism which makes sense in both of those countries. It makes far less sense in Australia for a number of reasons. Firstly, we have been among the most eager proponents of globalisation and, unlike the middle classes of Britain and the US, our middle class has benefitted from globalisation (or at least didn’t go backward). Secondly, our geographic position does not lend itself to national rivalries with other countries in the way that Britain has with other European nations, for example. Thirdly, nationalism is problematic in Australia due to its historical roots in the White Australia policy. It’s worth pointing out that the White Australia policy was supported mostly by the Labor Party as a way to guarantee the earnings and conditions of the working class. The abandonment of the working class by Labor in the 90s was partly a capitulation to the multi-national corporations and institutions who run globalist capitalism. For these reasons and more, neither major political party in Australia is the natural breeding ground of a Caesar in the sense of fighting back against global capital.
In Spenglerian terms, Australia was founded during the civilisational period of the Faustian culture. Thus, the Langs, the Bjelke-Petersons and the Whitlams were all working on variations of the bourgeois project. The age of Caesarism is when that project gets torn up and replaced by an appeal to “higher” values. One way this might play out in Europe is a resumption of military conflict. But this is highly unlikely to be relevant to Australia unless China turns belligerent.
So, it’s still very difficult to see how Caesarism could come to Australia. Much depends on how fast the bottom falls out of the US empire and what the ramifications are for global trade. If things turn out well and trade with Asia continues, it may very well be that Australia’s mineral and agricultural wealth enables the continuation of a bourgeois society here long after Europe and the US have moved into the phase of Caesarism. Australia might remain a relic of times past; a weird little European outpost in the south pacific upholding a tradition that has gone extinct. If things go less well, it could be that Australia will have an existential crisis to go alongside an economic one.
I got the sense during the anti-mandate protests here in NZ that we got disturbingly close to a Caesarian moment. Our nanny-in-chief played a dangerous game of ruling by decree that I’m sure she cannot comprehend the potential consequences of. Her actions created a thrust block and the response was both surprising in its intensity, and broad in its support. All she could do was meekly cower behind her bodyguards, actively avoiding any potential for confrontation which simply emboldened the resistance.
For the moment what saved our democracy (or at least, what little remains) was both corona and the jab being a comparative nothing-burger (two orders of magnitude lesser in effect that the Spanish flu for example). And thus after brutally disbursing the protests the energy could be dissipated by immediately relenting to almost all of the protesters demands.
But the issues that drove much of the underlying discontent that finally found an outlet through the mandates have not been resolved. High housing costs, the steadily decreasing wealth of our middle and working classes, absolutely insane levels of red tape right throughout our bureaucracies, and an obsession with woke ideology are are all issues bubbling away beneath the surface.
The key ingredient missing in the corona round was a suitably charismatic individual – should someone step up then things could ugly fast. The crisis that tips all this over into political turmoil could be something quite small , or nothing at all.
I’m obviously not there, but it would not surprise me if much of Australia was the same way.
Daniel – yeah, it’s the same here although probably not quite as advanced as NZ yet. There will be no shortage of discontent to tap into but the would-be Ceasar needs a positive story to tell and it’s hard to see what it would be in Australia as Australia has spent most of its history parroting the propaganda of the British and US empires. The only thing I can think of would be some kind of movement that coincides with Australia becoming a republic and severing all remaining political ties with Britain.
Does Caesarism alway require a positive story, or just a locus? The lack of positive national stories is one of the reasons I consider our government to be playing such a dangerous game – a counter-movement ‘for the people’ whilst demonising an ethnic minority is a well trodden path. The speed with which the public turned against the un-jabbed was terrifying, and from speaking with friends who have been subject to severely racist heckling there is certainly potential for a similar coalescence here.
Daniel – according to Spengler’s definition, it does need a story and implicit in that story is the rejection of the bourgeois status quo. The Nazis fit the bill quite well in this respect. They had the concepts of the thousand year Reich not to mention blood and soil which tapped into existing narratives such as the back to the land movement. The scapegoating of the unvaccinated fits with in the modern Plague Story so, even though corona has many of the elements of Caesarism, I don’t think it is Caesarism. It could easily, however, open the way to Caesarism as people are now conditioned to accept drastic government action.
Could you clarify what dangerous game you think the NZ government is playing?
Interesting thoughts Simon, and you’re right it is hard to see where the popular leadership in the late civilisation vein is going to come from here. There are a few factors that are unique to Aus that add in to this.
One is the lack of a heartland in the sense of the flyover states of the USA or the industrial North of the UK. With perhaps the exception of Queensland and NSW, we are basically coastal city states with hinterlands (interesting to note that the two aforementioned states are the two most nationalist/populist). Looking at the results of the latest election, there is a push towards more populist/nationalist/independent politicians in the rural areas of Australia, but it makes no difference as it is a tiny portion of the population. Bob Katter has been the Caesar of far North Queensland for decades, and is mocked in the rest of the country. The electoral heartland here is probably the outer eastern suburbs of Melbourne and the west of Sydney, which are heavily urban middle class suburbia most of who wouldn’t know a Casuarina from a Concertina, so there isn’t really any nationalism, and issues usually centre around Bourgeois economic issues, as you have noted. The enormous numbers of immigrants over the past 30 years add to this.
Secondly is our very confused history. We have this strange situation where many of the nationalists are basically British Empire stalwarts, as one could see from the Corona protests. It was really strange to see the Australian flag flown as flag of protest, as it is among the most imperialist flags in the world. The wars we celebrate are (with the exception of the New Guinea campaign in WW2) not those of independence or resistance, but rather blatant overseas invasions or our role as imperial cannon fodder. A true nationalism here would as you say come has to come from an anti imperial, anti globalist base, with perhaps some sort of fusion with aboriginal land ethics and old dinky die true blue ocker ‘Ozzyness’ that takes the form of our (supposed) cultural love of the larrikin and outlaw. Perhaps a Queenslander like Bob Katter is the perfect man for the job, given he has aboriginal ancestry, is as dinky die as they come and also appeals to recent immigrants with his Lebanese heritage (only half tongue in cheek).
But I suppose it boils down to what actually ‘is’ Australia? Because recently it feels like there is nothing there. All our half baked national character has been culturally cringed away because it is supposedly racist or controversial, and we have been left with… I dunno home ownership? Perhaps it is just going to take a much longer time, and a period where we are far more disconnected from the world.
Not specifically Australia-related but I think Spengler’s analysis is a little under-nuanced: I don’t think capitalism ends with the transition to dictatorial-type government, it just shifts focus from one part to another (to Elon Musk, for example).
Skip – good points. I think it was assumed early on that the Murray-Darling basin would become Australia’s heartland except it’s just damn hard country compared to the heartlands of other countries. Ironically, there is some evidence that the area might become wetter with climate change. Maybe that will change things if it happens. Or maybe that just means more flooding rains and less droughts. But, yeah, I can see the potential for some serious psychological meltdowns here. What is left if the bourgeois ideal disappears?
Austin – could you expand on that? I’m not sure what you mean by shifting focus.
Thank you for the clarification on the definition of Caesarism. I can see why you pointed out that having limited natural culture of our own limits the possibilities. I wonder if NZ (and perhaps Australia too, but to a lesser extent) are too small to fit within Spengler’s model. The culture (and economy) are so dependent on the world situation that our country has little control over its own affairs.
> Could you clarify what dangerous game you think the NZ government is playing?
A blatant disrespect for the forms of democratic process. We have only a single house in parliament, so there are no inbuilt checks on power and this makes us quite vulnerable to the system being captured and abused. Traditionally our parliament has functioned with a degree of honour, but for several successive governments the honour has been receding and the system used to pass controversial legislation without debate.
This government has taken it to new extremes with many of the corona rules literally decreed from the podium, the applicable laws and regulations written and gazetted after the fact (typically only a few days, or on the day of effect). In the rare few times the judiciary tried to reign the government in they immediately passed laws legalising their actions in retrospect, or just plain ignored the rulings. The government also paid off the media to the tune of tens of millions of dollars, creating a weird homogeny of opinion with no dissent acknowledged.
Should a charismatic opportunist (from any side) arise and seize power, there is very little standing in their way. In a sense this is nothing new and has always been possible, corona just exposed an inherent weakness. But the veneer of honour having been so blatantly stripped seems particularly dangerous to me.
As chaotic and convoluted as all the levels of Australian politics are, the levels themselves give a degree of protection that our system simply does not have.
Daniel – yeah. I could see us missing Caesarism altogether. I could also see us having a really bad case of it partly due to the immaturity of our institutions. Time will tell.
Wow. I wasn’t aware that NZ didn’t have a senate. That’s a really bad idea. The Oz senates are full of fringe nutters but sometimes fringe nutters have their uses.
The lack of honour is a definite problem because without it the laws become just obstacles in the way of the exercise of power. Do you think the voters will turn against Ardern next election?
A very interesting take on Caesarism. I didn’t quite understand why you’re counting Dictator Dan as an early example of Australian Caesarism.
Weren’t fear and conformity exactly the opposite of what a Caesar would be appealing to, i.e. things like strength and virtue in the face of adversity?
Wasn’t the wanton destruction of so many people’s economic future something more likely to be associated with Harari’s concepts (just recently repeated at Davos) of bourgeois people being superfluos anyway, and to be let go into a future of stay-at-home drug use and virtual immersion?
> Wow. I wasn’t aware that NZ didn’t have a senate. That’s a really bad idea. The Oz senates are full of fringe nutters but sometimes fringe nutters have their uses.
The closest we’ve had until recently was a single politician (Winston Peters) holding that role all by himself. He’s a scoundrel through and through, but he understands what honour is (and thus also when to bend it). So far no one has stepped up in his place, which is a shame.
> The lack of honour is a definite problem because without it the laws become just obstacles in the way of the exercise of power. Do you think the voters will turn against Ardern next election?
Exactly, and they’re rather weak obstacles at that.
The gloss on Ardern is already gone having achieved nothing of substance so far, and if our economy continues to deteriorate then yes, I think a change of government is likely. Not that I expect it to mean much, our current Labour government is just a red clone of the previous blue National one and the waiting replacements are eerily similar too.
We seem to be waiting for our Trump (or Brexit-like issue) to force the unaddressed problems to the surface, which is why I’m pondering how Casesarism will affect things. I’ve read before that we appear to trail the other anglo nations by about 7 years politically, thus the next election right would be right on cue for that to arise. A significant crisis (international or domestic) birthing a new minor party that steals a significant portion of the vote, and forcing a grand coalition in response is one outcome I think is possible.
Well, I guess all I’m saying is, I don’t see the imminent dictator-type regimes abandoning capitalism overnight like the Communist regimes did… capitalism will continue, with the energy perhaps shifting from ‘tired’ (Bill Gates) to ‘wired’ (Elon Musk). I imagine the re-moralizing aspect will come in gradually, piece-by-piece… I don’t think talk about ‘Caesarism’ is wrong-headed but imho it can overlook the differences between the ancient world and us (much more extensive secularization, capitalism, super-technological…). I doubt the reign of money will disappear overnight, even if its energies are redirected.
Michael – I should have been clearer. I don’t think the corona business is Caesarism, but it has a hell of a lot of things in common with it and for a variety of reasons should open the way for the emergence of true Caesarism. Nevertheless, now that the corona hysteria is over, Australia has gone back to the usual bourgeois discourse as if nothing happened. It’s a weird atmosphere. As for Harari, he’s quite interesting because he’s selling an inversion of Caesarism and he’s not even selling it to the people but to the elites.
Daniel – it sounds like the NZ political system would be more open to populist takeoever. But doesn’t NZ have the same problems as Australia in regards to Caesarism i.e. a lack of nationalism and an economic reliance on global capitalism. That will make it hard for a Caesar to emerge.
Austin – it depends how bad things get economically. I think a default of the US dollar is a real possibility in the years ahead (alternatively a hyperinflation). If that happens, then the reign of money may very well disappear overnight. Of course, that’s exactly what happened in Weimar Germany and you can trace the ascendancy of Hitler directly to the fallout from the reset of the Mark at that time.
It’s funny you mention the Murray Darling Simon as I actually live in it. If anywhere is the heartland in that inland rural sense it is probably here as it takes in four states and produces a huge portion of the agricultural output. You’re right that the climate actually seems to be getting milder and wetter the past decade since the Millennium drought. That could all change with another big drought, but this area could probably support greater population densities (especially the eastern parts), a trend that has picked up since Covid. There was even talk of succession during the lockdowns.
Skip – hah. I like that. The People’s Republic of Murray Darling. I’d move there.
I did my primary school years up in the northern half of the basin on the Namoi River and still have a soft spot for the area. During the great depression a lot of people migrated from the cities to the basin. Maybe we’re seeing the beginnings of a similar trend.
Hi Simon,
Wow! A very thoughtful essay and I agree with your final analysis. We have stuff (high grade iron ore just for one example) that other countries desire where the minimal competition from another part of the world is perhaps too complicated and thus expensive, and so my gut feeling is that we’ll end up the weird little (how did you put it so succinctly?)
Europe has run very low on their economically extractable coal reserves, particularly Germany which is currently imploring a step away from the use of coal.
I’d considered myself well read upon Australian politics and yet had not heard of either Jack Lang or the early days shenanigans of Gough Whitlam. Fascinating.
> Although we are nearing the end of the Keynesian paradigm now that debt is at levels that are clearly never going to be repaid.
I’m also wondering about this, and note that the opposite of one bad idea is another bad idea. The Great Depression occurred due to having stuff and no money. Right now we might get to find out what having money but not enough stuff looks like. I’m not a fan.
As an interesting side story, there are a very large number of interest only loans in play in the housing market (about a quarter) and the investment market (about two thirds) and eventually those little suckers have to revert to interest and principal or be reapplied for. It’s no small amount.
> of course, there are far more famous and historically important examples of this idea
Far out, yeah. Again, not a fan.
Cheers
Chris
An outline of the preconditions generally conducive to the emergence of Caesarism from within Modernity might be worth another post.
Chris – one of the most interesting things about the Jack Lang story is that even governments at that time held real cash in the bank. That was part of what caused the Great Depression because there was simply an inability to print enough cash to stimulate things. That’s why Lang wanted to stop paying the interest on debt so that he could funnel that money into the economy instead. Nowadays, we have the opposite problem. Governments have a licence to print as much money as they want and they can use that to buy off literally everybody. That’s the only way the corona lockdowns were ever possible.
Michael – I’ll consider it. Money seems to be the primary thing, though. Both Hitler and Mussolini were responding to economic crises. Right now in the west we seem to be in denial about the fact that there’s an economic crisis happening right in front of our eyes. When the denial ends, the Caesars should appear.
So is it a certain state of the distribution of money, or is money itself Aladdin’s Lamp, inevitably rubbing a Caesar into being?
We’re seeing quite a few articles now stating that Keynesian Communist Central Banking is culpable for what happened to “good” money.
Did Spengler differenciate between bourgeoisie/democracy and money, or were they a single force to him?
Michael – I’d have to go back and check but I think they are a single force. I think this is a problem as old as civilisation. The Ancient Greeks twice elected autocrats to reset the currency among other things, Solon being the most famous.
Simon – are you suggesting that people should withdraw cash from banks & stash it? My parents’ generation did a lot of this. Every time I’d tell people about my mum’s stockpiles in her camphor wood chest & the kitchen cupboard (!), people would tell me stories about rels who stored it in shoes, socks, drawer linings or buried it in the backyard etc.
Would be interested to hear your thoughts re CBCDs, there’s a lot of hype around about the end of cash & no wonder, after the preview during pandemic panic. Was made to feel like a leper more than once for trying to buy food w/ cash/coin even though I understood it was still legal tender.
Shane – I expect that anything can happen in the years ahead so having a “balanced portfolio” (including cash) is a good strategy ;). As for CBDCs, no doubt they’ll try it. I like to imagine that the week they make it mandatory is the week the power grid goes down. That would be poetic.
Hi Simon,
Ah, I had not known of that detail about Jack Lang wanting to default on the interest payments. Yes, that would upset some sectors of the powers that be, and please other sectors of the community. They do say that economic policy follows from the barrel of a gun.
But yeah, that’s my understanding of The Great Depression – the flow of cash didn’t exactly seize up, but there was not enough to go around, the money supply was pegged to gold, there was reluctance to revalue that peg, deposits at banks were not guaranteed, and that was despite there still being plentiful supplies of stuff for people to purchase.
And proving that the opposite of one bad idea, is another bad idea, our civilisation seems hell bent on discovering just what happens when you have too much cash, and not enough supplies of stuff for people to purchase. That’s I’m guessing behind the house price boom, which is another way to describe inflation. But when prices increase markedly for stuff that gets consumed in relatively short order, i.e. food. Well that’s a problem for sure. Paid $9 for a bag of oranges last week. Far out.
It also punishes people who have been economically prudent, and bizarrely rewards people who have over extended but that story depends upon wages growth and interest rates. And the pressures to respond to both would keep policy makers awake at night. But we’ll see how it goes. I wouldn’t have picked the lock downs as a response because they have caused widespread ‘demand destruction’. Behind every empty shop there is a sad economic tale. The flip side to all this might be a resetting of base costs. Economic carnage is different from other forms of destruction in that few things get physically destroyed.
For your interest, what I noticed about the recession in the early 1990’s was that the destruction began at the periphery. Rural (holiday houses) were the first to be dumped, and that market slumped. Have you noticed the crypto markets recently?
Cheers
Chris
CDBC is an interesting topic.
How is it going to be developed? This would be a major IT project going on for years. If this is in the cards in the near future, it must be in development as we speak.
How will it be rolled out? Slowly or overnight? Both ways have their problems.
What will the implications be? It would probably be some horrendously complicated and energetically wasteful blockchain technology. Big bureaucracies are notoriously bad at making complex things work effectively.
I would expect the rollout of this to have an immense entertainment value.
Maybe it could be a bit like the insanity of the last 2.5 years on steroids.
A lot of insane ideas moronically executed.
People with more than two braincells will predict this will do some damage, but let’s just call them names.
Then the whole thing collapses under it’s own weight.
Now even the morons running our countries these days realise that it was a dumb idea so we simply stop talking about it. This way we dont have to admit that we were idiots (again). And we don’t have to fix the mess we created. Maybe we can just call it the New Normal? Or has that been done?
There will be a convenient war going on somewhere. Or a famine. Or maybe a pandemic, although i think this card has been a bit overplayed lately. Not to worry, any horseman will do
The damage of course cannot be undone. We will be stuck with a monetary system that is even worse than what we have now.
Chris – as Aristotle said, virtue is the mid-point between two vices. But humans seem to be very good at pretending that a vice is really a virtue. It’s funny, we’ve been doing this civilisation thing for at least a few millennia now and we still haven’t figured out how to stop financial systems from crashing. Maybe it’s just the way it has to be.
Roland – agreed. The idea of Australian government IT building a mission critical system of any kind is highly amusing. I have a concept for a comedic novel where Australian government IT engineers accidentally create The Singularity while building the world’s most unnecessarily complex data entry software. Maybe I should adapt it so they are building a CBDC.
I think that novel is worth writing. Don’t think i’ll read it though. I am right at ground zero of bureaucratic madness at the moment. Don’t need to read about it. Hanging on to my sanity is hard enough at the moment.
About collapsing financial systems, maybe that’s one of the reasons why the bible is so adamant about the evils of interest? To avoid creating a system that can only run on exponential growth?
> The Singularity while building the world’s most unnecessarily complex data entry software
An AI whose foundational principals are parsing user input and form validation?
That is pure evil. I get nausea and chills just trying to comprehend it. Please write this – I guarantee your first sale 🙂
Roland – would be interesting to know if the financial system was breaking down at the time of Jesus. The money lenders were in the temples which indicates that they had excessive political influence just as they do nowadays.
Daniel – I’ll be sure to post it here if I do write it. The idea is actually based on a real world project I was on where we were brought in to fix up some software written by another company. The code was garbage and one of our developers ran a diagnostic tool to measure its cyclomatic complexity. The result was off the charts even though the system was doing nothing much more complicated than data entry.
I am not sure about the financial system 2000 years ago. Not a historian, but I think the warnings about interest are in a lot of places in the Bible, including the old testament. Originally written probably over a period of several thousand years.
So to me this points to a pattern. Something societies keep doing again and again. Not one specific case.
And we’re doing it again now…
Simon – for ages now I’ve been encountering paranoid narratives re the plan for an electronically monitored cashless global economy controlled by a small cabal of elites, which more recently seems to have merged w/ the prospect of AI displacing most human workers, hence the need for global implementation of a UBI (a large-scale version of something like NT-style cashless welfare but w/ microchips, designed to limit/dictate what we can buy?). But a narrative that interests me more concerns the inevitability of a posthuman (I won’t say ‘transhuman’ in case it confuses the issue ;)) existence. Yecch. (Giegerich presents it via the medium of depth psychology.) Believers tend to sound like religious converts. Ray Kurzweil is one of the high priests. Would you care to comment on this emergent faith w/r/t the second religiousness?
Roland – it’s not hard to see why. Loans at interest at great on the way up, especially if you own the bank. It’s the damn hangover that’s the problem.
Shane – I can’t remember if Spengler defined the second religiousness as a “real” religious movement or just the simulation of one. It seems to me that real religious movements come from the bottom up while all the posthuman stuff is exclusively the province of a small number of intellectuals. The average person even thinks that The Great Reset is a conspiracy theory. It’s hard to start a religion if the people who need to be followers think it’s a fake. It’s also hard to run a religion which is predicated on burning fossil fuels at an unsustainable rate.
Hi Simon,
🙂 It’s a dead give-away when you hear serious economists suggesting that: ‘it doesn’t matter’. I’m still not sure what they mean because history suggests otherwise.
Cheers
Chris
Chris – yeah, it’s easier to just pretend that everything is ok. To quote the lyrics of my favourite Bob Dylan – “what’s good is bad/what’s bad is good/you’ll find out when you reach the top/you’re on the bottom.”