Topic: Is a Madmax outcome coming before 2020? Thus do we need anonymity? - page 4. (Read 102809 times)

You hard resources and stored capital investor fools are misunderstanding the paradigm shift underway. The stored capital is the problem. It must be eliminated in order for the world to move forward into prosperity.

Armstrong has been predicting events precisely to the day. The below $57 closing price for oil on Dec. 31, he predicted long ago (I saw it). There are many, many examples I have observed.

The build up to the waterfall crash is a 51.6 or 31.459 year cycle, but the final waterfall is about 8.6 years with the largest portion of the transition over 4.3 years.

Events change but the pattern of time and human nature repeats.

You can't preserve stored capital. The western governments are going to confiscate it also. Sorry it is all going poof (highly devalued relatively speaking) in the Knowledge Age. Sorry knowledge age workers don't need your stored capital. The capital startup costs are near 0 now. Everybody has a computer. It is the intellectual capital that is extremely expensive.

We will permanently move to negative real interest rates. The coming crypto-currency of the Knowledge Age will be debased 5 - 10% per year. The Knowledge Age doesn't want to be enslaved by the power law distribution of stored capital. It wants to motivate knowledge capital instead.

The negative interest rates are a sign of what is changing. Most people see them as corruption, because they don't understand the paradigm that is occurring. I am not referring to Communism, because the knowledge capital will still be power law distributed and this will be a free market, not a command economy. And the debasement of a decentralized crypto-currency won't be captured by corruption, rather it will be expended in electricity to secure the system and secure the freedom of the Knowledge Age from the slavery of stored capital.

You might as well spend it now. Enjoy your life.

Remember the Bible verse, you will throw your (worthless) silver and gold into the streets...look again at the commodity price chart for the inexorable decline.

Waterfall collapse of the Industrial Age to usher in the Knowledge Age


Just like the fall of the Berlin wall, bankrupt paradigms waterfall collapse to usher in the new.

http://kwout.com/cutout/9/i4/cr/wdc_bor.jpghttp://kwout.com/cutout/f/5p/bg/yjb_bor.jpghttp://kwout.com/cutout/h/vj/mj/bqs_bor.jpg

The physical economy is bankrupt because the economies-of-scale are too great and the maximum division-of-labor can not advance. It may seem valuable to you because the ruler you are using to measure with is the illusion of a massive $200 trillion global debt bubble. Society is trying to prop up that bankrupt Industrial Age paradigm with debt and socialism.

Knowledge production generates several orders-of-magnitude more value per human than the Industrial Age. Heck in just a few months in 1998, I (all by myself) wrote some software that was generating up to $30,000 a month in today's dollar. The internet has 10 times more population now.

Sorry the USA has lost the advantage of the waterways. That paradigm is dead. This is another reason China and Asia will rise, because they have more human capital and their economies aren't burdened with the political dead weight of an aging population that is not able to make the waterfall transition and $trillions of promises to boomers.

Knowledge workers will move to cities (this is already underway with integrated BPO communities for example in the Philippines), no need to move goods to remote sparsely populated locations. Besides, the physical goods are a small fraction of the wealth generated from knowledge work. There is no reason that Silicon valley has to be in the USA, it could be any where that knowledge workers congregate. And the knowledge workers will run away from the USA when it turns draconian when the economy implodes after 2016 and the totalitarian expropriation of wealth goes into hyperdrive.

Another two charts supporting my position of the death of stored capital and fixed capital investment Industrial Age model shows that interest rates and commodity prices have been declining inexorably since the damn of human civilization:

http://kwout.com/cutout/x/ke/6d/c36_bor.jpghttp://bigpicture.typepad.com/comments/images/cfn396_1.gif




Pettis expects a top-down restructuring of China to rebalance from an economy that is highly unbalanced in the fixed capital investment and Industrial Age paradigm, to a more balanced consumer share of the economy. In other words, China has been subsidizing global manufacturing at below cost, by massively expanding debt and stealing from the workers by suppressing interest rates and their import purchasing power with the Yuan peg.

I think Prof. Pettis is wrong and the Communist Party will lose control of China as the contagion of the global bankrupt paradigm domino collapses. This is why war between China and Japan is probably imminent, as the leaders of China try to invoke nationalism to retain their grip on power.

But I think by 2032 (perhaps as early as 2024), China and Asia will fracture away from control and emerge with bottom-up high performance in the Knowledge Age.

Understand the Chinese people are just going with the flow of the Communist Party system but every step since the 1980s has been greater and greater freedoms and more autonomous governance and business. Now I read that Christmas is sweeping China a popular fad and the leaders are trying to outlaw it (haha the people ignore the leaders). Asia has been bottled up in cronyism since the mid 1900s, and now suddenly the cronyism is falling away because it is not viable economically, and the youth have woken up given the internet.

Even the youth in Japan want to get rid of the xenophobia.

http://blog.mpettis.com/2014/12/how-might-a-china-slowdown-affect-the-world/#comment-108021

While the knowledge age will render obsolete many of the reasons for which we "need" any more than local governments; it cannot guarantee that State or Federal governments will never again be needed. It's for this reason that I prefer a very limited federal government without the power to impose law on the people but with the power to enforce a Constitution of "do not touch" specific liberties and resolve disputes between states. From an economic perspective it may not be needed, but from a strategic and/or defensive perspective it will always be necessary since the knowledge age can possibly revert into a dark age under the right circumstances.

Rather than to kill the dog for its fleas, we could just treat the fleas... We can abolish income taxes, cede many federal and state powers to local governments where the treasuries can face much tighter scrutiny, and reform the government to reflect a balance of liberty and security. Weakening the bonds between localities will open up a society to invasion, even if all the members of a local community are armed, what assurance do you have that the others will aid you in the event of an invasion? Even in the knowledge age war will be a possibility, it's a part of humanity...

I believe the government employees will stand with what's best for themselves, their friends, and their families for the most part. Sure, some are ruthless people, but I don't believe the majority is like that...

Luckily in this society we haven't degraded to the point where we follow our leaders as if they were living gods. Not too many government employees willing to sacrifice their lives on command yet...

Absolutely, it's only natural that society will develop an anonymous crypto currency as the noose is constantly tightening. Anonymity is something that I feel society will appreciate much more in hindsight, and the added utility of crypto is just icing on the cake.

http://armstrongeconomics.com/2015/01/01/turkmenistan-devalue-by-18-start-of-the-deflationary-contagion/

I can't envision the threat of subjugation ever being eliminated in a human society for as long as the ability to oppress exists, it's a near statistical certainty that the desire and opportunity to oppress will eventually overlap, resulting in acts of oppression. For as long as humanity has existed people have coveted what they don't own. Even simple aspiration is a form of desire which can progress into greed and envy of others, which can further progress into oppression... What I'm getting at is that the risk cannot be removed due to basic human nature, it's never wise or a good idea to confront problems with a "reactionary" policy when the problem could have simply been prevented with prior planning.

Yes, the day may come where we don't "need" protection from the government, but to cast off that protection as if we will "never again need it in the future" would be foolish and self-destructive. Financial anonymity is one such form of protection that we should never cast off.


I've heard of this potential scenario before and I'm happy to say that the government can't do that so easily in the US or in other armed societies... In the US, financial expression is protected under the First and Fifth Amendments. Spending money is a form of speech, and money is a form of property when possessed. Money is any medium for the exchange of value... If the government made a law criminalizing a lawful form of expression (not causing undue harm; yelling "fire" in a theater, slander, etc...") it would simply cross the line into totalitarianism and make anonymity that much more desirable. The government is just a group of loosely associated individuals following orders from somebody higher up the chain; it's not likely the government would be able to enforce the unconstitutional law without weakening itself because the majority of the government employees will oppose totalitarian laws. The population has limits to what they'll accept; just start persecuting innocent people for buying a coffee with an anonymous currency and see what happens when that acceptable limit is breached by even a small percentage of society...

People are armed for few reasons more necessary or important than to abolish or reform oppressive or inadequate governments...


I would consider the cost of an anonymous currency to be net neutral since there are already alternative methods of anonymous exchange. The use technology to simplify anonymity shouldn't factor into the equation since the same level of anonymity is already possible in society using tangible currencies. Adding an alternative method for financial anonymity will therefore make no difference.

The above regarding statist suppression only aplies in small scale isolated societies where the leader can be chosen or overthrown by the group if necessary. Scale it up and you'll observe ever increasing levels of resistance with "too many chiefs and not enough Indians." So yes, it is natural in isolated macro economies where top down control is manageable, but it falls apart when the complexity of the economy increases to the point where it cannot be controlled from the top down... The system will inevitably collapse as the control mechanisms become ineffective...


Unfortunately, I also have a hard time envisioning this scenario lasting very long due to the same "too many chiefs and not enough Indians" problem (local governmental bodies being the "chiefs.") Local governments won't always agree with their neighboring areas. State governments were formed with their own sets of laws as a solution to this problem. The previous alternative was to invade your neighbor and subjugate them to the will of your local government while abolishing theirs... There is also the issue of international arrangements and treaties.

For as long as greed and envy exist in humanity there will always be a need for a national government. It is absolutely critical however, that the government remain no more than a servant of its own people tasked with preventing State over-reach, matters regarding interstate commerce, and international affairs. The Federal Government should have absolutely no power to make laws directed towards individual citizens; that power should remain solely in State and local hands. Limiting the power of the Federal Government is the first step towards local governance, strong communities, and economic prosperity.

In my opinion, the Federal Government should have only the legal authority to determine by electoral consensus which laws the States "may not" impose on the people; such is the purpose of the Bill of Rights.

I think the early United States was the closest that mankind has ever come to the perfection of government. We can look at US history and see clearly the causes and effects which led to this colossal failure and work to reform a new government which will maintain the strengths and benefits of the original, while additionally implementing new safety measures to prevent a recurrence of this manner of failure in the future.

I am somewhat loathe to post this, as it is a cop-out, but it may be useful to some.

A working understanding of the implications of variation of the degrees of freedom in complex adaptive systems is broadly helpful in life (both one's own, and biological life as a phenomenon).  For seminal or survey work illustrating this, compare:

• R. Clausius, Annalen der Physik und Chemie (1857, no.3) http://gallica.bnf.fr/ark:/12148/bpt6k15185v/f371.table
• A. Pigou, The Quarterly Journal of Economics (1917, vol.34 no.1) http://links.jstor.org/sici?sici=0033-5533%28191711%2932%3A1%3C38%3ATVOM%3E2.0.CO%3B2-C
• K. Firston, Nature Reviews Neuroscience (13 Jan 2010) https://www.statistics.ma.tum.de/fileadmin/w00bdb/www/lehrveranstaltungen/Sanjoy_Mitter/Free_Energy_-_Brain.pdf

In this vein, it's also advisable to have a grasp of the equipartition theorem (http://vallance.chem.ox.ac.uk/pdfs/Equipartition.pdf), and how quantization affects it, and the role of the ergodic hypothesis in deriving basic results of thermodynamics (http://www.sbfisica.org.br/rbef/pdf/060601.pdf).

The most predictive models of large ensemble systems are either a direct consequence of, or deeply effected by, these principles.  I may expand on the connections, and survey how I see them relating to this thread in future if time permits.  At the moment it does not, but I provide the references for those motivated to investigate.

You lied. Go check the data (from any source you can find) for the other years to educate yourself of the consistent trend to higher (what is now nosebleed) levels of government share of GDP in all Western nations.

The rest of your post was as usual, vacuous noise (maybe not the first time we discussed it, but it is the 100th time now...).

Note top-down isn't always "wrong", e.g. it can be the most expedient and when the system has Coasian barriers (e.g. FLOSS without my vision of micropayments) then top-down is unavoidable. My point (which I have repeated so many times) isn't that top-down can be eliminated in every scenario, rather that top-down in the IRON LAW of Political Economics (a.k.a. Resource or Fixed Capital Statism) has proven over and over in all the human history since Mesopotamia to lead to catastrophic outcomes such as world wars and megadeath. It is the definition of insanity to blame that on the free market (repeating the same outcome over and over, and blaming not the causal generative essence), when it is Coasian barriers inherent in the Tragedy of the Commons of collectivizing the taxation and regulatory purse (the honey that funds and attracts the flies) that enable the vested interests to capture the politics. Top-down exists even in bottom-up systems, because the autonomous agents in the free market are top-down decision makers for their slice of the system. The problem with top-down is a matter of the extent of what has been collectivized and whether it creates a divergent system that becomes a cancer on itself — which is the case for the collectivization of the taxation and regulatory resource.

It is simply impossible to fund those horrific outcomes if there isn't a collectivization of the taxation and regulatory resource. Repeat that sentence over and over again, until the profound causal generative essence point sinks in to those loose rocks in your cranium.

The Statist apologists want to convince us that with regulatory reform or with democracy, we can control that collectivized resource and put it to good use and not allow it to be captured. But history has shown over and over that is not the case. Blaming capitalism is the same as blaming opportunity cost. It is analogous to blaming an animal for killing in order to eat. If you put a big pot of honey in front of the free market, the free market will use game theory to try to steal it. No amount of regulation of the regulators who are regulating the regulation which regulates the regulators which... can solve the problem. Only eliminating that collective resource can solve the problem. This is also Armstrong's mistake when he calls for collectivized reform as a solution.

During the Fixed Capital (Agriculture and especially Industrial) Age, the Coasian barrier of the power law distribution of stored capital makes impossible to eliminate collectivization, because individual labor can't generate economy-of-scale production autonomously and thus can't prosper autonomously without top-down organization and thus the clamor for redistribution. But the Knowledge Age changes this fundamentally.

Recently I realized that the currency wars, are beggar-thy-neighbor competitions to see who can reduce the cost of production below 0 with debt subsidies. This is because there are too many people and the Industrial Age doesn't need them (because factories can produce more than we need with only a fewer and fewer workers). The only solution is to move to the Knowledge Age. The Industrial Age economy will bifurcate into megadeath for all those who don't jump to the Knowledge Age.

Communist apologist please go away. If the abject failure of Communism is not enough evidence for you, then just proceed along your merry way to the next Gulag. I certainly don't want to stop you. I am talking to those who want to seek freedom. We are not wasting our time trying to convince Communists.

Liar. No they don't. Yes you continue to lie.

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Yeah I know, that is why I have been working on a solution to that since 2010 at least:


You did not rebut aminorex's point, which is that finely grained (i.e. plurality of autonomous actors thus a high degrees-of-freedom, which btw is the definition of potential energy) adaptation is the only known system for dynamic optimization when the solution space is sufficient generalized (a.k.a. random or high entropy). Rather you identified that open source is currently partially economically bound to the Theory of the Firm collectivism, because the necessary technological paradigm shifts have not yet been put into place.

The Knowledge Age paradigm shift is going to kick all your fucking Statist teeth out. You will learn not to stand behind a horse and not move.


Because as an exact copy of the mistake in the bestselling nonsense book Capital in the Twenty-First Century, you propose top-down, collectivized actions, which are the antithesis of adaptation, i.e. optimization. If you tie your shoe laces together, you can't run, you can only hop. Reducing the degrees-of-freedom, reduces the ability of a system to adapt. That this point continues to fly over the heads of you socialist pigs means it is a waste of our time to discuss with y'all and y'all should instead be ignored.

Piketty assumes that government intervention was the source of the growth in the middle class after the 1930s Great Depression. The middle class in the West grew on the back of expanding debt. While the middle class in the developing world was oppressed by this system that kept cronies in power so the developing world could be raped of resources to feed that multi-decade Western debt bubble (which was radically accelerated after Nixon closed the gold window in 1971 as the boomers came into their prime working age). Piketty's analysis totally ignores the plight of the majority of the world's population from after the Great Depression until the 1990s. After the 1990s, the West debt bubble had reached saturation (negative marginal-utility-of-debt) so the only way to keep the party rolling was to pump debt into the developing world. This finally did lift the standard-of-living of the developing world at the cost of declining the real standard-of-living in the West, as real wages stagnated or declined and unemployment increased.

Piketty like Karl Marx is just propaganda bullshit lies.

The State intervention hasn't added anything and has given us a $200 trillion debt bubble. It was only technology and the adaptation of the free market that has added anything to the standard-of-living.

"wasteful capitalism" is a lot like open source software, or biological evolution.  what you perceive as waste is available energy expressed in diversity, from which selection occurs.  it is wasteful in the sense that creativity is wasteful, and search over the solution space has a cost.  avoiding those search costs often implies much more catastrophic forms of waste.  a species which does not adapt eventually loses its niche, and goes extinct, because it avoided "wasteful" search.

it is also worth noting that a substantial share of the total costs are themselves "bullshit"  (edit: as I see another poster observed in follow-up, in good detail) and caused by corrupted taxation, monies funneled to cronies and backers of the political establishment, justified as social costs.

Bifurcation of global economy into Knowledge Age vs. dying Fixed Capital Investment Age

CoinCube, an overshoot of socialist collapse is coming, that is precisely what I mean by a bifurcation of the economy and my assertion that Moldbug is incorrect because there can be two orthogonal currencies and economies. The Knowledge Age will be much smaller, but growing much faster in percentage terms than the socialism, potentially megadeath economy is shrinking in percentage terms. Vice versa on the nominal size change.

War is coming not because of anonymity, but because what Tragedy of Commons do when they collapse is they turn the citizens' attention away from their economic sacrifices to an ideological, patriotic, nationalism goal (delusion) of justice against an external nemesis, e.g. China and Japan are preparing to go to war, and NATO and Russia both have an incentive to go to war to deflect the attention away from the accelerating collapse of Europe and Russia. ISIS is the Muslim State turning against its enemies, which are external to the religion but internal geographically. The USA will also do the same once its economy collapses with internal fracturing external to competing ideologies, e.g. socialists versus traditional conservatives.

I know what was in your mind. You are thinking the government will go to war against anonymity. Hey they are already are. They are recording everything. They recently did a raid on 100s of Tor hidden services.

We are headed into massive chaos. One of the important goals is to get the anonymity programmed correctly. Tor, Bitcoin, Monero are not correct. As you may or may not have deduced, I am working on this. I am a (quite an exceptional one, if I may say so) programmer.

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BitcoinFreak12 et al, I have a simple request. Please do not respond to blahblahblah. He is a communist, thus he doesn't understand, will never understand, and he even lies about the statistics as all good communists and socialists do.

"Free market" also means contract freedom, which means oppressive one-sided contracts with no recourse for the weaker party if things turn sour.

A 12 month rental agreement makes your real-world costs VERY sticky, so you cannot just drop your prices in response market whims. You could probably buy insurance, but even that can be gamed by speculators playing a good-cop-bad-cop routine to try and bankrupt you so that they can collect your property. Those sorts of shenanigans probably contributed to the Great Depression: Libertarianism's last gasp in the Wild West, before governments got bigger and more organised.

Contagion I believe we are in agreement.

However, as we discussed previously socialism is likely to overshoot before it stabilizes in diminishing role. Anonymity is unlikely to rise sufficiently fast enough to limit this overshoot. The near term future (our lifetimes) will probably consist of a progressive and unrelenting move towards centralized one world government.  


I hope there is no war. If anonymity and cryptocurrency actually grew fast enough to limit the overshoot of socialism then such a conflict might be inevitable. However, if it grows more slowly then such a conflict need not necessarily occur.  

It is better not to attack a doomed but still strong system in a frontal assault. A superior choice is to quietly prepare for a transition to be implemented when that system is on its deathbed. Communism was not defeated by the west it defeated itself. Similarly socialism will not be defeated by anonymity it will defeat itself. Anonymity and cryptocurrency are simply tools to accelerate, smooth and facilitate the transition to a predetermined outcome. I believe the coming socialist overshoot is a necessary prerequisite for the transition to a better system. The road we are on may end at your dream but it winds through NWO.

Thats bullshit, everyone has the right to advertisement/self promotion, that the only way that decentralized economic units (companies) can promote themselves.

Oh sure state central planning doesnt waste resources on 5x more advertisement, so is it more efficient. Hell no because then you get bureocracy, unmotivated people, slow progress, and corruption.

So the only way a decentralized economy can work is by letting all of them work freely. Yes the ad costs are inneficient, but if the resources get thin, or if the advertisers dont pay that much to them, then the ad costs will go down.

You see either way the free decentralized market will solve anything. Good old Adam Smith economy, not Marxist bullshit

You should read some real economy because you have been brainwashed.

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Oh and BTW, if we talk about production/distribution/selling costs did you know that the government will take more money out from any product than any retailer or ad company out there?

Yeah:
5% harvesting the rice, (farm labour, land, equipment depreciation, fuel)  INCOME TAXED + VEHICLE TAXED+ FUEL TAXED +LOCAL PROPERTY TAX+ WORKERS WAGE (WHICH IS ALSO TAXED)
15% distribution (transport, sorting, un/packing) CUSTOM TARIFFS + TRANSPORT PERMITS + INCOME TAX + FUEL TAX+ WORKERS WAGE (WHICH IS ALSO TAXED) [/b]
30% marketing (technicolor cardboard, industrial printers, cutting and folding machines, glue dispensers, single
meal-sized packages and laser-cutters for the novelty perforated plastic, miles of conveyor belts, related factory work, industrial real-estate, graphic artists, advertisers, actors and film people, IT and accountants)
TRADEMARK REGISTRATION+OTHER GOVERNMENT PERMITS+ INCOME TAX + FUEL TAX+VAT COST OF ITEMS+ WORKERS WAGE (WHICH IS ALSO TAXED) [/b]
40 % retail (more of the above, advertising and branding, shop managers, assistants, premium real-estate
INCOME TAX + WORKERS WAGE (WHICH IS ALSO TAXED)+FUEL TAX+LOCAL PROPERTY TAX [/b]
10% cooking; disposal (I add this for completeness to account for rubbish trucks, waste water and the like.)
INCOME TAX + VAT+GREEN TAX+CARBON TAX+WORKERS WAGE (WHICH IS ALSO TAXED) [/b]

+INSURANCE COSTS + HEALTHCARE + OTHER STATIST BULLSHIT COSTS THAT ARE THERE TO MAKE SURE YOUR COMPANY GOES BANKRUPT OR INDEBT A.S.A.P.

How about that, the government taxed every single item, if done through separate companies, which is mostly the case, how about that commie? So while you are bragging about the ant you fail to recognize the elephant.

In all cases the government will take more money out of any product than anyone else.

What is unnatural is the Tragedy of the Commons when the statism grows beyond the Dunbar limit that human tribes were historically equipped to live in. In the primitive, post-paleozoic, hunter-gatherer time period, natural forces (feedback loop) prevented statism from outgrowing the Dunbar limit.

All I am proposing is we use technology to restore the feedback loop, i.e. to give the individual sovereignty to opt out of non-local community taxation. Thus restoring our Contentionism. We will not be anonymous in our local communities where our physical presence is.


It can even do the community welfare more optimally.

I agree 100%. However, it is theoretically possible that in some distant future, a future where government is tamed and no longer a threat the cost/benefit ratio will flip and it will be in society’s best interest to tame anonymity to the point where it can be breached in the event of crime. Hence my remarks that I hope we someday progress to the point where we outgrow the need for anonymity. I do not expect that future to exist in the next several generations if ever.    


It is easy for government to crush or at least severely suppress an anonymous currency in the physical economy. Attaching long prison times for accepting payment in said currency and then sending out lots of undercover agents who try to buy things would do the trick.

It is in the digital realm, however, where the seller does not have to physically deliver goods but can anonymously deliver data/analysis/programming that anonymity becomes very difficult for governments to deal with.  The thesis is that overtime this digital/knowledge economy will grow to dominate the overall economy while the physical economy progressively shrinks into relative insignificance.


I agree that my analysis of the negative vector of crime is not holistic and does not weigh the potential gains of anonymity. However, it would be disingenuous to claim that all vectors introduced by anonymity are positive ones. When looked at holistically I agree the overall benefits of anonymity outweigh the costs. Nevertheless there are costs. It is the responsibility of those seeking to introduce new vectors into society to analyze their negative aspects and (to the degree possible) mitigate them.  

Your philosophical argument above is an oversimplification in that statism is itself natural. It arises spontaneously from any group of interacting individuals. Statist suppression of behavior deemed aberrant or detrimental to group survival is also natural and spontaneously occurring. Over time on a macro level statism can and sometimes does dictate what is natural. If statist pressure is significant enough and maintained over a long enough time horizon aberrance is reduced and in certain instances can even be driven to extinction.


It is a beautiful dream.

I wrote about bifurcation of the economy where the majority tax themselves into oblivion, and the fewer Knowledge Age workers go untaxable in an anonymous crypto-currency.

The example of small tax free havens shows that frontiers do exist.

Btw, I know of a major country with 0% tax rate for citizens if you reside outside the country.