Tag Archives: #future of the world

The Two Faces of Freedom

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Americans are a freedom-loving people.  But we do not often think about what this means.  Freedom means different things to different people.  At this extraordinary moment in our nation’s history, it might be wise to consider what we understand it to mean.

Two distinct views of freedom have emerged during the past two centuries. 

One is simply the idea that we should be free to do or to be what we are able to do or to be without human interference.  The second is the idea of having full control over our own initiative and purpose as self-directed individuals.

These two concepts seem quite similar at first glance, but they differ substantially in their implications.

The first involves the absence of coercion—the wish simply to be left alone.  It asks that we be assured of a minimum area of personal freedom in such manner that our humanity is not denied or degraded.

Recognizing the potential for personal freedom to impact negatively on the freedom of others, this view seeks freedom for the many.  It asks only that we be guaranteed a reasonable measure of completely free space around ourselves.

Perhaps we would also agree that, at the very least, the liberty of religion, opinion, expression, and property need to be protected from arbitrary interference.

The second concept is quite different.  This view insists on unrestricted self-assertion and absolute control of one’s own life regardless of the consequences this imposes on others.

Deriving from the will to control one’s own life and destiny, the second concept has significant consequences for society.

Clearly those seeking such liberty perceive themselves as responsible persons possessed of good judgment and perhaps exceptional wisdom, who are able to make choices based solely on their own ideas and purposes.

However, given the natural human resistance to rational and moral limits, this attitude can easily disrupt the equilibrium in communities, or in society as a whole.

These two concepts of freedom have come into serious conflict with one another over the course of the last two centuries.

An insistence that we should be free to do as we wish cannot be exercised in isolation. It readily evolves into a belief that we may have the right to influence or control the lives of other people.

It is convenient to assume that we know best, and some people think they know the true interests of other people better than those people do themselves.

This view gained traction during the 19th century, hitching a ride with the powerful Enlightenment belief that all of reality must ultimately be harmonious, and that science and reason would give humankind knowledge of a single unified truth.

It followed, therefore, that fully rational thinkers would never disagree and that conflicting values or truths were ultimately impossible.

Consequently, a number of well-known thinkers became convinced that if reason and rationality demand that our values must coincide in a free and “just” society, they must be made to coincide by any means necessary.

The historian of ideas, Isaiah Berlin has written about this concern in his famous essay, “Two Concepts of Liberty.”  He reports that Enlightenment philosophers became convinced that the better educated members of society had a right and responsibility to create and maintain a “free” society.

They believed we should do for citizens what they would do for themselves if they possessed the rationality and competence to understand their own best interest.

Thus, political philosophy rationalized the idea that it can be valid to restrain people in their own interest.

In this extraordinary view, writes Isaiah Berlin, “freedom is not freedom to do what is irrational, or stupid, or wrong.  To force empirical selves into the right pattern is no tyranny, but liberation.”

“Liberty,” he continues, “so far from being incompatible with authority, becomes virtually identical with it.”

Needless to say, this problem raises substantial concerns about our understanding of justice, morality, and governance.

Can it ever be justified or appropriate to place pressure on citizens for being, in our view, “irrational?” 

It was not long before this idealistic absurdity led to the nightmares of totalitarian despotism and total war in the 20th century. 

Tom

Regular readers can look for the next post on or about October 1. My forthcoming book is “Liberty and the American Idea,” subtitled “Rebuilding the Foundations.”  It is now in the hands of my publisher and will be available at Amazon and other booksellers very soon.  Sample chapters can be found at the top of the homepage.

A Future We Can Respect

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We are living through an extraordinary transition in human history, a fraught passage between a technically advanced but disintegrating past and an ultimately coherent, sustainable, and civilized future. The distress we are experiencing is very real. The present challenges may feel new to some, but they have been coming on for years. The crisis deepens, but it is not new.

A future we can believe in and respect will demand a lot from Americans. Getting there will require steadfast patience and immense resolve. Most of all, it will call for an attitude and frame of mind that reaches far beyond partisan hostilities.

It will be necessary to respond in a way we are not accustomed to. We must remain even-tempered, creative, and constructive. Dishonesty and disagreeable behavior are guaranteed to continue, but we are strong.

The only future that matters will be built with genuine human caring and generosity of spirit.

You might think this to be impossible. Well, I’m sorry, but we have no choice. We will need to spare no effort. In extreme conditions we may discover we have strength or stamina we did not know we had.

The alternative will be to watch the future descend into a deepening abyss, a nightmare of degradation for ourselves and our children.

Constructive action must be pursued determinedly and responsibly by citizens who can bring themselves to engage meaningfully with those they differ with—to rise above our differences no matter what the response. The strongest among us are those who have suffered in the past. Our greatest resources will be people who have known hardship and have prevailed.

Please keep in mind that it might be helpful to back away occasionally for quiet moments to collect our thoughts.

What do we know? Humankind was never an experiment and never a mistake. Our extraordinary capacity as human beings allows us to overcome the challenges created by an energetic spirit and over-active imagination.

The weaknesses of egotism, selfishness, and dishonesty are the failures of individual people, not the failures of the human race. Pain and suffering are afflictions, not ultimate destiny.

We have responsibility for identifying and serving the purpose for which we exist: To engage the inborn promise of a just, trustworthy, and prosperous civilization. A coherent future will depend on authentic dialogue and collaboration—and a state of mind that remains steady in the midst of turmoil.

I come to you with the premise that safety, well-being, and economic stability all depend on a firm foundation in local communities. Practical guidance is available from many sources. My forthcoming book may assist you to focus effectively. It offers a practical vision and the means for advancing constructively.

We can expect extremes of civil disorder and social degradation in the coming years. Our determination and fortitude must not falter. Without authentic communities we will remain vulnerable and ineffectual.

So, what do I mean by “authentic community?” I am not talking about geography. I am talking about people, interactive relationships, shared purpose, and supportive institutions.

Authentic community transcends the diversity of social, religious, and political differences. It consists of engaged and trustworthy relationships. It involves commitment to local problem-solving and meeting shared needs.

Authentic community is actualized by engagement in meaningful dialogue and collaborative endeavors, supported by local institutions and the varied interest associations of civil society.

This will not come easily because most of us have little or no experience with true community. But the potential is real. Our friends and neighbors will find it increasingly attractive as their circumstances deteriorate.

A genuinely functional community is a living network of dependable relationships that supports personal, social, and economic well-being. Yet, it is far more than that.

Community encourages a consciousness that embodies ethical integrity, respectfulness, and caring. This provides strength and resilience in the face of duress.

Community supports coherent thinking and collaborative action. It transforms uncertainty into purpose and generates the fortitude to withstand hardship.

You are invited to explore this potential—to form a nucleus of support in your neighborhood, to think together, to learn and plan and grow.

Tom

Regular readers can watch for the next post on or about May 1.

My forthcoming book, “Liberty and the American Idea,” is being prepared for publication. The Introduction, an annotated table of contents, and several chapters can be found at the top of the homepage.

Will Tomorrow Be Like Yesterday?

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A multitude of interacting crises are converging on America and the planet in the 21st century—material, social, moral.  The extraordinary number and diversity of threats is unparalleled.  Something extraordinary is taking place.  Our experience of normalcy is evaporating.

It is natural to look for someone to blame, but this is not useful.  The most significant mistakes now plaguing us were made over the course of many decades.  And massive structural change is now impacting our lives, which is inevitable and no one’s fault.

Interrelated global dynamics—economic, political, agricultural—are all subject to a fragile fiat monetary system and supply chain, to the rapid and uncontrolled emergence of advanced technologies, and to the massive displacement of desperate populations.

This is structural change: Incoherent, ungovernable, disruptive.

Our most imposing challenges fall into two distinct categories, which will interact with devastating effect.  These two can be clearly distinguished, one from the other.  One is material in nature, while the other is social, mental, and ethical in its influence and consequences.  The second of these, while profoundly significant for us personally, also impacts our ability to respond effectively to everything else. 

When anxiety and stress are dominant, it becomes difficult to see clearly, to solve problems, to listen well and understand others.  Uneasiness and confusion prevail. Nothing is more subversive than distrust, nothing more destabilizing than dishonesty, nothing more destructive than fear.

Our current view of the future is disoriented and anxiety-provoking.   That a faltering social order and growing tensions have generated conflict and political divisiveness is not surprising.

Yet these extraordinary challenges present us with an equally extraordinary window of opportunity.  Yes, an opportunity.  Here lies both the problem and promise presently at hand. Never have Americans encountered a more powerful stimulus to rethink and re-negotiate a future we can accept and depend upon.

How, you ask, can such dialog be possible when no one is willing to listen or to talk rationally?

There is no quick fix.  There is, however, a practical response which will require courage and foresight, and can be initiated promptly.

We might resist personal effort or actual engagement with other people, but I don’t think we have a choice. The way forward will be determined by practical necessity.  Reality will impose itself.  The need for dependable neighbors is rapidly approaching.  And this is where authentic dialog begins.

Safety and security will soon require functional communities and neighbors we can depend on regardless of religion or politics or the color of our skin.

No political hero can do this for us.  We need to stand on our own feet.

And we can begin today—to gather those among our friends and neighbors who are ready to start thinking and planning together, assessing shared needs and acting constructively. You will need only a few to form a nucleus of dependability.  Others will be attracted gradually to the presence of sanity and civility.

Let me be clear:  We must do this in place, where we already are and with the neighbors we already have.  If we relocate out of fear, attracted by the mirage of like-minded partisans, we will sow the seeds of doom for the future of America.

There is a natural human tendency to think with our imaginations, rather than to investigate rationally.  But the bottom line this: In local communities, security depends on a diversity of experience, perspective, and learned skills.  And this is made possible with courage, authentic dialog, and a generosity of spirit.

It is time to act.  In today’s world it is not wise to think every day will be like the last.

Tom

Regular readers can watch for the next post on or about November 1. My forthcoming book is being prepared for publication.  I hope to see it available early in the new year.  The Introduction, an annotated Table of Contents, and several sample chapters are available at the top of the homepage.

To Seek an Authentic American Future

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The challenges we face in communicating and understanding one another are formidable.  Americans have always been politically contentious, as one would expect in a democratic republic.  But, as we all know, something has changed. Public discourse has been stifled and personal relationships degraded by an atmosphere dominated by fear and distrust.  Alienation has degenerated into open conflict and hostility.  Our differences are many and they are significant.

The failure of meaningful dialogue has obstructed communication, suppressed perceptual sensitivity, and closed the door to understanding.

The observations offered in the first half of my forthcoming book reflect on the American character and the past—ideas and perspectives that transcend partisan politics.  We have a responsibility to reflect on the history that has led us to the place where we now find ourselves. 

No one has a window to the truth.  Our knowledge and perspective are influenced by personal experience and investigation.  Nothing is ever quite what the human mind and imagination make it out to be. And in this extraordinary time, we are confronted with rumor, misinformation, and manipulative politics—all of which degrade our ability to perceive things accurately.

If we are serious about seeking a future we can live with, where freedom is protected and prosperity has a foundation in civil order, we must overcome the forces of disintegration. No enduring solutions will be found where there is alienation and destructiveness.

The United States was conceived as a nation of laws because prosperity is not possible where the subversion of trust dominates the social order. Law can be debated, negotiated, altered.  But the rule of law is a fundamental principle of human security which cannot be subverted without the eventual collapse of human civilization.  Once it is gone, there will be no safety and no easy recovery.

A future that affirms the constructive vision embedded in the Constitution might not be in the interests of a few.  But the vast majority of Americans clearly desire to see the possibility for civility, cooperation, and dependability in the future of this nation. 

The challenge we face in defusing distrust calls for authentic dialogue and a willingness to engage in working relationships.  This is fundamental.  Nothing will otherwise be possible.

So the question before us is whether, and to what extent, we are willing to accept the conditions and discipline it requires.  As demanding as this might appear, it is a project with clearly defined requirements and available means.

To begin, communities will need to sit down and agree on guidelines that make respectful communication possible and constructive action possible.  OK, listen now!  This is not a normal situation. We are hovering on the edge of collapse.  So, acceptable language and rules of engagement must be defined and agreed upon among neighbors, in communities, and in business relationships. 

This is essential.  The necessity for creating secure conditions for mutual assistance and collaboration will have to be taken seriously.  If we want this potential to come alive, we will have to respect and protect it.

As I have repeatedly said, engaging with diversity does not mean altering personal views or opinions.  Diversity is a form of wealth.  It provides us with knowledge, experience, and the learned skills that allow us to meet shared needs and resolve local problems. 

There are many places in this world where we can express our views, and can do so every day.  But in the local community, let’s do this with objective concern for the reality at hand.  In other words, let’s not inflict strong feelings on others in a manner that compromises working relationships, safety and trust.

The truth about people who differ from us is not what the politics of conflict want us to think.  Rather it is what they actually think, believe, and wish for.  Without this information we are flying blind. 

Understanding is only possible when we listen with the intention of understanding. 

In a collapsing civil order, we can set aside our personal philosophies provisionally.  Because safety will require effective communication, graceful collaboration, and dependable relationships.

Tom

You may watch for the next post on or about December 4.

Note to readers:  An introduction to the coming book, and several sample chapters are available in draft, linked at the top of the homepage.

Self-confidence and Dependability

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As we continue to mature throughout our lives, we gain knowledge and perspective from our experience in the world.  Our richest sources of perceptual experience will always be interpersonal relationships.  Reading, reflection, and the personal search are all valuable, but there is little wisdom to be found in an isolation devoid of dialogue.

How can we be self-confident in our view of the world, of society, of the people we encounter, without having our understanding genuinely tested—that is, without dialogue?

Perceptions and assumptions come effortlessly. Creative imagination is a wonderful human capacity.  Reason allows us to judge meaning and differences.  We should be grateful for both!  But neither should be mistaken for windows to truth.

It has been said that our first responsibility as human beings is the investigation of truth.  Our ability to investigate and comprehend truth is broadened and deepened throughout our lives.

And so it is that we benefit from authentic interactive relationships with friends or colleagues who do not always agree with us, yet honor our integrity and respect personal differences.

Personal identity and the sense of self begins to take form in childhood and youth, in our relationships with family and the people who bring us up.  If we are fortunate, our personal growth is further supported in the wider community.

Self-confidence matures with self-understanding, a process influenced most by meaningful associations with people who matter to us.

Why are self-definition and belonging so important to human beings?  Why is a self-conscious sense of identity so essential for the individual?  How do we know who we are?  What gives us energy to express ourselves?

As we consider the prospects for a stable, just, and prosperous future, these questions loom large.

The extent to which identity and self-definition are developed through interpersonal relationships might not be obvious.  But, in fact this is the only way identity is formed.

It is the means by which wisdom and character are refined throughout our lives.  And it is one of the primary reasons we benefit from community.

Charles Taylor helps to illuminate the significance this has for us: “We are selves,” he writes, “only in that certain issues matter for us.  What I am as a self, my identity, is essentially defined by the way things have significance for me.” 

He goes on to remind us that “one is a self only among other selves.”   Personal freedom and independence can only develop in relation to the world around us.  We learn from engaging with others and define ourselves in relation to others—even when our differences are great.

Charles Taylor continues: “My self-definition is understood as an answer to the question Who I am.  And this question finds its original sense in the interchange of speakers.

“I define who I am by defining where I speak from in social space…, in my intimate relations to the ones I love, and also in the space of moral and spiritual orientation within which my most important defining relations are lived out.

 “We are expected to develop our own opinions, outlook, stances to things, to a considerable degree through solitary reflection.  But this is not how things work with important issues, such as the definition of our identity.

“We define this always in dialogue with, sometimes in struggle against, the identities our significant others want to recognize in us.  And even when we outgrow some of the latter—our parents, for instance—and they disappear from our lives, the conversation with them continues within us as long as we live.”

The great need for constructive problem-solving in today’s world presents us with the need to work effectively with all kinds of people, including those we have differences with.

This is an essential endeavor—for survival today and for the future we want for tomorrow.  It will require great patience, courage, and determination. 

The future will continue to present a blank wall unless and until we learn how to understand one another accurately, while leaving assumptions and hearsay behind.

Only then can we find our way forward with assurance—remaining confident in our own values and comfortable in our own skin.

Tom.

You may watch for the next post on or about October 12.

A note to new readers:  A project description and several sample chapters from the coming book are available at the top of the homepage: http://www.freedomstruth.net

Grit and Grace

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Americans today face a critical moment in time, arguably as profound as any in our history.  Freedom of opportunity, social and economic justice, and the preservation of our ability to seek personal goals are all at stake.  The character of the nation appears to be in question.  Our sense of identity as a people has been shaken.

We are all aware that this crisis is far bigger than an unexpected viral pandemic.  The causes of social degradation and political disruption overshadowing recent decades have been making themselves felt for a long time.

We are experiencing the present adversity as an American crisis, and it is.  But it is taking place in the context of a great turning point in the human story, a period of time when an unprecedented number of monumental crises are converging across the globe.

Our own crisis is inextricably intertwined with the affairs of the world.  Never has there been a greater need for the stability of the American vision.

I have proposed a simple, yet demanding course of constructive action for Americans, which can allow for survival, safety and functional coherence in local communities.

This will be extremely difficult for us to carry off.  But we have a choice.  Without a willingness to engage with one another in this a way, we have to question whether the nation can survive as a democratic republic.

We must find our way with both grit and grace, navigating through complex, sequential and interacting crises.  We have entered a transition that will dominate the course of the 21st century.

For Americans the outcome will depend on our character as a people, and our understanding of the unprecedented structural change that will confront us every step of the way.  Necessity presents us with stark, uncomfortable choices.

We can give free reign to anger and disillusionment, allowing ourselves to be dragged down into demoralized helplessness.  Or we can determine to stand firmly together as a people, rising above our differences to address the immediate practical priorities that confront us.

Are we prepared to preserve core values as we forge a genuinely American response to evolving conditions and a converging series of crises?  Will we have the vision, courage, and fortitude to commit ourselves to principled means and to engage responsibly in constructive action?

I will not offer political philosophy, nor will I speak of ultimate goals.  Fundamental values and shared purpose must be agreed upon by the American people.  Rather, I am proposing a way forward that calls for qualities of character, attitude, and responsibility that transcend conflict and controversy.

As a first step, I ask that we begin by turning away from the dishonesty and deceit of partisan politics to respond to the practical needs and problems in our local communities – which, in microcosm, embody and exemplify the challenges facing the nation as a whole.

However, make no mistake:  Consolidating local communities is only the first step.  This will create a platform for democratic engagement and a base from which to confront the oncoming forces of disintegration and disequilibrium.

The ultimate vision of the future will be up to you, the American people.

Essential lessons involving physical needs and social order must first be learned in the crucible of crisis.

We must discipline ourselves to abstain from deceptiveness, deceit, or manipulation.  Genuine virtuousness and a constructive attitude are called for, however dark the prospect.

I ask that we rise above our differences with the conviction that however immense the tests we face, however the world changes around us, however diverse our personal circumstances, this nation must not be permitted to abandon its founding vision and ultimate purpose.

Tom

You may watch for the next post on or about June 2.

Note for new readers: A project description, introduction to the coming book, and several chapters in draft can be found at the top of the homepage.

Disruption and Endurance

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The twentieth-century brought an astonishing number of advances to the human world – scientific, technological, and agricultural.  It was also a century of appalling violence, the most destructive in human history.  An estimated 167 million to 188 million people died at the hands of their brothers.

The century that put communism, fascism, and nationalism on the map also saw the invention of highly efficient weaponry and a willingness to direct it against civilian populations on a massive scale.

Do we understand what could happen to us on American soil – tragedies more devastating than anything we have experienced since the Civil War?  How easily we ignore the warnings!

At this historic turning-point we can least afford a repetition of the world’s destructive past. Only a strong America, just and wise and levelheaded, can lead a disrupted world back to stability and peace.

In his book, “The War of the World: Twentieth-Century Conflict and the Descent of the West”, the historian Niall Ferguson, who I have introduced to you previously, is explicit:

“The hundred years after 1900 were without question the bloodiest century in modern history, far more violent in relative as well as absolute terms than any previous era…. There was not a single year before, between or after the world wars that did not see large-scale violence in one part of the world or another.”

Niall Ferguson’s observations are useful because he departs from the typical explanations that blame weaponry and fascist governments, as significant as these were.  Instead he identifies the true causes as ethnic conflict, economic volatility, and declining empires.

In short, he reminds us of our human vulnerability to fear, emotional insecurity, and tribalism.

The convergence of multiple crises I have been writing about here involve all these things, but also newly emerging threats that most of us have not seen coming.

These include an extremely fragile, interdependent banking system, depleted natural resources, the rapid loss of farmland and collapsing aquifers, and the degradation of critical environmental ecosystems.

Run-away technology is rapidly outpacing the maturity of human moral competence.

In every case, the challenges we face as individuals and families rarely come into focus until we consider their local implications.

And, as Dr. Ferguson points out, it is the anxiety of people under pressure that leads to social deterioration and violence.

Long-time readers know my views.  In the extremes of social and economic stress, it is my belief that local communities are the only place where we have the freedom and opportunity to take control of our lives in a civilized manner.

The difference between a disrupted past and a secure future will depend entirely on the manner in which we address problems with our neighbors and manage our local affairs.

We cannot completely wall-out the chaos of the world, but we can accept personal responsibility for the unity and well-being of our communities.

The distinction between past and future will be determined by dependable relationships, respectful attitudes, and giving a helping hand.

Building trust with neighbors and cooperating to meet shared needs are personal choices that lead to safety.

As we work together shoulder-to-shoulder, we can begin to know, understand, and influence one another.  The lessons of civility and cooperation to be learned here will serve us well as a nation.

Yes, we need to be realistic— Many people remain crippled by dogmatic prejudices.  This is unlikely to change until we are forced to address the essential needs that we face together in a disintegrating social order.

Patience and determination will then make many things possible as never before.  Necessity sharpens the mind and invigorates the will.

Distrust and alienation are diminished as we identify common concerns and work in service to common needs.

And what of our common purpose?

Ultimately, in my view, our first priority must be the survival of the United States as a constitutional republic.  The future depends on this.

Let us seek a strengthening respect for the Constitution and the cooperative form of governance it requires.

It is the Constitution that has allowed us gradual progress, an advancing strength toward unity, justice and inclusive fairness for more than 200 years

Tom

Dear readers:  I will be taking a short break— Please watch for the next post on or about December 17.  New readers will find a project description, an introduction to the coming book, and several working drafts of early chapters linked at the top of this page.

An Unexpected Threat

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In recent decades a profound and unexpected threat has been growing exponentially.  The densely interconnected world of digital networks, instant communication, and global markets have presented a seductively attractive frontier.  Yet, we find ourselves awakening now to the danger embedded in this complexity.

Hidden within this new reality is a menace that is difficult to comprehend.  A new and unpredictable world, it hides hazards of barely imaginable magnitude.

We are confronted with impenetrable complexity.

Exponential population growth and digital connectivity, along with warfare, fragile commercial distribution systems, and the global transmission of deadly diseases, are all contributing to rapidly intensifying complexity.

However, it is the immensity and density of digital networks that is most difficult to grasp.  It is here where we are learning that complexity can behave in very strange and disturbing ways.

Complex systems are capable of spiraling out of control suddenly and inexplicably.  Living as we do with the instability of today’s world, I think it important that we understand this.

In his book, “Ubiquity”, science writer Mark Buchanan writes that a natural structure of instability is in fact woven into the fabric of the world.

He writes that complex structures and processes – in geology, in rush-hour traffic, in financial markets, and in the many intricate networks of human society – have a natural tendency to organize themselves into what is called a “critical state.”

When this happens they are poised on what he describes as the “knife-edge of instability.”

A critical state occurs when a system is poised for sudden change.  Some mathematicians and scientists now believe that a pervasive instability is a fundamental feature in nature – and in the structures of human societies.

Any event, even a small one, can have an effect that seems far out of proportion to its cause.

A single grain of sand, for example, will cause a sand pile to avalanche. But it is impossible for us to know which grain of sand, which individual maneuver in heavy traffic, or which specific circumstance in the financial markets will trigger an inevitable catastrophe.

What is the difference between something that is complicated and something that is complex?

James Rickards, who I have introduced to you in the past, answers this question in his book, “The Death of Money: The Coming Collapse of the International Monetary System”.

Rickards explains: “Many analysts use the words ‘complex’ and ‘complicated’ interchangeably, but that is inexact. A complicated mechanism, like the clockworks on St. Mark’s Square in Venice, may have many moving parts, but it can be assembled and disassembled in straightforward ways.

“The parts do not adapt to one another, and the clock cannot suddenly turn into a sparrow and fly away. In contrast, complex systems sometimes do morph and fly away, or slide down mountains, or ruin nations….

“Complex systems include moving parts, called autonomous agents, but they do more than move. The agents are diverse, connected, interactive, and adaptive. Their diversity and connectivity can be modeled to a limited extent, but interaction and adaptation quickly branch into a seeming infinity of outcomes that can be modeled in theory but not in practice.

“To put it another way, one can know that bad things might happen yet never know exactly why.”

James Rickards goes on to expound on the instability of today’s financial markets and global economy.  He writes: “Bankers’ parasitic behavior, the result of a cultural phase transition, is entirely characteristic of a society nearing collapse.

“Wealth is no longer created; it is taken from others. Parasitic behavior is not confined to bankers; it also infects high government officials, corporate executives, and the elite societal stratum.”

Today the financial markets and monetary system are again poised “on the knife’s edge of criticality.”

My message here is the importance of resisting panic when confronted with frightening and unexpected shocks.  We must remain steady on our feet when others are ready to stampede.

Only with a commitment to justice and steady self-discipline will we hold our communities together.

The road to freedom requires courage, and getting there through a dark night will depend on the strength of local cooperation and moral responsibility.

Tom

Note to readers:  Watch for the next post on or about November 19.  New readers can find a project description, a draft introduction to the forthcoming book, and several chapter drafts at the top of this page.

The Problem of Trust and the Future of Humanity

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Trustworthiness and dependability are usually thought of as admirable aspects of personal character.  But as we witness the continuing deterioration of social order it becomes increasingly clear that these priceless attributes are pillars of civilization.

Fear of crime or violence will cripple any society, but the greatest insecurity comes with the loss of trust between friends or neighbors or fellow workers – those we depend on and thought we understood.

Have we found ourselves unexpectedly questioning whether someone we trusted is actually who we thought they were?  When such questions arise, how can we be sure?  How does one keep body and soul together?  It is hard to recover.

Distrust makes the world precarious.  Uncertainties spread; confidence vanishes.

Things fall apart.

Businesses are particularly vulnerable to loss of trust.  Without dependability in governance and consistency in economic policy businesses are hobbled by unpredictability.  Business owners cannot plan.  And a market economy abhors uncertainty.

This is not the way any of us wish to live our lives.  If constant uncertainty makes things feel out of control, it can get scary.

What can we do as responsible people when we live in a society dominated by distrust and a general lack of personal integrity?

The benefits can be great when we choose to be trustworthy ourselves – in spite of everything.  We can be consciously determined to demonstrate what moral integrity means.  But this is not easy.  If America is to turn the corner it will take time and extraordinary patience.

We will have to keep the necessity of dependability in focus at all times.

Nothing will change unless we establish the effectiveness of trustworthiness to those around us and draw attention to its’ value.

In so doing, it will be important that we not fool ourselves into imagining that we are better than others who are failing to meet our standards.  Moral pride can be obvious, and it will push people away.

How can we assist others to understand and value integrity?  Self-righteousness fails to acknowledge that everyone has the capacity to recognize their mistakes.  So, if we would help America move on to a better future we need to be self-disciplined in our contacts and relationships.  Kindness attracts; arrogance offends.

“Moral pride,” wrote Reinhold Niebuhr, “is revealed in all ‘self-righteous’ judgments in which the other is condemned because he fails to conform to the highly arbitrary standards of the self.  Since the self judges itself by its own standards it finds itself good. It judges others by its own standards and finds them evil when their standards fail to conform to its own.  This is the secret of the relationship between cruelty and self-righteousness.” (The Nature and Destiny of Man, Vol. I, p. 199.)

Readers who profess their belief in the Christian Faith may recall the admonition of St. Paul when he wrote: “For wherein thou judgest another, thou condemnest thyself; for thou that judgest doest the same things….” (Romans 2:1)

Those of other faiths, or those who do not consider themselves religious, will never-the-less recognize this compelling logic.

Integrity is a personal choice.  We must never assume that others are incapable of cleaning up their act.  It is an intrinsic capacity we are given at birth.

A word of warning before we finish: When we recognize a consistent pattern of dishonesty and deceptiveness, it can become necessary to distance ourselves from it.  Such destructiveness permeates and subverts everything around it.

We must be practical, but also ready, if possible, to care for people who are troubled in this way. The greatest forgiveness is the least deserved.

However, forgiveness and trust are two entirely different things.  Once trust is lost, it can be very difficult to recover.

So it is that the restoration of trust and dependability in all our endeavors must be championed by every American as we enter a new day.

Without trust the future is lost.

Tom

A note to readers:  This blog posts regularly.  The next post is due on or about January 31. However, it will be less predictable than usual as I will be traveling.

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Why the Bankers Are Trapped

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Few seem to grasp that we have arrived at an historic turning point: a nation and a world confronted with profound structural change.  The hope to recover the past will not be helpful. We must pick ourselves up, hit the reset button, and respond to a rapidly changing reality.

I cannot accept assumptions about political policies or intentions without asking practical questions. I want to understand a complex transition that is having an immense impact on us all.

There are many aspects to the changes we are experiencing, some with immediate implications, others longer-term.  To seek solutions we must recognize structural change.

I have given attention to the continuing financial crisis in recent posts because I believe that is where the closest danger lies.

So, I begin here with a financial question with structural implications: Why is the Federal Reserve unable to return the economy to some semblance of fairness and order? Or, to put it another way: Why have our financial liabilities not been corrected since the crisis in 2008?

The short answer is that they want to believe they are dealing with a cyclical crisis rather than a structural crisis.  Again, why?

Because the truth represents an unbearable existential threat.

Here we find a powerful example of the problems presented by structural change.

The economy has shifted into a long-term deflationary trend, which presents banks and governments with an impossible situation.

I refer you again to James Rickards’ best-selling book, “The Death of Money: The Coming Collapse of the International Monetary System”.  A monetary economist and former banker, Rickards has been advising the Pentagon and CIA concerning financial warfare and terrorism.

Using simple math, Rickards’ explains how, “in effect, the impact of declining prices [deflation] more than offsets declining nominal growth [GDP] and therefore produces real growth.”

Most of us would think this is a good thing.

He writes: “Despite possible real growth, the U.S. Treasury and the Federal Reserve fear deflation more than any other economic outcome. Deflation means a persistent decline in price levels for goods and services. Lower prices allow for a higher living standard even when wages are constant, because consumer goods cost less. This would seem to be a desirable outcome, based on advances in technology and productivity that result in certain products dropping in price over time….”

Why is the Federal Reserve so fearful of deflation that it resorts to extreme measures to oppose it? Rickards gives us four reasons.

First, deflation has a severe impact on government debt: “U.S. debt is at a point where no feasible combination of real growth and taxes will finance repayment…. But if the Fed can cause inflation…, the debt will be manageable because it will be repaid in less valuable nominal dollars. In deflation, the opposite occurs, and the real value of the debt increases….”

Second, deflation impacts the debt-to-GDP ratio, causing foreign creditors to lose confidence in the dollar and demand higher interest rates. This is an urgent problem because the debt is continually increasing. Budget deficits require new financing, and interest payments are already being financed with new debt.

Third, deflation is a major problem for banks. As Rickards’ puts it, “deflation increases money’s real value and therefore increases the real value of lenders’ claims on debtors…. But as deflation progresses, the real weight of the debt becomes too great, and debtor defaults surge.”

The fourth problem with deflation is about taxes. When a worker receives a raise, the additional income is subject to taxes. But, if the cost of living drops by the same amount, the worker in effect receives the same raise and the government cannot tax it.

“In summary,” writes Rickards, “the Federal Reserve prefers inflation because it erases government debt, reduces the debt-to-GDP ratio, props up banks, and can be taxed.”

“Deflation may help consumers and workers,” he says, “but it hurts the Treasury and the banks…. The consequence of these deflationary dynamics is that the government must have inflation, and the Fed must cause it. The dynamics amount to a historic collision between the natural forces of deflation and the government’s need for inflation.”

Such are the challenges of structural change.

Tom

Note to readers: You can support this blog and the book project by suggesting that your friends and associates take a look.  And, watch for the next post on or about November 3.

When Money Dies

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Americans experienced a major financial crisis in 2007-8.  Some would argue that it began far earlier, and clearly it is ongoing today.  We may be more aware of this crisis than others because it confronts us daily.  In preparing for what is to come, we would do well to listen to those who saw it coming and who continue to warn of its’ inevitable consequences.

Beyond all the foolishness and greed running rampant in the financial world, one great threat hangs over our future more than any other: The greatest expansion of debt the world has ever seen.  This is in large part due to non-stop deficit spending by governments.  Corporate borrowing has recently exploded similarly.

However, we need to understand that this has been made possible by a credit-based monetary system.  Easy access to credit, which is money created out of thin air, has led to the belief that credit is wealth.  This fantasy has infected society from top to bottom.

When a credit-based monetary system functions the way central bankers wish, the money supply should expand only slightly faster than economic growth.  Enough additional money must be created to cover the growing cost of servicing the expanding debt.

But, since 2008 the central bank (which we call the Federal Reserve) has expanded the monetary base almost four-fold while the economy has grown very little.

They call this “money”, but it is mostly debt.

The arrangement is extremely profitable for banks and the wealthy elite.  It allows for all kinds of mischievousness.  And, it depends on inflation, which is a long-term problem for the rest of us.  If it sounds to you like a Ponzi scheme, you are not alone.

In managing the money supply to avoid the growing threat of another banking crisis, the Federal Reserve has facilitated repetitive cycles of booms and busts, each more severe than the last.  This has perpetuated major social and economic distortions and dislocations.  It has stifled any possibility of restoring normalcy to the lives of ordinary Americans.

The economy has not been permitted to return to a normal and balanced condition.  Nothing has been fixed.  Extremely low interest rates have encouraged rapid growth of corporate and government debt, so the situation has been steadily worsening.

At such extreme levels, there are only two paths forward: default or devaluation.

Debt must default and be liquidated before economic productivity can recover.  But, the immediate pain of bankruptcy is too great for the bankers and policy-makers to bear. Consequently, they are struggling to gradually devalue the currency in relation to the cost of goods and services.

The government hopes desperately to meet the nominal cost of Social Security, Medicare, and other long-term budgetary obligations without defaulting.  This means the value of the dollar must fall significantly.

By altering the method of measuring price inflation, rising prices have been masked and social security payments held to a minimum.  Only those who live in the real world know the truth.

The devaluation of currencies is taking place around the world as budget deficits grow. Central banks attempt to minimize the interest costs of huge debt loads, while at the same time trying to avoid the failure of banking institutions that depend on interest rates.

Monetary economist and former banker, James Rickards, has written that “financial crises have supplanted kinetic warfare at the center of complex system dynamics. Financial crises in 1998 and 2008… are warnings – tremors ahead of a misfortune beyond imagining.” (“The Road to Ruin”, 2016, p.204)

The consequences of all this are profound and unpredictable.  We face a deepening crisis that will exaggerate all others, severely limiting the capacity of businesses to grow and create jobs, undermining our standard of living, and making it impossible to address pressing needs without worsening monetary instability.

The dependability of a productive, self-sustaining economy has been sacrificed to the tyranny of selfish interests.

Strangely, however, the wealthy elite have behaved like parasites that destroy their host.  They have wrecked the healthy economy upon which their profits depend.  And they have exposed themselves, as well as the rest of us, to the evaporating value of credit-based money.

Tom

Please look for the next post on or about October 6.  We will take a look at the problem of complexity, and the realities of financial markets and other systems that have vastly exceeded the human capacity to fully understand or control.