This page has been archived and commenting is disabled.

How Fiat Currency Leads To 'Collective Corruption'

Tyler Durden's picture




 

Ex-Barclays chief 'Austrian' economist Thorsten Polleit provides a few clarifying thoughts on the hyperinflatory endgame (and democracy-crushing impact) of the fiat currency environment. Critically, Polleit notes that fiat currency tends to result in "collective corruption" in societies, and how this then leads to hyperinflation, despite the dangers to society that hyperinflation always brings. Ring some bells? This brief interview (with more detailed article below) stretches from the development of the global fiat currency regimes over the last 40 years to the increasing levels of debt that may (just as Kyle Bass and others have noted) mark the terminal decline of the fiat regime and the self-serving majority electing themselves into a vicious circle. Mises noted:

"The masses... do not conceive any ideas, sound or unsound. They only choose between the ideologies developed by the intellectual leaders of mankind. But their choice is final and determines the course of events. If they prefer bad doctrines, nothing can prevent disaster." If these "uncommon men" become "court intellectuals," the door will be opened for effectively spreading of false theories, supporting government-friendly ideas."

Must watch.

 

Thorsten Polleit's excellent speech "What Do Bankers Know About Money And Banking" is also below:

Thorsten Polleit, "What Do Bankers Know about Money & Banking", PFS 2012 from Property & Freedom Society on Vimeo.

 

qjae14_4_1

 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Fri, 01/04/2013 - 20:45 | 3124305 tu-ne-cede-malis
tu-ne-cede-malis's picture

Thumbs up for Hans-Herman Hoppe and his amazing lecturers at his Property and Freedom Society.  Polleit is one of many other fantastic speakers there.

Fri, 01/04/2013 - 21:22 | 3124354 Enslavethechild...
EnslavethechildrenforBen's picture

Tons and tons of green confetti in exchange for all your land, your Gold and your children.

This "fiat" system seems fair enough to me.

Sat, 01/05/2013 - 00:26 | 3124653 Michaelwiseguy
Michaelwiseguy's picture

We need to nationalize the Federal Reserve Corporation and confiscate all their assets!

Sat, 01/05/2013 - 07:14 | 3124912 slackrabbit
slackrabbit's picture

No mate, lets just steal it and be honest about it!

 

:j

FU BEN!

Sat, 01/05/2013 - 07:40 | 3124931 negative rates
negative rates's picture

Yes, send me your poor, your fiat, and your orphans too, without damaged kidneys.

Fri, 01/04/2013 - 23:05 | 3124535 ball-and-chain
ball-and-chain's picture

Greed is the root of all evil.

People have been screwing over their neighbors for a long long time.

Gold, cash, jewels.

Folks will kill for wealth.

http://www.angrysinner.blogspot.kr/2013/01/yesterday-dragon-lady-served-egg-rolls.html

Fri, 01/04/2013 - 23:26 | 3124570 Harbanger
Harbanger's picture

Greed is one of the seven deadly sins.

Fri, 01/04/2013 - 20:46 | 3124310 I think I need ...
I think I need to buy a gun's picture

They said on CNBC today no signs of inflation

 

Fri, 01/04/2013 - 20:56 | 3124326 tom a taxpayer
tom a taxpayer's picture

Breaking News: Bullard hospitalized after Liesman interview.

San Diego: Just minutes after a CNBC interview in which he admitted the Fed prints money (fiat), St Louis Fed President Bullard was rushed to La Jolla Hospital for the Filthy Rich suffering from a bowel obstruction. After a two hour surgery, Bullard is in the recovery room and as comfortable can be expect after removal of the anal obstruction: Steve Liesman's nose. 

Chief Surgeon Dr. Noh Fee Noh See said he tried many conventional and unconventional surgical procedures but could not dislodge Liesman's nose from Bullard's behind. At the last minute Bullard was saved by a Tweet from Treasury Secretary Geithner to Leisman, promising Liesman an exclusive interview with Geithner…something about a bank holiday. Immediately, Leisman's nose popped out of Bullard behind like a champagne cork. 

Fri, 01/04/2013 - 21:29 | 3124376 Osmium
Osmium's picture

Ya, I got the bill for my homeowners insurance today.  20% increase from last year.  The only thing I can say is

FUCK YOU BERNANKE!

Sun, 01/06/2013 - 04:18 | 3126690 S.N.A.F.U.
S.N.A.F.U.'s picture

Current and expected low yield means insurance companies have to charge higher premiums even if price inflation hasn't hit the items they insure yet.  (Basically they need to charge their customers their full operating costs + profit margin rather than collecting a good part of that via interest on their balance, because right now their balance ain't earning them jack.)

Fri, 01/04/2013 - 20:48 | 3124314 tooriskytoinvest
tooriskytoinvest's picture

“Panic Buying” In Gold: Just Four Days Into 2013, A New Gold Milestone Has Already Been Passed

http://investmentwatchblog.com/panic-buying-in-gold-just-four-days-into-...

Fri, 01/04/2013 - 20:49 | 3124316 Seasmoke
Seasmoke's picture

I don't take money because I want to steal from you , I take money because I don't want you to steal from me.

Fri, 01/04/2013 - 22:25 | 3124472 dick cheneys ghost
dick cheneys ghost's picture

I am so sick of their FAKE money.................Buck you Fernanke

Fri, 01/04/2013 - 20:50 | 3124317 rodocostarica
rodocostarica's picture

it is Friday night. How about some nice classic queen to mellow you out? 

 

Queen

Fri, 01/04/2013 - 21:01 | 3124327 Yen Cross
Yen Cross's picture

Speaking of fiat corruption> The risk(fx) trade sure stuffed some longs over the last 24-48 hours. e/u down 300 pips, cable down 300+ pips, a/u down 120+pips ect...

  I have to admit the a/u did a nice squeeze gap down to 1.0420. It filled the "Fiscal Cliff" gap and hosed traders trying to play the short side, when risk fx caught a bid in the middle of the night- as usual- U.S. hours, and squeezed back up to the  %30? fibi retace of the move down. (aussie did a %90 retrace).

Fri, 01/04/2013 - 21:08 | 3124339 pragmatic hobo
pragmatic hobo's picture

to say fiat currency leads to corruption is like saying guns kill people.

Fri, 01/04/2013 - 22:02 | 3124428 Enslavethechild...
EnslavethechildrenforBen's picture

To say that "guns kill people" is like saying that "Bankers are sweet, generous people that only want to help others" 

fixed it for you

Fri, 01/04/2013 - 22:15 | 3124455 Yen Cross
Yen Cross's picture

  Well done. +1

Fri, 01/04/2013 - 21:14 | 3124347 JanaUsoFine
JanaUsoFine's picture

Dr. Polleit is legit.  I wonder, since he's a Dr., if he knew that Diarrhea is genetic...  Apparently it runs in your genes. 

Fri, 01/04/2013 - 22:04 | 3124433 booboo
booboo's picture

no,no,no. It's hereditary cause it runs in your JEANS. Leave it to a Vol to pecker up a good joke;-)

Fri, 01/04/2013 - 22:26 | 3124475 JanaUsoFine
JanaUsoFine's picture

Shit! You're right... with regard to both. I think it was Dooley who told it to me incorrectly, actually. 

Fri, 01/04/2013 - 21:15 | 3124352 Yancey Ward
Yancey Ward's picture

Nothing really surprising here- power corrupts completely.  If I had the power to create wealth through money production, I wouldn't stop either- I would enrich myself and every friend, relative, and loose acquaintance, too, in that order.

Fri, 01/04/2013 - 21:19 | 3124359 Seasmoke
Seasmoke's picture

thats why most of us here know the truth.......we would do the same thing

Fri, 01/04/2013 - 21:16 | 3124353 Yancey Ward
Yancey Ward's picture

Also, people want to believe in free money.  10 minutes on any online poker site confirms this.

Sat, 01/05/2013 - 07:50 | 3124940 negative rates
negative rates's picture

And they shall have their chance at it, legitimately too. They must be a survivor though, and it has a rather short timer before the survivor actually becomes the prey in this case, it's longer than 10 minutes cause they can already swipe 10 minutes stuff for free, which to them is free money.

Fri, 01/04/2013 - 21:38 | 3124397 gnomon
gnomon's picture

And to have the Reserve Currency is to have the most extreme "collective corrupter" possible on Earth.

To have the Reserve Currency was the Curse of Curses, accelerating our Road to Hell and Dissolution.

Fri, 01/04/2013 - 21:51 | 3124419 Manthong
Manthong's picture

So what’s wrong with fiat(s) ?

War is Peace.. Freedom is Slavery.. Ignorance is Strength.

Sat, 01/05/2013 - 07:52 | 3124941 negative rates
negative rates's picture

What's the difference between a fiat and a thief. There is no difference, they both work at night.

Fri, 01/04/2013 - 21:57 | 3124425 ISEEIT
ISEEIT's picture

Truth is gold. Gold is a check on truth. Gold places natural limits on mans ability to manipulate reality. Once the sociopaths have crossed the line..... Gold will remain as an opportunity for us creatures to make fair exchanges amongst one another.

REAL VALUE VS>> ARTIFICIAL CONSTRUCTS.

Men make it? Be weary.

Men DISCOVERED it...Perhaps a different story?

I can only wonder about so many things.

What I can know is that this 'creation' is stillborn and as much as that is terrible...It is also discipline and so good.

Fri, 01/04/2013 - 22:04 | 3124436 Cabreado
Cabreado's picture

"Polleit notes that fiat currency tends to result in 'collective corruption' in societies..."

Ah... so blame the currency for the corruption...

interesting, shallow, upside-down thought.

"the ideologies developed by the intellectual leaders of mankind"

The intellectual leaders are gone, replaced by the corrupt and the ideology of Self.
So then... there is conflict, circular bad logic, already, in this article.

"The masses... do not conceive any ideas, sound or unsound."

That would be untrue -- the masses are in the process of (re)conceiving the greatest idea ever known:  that Truth makes a difference.

Fri, 01/04/2013 - 22:35 | 3124492 gnomon
gnomon's picture

That is not "upside-down thought".  Only through repeated, regular corrections that are not short-circuited by fiat currency pumping can the public stay uncorrupted.  Only via extended severe corrections can the old lessons of what works be reinforced and bad behavior not be rewarded.  And the corruption that a perpetual boom promotes does not extend through several generations which keeps profligate spending and behavior from becoming entrenched.  

Some measure of true adversity with few backstops is what keeps a population grounded in reality.

We have lost the tough love of the Gold Standard, (or something fairly close to it).

 

Fri, 01/04/2013 - 22:08 | 3124439 PhD
PhD's picture

Collective corruption is unavoidable. It is an intricate process of the system which cannot be avoided regardless of the currency-regime. This is the entropy of the economic system; it will always grow as long as the structure that feeds it is in existence. This is why capitalism is the only answer to the stock-flow structure of the economy. It allows failure and thereby the movement of energy out of most corrupted components of the system.

Fri, 01/04/2013 - 22:18 | 3124461 Cabreado
Cabreado's picture

"This is why capitalism is the only answer to the stock-flow structure of the economy. It allows failure and thereby the movement of energy out of most corrupted components of the system."

There is nothing wrong with Capitalism, but it sounds like you've been napping.

 

Fri, 01/04/2013 - 22:24 | 3124471 PhD
PhD's picture

Yeah, its late. Maybe im talking nonsense

Fri, 01/04/2013 - 22:51 | 3124514 Cabreado
Cabreado's picture

Don't give up so easily.

It sounds like you're quoting a textbook.

Recognize the virtues of a system that can only exist in the context of freedom,
sing its praises and fight for it...

And recognize the Corruption, how no system is immune to it, and how no system can survive in a polluted state.

 

Fri, 01/04/2013 - 23:11 | 3124547 PhD
PhD's picture

:)

No, it was more an idea which just popped while reading the article. Choosing the word capitalism was perhaps poorly chosen, the topic is more of monopolies (such as the FED) which absorbs more and more of the available energy of the system, which is not put into work.  Given that the monopoly is protected from failure, the sum of possible states of the system will gradually decline, until there is only one left, that of collapse.

Anyway, been working for 20 hours straight, not thinking clearly.

 

Would love to hear your view on the matter:)

Fri, 01/04/2013 - 23:45 | 3124598 Stud Duck
Stud Duck's picture

I think you were working on the Ephany that Karl Marx had when he referred to the "centrafuge effect of Capitalism" Just like the cream from milk is seperated with a centrafuge, it will alway be consentrated/seperated from the Milk (labor) in the capital allocation by a select few controling it. Wealth and wealth generated by labor will alway go through the process.

The only difference between Capitalism and Socialism is method of allocating the capital, either through a central collective/ planning or the interest mechanism in a banking system.

Both central planning and the banking mechanisms must be maintained through some sort of controls on government or both will have a corrupt totalitarian system take control. Thats when the 2nd amendments is designed to take effect if things get so far out of hand that the peoples food have to be protected from the government.

Histroy over the last 100 years has attempted both, with central planning ending in failure due to corruption in government, and the collaspe of the USSR. We have  the same future, are past the point of no return, as the interst mechanism is also failing capitalism. It should be as ughly as the USSR, maybe worse.

 

Sat, 01/05/2013 - 00:14 | 3124638 Cabreado
Cabreado's picture

Just don't neglect the human component when investigating the system/constructs, etc.

Particularly, in your analysis, do not neglect the humans who do not care, and all that that entails.

Now that I understand more, I think you're thinking clearly (but the above is important).
Get some rest; you've earned it.



Fri, 01/04/2013 - 22:35 | 3124491 Schacht Mat
Schacht Mat's picture

The thesis of collective corruption is sound as to its symptomology, however; what is more important to understand are the mechanics of its causology, especially from the perspective of its snowball effect.  Corruption does not begin with the fiat, but rather with the society, as it cycles from the productivity and thrift axis to the consumption and greed axis.  Only once the society has shifted significantly to the latter axis, will the self reinforcing effect of oneupmanship on the financial parameters that lead to infinite printing result in the dominoing of the currency to its demise.  The question is where to find the schwerpunkt - and it is clear that we are already past ours.

Speaking strategically, were are done - all that remains is to understand the sequence of tactics that are being and will be employed to determine the timing of the endgame.  History will not be kind to our generation, any more than it has been kind to the Romans who fell when the Barbarians finally sacked the capital. 

Fri, 01/04/2013 - 23:27 | 3124573 Cabreado
Cabreado's picture

Oops...

You forgot to implicate the criminals.

Round and round we go.
The wordsmiths be damned.

Fri, 01/04/2013 - 23:11 | 3124527 Element
Element's picture

 

 

Mises noted:

 

"The masses... do not conceive any ideas, sound or unsound. They only choose between the ideologies developed by the intellectual leaders of mankind. But their choice is final and determines the course of events. If they prefer bad doctrines, nothing can prevent disaster." If these "uncommon men" become "court intellectuals," the door will be opened for effectively spreading of false theories, supporting government-friendly ideas."

--

You mean like this? World's most powerful people list:

1. Nobody  [i.e. Tyler Durden, non-state actor, persona non gratis]
2. Vladimir Putin  [has thermos of global mass destruction]
3. Ben Bernanke  [has bubblejet of global mass destruction]
4. Angela Merkel  [has taxpayers to pay for all mass destruction]
5. Barack Obama  [has a serious drone habit, armed with 5th-generation teleprompters]
6. Mario Draghi  [Goldman idiot-in-chief - see #3]
7. Xi Jinping  [bubblejet arsenal has peg stuck in it]
8 (tie). Ayatollah Khamenei  ["wtf? that should be me!" - Netyhorsehooey]
8 (tie). Christine Lagarde  ["why is this parasitic cretin even being mentioned?!" - Nancy]
10. King Abdullah Bin Abd al-Aziz  [ha!! … bwahahahaha!! … dat's a good one!!]

The list is for-real though, and was published by "Eurasia Group", who's moto is, "Defining the Business of Politics".

You read that right, so who might be these pretentious 'definers' of everything regarding global 'political-business' be then? 

COMPLETE ADVISORY BOARD

Vint Cerf
Senior Vice President, Chief Internet Evangelist, Google
 
Robert Citrone
Principal, Discovery Capital
 
Mark Franklin
Chief Executive Officer, EMSO Partners Ltd.
 
Ken Griffin
Chief Executive Officer, Citadel
 
Ryozo Hayashi
Special Advisor, Japan Industrial Policy Research Institute
 
Ali Koc
Director, Koc Holding
 
Sallie Krawcheck
Former President, Global Wealth and Investment Management, Bank of America Corporation
 
Tadashi Maeda
Director General, Energy and Natural Resources Finance Department, Japan Bank for International Cooperation
 
Edward L. Morse
Managing Director and Head of Commodity Research, Citigroup
 
Win Neuger
Vice Chairman, PineBridge Investments
 
Martin Pompadur
Director, Imax Corporation
 
Juan A. Pujadas
Managing Partner, Advisory Services, PricewaterhouseCoopers
 
Takumi Shibata
Advisor, Nomura Holdings
 
Ambassador Thomas Pickering
Vice Chairman, Hills & Company
 
Antoine van Agtmael
Chairman and Chief Investment Officer, Emerging Markets Management
 
Enzo Viscusi
Group Senior Vice President, Eni Corporation

 

http://www.eurasiagroup.net/advisory-board

 

Because we care so much we're defining the 'business' of public-policy 'making' - for you.

So what was it Mises said again?

--

RT: Putin second to 'Nobody' on world's most powerful list - thinktank
Edited: 05 January, 2013, 02:23
http://rt.com/news/putin-powerful-people-list-329/

 

Sat, 01/05/2013 - 07:59 | 3124943 negative rates
negative rates's picture

Booker T, booker T, booker t, booker t, booker t, booker t. Why they are all BOOKER t's. Should I say it again?

Sat, 01/05/2013 - 17:56 | 3125837 Ghordius
Ghordius's picture

Rupert Murdoch is missing from your top ten list. actually, you put "nobody" at his place

Fri, 01/04/2013 - 23:30 | 3124579 Stud Duck
Stud Duck's picture

My own personal observations, over the last 3 decades, is that the bankers  in 1980 began the squeeze on farmers who had mortgaged their farms (during the 70;s)  with the rapidly increasing farm land prices, and the request from the gedral government (think Richard Nixon telling to farmers to farm fence row to fence row, dozed out the fences) to produce grain for ecxport to pay for jacked up oil prices. This occurred after the gold window was close, I might add.

Then a man named Volker was appointed to Chairman, and with inflation at 17% ( they factor food and duel then).  Drought in the early 80's and interest rates to 20% the farmer was blown out, especially the cattlemen, as they were completely without any support.

The prices  land then collasped from $1,000 per acres in this area to $300 on the courthouse steps,  This went on for 6 years during the Reagan Adminstration. until most of the farmers were wiped out, THEN, the Reagan adminstration came up with the Conversation Reserve Program, the Doctors and Lawyers, Bankers picked the land up on the cheap, put it in the program for 2 decades or more, planted it to grass, and let it set idle.

Now the same Drs,  Lawyers, Bankers are selling the land at $6,000 per acre in large quantities, or leasing it  for high price per acre per yr.

The farmers that cintinued, were supported by the USDA for two decades, on subsidies, put the 3 world farmer out of business and now those same countries, like Egypt have large corporate/gov't raising cotton for export for currency to support the government while food prices have doubled.

Those mistakes are going to be paid for soon, as the people that have been kept in farming have no feeling for those that have needs for their food. Read the history on grain ecports from Ireland while 1.5 million people starved, It is the fate of many people in the UDA sooner than they think.

Sat, 01/05/2013 - 00:28 | 3124652 reTARD
reTARD's picture

 

A major symptom of a man's—or a culture's—intellectual and moral disintegration is the shrinking of vision and goals to the concrete-bound range of the immediate moment. This means: the progressive disappearance of abstractions from a man's mental processes or from a society's concerns. The manifestation of a disintegrating consciousness is the inability to think and act in terms of principles.

A principle is "a fundamental, primary, or general truth, on which other truths depend." Thus a principle is an abstraction which subsumes a great number of concretes. It is only by means of principles that one can set one's long-range goals and evaluate the concrete alternatives of any given moment. It is only principles that enable a man to plan his future and to achieve it.

The present state of our culture may be gauged by the extent to which principles have vanished from public discussion, reducing our cultural atmosphere to the sordid, petty senselessness of a bickering family that haggles over trivial concretes, while betraying all its major values, selling out its future for some spurious advantage of the moment.

To make it more grotesque, that haggling is accompanied by an aura of hysterical self-righteousness, in the form of belligerent assertions that one must compromise with anybody on anything (except on the tenet that one must compromise) and by panicky appeals to "practicality."

But there is nothing as impractical as a so-called "practical" man. His view of practicality can best be illustrated as follows: if you want to drive from New York to Los Angeles, it is "impractical" and "idealistic" to consult a map and to select the best way to get there; you will get there much faster if you just start out driving at random, turning (or cutting) any corner, taking any road in any direction, following nothing but the mood and the weather of the moment.

The fact is, of course, that by this method you will never get there at all. But while most people do recognize this fact in regard to the course of a journey, they are not so perceptive in regard to the course of their life and of their country.

There is only one science that could produce blindness on so large a scale, the science whose job it was to provide men with sight: philosophy. Since modern philosophy, in essence, is a concerted attack against the conceptual level of man's consciousness—a sustained attempt to invalidate reason, abstractions, generalizations, and any integration of knowledge—men have been emerging from universities, for many decades past, with the helplessness of epistemological savages, with no inkling of the nature, function, or practical application of principles. These men have been groping blindly for some direction through the bewildering mass of (to them) incomprehensible concretes in the daily life of a complex industrial civilization—groping, struggling, failing, giving up, and perishing, unable to know in what manner they had acted as their own destroyers.

It is, therefore, important—for those who do not care to continue that suicidal process—to consider a few rules about the working of principles in practice and about the relationship of principles to goals.

The three rules listed below are by no means exhaustive; they are merely the first leads to the understanding of a vast subject.

1. In any conflict between two men (or two groups) who hold the same basic principles, it is the more consistent one who wins.

2. In any collaboration between two men (or two groups) who hold different basic principles, it is the more evil or irrational one who wins.

3. When opposite basic principles are clearly and openly defined, it works to the advantage of the rational side; when they are not clearly defined, but are hidden or evaded, it works to the advantage of the irrational side.

1. When two men (or groups) hold the same basic principles, yet oppose each other on a given issue, it means that at least one of them is inconsistent. Since basic principles determine the ultimate goal of any long-range process of action, the person who holds a clearer, more consistent view of the end to be achieved, will be more consistently right in his choice of means; and the contradictions of his opponent will work to his advantage, psychologically and existentially.

Psychologically, the inconsistent person will endorse and propagate the same ideas as his adversary, but in a weaker, diluted form—and thus will sanction, assist, and hasten his adversary's victory, creating in the minds of their disputed following the impression of his adversary's greater honesty and courage, while discrediting himself by an aura of evasion and cowardice.

Existentially, every step or measure taken to achieve their common goal will necessitate further and more crucial steps or measures in the same direction (unless the goal is rejected and the basic principles reversed)—thus strengthening the leadership of the consistent person and reducing the inconsistent one to impotence.

The conflict will follow that course regardless of whether the basic principles shared by the two adversaries are right or wrong, true or false, rational or irrational.

For instance, consider the conflict between the Republicans and the Democrats (and, within each party, the same conflict between the "conservatives" and the "liberals"). Since both parties hold altruism as their basic moral principle, both advocate a welfare state or mixed economy as their ultimate goal. Every government control imposed on the economy (regardless in whose favor) necessitates the imposition of further controls, to alleviate—momentarily—the disasters caused by the first control. Since the Democrats are more consistently committed to the growth of government power, the Republicans are reduced to helpless "me-too'ing," to inept plagiarism of any program initiated by the Democrats, and to the disgraceful confession implied in their claim that they seek to achieve "the same ends" as the Democrats, but by different means.

It is precisely those ends (altruism-collectivism-statism) that ought to be rejected. But if neither party chooses to do it, the logic of the events created by their common basic principles will keep dragging them both further and further to the left. If and when the "conservatives" are kicked out of the game altogether, the same conflict will continue between the "liberals" and the avowed socialists; when the socialists win, the conflict will continue between the socialists and the communists; when the communists win, the ultimate goal of altruism will be achieved: universal immolation.

There is no way to stop or change that process except at the root: by a change of basic principles.

The evidence of that process is mounting in every country on earth. And, observing it, the unthinking begin to whisper about some mysterious occult power called a "historical necessity" which, in some unspecified way, by some unknowable means, has preordained mankind to collapse into the abyss of communism. But there are no fatalistic "historical necessities": the "mysterious" power moving the events of the world is the awesome power of men's principles—which is mysterious only to the "practical" modern savages who were taught to discard it as "impotent."

But—it might be argued—since the advocates of a mixed economy are also advocating freedom, at least in part, why does the irrational part of their mixture have to win? This leads us to the fact that—

2. In any collaboration between two men (or groups) who hold different basic principles, it is the more evil or irrational one who wins.

The rational (principle, premise, idea, policy, or action) is that which is consonant with the facts of reality; the irrational is that which contradicts the facts and attempts to get away with it. A collaboration is a joint undertaking, a common course of action. The rational (the good) has nothing to gain from the irrational (the evil), except a share of its failures and crimes; the irrational has everything to gain from the rational: a share of its achievements and values. An industrialist does not need the help of a burglar in order to succeed; a burglar needs the industrialist's achievement in order to exist at all. What collaboration is possible between them and to what end?

If an individual holds mixed premises, his vices undercut, hamper, defeat, and ultimately destroy his virtues. What is the moral status of an honest man who steals once in a while? In the same way, if a group of men pursues mixed goals, its bad principles drive out the good. What is the political status of a free country whose government violates the citizens' rights once in a while?

Consider the case of a business partnership: if one partner is honest and the other is a swindler, the latter contributes nothing to the success of the business; but the reputation of the former disarms the victims and provides the swindler with a wide-scale opportunity which he could not have obtained on his own.

Now consider the collaboration of the semi-free countries with the communist dictatorships, in the United Nations. To identify that institution is to damn it, so that any criticism is superfluous. It is an institution allegedly dedicated to peace, freedom, and human rights, which includes Soviet Russia— the most brutal aggressor, the bloodiest dictatorship, the largest-scale mass-murderer and mass-enslaver in all history— among its charter members. Nothing can be added to that fact and nothing can mitigate it. It is so grotesquely evil an affront to reason, morality, and civilization that no further discussion is necessary, except for a glance at the consequences.

Psychologically, the U.N. has contributed a great deal to the gray swamp of demoralization—of cynicism, bitterness, hopelessness, fear and nameless guilt—which is swallowing the Western world. But the communist world has gained a moral sanction, a stamp of civilized respectability from the Western world—it has gained the West's assistance in deceiving its victims—it has gained the status and prestige of an equal partner, thus establishing the notion that the difference between human rights and mass slaughter is merely a difference of political opinion.

The declared goal of the communist countries is the conquest of the world. What they stand to gain from a collaboration with the (relatively) free countries is the latter's material, financial, scientific, and intellectual resources; the free countries have nothing to gain from the communist countries. Therefore, the only form of common policy or compromise possible between two such parties is the policy of property owners who make piecemeal concessions to an armed thug in exchange for his promise not to rob them.

The U.N. has delivered a larger part of the globe's surface and population into the power of Soviet Russia than Russia could ever hope to conquer by armed force. The treatment accorded to Katanga versus the treatment accorded to Hungary, is a sufficient example of U.N. policies. An institution allegedly formed for the purpose of using the united might of the world to stop an aggressor, has become the means of using the united might of the world to force the surrender of one helpless country after another into the aggressor's power.

Who, but a concrete-bound epistemological savage, could have expected any other results from such an "experiment in collaboration"? What would you expect from a crime-fighting committee whose board of directors included the leading gangsters of the community?

Only a total evasion of basic principles could make this possible. And this illustrates the reason why—

3. When opposite basic principles are clearly and openly defined, it works to the advantage of the rational side; when they are not clearly defined, but are hidden or evaded, it works to the advantage of the irrational side.

In order to win, the rational side of any controversy requires that its goals be understood; it has nothing to hide, since reality is its ally. The irrational side has to deceive, to confuse, to evade, to hide its goals. Fog, murk, and blindness are not the tools of reason; they are the only tools of irrationality.

No thought, knowledge, or consistency is required in order to destroy; unremitting thought, enormous knowledge, and a ruthless consistency are required in order to achieve or create. Every error, evasion, or contradiction helps the goal of destruction; only reason and logic can advance the goal of construction. The negative requires an absence (ignorance, impotence, irrationality); the positive requires a presence, an existent (knowledge, efficacy, thought).

The spread of evil is the symptom of a vacuum. Whenever evil wins, it is only by default: by the moral failure of those who evade the fact that there can be no compromise on basic principles.

"In any compromise between food and poison, it is only death that can win. In any compromise between good and evil, it is only evil that can profit." (Atlas Shrugged)


THE ANATOMY OF COMPROMISE

BY AYN RAND

The Objectivist Newsletter, January 1964.

 

 

 

 

Inconsistencies ..... check

Lack of Clarity ..... check

Lack of Transparency ..... check

We live in an irrational world that lacks principles. Everything is connected and yet everything is upside-down.

Sat, 01/05/2013 - 03:13 | 3124776 q99x2
q99x2's picture

Dear Wordy,

We have the Internet now.

The amount of collaboration taking place has changed, in subtle and profound ways,  the meaning of the items you make reference to.

Would appreciate a paraphrased version of the post better.

Sincerely

ADD

Sat, 01/05/2013 - 08:45 | 3124983 CPL
CPL's picture

Sharing a funny cat picture on Facebook isn't principles.  It's spam.

 

Sad that you don't recognize that.  I was assuming you were over 10.

Sat, 01/05/2013 - 08:43 | 3124981 CPL
CPL's picture

Without principles there is no reason to get up in the morning and work for the greater good of your society.

 

Sat, 01/05/2013 - 15:03 | 3125491 John_Coltrane
John_Coltrane's picture

Read your "comment" in full and as I read I thought, damn, this commenter is off-the-charts brilliant.  And after finishing and seeing it was Ayn Rand, I have no reason to change my opinion-thanks for posting.  She is, along with Mises, one of the great philosophical minds of the 20th century-despite her significant personal weaknesses.    Every time I collaborators with other inferior, parasitic researchers in my career I got burned.  So, after awhile I quit doing it.  Second raters are always calling for more collaboration, cooperation etc. "fairness".  They really mean, you do the work, I'll share the rewards.  Doesn't work in the animal kingdom, why should humans think it will work for them? 

Sat, 01/05/2013 - 21:45 | 3125546 blindman
blindman's picture

john coltrane played in a "band", not only that
but appreciated improvisation in the form of
music come to be known as jazz. i can't think of
one timeless and interesting solo jazz artist.
there must have been a few but..? mostly, they go
for collaboration in the form of a combo.
i'm sure that many combos had members of the
band who were never payed much or appreciated
for their influence and contribution but were
indispensable.
@'why should humans think it will work for them?'
because we are not animals in the animal kingdom (nature).
the environment. we create our own environment from the
environment and that requires cooperation beyond that
dictated by the genetic characteristics provided to
the animals in the animal kingdom. i think man has
a special kind of legacy problem that the rest of nature
is untroubled by except for the fact that man's problem
tends to wipe out species, ecologies, environments
and relationships with greater and greater efficiency.
.
so maybe there is a good argument for de-evolution
on all fronts, nature's solution?
no man is an island and all that ...
when we see men buying islands for themselves we
may interpret this as a sign or a stage in the
devolving of the species , driven by nature, to save
the rest of the planet and species?
by the way, what is the subject of your research,
perhaps i could help? volunteer, be a subject?
one more thing, there is more cooperation in the animal
kingdom than you could put in a big book, in fact the
animal kingdom and nature are singing with cooperation
down to the very gene pool; and the universe down to the
photon.
but none of that matters when it comes to the egos
of great men and women riding on the backs of a
system built on slavery and genocide. anyway...

and i add without cooperation and collaboration man
would not even be an ape but more like a lizard
without the protective skin and cold blood, a doomed
creature with no dna for posterity. imho

and best to u

Sat, 01/05/2013 - 21:57 | 3126277 blindman
blindman's picture

when she calls "irrational" "evil" she displays
her insanity and ignorance. and for some reason
i suspect she reveals her discomfort with her gender
at a time when that was confused with hierarchical
power determination and status etc ... she is all about
the imaginary third party observer, god, conscience,
eternal judge and absolute truth thang. she was
insane and rebellious and for that she deserves credit,
but i don't care for her ideas or writing. or her "logic".
after all greenspan loved her, she must have been a sick
puppy! i think she suffered from a self induced
hemispheric lobotomy and then concluded that she had
seen the light because she was a woman rejecting the
cultural trappings of her physical gender. interesting
and weird but not satisfying in 2013. imho

Sat, 01/05/2013 - 22:03 | 3126284 blindman
blindman's picture

@".. the free countries have nothing to gain from the communist countries." ...
this might be the most ridiculous statement ever penned.
so much so that it is not worth the time.

Sat, 01/05/2013 - 00:42 | 3124667 prains
prains's picture

You need a blog

Sat, 01/05/2013 - 00:45 | 3124673 Yen Cross
Yen Cross's picture

 Element is excluded in this post/  Why is there a compulsion to explain every point of your worthless lives on Z/H?

 I value seclusion BITCHEZ

Sat, 01/05/2013 - 00:48 | 3124677 A Lunatic
A Lunatic's picture

It's a big Club (collective) and you ain't in it...........

-george carlin-

Sat, 01/05/2013 - 00:57 | 3124691 Yes_Questions
Yes_Questions's picture

 

So Fiat is the new apple.

"The fruit that once corrupted man.."

Well.

Well, well.

 

 

 

 

 

Sat, 01/05/2013 - 04:14 | 3124814 Mr. Hudson
Mr. Hudson's picture

Griffin discusses hyperinflation in his book "The Creature from Jekyll Island", and one point he makes is that every country that had hyper-inflation always had a severe deflation before the hyper-inflation kicked in. We will see more tyranny with wage and price controls, and money will be very scarce because of the banks refusal to give loans. The market can only be suppressed for so long, and at some point prices of essential goods climb steadily until the dam burst. The only thing then that will have real value is food, because people have to eat.

Sat, 01/05/2013 - 16:13 | 3124915 Radical Marijuana
Radical Marijuana's picture

I agree that Thorsten Polleit gave an excellent speech.

However, I disagree with the original dichotomy made.

Starting at the 5 minute mark of Polleit's speech, he posits a fundamental dichotomy between work versus robbery, because, IN REALITY, there is NO free market.

My point is that human "work" is basically or originally, by definition, "robbery."

Mechanical work is the amount of energy transferred by a force. However, a biological being necessarily operates as an entropic pump, which MUST take energy from its surroundings, in order to use that a fuel to keep itself burning. For a living thing, the work it MUST do is to take energy from other sources, outside of itself. For advanced multicellular animals, like human beings, the basic work they MUST do is taking the life of other living things. Human animals MUST rob other living things, in order for those human beings to continue living. Furthermore, since human beings can reproduce more human beings, they MUST continue to rob even more, to keep on living.

The basic ways that energy laws manifest in human systems is as organized systems of robbery. The "work" that they do is basically robbery. It is a false fundamental dichotomy to separate work from robbery. It is also a false fundamental dichotomy to separate any private property from the history of robbery that asserted that claim to that private property, and backed that up. The basic human "work" is to take other living things from surroundings by force, which is, by my definition, robbery. Nobody "owns" any property without staking some claim, and backing that up with coercion. Civilizations simply do that on a much larger scale, involving far more people. Money did not emerge from bartering, because all bartering was always inside the context of an a priori robbery. All voluntary contacts were inside the context of previous involuntary contracts.

The basic language that is necessary to make human activities in civilizations consistent with general energy laws and systems theory is SUBTRACTION and ROBBERY.  There was never any "free market," and there never can be. There was never any "private property," and there never can be, outside of some system of organized lies, operating organized robbery.

After that modification to the basic presentation by Polleit, I would agree with the rest of it, and especially his conclusion that collective corruption is going to drive the established systems towards disequilibria that are self-destructive. However, since I approach these problems through the unitary mechanisms of energy laws and general systems theories, my style of generating solutions are radically different.

Most of Polleit's approach clings to impossible ideals, which are promoted by his original use of fundamental dichotomies, which set up the notions that somehow there could be a "free market" in which people "worked" and voluntarily exchanged the benefits of their work.  None of those levels of idealization are sufficiently connected IN REALITY.

Human realities are ALWAYS organized systems of lies, operating organized robberies. All notions regarding barter evolving into money, or that there was some original validity to private property, are bogus short-circuits to what happened during history, and therefore, provide nothing but more bullshit as solutions in the future.

The bottom line is that money is backed by murder, as the most extreme form of robbery. Anything that can be bought with money is private property that was similarly originally and continually backed by murder, in the context of an on-going dynamic equilibria of the forces engaged in robberies.

There is no greater truth standard to be found in commodity based money, because the possession of commodities is still backed by murder, the same as fiat money actually is. Fiat money is robbery on a different runaway path, into "collective corruption."  The only solutions which can resolve these issues are evolving ecological ones, which means there is no final solution. The processes of subtraction are never absolute, and the processes of robbery are never finished.

Sat, 01/05/2013 - 12:37 | 3125210 IamtheREALmario
IamtheREALmario's picture

I wonder what it would be like to have my only lifelong talent and amibition to be a parfasitic sycophant?!? Maybe if appearing "successful" and wearing the right clothes and belonging to the right clubs and saying the correct witty things, just like everyone else, was important to me then I could find out.

The world is full of marvelous irony.

Sun, 01/06/2013 - 16:31 | 3127582 hooligan2009
hooligan2009's picture

excellent point...the author clearly thinks he is one of those that can comment on the "thought leadership" that goes for economics and philosophy. Well here's one for him to mull over. How about the "people" only have an opinion about the bullshit antics of those who seek "power and success" if they are forced to do so by elections. The "people" aready know that they have a choice between douche bags and shit sandwiches (apologies to South Park). 

without morals, ethics and rational thought all "thought leadership" merely tries to extract personal gain for proponents of a line of thinking at the expense of everyone else.

"People" gave up trusting politicians, economists, bankers and philosophers a long time ago, if they ever did trust them.

Sun, 01/06/2013 - 12:38 | 3127058 Monk
Monk's picture

The problem isn't just fiat currency but fiat currency that has to be created to back increasing financial speculation, such as between $600 trillion to over $1 quadrillion in unregulated derivatives (notional value).

 

Do NOT follow this link or you will be banned from the site!