Sunday, May 26, 2024

Is Hyper-Inflation that Destroys a Currency a "Solution"?

When predicting the future, we're best served by following "what benefits the wealthy and powerful," as that is the likeliest outcome.

This contrarian sees a strong consensus around the notion that hyper-inflation is the inevitable end-game of nation-states / central banks issuing fiat currencies, i.e. currencies that are not restrained by being pegged to tangible assets such as gold reserves. The temptation to issue (via "printing" or borrowing new currency into existence by selling sovereign bonds) more currency becomes irresistible to politicians and central bankers alike. as the means to mollify every constituency, from elites to the military to commoners dependent on state-funded bread and circuses.

This unrestrained creation of new money far in excess of the expansion of goods and services (i.e. the real economy) devalues the currency, as "all the new money chases too few goods and services." Gresham's law kicks in--bad money drives good money out of circulation--as precious metals, fine art, gemstones, etc. are hoarded and the depreciating currency is spent as fast as possible before its purchasing power declines even further.

The Cotillion Effect also kicks in: those closest to the spigot of new money get first dibs on converting the depreciating currency into tangible goods, leaving the non-elites to sweep up the "trickle-down" shreds left as the currency loses purchasing power daily.

The consensus holds that there is no way to stop this decay of purchasing power to near-zero, i.e. hyper-inflation, once it starts. As in a Greek tragedy, the fatal flaw of the protagonist--in this case, fiat currency--leads inevitably to its destruction.

In the real world, things having to do with money tend to occur because they benefit powerful interests. This leads us to ask of hyper-inflation: cui bono, to whose benefit? Exactly which powerful interests benefit when a currency's purchasing power plummets to near-zero?

The idea here is that there will be pushback if it doesn't benefit the wealthy and powerful. So either hyper-inflation somehow benefits the wealthy and powerful, or it escapes their control and wipes them out along with the powerless commoners. That raises the question: didn't the wealthy and powerful see what was coming and couldn't they have reversed the policies generating hyper-inflation? If not, why not?

There are a couple of different threads to follow here. One is that capital is what matters to the wealthy and powerful because they own the vast majority of it while credit is what matters to the poor, as credit is their only way to acquire a bit of capital to invest in their own enterprise / household.

The poor owe debt, the wealthy own debt: debt (such as a home mortgage) is an asset to the wealthy, who buy the loan for its income stream, while debt is a liability to the commoners that must be serviced out of their earned income.

If wages rise in parallel with high rates of inflation, those who owe debt find their burdens lightened as their mortgage payment remains fixed while their income rises with inflation. Imagine how cheering it is when one finds a once-onerous $200,000 mortgage can now be paid off with a month's salary due to hyper-inflation.

On the flip side, the wealthy and powerful who own the debt are less delighted, as the purchasing power of the currency used to pay off the mortgage has diminished, effectively robbing them of most of the value of their original purchase of the mortgage. Where the $200,000 they paid for the mortgage could have bought two nice luxury vehicles, the $200,00 they now receive in full payment can barely buy a used clunker.

This raises an interesting question: why on Earth would the wealthy and powerful let hyper-inflation destroy the value of all their debt-based assets and income streams? Isn't that completely counter to their interests? If so, why would they let that happen?

At this juncture it's important to draw a distinction between ancient examples of hyper-inflation and the present-day economy. In the declining era of the Roman Empire, the government drastically reduced the silver content in the coinage to generate the illusion that everyone was still being paid in full with only a fraction of the silver contained in old coinage. This artifice was quickly uncovered, and old coinage disappeared from circulation due to hoarding and inflation caused prices and wages to soar.

The difference is back then, the poor owned virtually nothing. Today, the poor "own" debt service: they owe interest and principal on the vast quantities of debt owned by the wealthy, who will lose out when the value of their debt-based assets crash to near-zero in hyper-inflation. Hyper-inflation is incredibly beneficial to debtors with earned income and incredibly destructive to those who own the debt being wiped out.

This leads to a second thread: the wealthy shift their wealth overseas as inflation picks up, wait for the hyper-inflationary storm to wipe out the value of literally everything in their home economy, at which point they return, foreign cash in hand, to scoop up all the best assets at fire-sale prices.

This certainly works on small developing-world economies, but it doesn't work in large economies such as the U.S. with $156 trillion in assets to convert into other nation's currencies and assets. In large economies, the wealth of powerful elites is generated by a functioning economy that produces goods and services and maintains a stable currency. Buying a castle and some gold overseas is not a replacement for productive capital that generates income and capital gains.

Wiping out the value of the nation's currency also destroys its value as a reserve currency and in global trade, two additional disasters the wealthy and powerful would seek to avoid at all costs. If we tote up the winners and losers of hyper-inflation, the commoners who owe debt win as long as wages rise with inflation, while the wealthy and powerful lose out. Given the vast asymmetry of wealth and power, do you really think this is going to happen?

We must also draw a distinction between borrowing currency into existence via paying interest on a sovereign bond and "printing" currency, as some studies have found borrowing currency into existence precludes hyper-inflation, as the interest payments on the rising debt act as a negative feedback loop on future borrowing: as interest consumes more of the state tax revenues, political and financial pressures to curtail runaway borrowing/spending emerge.

What seems more likely because it serves the interests of the wealthy and powerful is interest rates on sovereign bonds soar, enabling the wealthy who sold off all their risk assets such as stocks and commercial real estate to earn a healthy, low-risk return in Treasuries. The central bank is ordered to stop "printing money" and the government cuts spending across the board, leading to howls of outage but since the interests of the wealthy and powerful are at stake, too bad, suck it up, kids, everyone takes a cut.

Risk assets deflate, the purchasing power of the commoners' debt service stabilizes, and the ensuing deflation only hurts those who didn't bail out of speculative risk assets at the top and stash the cash in short-term Treasuries. Then, when rates max out, the smart money shifts capital into long-term sovereign bonds and waits for the deflation to send risk asset prices to the basement. Then the long-term bonds can be liquidated for cash, and the deflated assets scooped up at fire-sale prices.

If we ask cui bono, which scenario is more likely: hyper-inflation or a deflationary crushing of risk assets and soaring interest rates? Yes, a bunch of zombie / marginal borrowers will default, and those holding the debt will be wiped out, but all that is foreseeable and can be remedied by selling when everyone is bullish on real estate and risk assets.

As for the commoners, deflating prices increase the purchasing power of their wages. Those with little or no debt will benefit from deflation, as their wages will go farther and they'll finally be able to afford risk assets once prices return to pre-bubble levels. As for interest rates, we all paid 12% mortgages in the early 1980s and life went on because the loans were modest in size compared to today's bloated Everything Bubble.

Other than China, it doesn't appear that global money supply is going parabolic:



As this chart indicates, inflation is tolerated as long as it's stretched over a century and wages rise along with prices.



When predicting the future, we're best served by following what benefits the wealthy and powerful, as that is the likeliest outcome. Is hyper-inflation a "solution"? Not to the wealthy and powerful.

new podcast: CHS on Gold and What Currency Systems Make Sense (31:37 min).



My recent books:

Disclosure: As an Amazon Associate I earn from qualifying purchases originated via links to Amazon products on this site.

Self-Reliance in the 21st Century print $18, (Kindle $8.95, audiobook $13.08 (96 pages, 2022) Read the first chapter for free (PDF)

The Asian Heroine Who Seduced Me (Novel) print $10.95, Kindle $6.95 Read an excerpt for free (PDF)

When You Can't Go On: Burnout, Reckoning and Renewal $18 print, $8.95 Kindle ebook; audiobook Read the first section for free (PDF)

Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake (Novel) $4.95 Kindle, $10.95 print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 Kindle, $15 print)
Read the first section for free


Become a $3/month patron of my work via patreon.com.

Subscribe to my Substack for free





NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, Ian J.G. ($7/month), for your marvelously generous subscription to this site -- I am greatly honored by your support and readership.

 

Thank you, Mark ($7/month), for your splendidly generous subscription to this site -- I am greatly honored by your support and readership.


Thank you, Farez A. ($70), for your magnificently generous subscription to this site -- I am greatly honored by your support and readership.

 

Thank you, Mountain Blues ($70), for your monumentally generous subscription to this site -- I am greatly honored by your support and readership.

Read more...

Friday, May 24, 2024

Would Returning to the Gold Standard Resolve Our Most Pressing Monetary Problems?

We all know the problem with fiat currency: the temptation to print more currency is irresistible, but ultimately destructive.

Money in all its forms attracts quasi-religious beliefs and convictions. This makes it difficult to discuss with anything resembling objectivity. But given the centrality of money (and its sibling, greed) in human affairs, let's press on and ask: would returning to the Gold Standard (i.e. gold as money / gold-backed currency) resolve our most pressing monetary problems?

The conviction that the answer is "yes" is widespread. In this view, President Nixon "closing the gold window," in 1971, i.e. ending the convertibility of the US dollar to gold in international foreign exchange (FX) markets, is the Original Sin that doomed us to the inflationary Hell of fiat currency, i.e. currency unbacked by anything tangible such as gold or silver.

In this view, the only way to avoid the consequences of this Original Sin--the eventual reduction of fiat currency to zero value via hyper-inflation as the currency is "printed" without restraint--is to return to the gold standard.

So far, so good, but from here on in it gets tricky. We have a long history of precious metals being the only form of money in various economies, and an almost as long history of paper money augmenting precious-metal "real money" (in China, for example) and the issuance of copper coinage to grease small transactions.

Gold-backed currency rolls off the tongue rather easily, but what exactly does this mean? In theory, it means every unit of paper / digital currency in circulation can be converted on demand to a physical quantity of gold or silver at an exchange rate either set by the nation-state's government or by the market.

This conversion acts as a governor on the issuance of new currency: if the nation has $100 billion in gold/silver, it cannot issue $1 trillion in currency, as the whole idea of conversion is that each unit of currency can be fully converted to gold/silver. So in a truly gold-backed currency, the money supply in circulation must be limited to $100 billion.

There are various tricks that can be played here, of course. The government can assign a conversion rate that doesn't align with the actual market value of gold/silver, for example. Or it can limit conversion to the settlement of foreign trade with other nations.

Let's return to Nixon's Original Sin and stipulate that there is no such thing as "free trade", as all trade has geopolitical and domestic-economic elements. Those nations whose domestic growth depends on increasing exports, i.e. mercantilist economies, will naturally trumpet "free trade" as a cover for their exploitation of trade for domestic growth while they restrict imports.

Many observers seem to forget the US was engaged in an existential geopolitical struggle with the USSR in the 1950s, 1960s and beyond. Gaining and maintaining allies and "spheres of influence" were core dynamics in this global contest, and the US had over-riding reasons to support the war-devastated economies of its allies in Europe and Asia by enabling them to export goods to the US.

The US also had over-riding reasons to maintain the US dollar (USD) as a reserve currency, a currency that is available in sufficient quantity globally to grease commerce and credit and also act as a stable foreign exchange reserve for both private enterprises and nations.

Issuing a reserve currency offers an exorbitant privilege--what we might call monetary hegemony--but it comes with a price, a price explained by economist Robert Triffin as Triffin's Paradox, which has two key paradoxical dynamics:

1. The issuing nation must run a sustained trade deficit in order to "export" sufficient quantities of its currency into the global marketplace to meet the expansive needs of global trade and other nations. (This helps explain why the USD is roughly half of all reserves (48%) while China's RMB is only 2% of reserves: exporting nations running surpluses don't "export" their currencies for use by others.)

2. This need to serve international trade / geopolitical goals is fundamentally in conflict with the goals of the domestic economy: the currency cannot serve two masters equally well.

Why did Nixon end USD conversion to gold? He had no choice, as the geopolitically necessary trade deficits were rising to the point that America's gold holdings would have diminished to zero were the rising trade deficits settled in gold.

Existential challenges take precedence. To say that the US should have given up its reserve currency and insisted our struggling allies maintain balanced trade with the US is to ignore the geopolitical realities.

We must also recognize that markets discover the price/value of competing currencies, and so nations whose currency is priced higher than others will have difficulty exporting their goods, as these goods are priced in their own strong currency and are therefore more expensive in nations with weaker currencies. Nations with weaker currencies will have an easier time selling their goods to nations with stronger currencies, as their goods are cheaper as a result of their weaker / lower value currencies.

Those nations blessed with surplus essential commodities (energy, food, minerals, etc.) will naturally tend to run surpluses with nations less endowed with tradable goods, and as a result, the nations running trade surpluses will end up with the lion's share of the gold and silver. This generates global "haves and have-nots," with all the attending sources of conflict: "our lead will take your gold."

We might also note that fiat currencies issued by the sale of sovereign bonds are not actually "backed by nothing": they're backed by the interest payments made on the bonds and the entirety of the nation's economic-political-social stability and productivity which guarantee repayment of the bond at maturity.

We all know the problem with fiat currency: the temptation to print more currency is irresistible, but ultimately destructive: once currency is issued in excess of the actual expansion of goods and services, the result is devaluation / loss of purchasing power, a.k.a. inflation. Here's a snapshot of global money supply:



In response, central banks are adding gold reserves: gold reserves are now larger than the reserves of the second-largest reserve currency, the euro:



Where does this leave us? Not with an easy answer, but with more complexities, starting with credit. As David Graeber explained in his book Debt: The First 5,000 Years, credit has been an essential element of commerce from the earliest days of commerce, for very compelling reasons. How do we graft credit onto "money" when credit is itself a form of "money"?

We'll also have to consider the other crisis we face, soaring wealth-income inequality, which arose without restraint in ancient economies that used precious metals for money.

Looking at the history of Rome, we note that the wealth of Rome's elite in the Republic era has been estimated as 30 times the wealth of the average free male citizen, where by the Imperial era the elites had amassed fortunes 10,000 times the wealth of the average free male citizen. There was no fiat currency, so we must accept that politics is part and parcel of "money," social stability and economic vitality or stagnation.

We'll grind through these additional complexities in my next post. I discuss these issues with Richard Bonugli in a new podcast: CHS on Gold and What Currency Systems Make Sense (31:37 min).



My recent books:

Disclosure: As an Amazon Associate I earn from qualifying purchases originated via links to Amazon products on this site.

Self-Reliance in the 21st Century print $18, (Kindle $8.95, audiobook $13.08 (96 pages, 2022) Read the first chapter for free (PDF)

The Asian Heroine Who Seduced Me (Novel) print $10.95, Kindle $6.95 Read an excerpt for free (PDF)

When You Can't Go On: Burnout, Reckoning and Renewal $18 print, $8.95 Kindle ebook; audiobook Read the first section for free (PDF)

Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake (Novel) $4.95 Kindle, $10.95 print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 Kindle, $15 print)
Read the first section for free


Become a $3/month patron of my work via patreon.com.

Subscribe to my Substack for free





NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, Marty B. ($7/month), for your marvelously generous subscription to this site -- I am greatly honored by your support and readership.

 

Thank you, Peter H. ($7/month), for your splendidly generous subscription to this site -- I am greatly honored by your support and readership.


Thank you, Francoise L. ($70), for your magnificently generous subscription to this site -- I am greatly honored by your support and readership.

 

Thank you, Joe ($70), for your monumentally generous subscription to this site -- I am greatly honored by your support and readership.

Read more...

Wednesday, May 22, 2024

Is Anyone Else's Life as Stupidly Complicated by Digital "Shadow Work" as Mine Is?

We seem to have entered a world of anti-leisure and anti-productivity in which the unpaid "shadow work" demanded to keep all the complicated digital bits in motion obliterate our leisure and productivity.

Is your life as stupidly complicated as mine is? Of course it is unless you've withdrawn from all engagement with the digital realm and all devices containing digital components.

To rephrase the question: is anyone else a boiled frog like I am? Yes, a frog slowly boiled by the steadily increasing burdens of the "shadow work" required to maintain a life that has become, without us noticing, dependent on constant unpaid effort to keep all the stuff we now depend on functioning.

There are illusions galore in this mimicry of technological "empowerment:" the illusion that we "own" all the stuff that becomes a brick once a digital component fails or we fail to accept the new terms of service. The illusion that all these services and devices "free us" to enjoy more leisure. The illusion that performing all the unpaid shadow work needed to keep all the complicated stuff functioning is "worth it" rather than a form of digital servitude. The illusion that we have a "choice," an illusion that's broken once we "choose" to opt out of the shadow work and everything ceases to function.

Parody abounds in the digital realm. Pathetically wretched services and products are touted as "Progress" with a capital P. "Consumer choice" when your smart phone screen dies is reduced to buying a replacement phone from one of the phone quasi-monopolies. Do you really want to endure learning a new system, or would you rather bite the bullet and stick with the same monopoly so you don't have to spend unpaid hours trying to figure out a new system?

Our dependence on the quasi-monopoly platforms is complete, and so we are wary of violating the infinitely capacious caprices of their terms of service, which mean exactly what we want them to mean, which means you can be sent to the Demonetization Gulag in Digital Siberia without warning or recourse.

Consider a typical experience of the stupidly complicated time-sink unpaid shadow work we endure on a daily basis. A payment platform that we depend on recently informed me mid-day on May 18 that I was required to update "business information" by May 18 or my ability to access my own earnings would be suspended.

Well, thank you very much for the advance notice. So I navigate their wretchedly confusing site to the "business information" page and discover it's blank: there is literally nothing there. (Metaphorically, how apt.) Okay, so all of us busy digital shadow workers know the drill: reload the page--no dice. Okay, open another browser and try that--nope, the page I need to update to avoid being sent to the Demonetization Gulag is still blank.

It's obviously hopeless now, but we continue to play along because we're trapped in Kafka's Castle, always churning 24/7 with busy-work that is completely unproductive. So we email tech support, knowing it will be useless.

And sure enough, it is utterly useless. The tech rep (or chatbot, who knows) apologizes for the inconvenience, but has no solution. All of us shadow workers know we have to enter the rat-maze again and hope the page loads so we can jump off the train taking us to the Demonetization Gulag. Perhaps our prayers to the Digital Gods and Goddesses are answered, or the Matrix self-corrected, who knows, but the page finally loads hours later and we dutifully enter the same data the platform already had on record. This seems to satisfy the Kafkaesque requirements, and we breathe a sigh of relief.

But wait, there's more! No sooner do we get that unpaid waste of our lives done than we receive another email from the same platform demanding another update to our "business information." Gee, is it really asking too much to send a single email with all your required updates instead of torturing us with a string of emails?

So back we go to the same page and re-enter the exact same information and click "update." Um, is this a parody of technical simplicity and productivity, or is it simply a gigantic waste of time, a form of digital servitude we cannot escape?

Then the final slap of parody: the "how did we do?" email requesting us to waste even more time answering a questionnaire about their wondrous tech support. You mean the tech support I was forced to contact because your site was broken, the tech support which did nothing to address the problem? No thank you, I'm already boiled alive and don't really feel like wasting more of life rating your "service."

Want to sign up for a short-term vacation rental platform? Sort through these 4,000 photos and select all those with a frog (live or boiled) and then move to the next excruciating step of our "validation process."

Please submit photos of your bank statements, a voided check, your big toe, a retinal scan and your passport. Or go ahead and lose access to your own money. That's a heckuva "choice," isn't it?

We're sorry, we cannot accept your form because it's out of date. Oh, do you mean the form on your website?

Please follow the instructions via this link. Um, the link you sent to explain how to navigate your system is dead. It seems monopolies don't need to bother fixing dead links and outdated instructions.

Social critic Ivan Illich's 1981 book Shadow Work describes how the modern wage-earner economy demands unpaid shadow work to do all the necessary domestic / daily-life work so the wage earner can spend hours commuting to work, performing at work and then returning home too drained / zombified to do much in the non-paid-work realm. Highly processed "food" (that makes us ill) is offered up as a "time saver" and a plethora of "conveniences" (that break down after a few years of service) are available for purchase to reduce the shadow work.

The digital realm has created an entire new universe of unpaid shadow work over which we have little choice or control other than to give up access to our own earnings and the proliferating accounts we now need to function in the digitally-dependent world: the airline booking accounts, the subway / bridge toll accounts, the insurance accounts, the bank accounts, the rental car accounts, the healthcare accounts, and so on, dozens upon dozens of accounts that must constantly be updated, new passwords entered and recorded in our own paperwork, and then all the accounts we might need to maintain a livelihood.

This digitally boiled frog looks at the time-sink of unpaid shadow work required to "be productive" (heh) and wonders: what happened to the techno-enthusiasts' promise of greater leisure? We seem to have entered a world of anti-leisure and anti-productivity in which the unpaid shadow work demanded to keep all the complicated digital bits in motion obliterate our leisure and productivity.

This is a world ruled by rather tiresome irony and parody.





New podcast: CHS on Leafbox (1:20 hrs)--authentic community, going grey, Doom Loops and more.



My recent books:

Disclosure: As an Amazon Associate I earn from qualifying purchases originated via links to Amazon products on this site.

Self-Reliance in the 21st Century print $18, (Kindle $8.95, audiobook $13.08 (96 pages, 2022) Read the first chapter for free (PDF)

The Asian Heroine Who Seduced Me (Novel) print $10.95, Kindle $6.95 Read an excerpt for free (PDF)

When You Can't Go On: Burnout, Reckoning and Renewal $18 print, $8.95 Kindle ebook; audiobook Read the first section for free (PDF)

Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake (Novel) $4.95 Kindle, $10.95 print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 Kindle, $15 print)
Read the first section for free


Become a $3/month patron of my work via patreon.com.

Subscribe to my Substack for free





NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, Rick B. ($300), for your beyond-outrageously generous contribution to this site -- I am greatly honored by your support and readership.

 

Thank you, Charles C.W. ($70), for your splendidly generous subscription to this site -- I am greatly honored by your support and readership.


Thank you, Rich T. ($70), for your magnificently generous subscription to this site -- I am greatly honored by your support and readership.

 

Thank you, Patrick B. ($70), for your monumentally generous subscription to this site -- I am greatly honored by your support and readership.

Read more...

Sunday, May 19, 2024

Maybe We're Closer to "You'll Own Nothing" Than We Realize

Maybe we should rephrase the slogan to "you'll appear to own things you don't actually control and be happy."

The World Economic Forum's catchphrase you'll own nothing and be happy was widely mocked as an eyebrow-raising vision of a "sharing economy" future without the implicit agency granted by full ownership. Renting stuff that one needed only for one-time use has long been a market, and car-sharing makes sense for urban dwellers who only need a vehicle on occasion.

But to own nothing still implies powerlessness and poverty, not happiness, which continues to be associated with owning income streams and nice things, i.e. wealth.

Given our dependence on software / digital rights and the phantom wealth of credit-asset bubbles,"how much do we actually own?" is a fair question. Consider the recent New York Times article Why Tech Companies Are Not Your Friends: Lessons From Roku, which was reprinted in other publications with the more accurate title Our Gadgets Are Not Ours.

The gist of the article is that since we don't own control of the software, our "ownership" of the device is illusory. Here is an excerpt:

More than a decade ago, when we bought a TV it was just that--a big screen that let you plug into it whatever you wanted. Nowadays, the vast majority of TVs connect to the internet and run the manufacturer's operating system and apps. Even though you bought the TV, the software component, a major part of what makes the product work, remains controlled by the company.

Changes to the product's software interface and data collection practices can happen at any moment. In extreme examples, a device can stop working. In 2020, for instance, Amazon deactivated the Echo Look, a camera that helped people organize their wardrobes. It issued a promotional credit for owners to buy a different Amazon gadget that lacked similar features.

The less extreme, more common situation is when companies stop supporting older products because they need to sell new gadgets. Apple's original Apple Watch from 2015, for example, no longer gets software updates and now barely works.

This issue is not new but has grown more problematic as more of our devices rely on apps and internet connections, said Nathan Proctor, a director for the U.S. Public Interest Research Group, a consumer advocacy organization. With computers, consumers could modify their machines by installing a different operating system. But with many other types of electronics with locked-down software systems, from streaming devices to e-book readers, those modifications are typically not possible.

"When you get to the core of it, do you even own it anymore?" he said.


Indeed. Now think about the "ownership" of software-dependent systems such as vehicles and Smart Homes, and income streams running through software platforms such as Stripe. Payment software platforms can block your access to your money and delete whatever illusion of control you might have had by informing you that you violated their "terms of service," which are open-ended and cannot be questioned.

One's "ownership" of money and income streams turns out to be highly contingent.

As for vehicles, if the software fails (or is rendered inoperable), your vehicle becomes an expensive brick. So what exactly do we own if the vehicle is inoperable?

Widening the scope of our inquiry, consider our ownership of a house that is mortgaged. If the fine print doesn't preclude the lender calling the mortgage, then should the lender (or current owner of the mortgage) call the loan, the "owner" must pony up the sum owed or the "ownership" reverts to the lender.

Given the valuations' dependence on phantom capital asset bubbles, we might say that "ownership" of a mortgaged house is more an option bet on future valuation than actual ownership, for should the Everything Bubble pop and the house value drops below the mortgage owed, then "ownership" means "ownership" of an asset with negative value, i.e. it's worth less than zero as the "owner" owes more to the lender than the property is worth.

If the house is in a high property tax state / county, "ownership" includes a hefty annual payment which may well have no upper statutory limit. If the "owner" owes $20,000 in annual property tax, the "ownership" is in effect a lease, as non-payment of the taxes/"lease" eventually leads to confiscation of the property as a means of collecting back-taxes.

The same dynamic occurs in condominium "ownership" when common-area fees and special assessments have no statutory limits and must be paid. This article on outsized special assessments being mandated for older condo buildings raises the question, what exactly does the owner own, and what is in essence an open-ended lease?

New Florida Law Roils Its Condo Market Three Years After Surfside Collapse: More units are being dumped on the market because of six-figure special assessments tied to repairs for older buildings.

Ivan Rodriguez leapt at the chance to buy a unit at the Cricket Club, an exclusive bay-front condominium in North Miami. In 2019, he liquidated his 401k retirement account to purchase a nearly 1,500-square-foot unit with water views for $190,000.

But because of a recent state law that requires older buildings to meet certain structural safety standards, the condo board recently proposed a nearly $30 million special assessment for repairs, including roof replacement and facade waterproofing. It would amount to more than $134,000 per unit owner.

Rodriguez, 76, didn't have the money. So he reluctantly put his two-bedroom condo up for sale, joining dozens of others in the building who are doing the same. After originally listing his unit for $350,000, he kept marking it down until finally it sold for $110,000 last month, or 42% less than what he paid for it.

Every time a potential buyer learned of the assessment, he said, "they'd run in the opposite direction."


Maybe we should rephrase the slogan to you'll appear to own things you don't actually control and be happy. Does that generate the intended warm and fuzzy feeling?





New podcast: CHS on Leafbox (1:20 hrs)--authentic community, going grey, Doom Loops and more.



My recent books:

Disclosure: As an Amazon Associate I earn from qualifying purchases originated via links to Amazon products on this site.

Self-Reliance in the 21st Century print $18, (Kindle $8.95, audiobook $13.08 (96 pages, 2022) Read the first chapter for free (PDF)

The Asian Heroine Who Seduced Me (Novel) print $10.95, Kindle $6.95 Read an excerpt for free (PDF)

When You Can't Go On: Burnout, Reckoning and Renewal $18 print, $8.95 Kindle ebook; audiobook Read the first section for free (PDF)

Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake (Novel) $4.95 Kindle, $10.95 print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 Kindle, $15 print)
Read the first section for free


Become a $3/month patron of my work via patreon.com.

Subscribe to my Substack for free





NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, Jason ($35), for your splendidly generous contribution to this site -- I am greatly honored by your support and readership.

 

Thank you, John D. ($100), for your outrageously generous contribution to this site -- I am greatly honored by your steadfast support and readership.


Thank you, John K. ($300), for your beyond-outrageously generous contribution to this site -- I am greatly honored by your steadfast support and readership.

 

Thank you, Robert B. ($50), for your monumentally generous contribution to this site -- I am greatly honored by your steadfast support and readership.

Read more...

Thursday, May 16, 2024

The Decay of Everyday Life

So where does this leave us? We're on our own.

This month I've described what can be summarized as The Decay of Everyday Life: the erosion of the fundamental elements of everyday life: work, opportunity, social mobility, security and well-being, which includes civility, conviviality and a functional, competent social-political order.

In other words, Everyday Life includes far more than the financial statistics of Gross Domestic Product (GDP), the stock market, wealth and income. Everyday Life is fundamentally about relationships, agency (i.e. control of one's life and ownership of one's work), the fulfillment of life's purposes (livelihood, family, friends, community and self-growth), leisure time and the experiences of everyday living, both the stressors and the joys.

As I've explored in recent posts, the experiential elements of Everyday Life have decayed over the past 40 years: life is more difficult and less secure in ways that are not offset by technological advances. Indeed, the most highly touted technological advances (Internet and mobile phones) have increased the burdens of shadow work and introduced new pathways of addiction and stress that have reduced well-being. Rather than being free, they include structures of control that we have yet to grasp, much less limit.

Here are my recent posts:

Precarious: One Misfortune Away from Insolvency
Squeezed for Decades, America's Working Class Is Finally Up Against the Wall
Lost in the Vast Wasteland of Social Media
Hikikomori and Lying Flat: When "Making It" Becomes Hopeless
Withdrawing from the Rat Race Is Going Global

The Decay of Everyday Life echoes the title of one of the more important books I've long recommended, The Structures of Everyday Life Civilization and Capitalism, 15th-18th Century Volume 1 by Fernand Braudel. The book outlines how changes in the economic structure led to changes in everyday life.

The structures I outline in the five posts describe the economic structures that shape our daily lives and the political and social structures we inhabit. While I focus attention on the way globalization and financialization have hollowed out our economy and increased the precarity of labor, in the larger context we can identify these structural drivers of decay:

1. The balance between labor and capital has been skewed to capital for 50 years. Labor's political power and share of the economy has declined while capital's political and economic power has become dominant. This has driven income-wealth inequality to extremes that are destabilizing the economy and the political-social orders.

Increasing the sums labor can borrow to keep afloat only works until debt service consumes all disposable income, crushing consumption. The end result is mass default of debt and the erasure of debt-based "assets" held by the financial elites (top 10%).

Labor will have to restore the balance with capital or the system will collapse in disorder. History is rather definitive about this causal chain.

2. Process and narrative control have replaced outcomes as the operative mechanisms and goals of the status quo. The illusions of limitless "progress" and "prosperity" have generated a mindset in which outcomes no longer matter, as "progress" and "prosperity" are forces of Nature that can't be stopped, so we can luxuriate in Process--completing forms and compliance documents, submitting reports to other offices, holding endless meetings to discuss our glacial "progress", mandating more Process, elevating managers who excel at Process--with the net result that building permits that were once issued in a few days now take months, bridges take decades to build, and incompetence reigns supreme.

To obscure the dismal outcomes--failure, delays, poor quality, errors--narrative control is deployed, expanded and rewarded. The managerial class has been rewarded and advanced not for generating timely, on-budget, high-quality outcomes, but for managing Process and Narrative Control: everything's going great, and if it isn't, the fault lies elsewhere.

The net result of this structure is that the competent either quit in disgust or or assigned to Siberia, while the incompetent are elevated to the highest levels of corporate and public-sector management.

3. The dominance of monopolies and cartels has fatally distorted markets and politics, undermining the foundations of everyday life. By eliminating competition and buying political-regulatory complicity, monopolies and cartels lock in ample, stable profits, profits that are increased by squeezing labor and reducing the quality and quantity of goods and services, to the point that quality services and goods are either luxuries available only to the elite or simply unavailable at any price, as the knowledge, systems and values required to produce high-quality goods and services have been irrevocably lost.

4. The dominance of digital communications in everyday life has increased the unpaid shadow work we're forced to do and injected new forms of narrative control, digital hypnosis, addiction and derangement into daily life that cannot be reversed in any meaningful way other than drastically limiting our exposure to the toxic flood tide.

So where does this leave us? We're on our own. The status quo is incapable of unwinding the fatal distortions generated by the dominant economic structures, and so it is also incapable of "saving" us from being seated at the banquet of consequences. This is why the only rational response is to focus on increasing our Self-Reliance.

Rather than becoming enraptured by the apologists and cheerleaders proclaiming everything's great, launching a lifeboat and setting a course for land is a strategy with much higher odds of success.





New podcast: CHS on Leafbox (1:20 hrs)--authentic community, going grey, Doom Loops and more.



My recent books:

Disclosure: As an Amazon Associate I earn from qualifying purchases originated via links to Amazon products on this site.

Self-Reliance in the 21st Century print $18, (Kindle $8.95, audiobook $13.08 (96 pages, 2022) Read the first chapter for free (PDF)

The Asian Heroine Who Seduced Me (Novel) print $10.95, Kindle $6.95 Read an excerpt for free (PDF)

When You Can't Go On: Burnout, Reckoning and Renewal $18 print, $8.95 Kindle ebook; audiobook Read the first section for free (PDF)

Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake (Novel) $4.95 Kindle, $10.95 print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 Kindle, $15 print)
Read the first section for free


Become a $3/month patron of my work via patreon.com.

Subscribe to my Substack for free





NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, Julian N. ($70), for your splendidly generous subscription to this site -- I am greatly honored by your support and readership.

 

Thank you, Ben P. ($70), for your magnificently generous subscription to this site -- I am greatly honored by your support and readership.


Thank you, Daniel R. ($7/month), for your marvelously generous subscription to this site -- I am greatly honored by your support and readership.

 

Thank you, SG ($7/month), for your monstrously generous subscription to this site -- I am greatly honored by your support and readership.

Read more...

Tuesday, May 14, 2024

Precarious: One Misfortune Away from Insolvency

As a result, a significant percentage of households that are considered middle-class are one misfortune away from insolvency.

We can summarize the changes in our economy over the past two generations with one word: precarity, as life for the bottom 90% of American households has become far more precarious over the past 40 years, despite the rising GDP and "wealth" as measured in phantom capital.

This reality is expressed in the portmanteau word precariat, combining proletariat (someone whose livelihood comes from their labor) and precarious: outside of government employment, work has become far more precarious. Where it was still common 40 years ago to work for a company for much or most of one's career and have a private-sector pension, now private-sector pensions have vanished, replaced by self-managed 401K funds, and private-sector work is characterized by a series of not just job changes but career changes.

The source of one's livelihood can dry up and blow away almost overnight, and to fill the hole many turn to gig-work with zero benefits that saddles the worker with self-employment taxes (15.3% of all earnings, as the "self-employed" gig worker must pay both the employee and the employer shares of Social Security-Medicare payroll taxes).

This isn't true self-employment, of course, as true self-employment means the owner-worker can hope to extract the full value of their labor; in contrast, much of the value of the gig work is skimmed off by corporate platforms (Uber et al.). The gig worker is a precariat wage-slave, not a self-employed owner of their own labor and enterprise.

Forty years ago, households with healthcare insurance being driven into bankruptcy by medical bills was unknown. Now this is commonplace. We're forced to ask, what exactly does "insurance" even mean if our share of the medical bills is so burdensome that we're forced into insolvency?

This is just one of many examples of the increasing precarity of life in America. Need dental work? "Insurance" covers only the basics; the rest requires savings, an inheritance, a line of credit or a top 10% income.

Speaking of income, even a substantial earned income doesn't go that far nowadays. Consider what a typical family spends on what we consider middle class birthrights: eating out, going to a movie, etc.



This budget of a household earning a top 1% income (top 2% in high-income states) of $500,000 is interesting on several fronts. Those living in lower-cost states may view it as bloated beyond belief, while those living in NYC, Los Angeles, San Francisco et al. will view it as entirely realistic: yes, property taxes are $20,000, "enrichment" childcare costs $42,000, and so on.

What's not realistic is $5,000 for home maintenance and $18,000 for three vacations a year. Given the age of American houses (40 years being average), the poor quality of a significant portion of recent construction and the soaring cost of labor, $5,000 doesn't buy much in the way of maintenance. A more realistic estimate for pretty much anything serious is $20,000, and $50,000 is remarkably commonplace for even modest kitchen makeovers. The $18,000 in charitable donations may be sucked up by a new roof.

As for vacations, unless it's a very short trip, a camping trip or travel to a low-cost destination, $6,000 per vacation may not be realistic.



The point of this exercise is to examine the buffers needed to survive a serious misfortune, such as losing one's job or a medical crisis. Two generations ago, costs were lower and households generally had enough savings or credit to cover the emergency expense or survive a bout of unemployment. With costs now prohibitive, modest savings are no longer enough.

As a result, a significant percentage of households that are considered middle-class are one misfortune away from insolvency. The concentration of income and wealth into the top 10% isn't just a statistical abstraction; in the real world, it means the buffers of the bottom 90% have thinned while the buffers of the top 10% have increased: for the family holding hundreds of thousands of dollars in 401K accounts and sitting on $1 million in home equity, a $25,000 medical or home repair bill is an inconvenience, not a push off the cliff into insolvency.



This precariousness extends into small business as well. Costs have soared and buffers have thinned. A great many small enterprises are one misfortune away from closing / insolvency.

As the tide of precarity rises, the apologists and cheerleaders of the status quo are cheerily predicting a "Roaring 20s" of widespread prosperity ahead. Correspondent David E. forwarded this cartoon which captures the current zeitgeist perfectly:





New podcast: CHS on Leafbox (1:20 hrs)--authentic community, going grey, Doom Loops and more.



My recent books:

Disclosure: As an Amazon Associate I earn from qualifying purchases originated via links to Amazon products on this site.

Self-Reliance in the 21st Century print $18, (Kindle $8.95, audiobook $13.08 (96 pages, 2022) Read the first chapter for free (PDF)

The Asian Heroine Who Seduced Me (Novel) print $10.95, Kindle $6.95 Read an excerpt for free (PDF)

When You Can't Go On: Burnout, Reckoning and Renewal $18 print, $8.95 Kindle ebook; audiobook Read the first section for free (PDF)

Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake (Novel) $4.95 Kindle, $10.95 print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 Kindle, $15 print)
Read the first section for free


Become a $3/month patron of my work via patreon.com.

Subscribe to my Substack for free





NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, David ($70), for your splendidly generous subscription to this site -- I am greatly honored by your support and readership.

 

Thank you, Timmy T. ($70), for your magnificently generous subscription to this site -- I am greatly honored by your support and readership.


Thank you, Merry Wing ($70), for your marvelously generous subscription to this site -- I am greatly honored by your support and readership.

 

Thank you, Juli B. ($70), for your monstrously generous subscription to this site -- I am greatly honored by your support and readership.

Read more...

Sunday, May 12, 2024

Squeezed for Decades, America's Working Class Is Finally Up Against the Wall

The net result is America's working class is up against the wall, maxed out.

Let's start by defining the working class in a meaningful way rather than by tossing around meaningless income metrics which implicitly suggest that exceeding some semi-arbitrary income bracket will magically lift a working class household into the middle class.

In the real world, in terms of class status it doesn't matter whether the household income is $30,000 or $130,000; what matters is 1) ownership of assets that have bubbled higher in the Everything Bubble which then provide a buffer of wealth that can be tapped when misfortune strikes, and 2) a cost of living that is consistently and significantly lower than net income, enabling regular savings.

In other words, a household earning $130,000 that owns negligible assets / wealth buffers and consumes every dollar of income just to service its debts and pay all the other bills is working class, while the household earning $30,000 that owns meaningful assets and frugally gets by on $20,000 a year is middle class. The household that earns $130,000 (generally considered a middle class income) but has a net worth is $2 million, no debt and an annual cost of living of $90,000 is upper middle class.

Income by itself misses what's truly important: wealth buffers and a lifestyle that leaves surplus income to be consistently saved and invested.

While we focus on the alarming leap in the cost of living over the past three years, we lose focus on the larger issue: America's working class has been squeezed for decades by the relentless decline in the purchasing power of wages. I explained how to calculate this in We Feel Poorer Because We Are Poorer: Here's Proof (December 4, 2023).

The devastating decline in the purchasing power of wages since 1975 is beyond dispute. As I noted in the above post: "The status quo cheerleaders in the Ministry of Truth ignore the $5,000 annual cost increases in essentials while trumpeting the $100 decline in occasional discretionary purchases. Your rent costs you 100 more hours of work, but you save $100 on airfare, so it all evens out. Um, no."

This chart reveals that the decades of hyper-globalization-hyper-financialization transferred trillions of dollars from wage earners to owners of capital. I explained this in Labor Rising: Will Class Identity Finally Matter Again? (May 1, 2024).



As the purchasing power of wages fell and costs increased, it became more difficult to save earnings and climb the ladder of social mobility. The net result is the bottom 50%'s share of the nation's financial wealth has plummeted to a rounding error / signal noise: 2.6%. A great many of the bottom 80% households have little financial wealth to serve as buffers when misfortune strikes.



Many of the bottom 90% of households own a family home....



But "ownership" doesn't measure equity or mortgage debt. This chart shows that the bottom 90% "own" the majority of debt that drains income, while the wealthy own income-producing assets:



Meanwhile, with interest rates rising, the cost of servicing debts is soaring: since the majority of debt is "owned" by the working class and middle class, the higher interest payments burden the many, not the few.



The working class households which don't own a home are being squeezed by sharply higher rents: as for buying a house now, that is a luxury only affordable to the top layer of American households.



The net result is America's working class is up against the wall, maxed out: whatever lines of credit that were available have been tapped (credit cards, "buy now, pay later" credit, etc.) and wage increases are soaked up immediately by higher costs for virtually everything.

The ladder of universally accessible social mobility has been broken. The stresses generated are already visible, but the political-social consequences are still ahead, and once they manifest, economic earthquakes will follow.

New podcast: CHS on Leafbox (1:20 hrs)--authentic community, going grey, Doom Loops and more.



My recent books:

Disclosure: As an Amazon Associate I earn from qualifying purchases originated via links to Amazon products on this site.

Self-Reliance in the 21st Century print $18, (Kindle $8.95, audiobook $13.08 (96 pages, 2022) Read the first chapter for free (PDF)

The Asian Heroine Who Seduced Me (Novel) print $10.95, Kindle $6.95 Read an excerpt for free (PDF)

When You Can't Go On: Burnout, Reckoning and Renewal $18 print, $8.95 Kindle ebook; audiobook Read the first section for free (PDF)

Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake (Novel) $4.95 Kindle, $10.95 print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 Kindle, $15 print)
Read the first section for free


Become a $3/month patron of my work via patreon.com.

Subscribe to my Substack for free





NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, Eugene O. ($70), for your splendidly generous subscription to this site -- I am greatly honored by your support and readership.

 

Thank you, Mendo ($7/month), for your magnificently generous subscription to this site -- I am greatly honored by your support and readership.


Thank you, Faultline ($7/month), for your marvelously generous subscription to this site -- I am greatly honored by your support and readership.

 

Thank you, Ben C. ($70), for your monstrously generous subscription to this site -- I am greatly honored by your support and readership.

Read more...

Thursday, May 09, 2024

Lost in the Vast Wasteland of Social Media

Once we've made "digital visibility" the primary source of our identity, status and self-respect, we've doomed ourselves to wandering, compass-less, in a vast artificial wasteland.

That social media is addictive is self-evident. The temptation to continue scrolling is as limitless as the vast wasteland of content.

The destructive nature of this addiction is also self-evident. The net result of this addiction is depression, anxiety and rising rates of self-harm and suicide.

The immense profitability of addiction to screens and social media establishes the corporate incentives to increase their addictive power and thwart attempts to limit this profitable power. Who cares about self-harm and depression when shareholder value is at stake?

Though social media is pitched as connecting us all, it's actually about control: the platforms control the flow of user-created content, the addictive mechanisms and the monetization of user engagement.

What's less obvious is the incentive for users to keep creating content for the tech platforms to monetize. This is of course the great "innovation" of social media: entice users to create content so the corporation gets all this content for free. The second "innovation" is to monetize the users' attention / "engagement," a two-fer: monetize the free user-created content and then monetize the addicted users who can't stop scrolling.

The incentive for users is core to human nature: to gain recognition and respect. We observe the tremendous status and respect lavished on those with high digital visibility on screens, and this ignites our Mimetic Desire--we want what we see others wanting and value what others desire--to increase our digital visibility so we too can enjoy some of the status and respect heaped on those with screen presence.

Concurrent with the rise of digital visibility as the key source of status and respect is the decline of other social means of gaining status and respect. The economy places a premium on mobility of both capital and labor, so the workforce and neighborhoods are in constant flux. Unlike the previous economic model of stable employment, where people routinely worked for the same company for decades, as did their peers, now there's no stable community at work that provides social ties and respect: everyone is an atomized, free-floating individual.

Sure, we can pass physical prints of our selfies in famous locales around to our stressed-out, here-today, gone-tomorrow co-workers, but who cares? How much status and respect can we possibly gain in the limited, unstable circles of work and neighborhood? Very little.

The same is true of neighborhoods: here today, gone tomorrow. There is no stable social order left in the real world to provide the recognition and respect every human needs. So we turn to the artificial media-world of screens and social media.

What defines the media? That it's staged, scripted, enhanced, edited, artificial. TV programs are artificial representations of real life, not real life: the boring bits have been edited out, the drama enhanced, the actors made up and the scenes staged.

Real life can't compete with this carefully edited, distilled, enhanced simulation of real life. We understand this and so our goal on social media is to stage, script and edit our real-world selves and lives into an enhanced artificial facsimile that is worthy of a higher status than that earned by our unstaged real life.

So even as we share a crowded apartment with five other low-paid workers, we post photos of ourselves in luxe bars holding $20 cocktails. This is only half the battle for digital visibility; the other half is building an audience so our visibility increases. As our visibility increases, the status and respect we gain increases proportionately.

As the means to gain status and respect in the real world have diminished, the potential to increase our status in the digital realm has skyrocketed. This is the difference between the old legacy mediums of TV and print: we could only be passive observers, as it was extremely difficult to get through all the gatekeepers and actually get on TV or in print media.

Anyone can get on the screen and page in social media. There are three billion Channels of Me, and so the Darwinian struggle is to stage, edit and enhance one's channel to somehow become more appealing and compelling than the millions of competing channels.

This generates another addictive dynamic: did anyone "like" my last post or comment? The desire for an audience introduces an emotional vulnerability: we want the higher status awarded to larger audiences, and so we become obsessed with monitoring our "likes" and views. We become easy targets for trolls who relish crushing the hopes and spirits of those seeking to out-stage and out-enhance everyone else trying to increase their digital visibility.

This is the potent source of much of the depression, anxiety and self-harm stripmining the mental health of the younger generations. Once we've made digital visibility the primary source of our identity, status and self-respect, we've doomed ourselves to wandering, compass-less, in a vast artificial wasteland.

To avoid self-destruction, we must understand the nature of social media--that it's been carefully crafted to addict us--and to free ourselves of the illusion that an enhanced digital representation of ourselves is a worthy foundation for our identity, social status and self-respect.

The artificial digital realm is not a substitute for real life, nor is "status" gained on social media a substitute for an authentic identity and selfhood. We reach through the screen for the proffered feast and are left even more starved when we finally turn the screen off.

Addiction is profitable:



Smartphone addiction:



I've written dozens of essays on social media over the past 13 years; here are a few:

Social Media Week: 800 Million Channels of Me (February 21, 2011)

Why Is Social Media So Toxic? (October 31, 2018)

Is Social Media the New Tobacco? (December 28, 2019)

Social Media's Plantation of the Mind (May 28, 2020) I've been discussing the neocolonial-plantation structure of the U.S. economy since 2008, and now this model has reached perfection in social media's Plantation of the Mind.

New podcast: CHS on Leafbox (1:20 hrs)--authentic community, going grey, Doom Loops and more.



My recent books:

Disclosure: As an Amazon Associate I earn from qualifying purchases originated via links to Amazon products on this site.

Self-Reliance in the 21st Century print $18, (Kindle $8.95, audiobook $13.08 (96 pages, 2022) Read the first chapter for free (PDF)

The Asian Heroine Who Seduced Me (Novel) print $10.95, Kindle $6.95 Read an excerpt for free (PDF)

When You Can't Go On: Burnout, Reckoning and Renewal $18 print, $8.95 Kindle ebook; audiobook Read the first section for free (PDF)

Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF).

A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF).

Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World
(Kindle $5, print $10, audiobook) Read the first section for free (PDF).

The Adventures of the Consulting Philosopher: The Disappearance of Drake (Novel) $4.95 Kindle, $10.95 print); read the first chapters for free (PDF)

Money and Work Unchained $6.95 Kindle, $15 print)
Read the first section for free


Become a $3/month patron of my work via patreon.com.

Subscribe to my Substack for free





NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.

Thank you, Gery S. ($70), for your splendidly generous subscription to this site -- I am greatly honored by your support and readership.

 

Thank you, Stephen H. ($7/month), for your magnificently generous subscription to this site -- I am greatly honored by your support and readership.


Thank you, Mark D.M. ($7/month), for your marvelously generous subscription to this site -- I am greatly honored by your support and readership.

 

Thank you, Moon Ribs ($70), for your monstrously generous subscription to this site -- I am greatly honored by your support and readership.

Read more...

Terms of Service

All content on this blog is provided by Trewe LLC for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site. The owner will not be liable for any errors or omissions in this information nor for the availability of this information. The owner will not be liable for any losses, injuries, or damages from the display or use of this information. These terms and conditions of use are subject to change at anytime and without notice.


Our Privacy Policy:


Correspondents' email is strictly confidential. This site does not collect digital data from visitors or distribute cookies. Advertisements served by a third-party advertising network (Investing Channel) may use cookies or collect information from visitors for the purpose of Interest-Based Advertising; if you wish to opt out of Interest-Based Advertising, please go to Opt out of interest-based advertising (The Network Advertising Initiative). If you have other privacy concerns relating to advertisements, please contact advertisers directly. Websites and blog links on the site's blog roll are posted at my discretion.


PRIVACY NOTICE FOR EEA INDIVIDUALS


This section covers disclosures on the General Data Protection Regulation (GDPR) for users residing within EEA only. GDPR replaces the existing Directive 95/46/ec, and aims at harmonizing data protection laws in the EU that are fit for purpose in the digital age. The primary objective of the GDPR is to give citizens back control of their personal data. Please follow the link below to access InvestingChannel’s General Data Protection Notice. https://stg.media.investingchannel.com/gdpr-notice/


Notice of Compliance with The California Consumer Protection Act
This site does not collect digital data from visitors or distribute cookies. Advertisements served by a third-party advertising network (Investing Channel) may use cookies or collect information from visitors for the purpose of Interest-Based Advertising. If you do not want any personal information that may be collected by third-party advertising to be sold, please follow the instructions on this page: Limit the Use of My Sensitive Personal Information.


Regarding Cookies:


This site does not collect digital data from visitors or distribute cookies. Advertisements served by third-party advertising networks such as Investing Channel may use cookies or collect information from visitors for the purpose of Interest-Based Advertising; if you wish to opt out of Interest-Based Advertising, please go to Opt out of interest-based advertising (The Network Advertising Initiative) If you have other privacy concerns relating to advertisements, please contact advertisers directly.


Our Commission Policy:

As an Amazon Associate I earn from qualifying purchases. I also earn a commission on purchases of precious metals via BullionVault. I receive no fees or compensation for any other non-advertising links or content posted on my site.

  © Blogger templates Newspaper III by Ourblogtemplates.com 2008

Back to TOP