23 November 2022

It’s an unreal world that we’re forced to live in

Yves Smith over at naked capitalism recently reposted an interview between Nomi Prins, the author of several books about central banking, and Lynn Parramore of the Institute for New Economic Thinking. It’s a disturbing and in many ways disheartening read, in part because it describes a fictional economy of pure finance and manipulation of money that has become increasingly severed from what Prins calls the ‘real economy’ – that is to say, the economy in which real people exchange real goods and real services. The inflection point for this divorce, in her view, was the 2007-2008 financial crisis under the George W Bush administration and the Federal Reserve’s choice to insulate in perpetuity the investment-finance sector of the economy from any real-world consequences of their actions.

In many ways, what Prins is describing is a terminal stage in what Christopher Lasch called ‘the revolt of the élites’. Lasch talks about the divorce of élite segments of the society from their neighbours in terms of both values (with the élites being distinguished by New Age spirituality, a therapeutic self-help mindset, and carefully-cultivated lifestyle habits that are meant to serve as status markers) and space (with élites caging themselves off into exclusive universities, upscale neighbourhoods and gated enclaves away from everyone else). And Lasch’s prescription was for a rediscovery of certain community norms that would encourage cross-class contact. Unfortunately, the attempt by the élites to further distance themselves from working- and even middle-class people has only accelerated—a fact pointed to by more sociologically-minded (and less politically-correct) leftists such as Catherine Liu (who aims her guns as much against the élite-wannabe professional-managerial class as against the élites themselves) and Angela Nagle (who indicts the consequences to online communities of the élite betrayal of the commons).

Nomi Prins, on the other hand (as a former manager at Goldman Sachs and Bear Stearns), has a unique look into the inner workings of the economic side of the élite revolt. She talks about ‘wealth accumulation without accountability’, in which the creation of money, as decided largely through policies of the Federal Reserve meant to benefit the wealthiest fraction of the one percent, is increasingly unhinged from the creation of actual wealth. She notes that public policy initiatives, and indeed any attempts to influence the real economy for the better, are fundamentally impeded by the behaviour of this fictitious, purely monetary economy. This economy operates by processes which are irrational and opaque. One might almost say that this purely monetary economy is occult.

Prins still unfortunately places too much faith in fictive ‘decentralist’ solutions which are in fact not solutions at all. Cryptocurrencies, as we are currently seeing with the collapse of FTX and now possibly also Genesis, are not the transparent and stable alternative to checkbook-money that they promised themselves to be, but instead are themselves fuelled by the same occult processes that fuel the fictitious checkbook-money economy. (But honestly, we didn’t need FTX to collapse to figure this out. The evidence was there all along, and there were people and organisations warning us about the fundamental instability of crypto from the very start.) And the nature of exchanges in massively multiplayer online gaming spaces like Minecraft and World of Warcraft offers several intriguing possibilities, but they still ultimately cannot take the place of exchanges in the real economy. But taking Prins’s analysis alongside Liu’s analysis of the virtue-signalling élite-pretensions of the professional managerial class, and Nagle’s analysis of how online spaces have been warped by new (even nihilistic) configurations of value… it becomes clear that the Laschian emphasis on élite revolt in terms of social-ethical values, and the economic side of élite revolt in terms of the complete unmooring of the money economy from any sort of real-world accountability, cannot be divorced from each other.

Alongside the real world of actual ecologies and people and things, there now exists an alchemically-conjured financial world of unreality, which is governed by laws that are nearly completely resistant to rational analysis—even by those who have conjured it. And the élites who have conjured forth this unreality, are constantly seeking new ways to leverage that unreality to extort more and more control over the real world and its resources away from the rest of us. And the rest of us are thereby forced, to varying degrees, to live in both the real world and its simulacrum.

Among the reasons that the Fathers of the Early Church—people like Saint Basil the Great, Saint Gregory of Nyssa, Saint Gregory the Theologian and Saint John Chrysostom—preached so strongly against the practice of usury was that usury was based on a lie: producing what seems to be wealth out of the misery and debt of the indebted, or planting money in the backs of the poor and expecting it to grow out of itself. Consider what the Fathers of the Church would have to say about the way the Western form of capitalism is currently run: in which central banks—all empowered to do so by lending at interest—can conjure money out of thin air and flood it into various sections of the economy practically at whim, distorting the outcomes in the real economy of real people, real ecologies and real things as it pleases! Would they not see at work in this the hands of demonic powers? I understand how much he is (unjustly) hated in the West (because the West now blindly, unthinkingly, reflexively hates everyone and everything Russian); even so, I think the person who gave best voice to the suspicion of the way the current economy works is Patriarch Kirill of Moscow:
The modern economy is built largely on fraud, creating money out of thin air. [Money is] equivalent to human work and the riches God has given us: namely coal, ore, oil, our intellect, our physical labour, our culture and our spirituality. [But today,] every company produces its own money in the form of shares, which in the secondary market, rather than acting as simple securities, are used as items of trade and speculation. If these spectres earn billions, not being backed by real labour or capital, how can such an economy exist? And what becomes of the simple worker, who produces the value behind this entire bubble! [We need] a fair economic system, where money and capital are equivalent and are the expression of real work.
I don’t think it is entirely coincidental, either, that Russia has been placing so much emphasis on building up its dacha agrarian economy, its ability to grow its own vegetables, over the past decade and a half—or that this food security has been of great use to Russia in weathering and combatting the effects of Western sanctions. Or that Russia’s banking sector, with some input from the Church of Russia, has been exploring ways to organise itself in ways that don’t resort to usurious lending. These are healthy trends which deserve to be encouraged, which attempt to ground the economic life of Russians in the real world rather than in the simulacrum.

Ultimately, the West must do the same as Russia is doing now. We must choose to live in the world that God created, rather than in the simulacrum over which we fancy ourselves little gods—but within which we are at the whim of powers which we do not understand. And in order to do that, it strikes me that we need to be listening to those thinkers within the West, like Lasch and Liu and Nagle, who in pointing out the élite revolt against reality are in fact also pointing the way back to reality.