Modernist materialists, burdened as they are with a historicist metaphysics and an undue prejudice against philosophy that occurred before Descartes et al., are left proposing increasingly silly and onerous conceptions of the mind. As I have discussed before, an Aristotelian picture of the world dissolves the “hard problems of the mind” with the least consequence, concluding that mental phenomena fit into a kind of phenomena that we witness occurring throughout the world. However, with a focus on micro-objects and the consequent necessity of trying to explain all phenomena in terms of them, the modernist materialist is left with the task of trying to explain the mind without appealing to any fundamentally “mental” processes.

The most popular view on the mind presently is that of “functionalism,” which the Stanford Encyclopedia defines as “the doctrine that what makes something a mental state of a particular type does not depend on its internal constitution, but rather on the way it functions, or the role it plays, in the system of which it is a part.” This view avoids problems present in other views, such as identity theory, the idea that the “mind and brain are identical,” which runs into the problem that it seems there then couldn’t be any other minds possible in the universe except for humans with their particular biology. Nor is it so extreme as eliminative materialism, which just does away with what can’t be explained by matter. No, really, that’s what it does. It doesn’t explain the phenomena, it just denies that it occurs. For as reticent as modernists are to give up their materialism, they do still find that view difficult to square away, but for reasons it seems they will never really depend on for anything else.

However, let’s delve into functionalism in particular, since I believe it suffers from a rather unique problem that the other views don’t. In fact, I think this problem actually makes it a weaker view than, say, identity theory, because at least that view provides a means of restricting phenomena to a particular place and time. Functionalism without restrictions leads to the conclusion that “everything is a mind.”

The supposed reason for preferring functionalism is that it gets us out of some anthropocentric chauvinism. Human minds are only a particular kind of mind, rather than the only kind of mind. There could be non-human minds. If this is possible, then we must place the mind in something other than humanity’s particular biology, place, and time.

Consider the difference between a rubber ball and a clock. One is, we could say, ontologically constituted, while the other is merely functionally constituted. This becomes apparent when we ask what makes each to be what it is. In order for a rubber ball to be a rubber ball, it must actually be of a spherical shape and constituted by a certain set of elements that we call “rubber.” If I were to produce a simulation of the rubber ball in some realistic computer program, the simulation would be ontologically distinct from the actual rubber ball, so that while we might recognize an identity in functional occurrence (say, our description of the activity of either will fit to both equally), they are yet not identical per se, since we don’t mean by “rubber ball” what is identical to a “simulation of a rubber ball.” On the other hand, the clock in its functional occurrence can be perfectly represented by a simulation, since it is not the ontological elements in its constitution that we care about but rather whether they fulfill a function that we understand to represent marking the passage of time. If I wanted to keep time, both the clock that takes up space and the simulation will, because they function identically, serve the same purpose. The ontological constituents are moot.

However, because the ontological constituency is moot, we are able to understand virtually anything to be a clock. A clock can be composed of wood, ball bearings, metal gears and springs, water, cesium atoms, light passing through vacuum, and so on. The only restriction is the accidental ability of us to be able to interpret the marking of time by these things; but if we had god-like powers, then anything which in its ontological constituency has order could be considered a clock.

The functionalist would like to take this story about clocks and apply it to minds. A mind is not so much its ontological constituency but the functions undertaken by the parts within a system. In fact, the mind is nothing but the functioning undertaken by the system. The mind is just a kind of functional constituency.

However, the problem we run into is that minds, unlike clocks, are not the case just whenever a person considers something to be a mind. That is, while every conceivable system (which is to say, the relations understood between any things in the world) performs a function which could be identified as “marking the passage of time,” a clock must still be identified by a mind to fulfill that function to itself. If we don’t recognize it as a clock, it isn’t a clock. While we might not choose to make clocks out of ice, that is not because ice couldn’t fulfill the function of marking the passage of time, it’s because we prefer to inhabit environments above freezing.

A mind, unlike clocks, is not so arbitrary. Something is not a mind just because a mind understands it to be a mind; in fact, the mind must be prior to this understanding. A mind can be the case without any other mind, outside itself, recognizing it to be such. Minds have objective identities; that is, they are not dependent on external subjects for their being the case. As such, we cannot attach the qualification to the functionalist thesis that “minds are only what we recognize to be minds.” That would introduce a kind of subjectivism, since certainly we don’t want to say that something is a mind provided it is recognized by other recognized minds. This gets us into the problem, well, who was the original mind and how did it get recognizes as such? What do we say of “minds” that are recognized only by some minds to be minds and not by others?

The functionalism must accept, then, that whatever fulfills the “functions of mind within a system” would then be a mind, even if people might not recognize it as such. However, once this is accepted, we come around to asking what are the functions of mind? That is, which functions must take place in order for something to be a mind?

It does not seem there are really any conditions we could add from within the thesis of functionalism, since the only reason to prefer this doctrine to others is precisely that its supposed to capture the intuition that human minds are just a particular kind of mind, but not necessarily the only kind. That is, human minds represent only one of a plurality of possible minds. There could be minds that operate differently. But if this is our reason for going down the path of functionalism, it seems that any condition we might stipulate of a function within a system, e.g. “that it represents logic gates” or “it can store memories” is to simply re-introduce that same anthropocentric chauvinism, and if we want to do that we may as well be allowed to go beyond the functionalist thesis; that is, minds are more than just functions, but require some particular ontological constituency.

But sans the condition of ontological constituency as an essential element of minds or that of particular functionings, then we find that to be a mind is just to be an order. An order is simply relations between concrete objects. Every concrete object has a relation with another, no matter how abstruse or remote. As such, since everything instantiates an order in some way, then everything is a mind. In fact, there is a mind for every distinct relation that could be identified in the world. There is a mind not only in your body, but between every concrete object that exists in and out of your body; there is a mind represented in the atoms between a cluster of neurons in your brain, there is a mind in every star, there is a mind in every galaxy and atom and so on. The world is literally permeated by billions and billions of minds.

The only we can get around this is to suppose there is something to the mind besides function/order. It seems we need to be able to introduce an ontological constituent of minds, without also just making that ontological constituent “the human body.” But of course, to do that seems like we’re going down the path of dualism, and that just can’t be allowed.

In a discussion with my friend about how I’ve decided to re-evaluate some personality traits of mine:

Me: So I’ve decided that I need to try being more humble.

Him: That is certainly a good thing which you could use.

Me: I know. I’ve been very arrogant, and I fear that it has harmed some relationships of mine.

Him: That seems a clear possibility.

Me: Yeah, but, if there was anyone who could back up his arrogance, it was me!

This may or may not have been a real discussion.

The ontology of materialism faces a dilemma; one horn which it is usually recognized to push up against, that of irreducibility, and another horn which it usually levels against a rival ontology, that of interaction. Whichever horn the materialist accepts, and what those implications would be, will become clear from whether our materialist chooses to accept that there is a plurality of fundamentally existing things that constitute the “set of fundamental material substances” or else whether there is just one fundamentally existing thing. This will pull to some extent from my analysis already given in On What Things Exist.

First, the problem of interaction. This problem actually arises from an objection that modernist materialist brings against modernist substance dualism: if there are these two distinct and fundamental substances, how is it that they interact? Under monism, especially materialism, there is no such dilemma because the monist accepts that there is only one fundamental substance, from which it is apparently very easy to accept that it can interact with itself. The mechanism for interaction is essential to the one thing itself. With a plurality of substances, it becomes unclear what makes them able to interact in the first place.

We can note that, at this point, the dualist response will just be that, while it is clear one cannot describe the interaction by physics, it is clear enough that there must be this immaterial substance which composes man, as is evidenced by his having thought. That there is interaction follows just by plain reasoning. I bring up this response because I believe that the materialist will have to use it in responding to this horn of the dilemma, but if they have to accept this reasoning, then they would also have to accept this dualist’s reasoning: it isn’t clear why fundamentally distinct substances can interact, but it is clear that they do, so that settles it.

The problem for the materialist is this. It seems possible, and maybe from the standpoint of modern physics, likely, that there will be a plurality of fundamental substances which constitute the material world. For instance, electrons do not seem divisible, yet they are also themselves distinct from positrons, muons, various bosons, up quarks, strange quarks, and so on. If each of these elementary particles are supposed to compose everything that there is in the world, then it seems that the material world, and hence the materialist’s ontology, is left with grappling over how fundamental but distinct substances can interact. How can the materialist claim to be a monist any longer, if his “monistic” ontology is actually constituted by mutually distinct and fundamental substances?

The materialist at this point can say that, while it may not be clear why fundamental and distinct substances can interaction with each other, it is yet clear enough that they do, so that settles it. But this is exactly how the dualist responded! If the materialist is left answering in this way, that deprives them of a very oft-touted arrow aimed at showing the problem of substance dualism. In fact, it seems that the dualist has an ontology readier than the materialist to accept that the material world may be constituted by a plurality of distinct substances. What is the material world, for the dualist, but just those things which are extended? He is not in principle opposed to the extended realm being composed of fundamental and distinct substances. Likewise, the dualist was not opposed to there being fundamental and distinct substances that constituted the immaterial realm. The materialist can no longer argue that this sort of ontological parsimony is in his favor, since the world itself is clearly less parsimonious than he should like.

But that is the first horn of the dilemma. The materialist might try retreating at this point and argue that for reasons of pure philosophy the world must be constituted by one fundamental substance. Science is powerless to observe such, and bringing in the discovery of particles that seem indivisible is beside the point. I would have to agree that this is certainly a valid avenue of argument. Science isn’t the end-all be-all of knowledge, not even for understanding what the world can be fundamentally constituted by.

For as much as it appears that the world is constituted by a plurality of distinct substances, it must be constituted of only one fundamental thing. Whether this is a particle, a field, or what have you, it remains the case that this ultimate monism is feasible and would also remain impervious to the objection brought against it above. Granted, such is the case. However, it also brings with it another problem, that of seeming irreducibility. How can one fundamental substance produce a plurality of distinct properties? This is not merely an objection at the level of the mind, though such an example of distinct properties in the world is salient. Such must occur at all levels of existence above that of the fundamentally existing thing. Even our “elementary” particles, which exhibit distinct properties of motion and interaction, atomic elements which exhibit distinct properties of appearance, malleability, and electronegativity, chemicals, living things, and animated things all pose a problem, since it does not seem that you can “reduce” each level of existing things to the more basic ones.

This is the problem of irreducibility. In fact, even the venture of reduction may be futile, since in the process of reducing one thing to another you may end up just leaving out the very thing one was trying to account for. Irreducibility is certainly a recalcitrant problem, and the non-reductive methods of dealing with it seem to either re-introduce the plurality one’s monism was attempting to cut out of the world (e.g. emergentism) or to posit a “poof! it just happens!” model (e.g. supervenience).

This is the interaction-irreducibility dilemma of materialism. One ends up accepting a plurality of fundamental and distinct substances, which weakens the case for saying that “non-material” things exist, or else that we are powerless to explain why the world doesn’t appear to be so monistic.

Part 1 here.
In the latter part I detailed the correlations that hold between savings and interest, and showed how lower interest rates will increase present consumption both by borrowers who find it profitable to do so since they expect it easier to make returns on investment and potential lenders who aren’t persuaded by lower interest rates to save money rather than spend money now on consumption. Low interest rates would then indicate prosperity, since it is generally only societies in which most income is spent on immediate consumption of food and shelter where it is harder to save and thus higher interest rates hold.

I left with these questions. Provided this understanding, how would those desiring to manufacture prosperity think they could manipulate the institutions involved in lending and borrowing (e.g. banks and households) to make their political record look good? What would they achieve throughout the system?

What would a lower interest rate achieve in the short run? That is, if we suppose that the interest were lowered by political policy from 5%, the rate determined by savings, to 2%, a rate made possible due to interventions of various kinds I will discuss later, what would happen?

First, and most obvious, borrowing will increase. Entrepreneurs will find it cheaper to borrow, and as we know, lower prices cause higher quantity demanded. Where before, at the 5% rate, people would borrow only when they thought that the returns in the future would be over 5%. Now, at a 2% rate, they would be willing to undertake investments for goods and services that will have returns which are lower, say at 3%.

At the same time, real savings will decrease. Lower prices cause lower quantity supplied. When it was relatively more lucrative to lend, people saved more. Now, they will choose to consume since lower present utility seems more likely equal to only negligibly higher future utility. Why try harder to save when the return is lower than my present consumption?

These together mean higher spending. Investors are putting more money into capital, in order to produce goods and services in the future, while consumers spend more on goods and services. There is an uptick in GDP and jobs are easier to come by. The economy booms. The credit is given to the politicians and their policies to lower interest rates.

Can it last? It does not seem likely. Let us make some suppositions so that it is easier to see cause and effect.

I will propose a value I am calling the “value of sustainable production” (VSP). What this value represents is the total price value of goods available for all consumers that would sustainable, where producers are making a sufficient profit that they can continue their operations.

In the economy before the manipulation of interest rates occurred, VSP was $10m. Savings equaled $1m. Total income is $11m. This is, all together, a sustainable structure, since as much as is produced can be consumed and the producers remain profitable (which is to say that the producers derive an income of their own).

After the manipulation of the interest rates, VSP is $12m. Savings total $500k. Total income has risen, to $12m. Since there is now produced more than can be consumed, at least while the producers would remain profitable, it follows that a correction will follow as only $10.5 of production is consumed, leaving in excess of 500k not profitably consumed.* This will put people out of jobs, since the capital with which they labored must be redeployed to sustainably profitable operations.

*While total income is $12m, and after $500k is saved this leaves a gap of 500k for consumption, it is altogether likely that many products will be lowered in price, not in order to make a profit, but to lessen losses.

We must ask, why didn’t income rise commensurate to VSP? That is because, in order for income to have increased at the same rate, the rate of saving must have increased as well. Higher savings in the present mean greater income in the future, and thus the possibility of higher consumption. However, since the interest rates were purposefully separated from savings, savings actually decreased, meaning that the growth of income due to savings decreased. Why then the increase in income? Nominally, it is because more money is being thrown around, and jobs and raises are easier to come buy; as such, the increase in consumption in the present will be paid for by the correction to the production structure, and the jobs from which people derived their income are found not sustainable.

After the correction, VSP is $11m, total income is $12, and total savings is restored $1m. This increase from before manipulation will be explained.

The gap between VSP and consumption prompts some economists to worry about “underconsumption.” This leads them to advocate policies that will “increase demand.” However, these policies can only work provided they further exacerbate the problem of lending not backed by real savings. For instance, if they were to incentivize spending so that savings are even lower, in fact, perhaps even negative, this will leader to an even greater gap in VSP and actual consumption, which must inevitably lead to a correction when either manipulation will no longer be done or can no longer be done.† As such, the problem is not underconsumption but overproduction, since some production took place that could not be supported by what could be sustainably consumed. After all, doing nothing but increasing one individual’s consumption must be backed by someone else’s savings, i.e. they borrowed in order to consume more.

†The point at which these “stimulus” policies simply can no longer be effected will be discussed in Part 3, when I go over mechanisms for lowering the interest rate apart from savings.

Now someone might point to the fact that VSP does, despite the correction, remain increased from before the manipulation of interest rates. Thus, it seems that this increased prosperity is real, it simply came at the price of a temporary setback. However, this ignores that the recession is a real cost which could’ve been avoided. The recession indicates that time and resources are wasted forever, and these things cannot be regained. The time spent on training and moving labor and committing resources to some particular production structure is wasted. Growth without waste must be able to increase faster than growth with waste.

But, how are we to account for what growth did occur? Some investments did remain profitable even despite the recession, though we must not forget that the recession would serve to kill some investments which would’ve been profitable without the manipulation of interest rates, and some investments wouldn’t have been profitable under either course. Investment would have occurred without the manipulation of interest rates, and if investment never proved profitable, it never would occur in the first place. As such, growth does take place without manipulations, and can occur even despite manipulations!

As our analysis finds, manipulations cannot of themselves produce real growth, and what growth does occur occurs despite the manipulations, rather than because of it. Manipulations impose great costs on society, since time and resources are wasted on the production of goods and services which it is not profitable to sell, and that time can never be regained while the resources at best might be recycled.

How are manipulations effected? I will cover that in Part 3.

Just a short aside from the theorizing and conceptualizing. Our (ir)regular broadcasting will return soon! This is part preview on the subject of upcoming posts, part sharing of present preferences.

I started watching Cowboy Bebop again. The first time I tried I only made it halfway through the series. Just listen to this intro!

It features a great assortment of jazz pieces. The reason I didn’t make it through the first time is because I find myself preferring series with an overarching story arc; after all, if I finish an episode and I’m not left with a question about what happens next, it’s hard to find the motivation to continue. I watched Samurai Champloo before this, which has a much more linear story arc while benefiting from the emphasis on a stylistic presentation.

I’m also watching Fullmetal Alchemist: Brotherhood. I watched the original anime, which departs a great deal from the manga, and this is supposed to stay closer to the manga. Not having read the manga, I can’t tell you how much closer it resembles the manga, but there is a definite difference in storylines after the 12th episode in FMA:B.

On the down times, otherwise known as those times in which I’m just stressed out or can’t imagine putting any more work into something, I watch a little cartoon called My Little Pony. *sigh* I blame my friend Chris for this. “Just watch one episode! You have to at least give it a try before you write it off.” Then before I knew it I was humming Winter Wrap Up walking down the halls at my school. Luckily, no one recognized it. I have to admit, the show is awfully bright and cute.

This semester I submitted a proposal to get funding in the spring through my school to work on a project. I’ve decided to analyze the “rationalistic elements necessary for scientific inquiry.” It is generally a philosophy of science project in line with some thoughts on how we’re able to induct knowledge about the world that I wrote here. In preparation for that I’m doing some reading of Kant, since I utilize his concept of intuitions for that project. A Critique of Pure Reason. So just a warning that posts dealing with that subject matter will most likely come around in time.

I’m near the end of Detlev Schlichter’s Paper Money Collapse, which, despite the name’s popular-seeming intent, is mostly a treatise on effect on production structures caused by government manipulation of the currency, with a judgment cast on the sustainability of the present system based on that framework. I will be going over the same content in The Rate of Savings and the Rate of Interest, so if you would like to be presented with a concise summary of the relevant information in that book, just be sure to stick around and catch my posts on that.

I am also near the end of The Line of Polity by Neal Asher, which takes place in a post-singularity scifiverse. It is Book 2 of the Agent Cormac series, with two other series taking place in the same scifiverse. The first book, Gridlinked, was really good, while this second entry is a little meandering in comparison. For that, it is definitely enjoyable as an example of scifi were the scifi suits the purposes of narrative. While it doesn’t really bring up interesting questions about the state of future humanity, and the narrative suffers from intrusive amateurish philosophizing on religion here and there, it is certainly a solid hard science fiction series.

Unlike Freedom. Over the summer I read Daemon by Daniel Suarez, an interesting near-future scifi what-if story about a deceased game company mogul worshiped like Steve Jobs who tries to change the structure of society by subverting it through a complex computer program that reacts autonomously to news stories and sets up a decentralized society of individuals who are persuaded by his vision of a society in which… well, that’s the problem. For as intriguing as the premise was, that premise was all dried up by the time it came to the implementation and end of such a program. It turned into a mushy and preachy eco-Marxist’s wet dream. I couldn’t finish Freedom, the sequel. It’s really quite a bother for a scifi premise to be so bound up in a petulant and annoying ideology. For as hard as the premise was, I would classify Daemon and Freedom as a soft scifi series simply because of its mushy political preaching.

I just finished reading Chaos Theory by Robert Murphy, a handy little tract which presents in a very simple fashion how law and defense would be provided in a purely voluntary society. I will certainly be getting around to the ideas presented in it, but before then I would recommend to anyone interested in the topic. It is easy to read and easy to understand. You won’t need a background in political philosophy or economics to digest it.

I’ve been spending more time lately listening to the bands Pinback and Sleep Party People. They are much at a contrast. Pinback is a chill indie rock band good for listening to in the car and driving around. Here’s their laid back tune “Fortress.”

Sleep Party People, on the other hand, is a postrock group ideal for putting on in the background. Relaxing but haunting, their music seems like it was born of the made-to-be-a-cult-hit Donnie Darko, and their getup seems directly inspired by the character Frank. Here’s my favorite tune of theirs, “I’m Not Human at All.”

Finally, I think I’ll leave with some succinct details and such.

I want to write something on space fantasy and space princesses, much in reply to John C. Wright’s writings on space princess scifi.

Law, order, and defense in an anarchical society is probably a few months away yet, as there are several books I want to read before I open my yap anymore on the topic.

I’m thinking about moving my blog to a new domain, as “amtheomusings” no longer fits so well., but that is several months into the future yet. I will probably also get an email dedicated to the blog at that point. I have a name picked out at this point, but I’m not telling you because I don’t anyone swooping in to occupy my niche.

I want to establish an anti-Marc Barnes club, just because he’s younger than I am and already much more successful; I can’t be having my midlife crisis already! My friend Eric over at RPG Catholic is a member, or at least so I have inducted him, possibly against his will. He is also to blame for the ponies, I’m still sorry about that.

My 21st birthday is coming up soon, and if anyone has recommendations of beer and liquors to try, I would love to hear them.

An anarchist guide to voting? Seems a contradiction. Well, yes, to some degree, but let me explain my preliminary reasoning on the matter. One, there’s not really any chance of my convincing a significant amount of people before the 2012 election to not vote, or else to vote for an anarchist candidate who would do all in his power to disband government. This means I am, to some degree, left to work out a preferable state of affairs with tools that are, admittedly, incredibly lackluster. However, no matter that it is an injustice for one to have to vote at all just to try and keep more of what is his own, if one can somehow influence his captors to not molest him to such a great extent, he may as well. So long as other Catholic bloggers and clergy of conservative or liberal bent have it in their mind to produce voting guides, I may as well chime in with my view.

Let us consider first the principles of what one can politically support within the limited sphere of such political expression as your humble anarchist might conscientiously partake.

I could not support a murderer, so Obama is out. He has, through the machinery of government and its military, effected the assassination of innocent civilians in foreign lands. Murderers ought to be brought to justice, but well, as we anarchists are all too aware of, politicians never pay for the suffering they inflict on people through whatever policies and decisions they effect.

For that, I am not confident Romney would restrain himself from engaging in the same capricious behaviors available to the president of the United States and commander-in-chief. He is likely to continue and perhaps even increase the US’s current foreign policy of provocation and aggression against nations like Iran for the sin of trying to develop modern modes of energy production. He has, after all, campaigned on the promise to increase the military’s budget, and essentially every budget increase is anathema to an anarchist.

Yet, there circulates the argument that a Catholic in good conscience can, or might even be obliged, to vote in the “lesser of two evils.” Is Obama or Romney that lesser of two evils? I will not attempt such a futile calculus of despair; I will only note my preference to perish than support such great evils. Do I draw the line too soon for complicity in such evil? I do not know, I am only sure that neither a Democrat nor a Republican in power will do anything substantial to void the course America is socially and politically set on, so it would not matter. If I gun were put to my head, and needed to make a choice between those two, I would toss a coin: heads for Obama, tails for Romney. Let me flip a coin and find out… Obama. So, if you would like to know who I endorse between the two evils under such a condition, there you go. You can put that on the record.

Frankly, neither of the two major candidates will save America from going over the cliff of social decay and degeneracy. As an empire, such elements of popular apathy and corruption of social institutions has set in like mesothelioma. Politics is playacting, politicians appeal to the base elements of security over liberty. Panem et circenses!

Are there third-party candidates who can change anything? I’m deeply skeptical of such. Besides, one of the two Greater Evils will be elected no matter. Some make the argument that voting in such a way does help incrementally bring focus to those of a more libertarian or alternately socialist bent, so that such a candidate is elected for in 40 years, but it will be too late for that to matter, as any substantial change they’d be interested in will have already been effected just by the destruction government brought on itself.

The only politically charged vote an anarchist might make is to not vote. Can it accomplish anything? No. Could acting differently accomplish anything? Nothing meaningful. So, I have to state for the record that I will just not be voting for a president this election, and I think anyone who believes their vote makes a difference is deluded. The Republicans have not kept their promises to conservatives for either “fiscal sanity” (as if funding government were sane in the first place! ha!) or the advocacy of conservative social values (as if government should be making such decisions for society!). No, the Republicans are, for all intents and purposes, statists and politicians, and they will act to preserve their present power at any expense. Socialists, on the other hand, should be happy to have an increasingly centralized government, since it can only indicate increasing control of society overall.

Ah, but what of Catholic values, don’t I mean to speak for those? Are there not pressing concerns at stake, such as the fate of the contraception mandate, the future Supreme Court justices who might be called to make a ruling on the legality of abortion, and so on? Aren’t we supposed to take our faith into the public square and exercise it in politics? After all, don’t I believe that abortion ought to be illegal and that the contraception mandate infringes on our religious rights?

Sure, of course I do. However, saying that, I find this concurrent faith in government ludicrous. You think that Romney will make things better? Sure, he might do something about the contraception mandate, but that’s only one issue of literally hundreds that are at odds with the corpus of values I hold as a Catholic. Is being one step less evil by being only at odds with my Catholic values in 101 ways better than the other candidate who is at odds in 102 ways? Hmm. I can’t divine the significant difference; in fact, I couldn’t tell you which of either the Greater Evils is that 101! Would I prefer that we kill Pakistanis or Iranians? That seems to be the only lives hanging in the difference here. Then again, I have no idea which group of people will be more persecuted by either candidate, so that’s a crap shoot, assuming either would even be different, which any rational person should doubt. Politicians can obviously conclude that the voting public are fools, since no promise for peace is ever kept. Are you a fool? No. So why give politicians the conceit that they matter to you?

That is a Catholic reason for not voting. No matter which president gets in office, neither will respect the dignity of people, unborn or foreign. The only way to give the impression to the politicians that we do not believe them, to spread the message to other people that we no longer believe in this meaningless and contrived system, is to not vote. Go out into the public square and protest loudly that you are not voting because it is not an effective means of securing justice.

The right to live, the right to practice our religion, the right to keep one’s own property, the right to associate as one will and to do as one pleases is not up for a vote! Why give truth to the lie that voting was ever about something that should be decided by people whose place it isn’t the right to make such a decision, whether it be the murderous and tyrannical politicians or a foolish mob? At this point we do not need to only protest the politicians, we need to protest the political system itself! A vote, no matter which politician it favors or disfavors, only affirms the essential rightness of the corrupt system that we can no longer abide.

What causes booms and busts? Why is the upward procession of the economy so prone to downward recessions? It is nothing so exciting as things like animal spirits, drops in consumption, or anything like. It is caused by a divergence of the rate of savings and the rate of interest. To put it very simply before I elaborate: the rate of savings determines the natural, or “real,” interest rate; if the interest rate is distorted so that it does not reflect the rate of savings, and thus is no longer a natural rate of interest, then it follows that the building up and consumption of resources in the pursuit of investments to ultimately produce items of consumptions will eventually lead to the market being systematically overfilled with products that consumers do not buy because they did not save so that they could buy such items at a later time. At this point it is discovered that investments are not profitable, so a readjustment of ownership and capital ensues economy-wide, which leads to widespread unemployment to a degree as high as the original distortion. This will be painful, but will quickly lead back to resources being properly utilized, and employment will pick up again. That is, it will pick up again assuming the economy isn’t further distorted.

The moral of the story: Investment not backed by someone’s real savings will lead to recession.

So first, what does savings have to do with the interest rate? The interest rate is essentially the price of borrowing, wherein the price is paid at a later date for present resources. It makes perfect sense to borrow in the expectation of paying it back; if I can borrow $1 today to pay back $1.10 tomorrow, but with that dollar I make $2.10, then I’ve made $1. The person who lent now has an additional $.10, I have an additional $1, and I will (presumably) have provided an economic resource to someone else who is also better off for having it (otherwise why would they use their money to buy that, and not another thing?).

If it is difficult to save, say because one lives in a poor society and a large amount of income is dedicated to immediate consumption, then one must be offered more future money to part with present money. The extent to which present saving, or present withholding of consumption, is found less preferable than simply partaking in present consumption, drives up the price of borrowing, which is to say that it increases the rate of interest.

On the other hand, if one finds it easier to save, either because they do not need to devote such a large portion of their income to present consumption or just because they are able to easier restrain their spending, then they will be more easily persuaded to lend at lower rates of interest.

Of course, supply is only one element of the price of something. The lender, who supplies savings, has only half the say in the rate of interest. Of course, if they had perfect control, then they would raise the rate of interest to infinity, which would lead to extremely high rates of savings.

If interest rates were that high, however, then no one would borrow. Borrowers are those with a demand for present money greater than a demand for future money. That is, they are in a position where they judge it to be likely profitable to spend money in the present on something in order to produce for the future.

If someone is more sure that they will be able to turn present money into future money by investing in some venture, then they will have greater demand. Greater demand means they are more willing to pay a higher price for borrowing, which means that greater demand for present consumption (much like with the lender!) leads to higher rates of interest. Conversely, a lower demand for borrowing would lead to lower rates of interest.

The real rate of interest then reflects that middle between what persuades people to save money and what lets borrowers to spend future money.

We can note that the rate of interest in its own right is a form of information. Low interest rates tell people now is a good time to spend in the present, whether potential lender or actual borrower, while high interest rates tell people now is a good time to save for the future, whether actual lender or potential borrower. Expressed as a simple formula, the (natural) rate of interest correlates inversely to the present rate of consumption. In other words, higher interest rates mean lower present consumption, lower interest rates mean higher present consumption.

Seeing that such a relationship holds, it is obviously tempting to economists and politicians of a certain disreputable bent to have it in their designs to lower the interest rate at whatever means, since such would lead to an increase in spending and thus give the appearance of prosperity as people who would otherwise save are persuaded to spend on items of consumption as well as borrowers to spend on investments, which provides people jobs and uses up resources. The aggregate effect of a lowered interest rate will be a higher GDP, since higher spending = higher GDP. As you surely have heard, high GDP is good. The effects of such a plan, if it could be implemented, will be systematic and economy-wide. It follows then, that if such a design will lead to investments which produce more than people will later consume, there will come a period of time when it is understood that the investments made in the past are not as profitable as they seemed they might be; this would lead to a selling off of accumulated capital and the firing of employees. If such plans are unsound, they will lead to an economy-wide recession as the economy readjusts by redeploying previously committed capital and employees.

How would such a design to lower interest rates through artificial means be achieved? Who advocates such a design? Is it a reflection of present policy? If such a policy is unsound, what makes it unsound? I’ll come back to that in Part 2.