It's tough to fight human nature

Even my prefaces have prefaces.


Ran across these remarks the other day while trying to document something else. Maybe they make a good opening for where I want to go today.

Jazz said something about economic policy driving us "into depression, fascism, and neo-feudalism."

"And dark age," I added. "It's all part of the cycle of civilization."

To which Greg replied:

This cycle is not predetermined, rendering us helpless to stop it. It is all due to our choices, our policies, our (mis)understanding of human nature and our deference to authority figures who have no business being in charge. I cant go on believing we are stuck in a repeating cycle and are helpless to stop it. We simply need to lift the veil form our eyes and see what bad choices we've made in putting ourselves here. We CAN control where we want to go to a much greater degree than we give ourselves credit for.

I expressed strong agreement with Greg on that, but added:

However, given the fixity of human nature, continuation of the cycle is the most likely outcome.

As Arnold Toynbee observed, civilizations die by suicide.

For thoughts on the Cycle of Civilization, click the "label" on that topic in the sidebar. And in particular see these notes.


On the 14th I quoted Paul Mason but ignored this bit of the quote:

So what is "financial repression"? Put simply it is a combination of inflation and capital controls designed to erode the value of debts - and therefore of savings. It is overtly designed to prevent market mechanisms responding to inflation, leaving the price of borrowing too low and the return on savings too low.

I'm not sure that eroding debt must necessarily erode savings. Many people argue that "loans create deposits" and that banks do not need to have deposits in order to lend. If a bank doesn't need to have a supply of savings in order to lend money, the presumed strong connection between savings and debt comes into doubt.

So then it might be possible to reduce debt without reducing people's savings. And that's a good thing, because everybody thinks saving is a good thing and nobody wants to reduce their savings. Yet we must reduce debt.


The Paul Mason quote is from his article titled Repressionomics - can 'financial repression' solve debt crisis?

The word "repression" occurs twice in that title. Do you think he opposes the policy? You can bet he does.

What do we have in the excerpt?

• Capital Controls. This sounds like government control, and everybody hates government control.

• Inflation. And everybody hates inflation, except people who have already given up on economic policy.

• Erosion of Savings. And nobody wants that, not even the people who have given up on policy.

• The return on savings too low. And nobody wants that, not even the people who have no savings, because everybody wants to have savings.

And there is more in that little excerpt designed to get you opposed to "financial repression" -- It is overtly designed to prevent market mechanisms responding to inflation, for example.

Convinced yet? Paul Mason opposes financial repression. By definition.

Why? It's human nature, I think. He's got a little money stashed away, maybe, or wants to have. And he sees this policy that is an attempt to solve the severe economic problems that were exposed by the crisis, and he sees it as an attack on his savings or his potential savings. And he responds like a cornered coyote.

For the record, Paul, it's nice to start a definition with a little objectivity.


The way Paul Mason approaches his definition of financial repression is a full-bore assault.

Why? Human nature. He is defending his interest, defending his own.

It doesn't matter to him that his approach might be the approach that moves civilization closer to its demise rather than farther from it. It doesn't matter to him, I suspect, because he never even considers the possibility.

Why? Human nature. He is defending his interest, defending his own.


We can depend on people to defend their interests. The tougher times get, the more protective of their interests people become. It's human nature.

This is the reason civilizations die by suicide.


Paul Mason is right about one thing. Everybody who is not with him on this, is someone who thinks inflation is a solution to the debt problem. Everybody except me.

I think we can solve the problem of excessive debt not by means of inflation -- and we can slow the pace of inflation not by jacking up interest rates -- but by using tax incentives to accelerate the repayment of debt.

Two birds. One stone.