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Peter Joseph - Origins and Adaptations, Part II - Toronto Z-Day, 2014

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Origins and Adaptations Part II Peter Joseph, ZDay 2014, Toronto Good evening, and thank you all for coming. I very much appreciate you all being here, and of course thanks to the Toronto team for a tremendous and diverse presentation order; I was really happy to see the diversity. This is 'Origins and Adaptations - Part II' I tested it out at about 4:30 in the morning, found out it was about 15 minutes too long so I've been trimming this thing down in the midst of everyone else speaking (sorry to be rude). But, I want to state up front that this is not my normal type of talk, and if in the course of this, if you can't figure out what it is I'm getting at just bear with me, because I will get back to the main point as I go through this. In 2012, I gave the first half of this presentation, talking about the kind of toxic evolution of the market mindset, a mindset which was quite innocuous many centuries ago, but has continued to evolve in ever-problematic ways, including the resulting consequence of growing environmental and social imbalance as we all know. And sadly, the market's internal incentive structure and its general mechanics literally doesn't have the vocabulary to solve these problems, as others have alluded to today, which is one of the reasons, perhaps, that there are more activist groups and NGOs, and socially concerned nonprofits in the world than ever before, in absolute and in percentage terms. And if that's not a barometer of societal health, I'm not quite sure what is; it's a very telling sign. The implication, is that not only is the market as we know it inadequate (as the market is supposed to solve all problems), so is the government, as we know it, and both of them have been failing for a such very long time when it comes to problem resolution, people are going way outside of the traditional frameworks, as best they can, to try and help. Too bad- not to be cynical- the vast majority are not going far enough in their thinking about true root problems, some of which I will try and cover today. In Part I 'Emergence of the Arbitrary' I will use the stock market as an example of how the system of market capitalism has 'decoupled from itself,' gesturally speaking, highlighting what I think are very interesting features of crowd behavior in this type of incentive structure, along with revealing what are I think the 'true colors' of the market mechanism and the mindset it creates- the true, naked colors of what this system actually is when you remove everything that glamorizes it, and covers it up, and ornaments it, in the wrong way. In Part II 'Rational Imbalance,' I'm going to attempt to show, in the most simplistic and accessible relationships possible, how the market organizes itself 'rationally' amongst competing players. For those that have ever studied game theory, or utilitarian models regarding behavioral economics (kind of obscure) you've probably come across something called 'Rational choice theory.' Rational choice theory means that an individual acts 'as if' they are balancing costs against benefits, to arrive at actions that maximize personal advantage. In this context the term 'rational' has little to do with the commonly accepted definition, most would consider synonymous with say, 'sane' behavior. Rather, it assumes that individuals make logical decisions based upon their perception of obtaining the greatest satisfaction, oriented by only the game they are focusing on. My goal is to show not only how there is a lack of equilibrium constant in the market, perpetuating economic imbalance, wage imbalance, general inefficiency, and hence the resulting creation of desperation, it's also to show that this thing is so locked in, we can't even avoid the issues because these 'rational' defenses are formed by pressures that are external to the vocabulary of the market economy. An externality- as I will touch upon, as I get into it- is something that the market doesn't understand and account for. Examples include: technological unemployment, poverty, over-consumption, realized scarcity, growing inequality, climate destabilization, and other such issues that we have talked about at length today. This realization stands in stark contrast to the spectrum of equilibrium, theorists who argue that a properly tuned, free market would naturally produce, such as full employment, wage stability, equitable distribution, etc. This section with also imply that the idea of a 'green' or humane capitalist economy- given the general consensus of what those value terms mean- is actually structurally impossible as a natural state, showing that no matter how ethical, caring, and environmentally conscious you think you are being, virtually everything in the market moves against these sustainable interests, as evidenced in its total system behavior. Now this doesn't mean improvement and influence can't be made and we shouldn't try and be helpful and active, but you're walking against the current greatly and, as I will show, the system's design has some very, very powerful mechanisms that keep it in place, without anyone really understanding what these mechanisms are. Everyone thinks about power; we're talking about a structure. And to be clear, system behavior- this is what it's about- is by definition behavior that is unpredicted by the behavior of its apparent parts. It isn't to say the behavior cannot be understood, but it has to be analyzed as a whole, as much as technically possible, to gain a more accurate picture. This is why the only type of social analysis viable, must fall in the context of global statistics, and large scale trends over time. It is very, very easy for classical economists today, to defend the market by anecdotal scenarios, narrow reductionist proofs, and examples of short term improvements that basically ignore broader, negative trends. In about 15 years there will be another billion people trying to survive on this planet. Yet, as of now, all life support systems are in decline, and general social destabilization is statistically on the rise. These system results trump all other perspectives as qualifying measures. For example: Numerous corraborating studies show that we need a 60 to a 110% increase in food production by 2050, and of course this stat is not accounting for the fact that 1 billion people today are already are already not getting enough food to meet basic nutritional needs. Potable water is worse, with the UN finding that over 65% of the world will experience water stress in just 10 years, with 1.8 billion already living today with true scarcity problems. Pollution- both land, water and atmospheric- which is already epidemic, has been estimated to continue to rise overall, especially in the countries desperately trying to pull themselves out of third world economic conditions. And as much as we all would like to see the world come up to a higher standard of living, the industrial methods used by these strapped nations are horribly inefficient, and essentially ecocidal. China is a perfect example: 16 out of 20 of the world's most polluted cities are in China, and I see China's development as the path that most other nations are taking, preferring economic growth over environmental sustainability, through dirty, cheap industrial methods, with no regard; they're just trying to get it done, looking the other way. As far as energy, despite the green rhetoric and the earth stickers stuck to everything being put out by the oil industry, they are spending billions in development of conventional and unconventional hydrocarbons, and substantially less on renewables still. Tar sands, fracking, oil shale [are] horribly polluting, destructive, and have very weak net energy conversion, as compared to conventionals. And it is estimated that we need a 56% increase in world energy by 2040. And guess what? If that increase is going to come from hydrocarbons, it's gonna be a CO2 pollution disaster because we've already hit the 400 ppm benchmark. So, if were going to try to meet this demand with the oil industry, we're in a lot of trouble. As far as resource consumption and loss of biodiversity, a 2011 study found that we need 27 more Earths to keep current rates going by 2050, with losses of 50 to 150 species daily, a level 10,000 times greater than the natural [rate] of species extinction in the fossil record. As far as public health, the WHO has recently stated that cancer rates are expected to surge 57% in the next 20 years, while depression and anxiety disorders continue to also rise. Heart disease, the general global killer, at least in the West mostly, while decreasing in global mortality a bit in the last few decades, is actually increasing in diagnosis; people are just living longer due to medical servicing. And closely tied to such public health is income inequality, which is at its highest rates by some estimates, than anytime in human history, with poverty, overall, on the rise in the first world nations, with extreme poverty, as it's called, in the third world, staying more or less the same in the long term. Please note that income inequality is not some mere inconvenience. It's a silent killer and social destabilizer. Heart disease, for example, has a direct correlation to inequality both in terms of absolute deprivation, and relative or psychosocial stress pressures. And the last socioeconomic result is the ever-growing unemployment crisis. The flow of reasoning within the market, coupled with the exponential increase in information-based technology and resulting cost decreases of applied technology, will incentivize all businesses to automate over time- just watch! How can we expect to keep humans meaningfully employed in this climate, when keeping cyclical consumption and growth will become more and more elusive, as time moves forward, and this market logic prevails? Bottom line: Anyone who tells you that the market and its underlying mechanisms and incentive structure is exempt from blame regarding these causes, they are either completely and utterly dishonest with themselves... or they're incredibly poorly informed with respect to the etiology of market synergy, the causality. Overall, poverty and inequality together, are perhaps the most embracing as a result of these pressures, both of which, as TZM knows well, are technically unnecessary, given the state of our capacity to actually meet human needs, and keep ecological balance at the same time. The structural violence we endure today is an assault, and in form, a civil/human rights violation. And you know we've watched over the many years increased race equality, gender equality, creed equality, and to a limited affect - legal equality emerge on this planet. Yet, most everyone has been conditioned- have you noticed- to stop short of demanding economic equality, in the truest sense of the idea. It appears the idea of economic equality is seen as utopian, that is the way people think about it, unattainable. And in the past, this was probably true. But no more, provably. With the phenomenon of ephemeralizaton- more with less- we can do it! And I hope that the civil/human rights groups out there can really realize the merit of this, and how the result of this equality through, of course, the installation of a Natural Law Resource-Based Economy- something that I'm not talking about today as I have at length in other prior lectures- is the only logical means to do so, based on assuring the proper behavior reinforcers to assure balance, abundance, and sustainability. And to conclude this tangent, when you really trace the etiological unfolding of the most damaging problems and fatality in society, logic will lead you to one conclusion: Capitalism is the leading cause of death on the planet Earth, and it's time to change! [Applause] Then in Part III, 'Revolution by Design,' I will quickly address the critical importance of educational design projects and think tanks, which can essentially mockup this vision and prove its efficacy to the general public in a very tangible way. And by the way, this is not to override any other activist ideas- boycotts, etc.- but it's about getting down to what will make the world realize what is actually possible in the most direct, applicable, educational sense. However before I begin all of that, as if this intro couldn't be any longer, a personal note. As mentioned, I don't like to repeat myself too much when it comes to prepared talks. I do my best to always look for new content and angles. And today we live in a digital age where we have access to vast historical media online. So repetition in presentations just isn't needed, if those intent on understanding this stuff put forward the proper research, into the Movement. And for those new- say finding this video archived online later- here's a list of all the main talks I have contributed to the Movement since 2009. And if anything I say here today- which this is an advanced and rather abstract presentation I'm going to give- if it's not understood, please go back and review these talks. Some are a bit outdated in hindsight but they have a lot of merit as far as I'm concerned. I've also done hundreds of hours of radio shows, interviews, third party podcasts, Q & As, and the like, and to be frank, I have pretty much burnt myself out entirely, [laughter] which is part of the reason I bring all of this up, as after this event I'm going to be shifting gears a bit, moving away from public speaking, focusing on back end TZM projects, along with returning to my most important and neglected activist strength, which is socially conscious feature film production. [Applause, cheers] And finally, with the creation of the new book that- I think about 200 or so were donated to this event, that I assume have been passed out, which is also free to download- coupled with the numerous other talks by prominent and great speakers that we have, there is no shortage, no deficiency of thoughtful research, data sourcing, and details regarding the train of thought that comprises the aims of TZM. Anyone out there that says the observations are vague or ambiguous, have simply failed to properly research. And by the way, there will be a workbook for those interested in furthering this and being able to learn the talk as our expanding lecture and communications team, a workbook will accompany this to help engage the person to think even more critically, with Q&A ideas and common objections, and things like that to help them. So all that said, let's jump into what will likely be my last formal lecture for a good while. Part One - Emergence of the Arbitrary As some may know I spent about six years of my life actively interfacing [with] the equity markets, mainly short-term trading of high volume stocks: day trading. I did this mainly because I didn't want to be a part of the dictatorial business model, and even in my early 20's I accepted that the economic system had a very distorted incentive system. So I went along with the ride. I was a dedicated classical musician at that time and the obscurity of my interests and passions just - they weren't economically viable and I really had no interest to be a paid professional in my field. It just polluted it. So I examined the landscape and the only occupation I found, which did not have a boss, clients or any entity that was to decide my fate or impose control, was equity trading. I read numerous books, took mentorships with accomplished traders and specialized in what is called 'pattern trading.' It was also in this environment I began to realize just how absolutely insane the market economy and the concept of market capitalism really is, as the stock market is basically- you could call a 'proxy market,' is a better term for it because it's just really just a representative thing that's been made out of nothing- it really shows the dark truth of what underlies this model, the lowest common denominator of orientation and intention. Let me try and explain by giving a brief tutorial about what this type of trading actually is- what people are doing- and why it is sociologically interesting on a few levels. Pattern trading is the art of simply recognizing crowd behavior through charted visual price patterns, over time. These price patterns, once recognized, have a probabilistic resolution in the way they move. In other words, the trade happens when a trader sees the formation of a price pattern, visually, and can intelligently bet on which direction it's going to resolve. This is an odds game and just like a professional poker player, you have to know when the odds are in your favor and when the are not. And when it comes to pattern trading, a disciplined trader is looking for a clean pattern, as I'm showing here with what we would consider a quality 'ascending triangle' on a 15 minute chart, meaning that each one of these little candle bars represent the opening and closing price in 15 min blocks, for a particular share of stock. This pattern suggests a breakout to the upside, however it isn't that good of an odds play in and of itself, even though it's a very nice pattern. The trader also needs to assure that the pattern is occurring in the proper climate, and is supported in what are called multiple time frames. The proper climate is assessed by assuring the broader 'aggregate market' is supporting your bias. It's like a weather system, you want to go with the flow. Generally speaking you want the movement of the related Exchange to support your anticipated move, along with the stock's sector, which is orientation of what kind of stock it is, as far as classification. In other words, if you're trading a technology stock, you want the technology tracking index- meaning the aggregate movement of all other related tech stocks- to support your anticipated pattern resolution- the move- along with the Nasdaq Exchange, as a whole, to make sure that the weather pattern, the tide, is going in your favor. Here on the left we see a 'bottoming climax' pattern, which presents an extended deviation, you would call it, from an average range, in the stock's Exchange. This means we can expect a short term reversal to the upside to gain equilibrium in this time frame, like a rubber band snapping back. On the right, XYZ, the stock that had the ascending triangle, this is its sector, the technology sector we'll say hypothetically. It's showing resilience, as they would say, against that huge bearish down move you saw in the Nasdaq Exchange, and it's consolidated a channel, meaning it doesn't want to go down, which implies upsided bias, which means that there are buyers supporting it, waiting for the tide to shift, so they buy it and send the stock up which is what you want. Or the sector up, is what you want. And the ideal would be for it to break out of that channel to the upside, with the XYZ stock you are trading, at the same time. Now what does all this mean, psychologically? It is crowd behavior, and people move in droves based on what everyone else is doing. If you are a day trader and the Nasdaq Exchange starts to tank, the crowd is predictably going to start bailing on their long positions (meaning they're buying them) and they're going to get out of it out of fear. However the really interesting part- I'm sorry to bore you with all of that but I think it's important to get a sense of this- the really interesting part is this 'multiple time frame analysis' concept in the stock in question. Market behavior is what you would call 'fractalic.' A fractal is a mathematical result, so to speak, that displays what are called 'self-similar' patterns, characteristic of a fractal, we've all seen fractals-... you see them in nature, the snowflake is a common example. While a tree, the branches, they branch off into smaller and smaller trees. It's self-similar, it's repeating itself, in different ways. Mass human behavior, especially in the arena of the stock market, does the exact same thing. The patient traders are not only looking for A) a quality price pattern as we've seen, B) assuring that the supportive overall market climate (the weather) is good, and they also want to see their position supported in multiple time frames which means, in reality, multiple groups of people focusing on different holding periods, in the same bias, hence the creation of self-similar fractal patterns. In other words, time frame doesn't matter when you're looking at these patterns just like, you can look at a part of a tree and it still looks like a tree, if you zoomed in on it you wouldn't know how big it actually was, even if it was a branch. So you can have any time frame in an active stock from a one minute chart to a yearly chart, and they all look the same. It's actually quite fascinating and interesting. Now clearly I'm not here to teach you how to trade, but I want to make sure you have a basic understanding of what's happening under the surface and why, and what people are doing, as it will become more relevant in a moment. Returning to our example, the 15-minute ascending triangle, So some trader, they find this pattern, they jump to a daily time frame (each bar represents a day), they see what's called a 'Inverse head and shoulders' (it's just a pattern) broke out in late October, with a first pullback occurring close the neckline (a very positive thing the trader is looking for to buy). So then we jump to the 120-minute chart (each bar representing 120 min), which is a close up of what is shown in that red circle, shows a smaller channel breakout from the first pullback, with its own tiny consolidation flag- another bullish thing you want to see, another signpost of upward bias (that's on the far right of that 120-min chart) and that's what you're actually seeing in that 15-minute chart, with the ascending triangle. Now we could even go down a timeframe in this fractal geometry to see if there's a supporting bias in crowd behavior, say the 3min chart. If the bias is supported, then that's great, not that it's that particularly relevant because it's a smaller timeframe. And yet we find a nice little mini-continuation flag it's called- you can see the flag pattern- positive bias. Most traders would look at this and they say "Hey this is great! We have climate support; we have multiple timeframe support," and we buy this 15-minute breakout, as it moves out of the ascending triangle and the probability gods give you a profitable move in your favor. 'Wow!' That is what people are doing, in the world, to make money! A lot of them! Now, the point here, I like this concept, I want to get into the fractal element too because I think philosophically and scientifically if you're kind of a sociological science geek like me, you might find this interesting. In fractal geometry, a mathematical equation is set up which creates the fractal, it basically feeds the result of that equation back into the equation, over and over and over again; that's why it produces that crazy fractal pattern. These are called iterations; the feedback loop is what's the result of the iterations, and that creates the pattern. So the iteration, every time it keeps moving it generates a larger feedback loop that continues. So what is iterating to create the mass-decision feedback loops that are creating these price patterns? What is the input and output, so to speak? The answer is fear and greed- fear of loss, and excitement for gain- which are perhaps the most psychologically predictive of all human emotions, going back to Rachel's talk. If you want to see someone behave predictively, get them really greedy or get them really afraid, and odds are you're gonna see something repeat over and over and over again. The patterns are self-similar in various time degrees because again, different groups of traders have different holding periods, and each are focusing on different time frames at once, engaging this fear and greed mechanism. So the feedback loop is driven by people seeking to gain, creating this mass interwoven iteration cycle through fear and greed - predictable chaos if you ever study chaos theory, which is basically what this is all about. And the real reason I'm bringing all of this up is because sociologically, economically, and historically, this whole thing has to do with a notion called 'utility.' I'm using the term utility in the economic and game theory context, not the broad philosophical idea of utilitarianism, which is much more vague and rather convoluted. Utility just means usefulness, the ability of something to satisfy needs or wants, and the stock market as a adaptation or variation of the buying and selling premise of capitalism, for the exact goal of profit, presents perhaps the most raw, stripped away, utilitarian behavior you can possibly find. These proxy markets exhibit no input variation outside of the game's focus, and hence they represent a kind of purified microcosm of the idealized market incentive, the behavior that's anticipated, behavior that's wanted, the behavior that's expected, when it comes to our preference choices, not to mention embodying the idealized intent- the pursuit of profit, right?- which, as many classical theorists still believe, creates social progress and improves public health by proxy, meaning progress is actually, in this model, a mere byproduct of the true motivation of seeking simply income and gain: the driving incentive. It's a proxy system; everything we have is auxiliary. The system is not designed to create. Even more interesting is how this 'naked' version of the market has revealed itself over time. It is perhaps the most profitable institution on the planet, meaning the financial sector overall, which has nothing to do with anything that actually helps people again in a direct sense. I would use the word 'decoupled' here, as I have before, but it's not really accurate. The market is actually just becoming more minimized and concise, more efficient with respect to the true intention of market logic as a whole, its driving true driven premise; the abstraction becomes reality. And just to assure this adaptation is very very clear, let's walk through this crudely, as far as the evolution. We came out of the Neolithic revolution, moving from simple hunting and gathering, to processing agriculture, and controlling nature to increasing degrees. We begin to make better tools, noticing some people have superior abilities than others for certain functions, so labor specialization naturally evolved, through talents if you want to use that term. Mediums of exchange naturally developed to bridge trade between these specialists, who would prefer to focus on their craft, and not worry about anything else. This led to the use of merchants to bring their goods to public market centers and help distribute items through trade, hence creating a new class of middlemen, who made profit off of helping the process of distribution. This new merchant class begins to see that they make money from just trade itself, the trade issue- whatever they're actually trading, the good- really becomes secondary. The purpose of trade utility becomes decoupled in this light. The new value sought is the medium of exchange, not the purpose of any good or service. By the late 19th century, companies routinely go public, listed on exchanges (stock market), dividing representative certificates or shares, of the company, usually providing dividends or percentage payments to those who own them, coming out of their actual income, coupled of course with that speculative value generated by those do who wish to trade the shares. That was considered secondary in the early stages. But over time, dividends and other direct payments based on true company income take a back seat to the speculative aspect, which grossly overshadows everything. At the same time, what do we see? We see raw commodity cultivation- true production- get turned into these things called derivative futures, where the value of raw materials can also be gambled upon now, with the true value of those resources being manipulated, completely, and decoupled from everything you that would consider economic and supply and demand in a tangible, classical sense, lost to the whim of the madness of crowds in speculation, along with most recently the floating currencies now that have taken over everything, which draw value, in part, simply by comparing the power of trade occurring in different currencies across the world. And of course, by the modern day, now, trillions- hundreds of trillions!- in speculative derivatives of all kinds, investment vehicles made up out of thin air by investment bankers, dominate the world economy, utterly and completely ignoring everything that actually has any true relevance to public health and human progress. And the trend of this 'financialization' as it's being called, is only getting worse. Why? Because the real 'goods' market- meaning the actual assisting, life-support tangible creations- is running out of steam, to keep money moving. Things are getting too technically efficient, and the traditional market is slowly dying. Wages are lowering, and the stock market is soaring. The financialization of the global economy, in part, is a consequential result, believe it or not, of technological development, and technological unemployment, which has been changing society, since the beginning that you could consider anything to be technological. That's how our values and structures continue to change by the impression of technology. And the market today has no idea what to do, to keep this economic growth going. So now? What's happening? It's broken down. It's being reduced into its core utility, its core function, the narrow game based on the pursuit of profit, no matter what the means of obtaining that profit really are. And this tendency was always there- that's one of my main points- it was always under the surface of this system. It's not a crude deviation that we can pull back the reins. It just took this time- this much time- to mature. Part Two- Rational Imbalance Now with that in mind, let's now shift gears a bit, and consider what's left of our traditional market: the actual buying and selling of raw materials, consumer goods, labor, the seeking of cost efficiency, and essentially the overall interplay inherent in the competitive system, theorized of course as the free market, still considering this theme of behavior though. As a brief aside, I'm well aware that there's a huge subculture that would complain that the world today does not operate at all with respect to true free-market principles, as per the lassez-faire ideal of a completely unregulated market. 'Free market' is defined as an economic system in which prices and wages are determined by unrestricted competition between businesses, without government regulation of fear of monopolies. And in the context of this accepted definition, they are correct, this theory holds true. But let's be realistic, shall we? Saying the free market is unrestricted competition between businesses, without government regulation or fear of monopolies, is like saying ultimate fighting is defined as unrestricted fighting techniques, except for biting, eye poking, and groin kicking. [Laughter] The truth of the matter is that there has never been, and there never will be, a free market by this idealized definition, because it is underscored by one massive continuum fallacy, drawing lines that don't actually exist, morally, which make it functionally impossible. A continuum fallacy is the acknowledgment that two states or conditions cannot be considered distinct because between them there exists a continuum of states. And as per my usage, the continuum is linked to the principle of open, free competition, and any lines drawn with respect to where competition starts and ends in 'free exchange' is absolutely arbitrary. While it is perfectly acceptable to create a car, advertise it, price it competitively against other producers in the interest to strategically take market share from your competitors, in your genre, through differential advantage and the like, apparently, according to free-market purists, to create a car, create a political lobby to finance the favoring of that manufacturer in the international arena by some means, enabling differential advantage through a government-sanctioned export monopoly that restricts other producers- is not okay. But wait!-... If the free market says that we should be free to buy, sell and compete without regulation, then why can't I buy legislation to assist my purpose of competitive advantage?! [Laughter, Applause] And if you're one of those people that says the problem is simply because the state exists at all, well I have one word for you: Mafia! [Chuckles] We have had many many centuries of so-called criminal muscle, forcing their commercial will through violence and coercion. How do we resolve such a clear and present propensity? Well, I guess we could make rules or laws that deter such behavior through punishment, right? But who's going to enforce those laws... the state? And of course you could be like Milton Friedman and declare "Government should be a referee, not an active player." But again, aren't we forgetting that government actually is a business? And since the very start of its inception, it has derived its membership from the pecuniary or business culture, almost explicitly? Saying government is simply not to get involved when the underlying ethos and overall interaction is exactly the same as a company, as the interests of those that comprise the government come from that same genre - it's like telling a hungry dog not to eat your food when you leave the room even though it's sitting directly in front of him. So I really hope- and I hate to drill this in- but many well meaning activists out there (I know it's not in this culture, but those who watch this, that still believe this) they begin to get past this idea. And what I want to do further in this section is show that even if you had a theorized, pure free market, with such high moral integrity of the population- meaning that they really did stop collusion, they wouldn't allow state interference, they wouldn't use the state for any purposes as such- and they forced a total market arena of pure competition in a strict game board structure, the idea that the system would actually result in ethical results, as per our most commonly, again, assumed assumptions of ethics, or any form of equilibrium, meaning... eliminating inequity, or full employment, or fair and balanced wage spectrums, this is also provably false. And the reason for this, as I will explain, [is] no matter how ethical, or humane, or eco-friendly you think you are being, the market's central behavioral reinforcers- its core game mechanisms, going back to the stock market, and what it rewards- will always create a larger order climate of deprivation, the desperation of it the effect that, we cannot be stable because it's always moving things around, in the sense of moving poverty around, moving this imbalance of suffering around in different ways, as I'm going to explain. And the forces predictably bend the threshold of the idea of ethical greatly by traditional standards. So ... the problem isn't ethics at all, the problem is this rational choice mechanism that dictates the necessary gaming strategy, something that I'm going to reduce to the term 'Competitive self-regulation.' I define Competitive self-regulation as the causal, resulting, and adaptive mechanism that guides and shifts ... rational decisions, based upon the logic of seeking and maintaining success in the marketplace. It is the same mechanism praised by the Chicago, Austrian schools, the Ayn Rand acolytes, and many other market schools who also claim, that a pure free market will simply not allow monopoly, cartel, and power consolidation. As I will explain, this mechanism- competitive self-regulation- is inherently myopic, too truncated in what it is capable of facilitating, to create any type of true social balance - it can't see it. It just keeps moving the problems around in a massive chain reaction as the game unfolds. So I want to begin this explanation with a very generalized example... Meet Jeff. He owns a T-shirt store. He also has great faith in the free market. He orients his actions based around the mechanisms of this 'competitive self-regulation,' meaning again, as per the theory of a true free market, this regulation is not legislated by some power, it is considered built into the market's defining logic, coming from the mutual, competitive interest inherent, in the entire aspect; everyone fighting at once. Jeff needs inventory, so he purchases his shirts at bulk rates, with his decision on what to buy, price-wise, based on the price competition coming from other T-shirt stores in his region, assuring of course his customer satisfaction as best he can, via competitive association. Likewise, he has about 5 employees, which he honestly cares about. He hangs out with their families, he wants nothing more than to see them be well. He derives their pay, competitively of course, to assure that they do not find a better wage at another store and leave, while also knowing he has to keep a viable margin to support his business overall. Jeff is also socially conscious in the traditional sense. He is aware of problems with pollution, resource overshoot, and common environmental issues on the planet, and considers himself eco-friendly, doing his best to be earth friendly; he recycles religiously, he even rides his bike to work everyday to help try and reduce CO2 pollution. Now let's assume everyone in the world had Jeff's mindset, 7.3 billion Jeffs, which believed again, in the market as the director, the orienter of proper societal action, through the free system, through free enterprise and competition, through the pursuit of profit. They're not being greedy, they're not being corrupt in any traditional sense that we tend to define it. In this case, would it work out? What would the end result be? Would the global market achieve full employment, humane working conditions, a relatively high standard of living and a generally balanced and equitable society? Well, a logician would tell you that you have to model it axiomatically, setting the market parameters in motion to see how the equation finds results. And I'm sure there are plenty of utilitarian, game theory equations out there that have tried to do this - to prove, in effect, how the invisible hand of Adam Smith would actually unfold. However, as I will explain, this isn't actually needed, in order to infer a highly probable expected result. All you need to understand is that the market's vocabulary, again, is simply too limited to account for the vast range of offsetting "externalities" that result as either a natural byproduct of the mechanistic logic inherent, or as a result of something completely unrelated, or unforeseen. And those results invariably create a survival deficiency in some way, A deficiency which puts pressure on the individual, desperation, or on a company, to rationally reduce their ethical and moral standards, in order to overcome the deficiency at hand. Deprivation, natural disasters, resource overshoot, scarcity, pollution, homelessness, disability, species extinction, climate destabilization - I think we all know what externalities are. And they are simply unrecognized. Why? Because the market cannot rationalize anything that can't be turned over through money. And it certainly can't rationalize anything that has an interest to slow consumption. The result is an ever-mutating chain reaction each time one of these issues arises, interfering with the so-called market efficiency, as it sends a shock wave through the system, altering behavior, if you can visualize this. This is why when you back any market economist into a corner on the issue, all they can resort to is one solution: charity and volunteering to solve external problems. They have no other 'rational' option, as the market game can only service things that enable financial exchange; again, if that isn't available, it won't happen. The best way to demonstrate this is to continue my example. As stated, Jeff purchases his shirt inventory at bulk rates based upon staying price competitive with other shirt stores in town, assuring satisfaction by competitive association. So two questions arise: A) What is the ethical integrity of his labor? or the labor of the shirts, I should say, and B) What is the ethical integrity of the materials? With respect to labor, it just so happens that a few years back, a typhoon hit the coast of Thailand, damaging its industries. Now with limited means to keep money flowing in the local economy, and with little to no help from any financial establishment since, again, state intervention is deemed an interference in this world, a Western company which, consequentially, has had massive losses ... due to a lawsuit, losing lots of money, they decide to offer contracts to this vulnerable society to manufacture clothes. And the only way this company can stay afloat is to offer 12 cents an hour for a 10-hour work day. This community in Thailand, of course, has no other recourse due to their misfortune, so they voluntarily agree to accept these low wages. Again there's no internal state intervention or regulations to assure healthy conditions of the factory, and the market, in its most pure form, only sees 'competitive cost efficiency' in that scenario. The results are of course poor conditions, poor health for the workers, and the community who are barely able to survive on the wages in general. Back to the hiring company again, we don't want to demonize them- are they being exploitative? Actually no, it's not an issue of greed. They are trying to recover from a major lawsuit, an externality once again, like the typhoon, and they're short on funds, and they're backed into a corner; they have 500 employees to feed. Then there are the shirt's materials, and let's assume assume cotton. As some may know, in reality, the US today still dominates the cotton market globally, and any of you who have clothes say, made in China, odds are that cotton actually came from the United States. So as it turns out, the shirts from Jeff's store are not only being made by sweatshop labor in Thailand, by desperate people who have no recourse but to submit, voluntarily, to work for very poor wages, the cotton they are using was brought in on a shipping container coming from the US traveling over 9000 miles, one way, by combustion power. As it turns out, in reality, one of those shipping containers, on average, has been found to pollute as much as 50 million oil-powered cars in one year. Why aren't US companies just making these shirts themselves, if they have the cotton, perhaps even alleviating the growing unemployment epidemic? Well because again, as for the laws of market efficiency, the competitive self-regulation, the same mechanism that generates the savings appreciated by Jeff's ... T-shirt consumers, it is cheaper to ship cotton 9000 miles away, burning an enormous amount of fuel and damaging the environment greatly, have it made by slave labor, essentially, [then] sent all the way back to Jeff in the United States. And the logic perfectly follows the standards set by free market principles. Then there are Jeff's employees. It just so happens that Jeff lives in a town where unemployment has been growing, mainly due to the automotive manufacturing that used to be there, once the pillar of employment in his region. And it has been either moved overseas, or it's been replaced by machines through mechanization, the factory dropped from 500 people to say 30 people; the intention of that circumstance equally follows the laws of the market, because of cost efficiency: exporting the labor or using automation is cheaper. In this climate, the cost of labor, it has been dropping, and now there's a labor surplus in town, in Jeff's town. This translates into a loss of purchasing power as well, with fewer people in his town buying things, and consequently, Jeff then starts to notice his competitors reducing their paid wages, and reducing their T-shirt costs as a result as well, forcing- guess what?- him to do the same in order to survive and keep up. Since people will work for less and less, workers also have no recourse but to submit to these lower wages to feed their families, if they can at all. Suddenly, Jeff finds that he's paying base wages to his employees which he cares about. Some of these people have college debt, some have medical costs, they're taking care of sick parents... Jeff's doing the best he can, even though the quality of life of his employees have dropped to subsistence. Now as you can imagine, in this broad hypothetical, I could continue this example in many many causal directions, but I think you get the point. At no time is anything in play except the dynamics of the market, as it is theorized by its proponents. And what disturbs this balance is anything that begins the trend, essentially, of deprivation: the externalities that it doesn't recognize. So I ask you, can we seriously consider Jeff as being ethical when sweatshop labor is making his shirts? Can we seriously consider Jeff as being eco-friendly, when the materials of his shirts are being carted around the world 18,000m round trip on one of the most polluting transport mediums in existence? Can we seriously consider Jeff as being humane when he is a proprietor of a store that pays his employees the most base wage and they're barely able to meet their needs? Obviously, it's a trick question. Because it assumes isolated behavior and free-will decisions, absent external forces and pressures that inhibit and alter our behavior. This is also why the idea of 'voluntary trade' is an empirical absurdity. Can Jeff decide not to buy those shirts made by the sweatshops? Let's assume he tried. He bought American-made shirts, and it resulted in a 30 percent markup. This would mean that the consumer would have to have the same ethics as Jeff; they'd have to have the green ethic and say "Oh, I'm not gonna buy this cheap shirt because I know how it's made and where it came from, I'm gonna go to this store over here." So it assumes they're willing to pay up. Yet, in America today, still deemed the highest standard-of-living first world nation, 50% of all Americans don't have enough in savings to go three months without employment. While another study found that the average household debt is about $225,000 now, and many having less than $500 in savings. Do you think the first concern of most of these people is sweatshop slavery? No. Personal survival comes first, needless to say. You see, caring is an inconvenience. If you want to care about the world, you have to have the freedom and the ability to move around in a certain way: the luxury of caring, in this system. And have you also noticed, on that note, that all of the 'green' products you see in stores- everything that's supposed to actually help health and be sustainable in the environment- are usually 2 to 3 times the price of normal goods? Apparently you have to be wealthy to be a socially conscious consumer. The bottom line- and I'm sorry to run this abstraction into the ground- is that an "ethical equilibrium" [is] mathematically impossible, state interference or not. The market simply cannot see or resolve the externalities that occur outside the board game, or even as a result of its own creation. Hence the idea of a clockwork market oriented competitive self-regulation, finding equilibrium in wages, employment, and ethical standards, is structurally impossible. Part Three- Revolution by Design I've had to shorten this due to time, but I think I get to the point. TZM Activism and Projects, I want to address very briefly. The role of chapters. What are quality projects and how do we think about what has true merit and what doesn't? Being here today, it seems there's different ideas about what a project is, so let me define a project based on my own terms. A project is basically anything that your doing that is viable to support the interests of the Movement. Now, that's a gray area to a certain degree but it's also a matter of focus and a matter of how dedicated you really are to the mission of the Movement. In the past six years there's been plenty of discussion regarding what it means to promote this work, as far as day to day activism, both globally- meaning what the Movement is defined as, as a single unit- and what activism means in the context of regional or local chapters. The first thing I'd like to state is that the thesis of TZM hasn't changed since day 1, regardless of its original association with The Venus Project upon startup. We are an educational movement, working to show the world what is possible for the future, working to get humanity on the same page through a common ground relationship of needs and sustainability, and to help facilitate developments towards the implementation and transition into a Natural Law Resource-Based Economy (NLRBE). The chapters, in truth, are agents of this message, sharing the common view globally, and it's very important to keep this focus. It's natural for chapters to grow, and to forget sometimes, that they are a part of something, and TZM's structure was based really on the Civil Rights Movement orientation, where everything is moving in the same direction, but they're just in different locations, so they can affect people in their local community and inspire change, in their own ways, locally. We are the transition, in other words, whether we're one unit or we're the entire planet. And I don't mean that poetically... half a million people are subscribed to our newsletter, and the millions of quiet supporters that watch the Movement from afar, and believe me there are a lot of them hiding in the woodwork! They're all engaged in this value shift one way or another, and this is really the first step. And the bottom line is that we need global unification towards a single, clear, and obvious direction for human progress. And when you think about projects, you have to think about what it actually means to move forward: projects in the sense of anything that has to do with activating the train of thought and engaging others. Are we working together in the proper synergy? is the question I think about when I look at chapter activity. Do we sense that all the chapters are really sharing the same view? Are we unified in the common goal? And of course, we all know activism is about communication, and who are most prone to this message? Other activists, naturally, right? I would never put down any chapter that decides to say, do soup kitchen help, put up the flag of TZM while helping others, sharing this worldview with the staff, and other activists that are helping, to help others. This is a brilliant way to actually bridge communication between this other large massive community around the world to say that "We are also here, we also want to help, our ideas might seem radical to you but give us a moment, and you might begin to see the error of your ways," and see that we have to begin to look at this in a root change orientation. We can't keep the patchwork going. And I think the other activist communities are really the central hub of how this Movement can spread. [Applause] But in the end, if you're going to use the term 'projects' the only real projects at hand are educational and awareness projects, and that's not all talk, either. The next logical stage, in my view- and I've been pushing this for a little while because I think it's extremely applicable- are 'virtual design initiatives' : models and programming that embrace the intention and dynamics of the sustainable revision proposed, as best we can, in reduced form. (there's not a lot of resources, people are volunteers, what have you) But we need to create this world artificially, show its potential, test it, and I am going to address two important ones that I think can be very helpful. The first one as I mentioned in other talks is called the Global Redesign Institute. The Global Redesign Institute is a macro-industrial design initiative, which virtually removes all topographical, infrastructural attributes of society, digitally- an interface that people can engage- and works to replace them, with actual optimized means. It's macro-economic in the sense that we're not talking about how to build 'this,' we're talking about how to construct a really efficient layout that actually serves the population, where energy is, and so forth. It's a systems-theory approach, and it does not, of course, observe human contrivances such as countries, property rights, and other artificial inhibiting factors that exist today. To do this, we need to create a programming project that can slowly layer it out. There are a number of data services already out there, so my goal is to try and get people into a good developers team and begin to construct this thing. And the hope is to have something refined and online for public contribution say in the next year or two. It's not an easy project to do, to do it right, with the proper programming. So anyone listening this you can contact [email protected] if you think you can contribute, to this type of approach. (API understandings, things like that) And the next, very briefly, is the Collaborative Design System interface. This was initially presented in the Berlin talk, 'Economic Calculation in a Natural Law Resource-Based Economy' I did in November, it's also detailed in the book. It's this mechanism creation, that is not easy for the general public to understand- it needs to be literally programmed algorithmically- but it's a filter, an AI regulatory filter that takes into account the efficiency and sustainability protocols that we have talked about at length, things that the economic structure needs to understand directly. The goal is to create code for this in a reduced form. This can be done in an open source setting, once again, if you have an interest to be a part of this, please email us, again at the same email. A realtime interface would be created in a minimized form; we'd go to conferences like this or you go to other activist conferences, you stand up at a conference and say "Boom! Look at what we've created!" Here's a regulatory filter that can assure efficiency and ecological balance, taking into account all of the issues that are happening in the economy using technology that we know works today, bypassing the market, the price mechanism with amazing precision in a democratic design and contributive environment. And finally, there's a new iOS- eventually Android- app that will be done in a few weeks, and I have the beta on my phone and it's very nice. And apart from embracing the basic website, RSS feed, network and push notifications, it will allow all users who have it, to contact anyone else who has it, globally, hopefully in about in 15 languages, further unifying the Movement in your pocket. It will be free, of course, and that's it for me, thank you very much. [Applause]

Video Details

Duration: 55 minutes and 40 seconds
Year: 2014
Country: Canada
Language: English
Producer: The Zeitgeist Movement
Director: The Zeitgeist Movement
Views: 107
Posted by: ltiofficial on Mar 27, 2014

In this presentation, Peter discusses how the Market Economy has not only evolved/simplified into its most core function of blind gain and the arbitrary trading of the "widget", using the Stock Market / Financialization as a point of focus, he also explains how any social progress that has occurred has happened "by proxy" - or incidental to the market game.

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