Mearsheimer, in part one of our two-part political overview defines what Liberalism is and how Liberalism in general can be subdivided into differing camps of Liberal action. These camps he describes as Nationalism, Realism, and Liberalism. The way we have defined these with an Integral lens is to say that what is believed is Orange Liberalism but how this is enacted and believed is through Blue Nationalism, Orange Realism, and Green Liberalism. In part two we get into International Relations and how these groups see the application of their beliefs beyond their own borders.
From the perspective here at CrazyCanadia, Orange is always labeled socio-centric where Green is world-centric. It is the case however that these are not perfectly discrete steps. These are noticeable parts of a wave of development. That is to say, the upper most progressed part of Orange is also world-centric where the middle part is socio-centric, and the lowest part of Orange is closer to ethno-centric. You can be in an Orange perspective, though the drive to bring that perspective global is the push into Green. The Orange idea of individual inalienable rights is Orange but is easily world-centric as well when simply extended to any individual. This is the nature of the fine line or blurry transition from one stage to another.
To look at this progression more linearly we can see this as a progression from Blue through Orange and into Green. Or put in other words, from Ethno-centric to Socio-centric to World-centric; from Nationalism to Realism to Liberalism. Or to relate this to the ‘left-right’ notion of politics, from right conservative to middle libertarian to left democrat. Normally I present development visually from left to right however to show the political ‘left-right’ of common speech we have the following:
Keep in mind that Blue ideology alone does not produce nationalism. It is tribal in its nature but this tribal nature existing whilst holding a national socio-centric ideology creates the tribal nation-team dynamic. The above is the separation of How the What of Orange liberalism is seen. If it’s not making sense, try to remember our looking glass lens of the quadrants from the last posting. We are looking at the How of Liberal belief and the added arrow in the graphic below illustrates the same direction of development above in the linear graphic.
Mearsheimer starts by defining Liberalism’s three main reasons to spread Liberal Democracy internationally.
1. Protect human rights globally
With an emphasis on individual rights being a cornerstone of Liberalism and Orange perspective, liberals see others in different countries as also be endowed with the same inalienable rights. This produces a moral imperative to help especially when these rights may be violated by another government on its people. Further than simply intervening in another country temporarily and firefighting against injustices, that country can be turned into a Liberal Democracy in which these individual rights are protected and will not then need outside intervention.
2. Cause international peace
Mearsheimer expresses that one of the ideas of a Liberal Democracy is that if all countries were Liberal Democracies than there would be no war. (I do not share this perspective) However, he argues that countries who are Liberal Democracies will be following the core aspects of the Liberal Solution in part one, inalienable rights and tolerance for other people in other states and therefore will have peace between nations which is called Democratic Peace Theory.
3. Protect Liberalism at home
Where other forms of government in other countries may wish to go to war with countries whom are Liberal Democracies or overthrow them from within, Liberalism could be wiped out. The ‘Red Scare’ of a communistic takeover of the world is an example of this Liberal hegemony in action. An attempt not to be wiped out. Here he also references President Woodrow Wilson who stated “The world must be made safe for Democracy” when calling for a declaration of war against Germany in 1917.
Within the first point of protecting human right globally Mearsheimer states that there are two strands of liberalism (simply seeing the development in a linear polar fashion), Universalist and Particularist. He states that the Universalist strand “wins out” over the particularist strand when seeking to enforce protection of human rights within non-liberal-democracy states (i.e. seeking to enact Liberal Hegemonic foreign policy).
“Liberals [Green] tend to believe that they have discovered at least one important truth. They’re basically violating their core precept that you can’t reach agreement on first principles. Liberals are basically saying that liberal democracy is the best political order and there is no acceptable alternative, but you’re not supposed to be able to say that.”
This contradiction seems somewhat reminiscent of the self-defeating logic of Green ideology itself which believes that its hierarchy says that all hierarchies are bad. However, I digress…
What is interesting in the last couple lectures of this series at Yale is how Mearsheimer continues to expound on the decision making of the factions. Again, in a polar style, he mentions that the Liberal or Universalist [Green end] strand approaches international relations differently than the Realist or Particularist strand of Liberalism [Blue end].
Based upon the tendency of orientation in the above progress of Liberal Hegemony, Mearsheimer suggests the above two factions tend to operate and engage in propagating Liberal Hegemony. How they engage is dependent upon where they operate from. The above graphic attempts to indicate the three types of engagement which Mearsheimer expresses as being two types with the Realist type having offensive and defensive subsets.
Lastly, what is interesting is the notion that the “globalist” ideology seen here within Liberalism, which at its core is Orange nation-state ideology, is being pushed towards a global society or global community. This seems to be a very corporatist style governing of trading partners in free markets which is pushed by multinational corporations seeking to expand their Orange corporate playground globally. This sentiment was also touched on with a brief comment by Mearsheimer who mentioned that there is “little public support for liberal hegemony as it is largely an elite-driven phenomenon”. He also stated that many political scientists believe it to be the case that America has pursued Liberal Hegemony since the end of the cold war in 1991. However, he claims that almost all would agree that it has been the case since 2001. This time frame has been a period of one single dominant power without a need to worry about balance of power politics and thus the US and the elite interests who generally run it have been free to operate from the Universalist end of policies rather than the Particularist ones.
After all of this, Mearsheimer expresses that the balance of power politics may be increasingly important to consider as China and Russia predominantly join as a counterbalance to US hegemony. What he is essentially suggesting is that of the options he sees we should be moving back to the particularist end of policies. What I would suggest is that we continue forward beyond the Green policies of Liberalism and into Yellow Integral policies.
After the last couple of long entries, I feel like another shorter one is in order. Today we are talking about Political Science and a look at John Mearsheimer’s breakdown of Liberalism in the United States. We will be able to break this down relatively quickly as we have already discussed "Blue Babies in a Green World" and "The 21st Century Political Horizon" in former posts. Mearsheimer’s work and a series of lectures on Liberalism seem to only reinforce the value of an Integral view of politics and political history. (Quick disclaimer: development is not as discrete as the graphic may suggest, it is a wave of development creating gradations of being and understanding.)
Mearsheimer starts with two underlying questions that Liberalism is based upon.
Mearsheimer states that Liberalism is fundamentally based upon the answers being that we are individuals first who form social contracts and the notion that we cannot agree on first principles on the big questions to life.
As the basis for Liberalism these answers are really the upper right Orange quadrant perspective on things. This is a perspective which is focused on the individuality of people. Furthermore, it follows from this Orange perspective certain ideas which are inherent in liberalism itself. As each person can be seen in a 3rd person perspective they are seen as each having individual human rights. These rights are afforded to people regardless of race, sex, color, creed, nation, etc. This is also why Orange level industrial societies were the first societies in history to abolish slavery and to engage in the equal rights of men and women.
This level of perspective brings with it an important problem. If people are afforded their individuality and freedoms to believe differently, How do we create a Liberal society in order to prevent conflict between sometimes harshly contrasting individuals? In what Mearsheimer calls the Liberal solution to the problem, he presents the following aspects of Liberalism:
The Liberal Solution:
1) Inalienable Rights
3) The Night Watchmen State
The first is Inalienable rights of all individuals [Orange]. Growing from those individual rights there should secondly be tolerance of difference [Orange]. Thirdly, to ensure that individuals who have different beliefs can live in tolerance with each other there should be an overseeing authority of rules maintaining the balance of the game [Orange].
These three tend to frame the basis for understanding a Liberal ideology. However, what is also important to understand about this perspective is the spectrum of Liberalism that exists. This is really what Mearsheimer talks about in his lectures about Liberal Hegemony and what he mentions his book titled “Liberal Ideals and International Realities” is all about.
The focus on the individual and his or her inalienable rights turns liberalism into a universalist ideology.
If you focus on the social groups, not the individual, you end up with a particularist ideology, which is what you get with nationalism.
There are many ways to look at something and what you see will really depends upon your perspective. We can see the spectrum of Liberalism being a polar view or a developmental one. Mearsheimer basically puts it in a polar orientation. On one end of the spectrum exist the Liberal realists and on the other the Liberal Idealists; the more classical modus vivendi liberals to the more modern progressive liberals. (FYI – modus vivendi: an arrangement or agreement allowing conflicting parties to coexist peacefully, either indefinitely or until a final settlement is reached. [Seems very pragmatically Orange to me])
Mearsheimer adds in a couple dimensions to consider as the differences between modus vivendi liberals and progressive liberals. He states he believes the differences lay within the negative rights versus positive rights and the desirability and efficacy of social engineering. For example, some believe in the right to liberty, the freedom from government intervention, freedom of speech, freedom of assembly, the right to property – where the state exists solely to protect your freedoms. In contrast, others believe additionally in positive rights, where government oversight and regulation are a must to ensure the rights of people like the right to equal opportunity or public healthcare – where the state intervenes to level to playing field. Mearsheimer then states that if you believe in positive rights, you will tend to believe in the desirability of social engineering as the government needs to socially engineer the environment to enact positive rights.
Now after having this simple realist to idealist polarity then adding a couple dimensions to it already starts to add complexity which may be hard to follow. Thankfully we here are well versed in Integral. The four quadrants do a beautiful job of succinctly explaining the patterns Mearsheimer is talking about. What we do have to understand is that the difference between what ideology is believed and how it is believed.
What is seen is Orange level Liberalism but How Liberalism is seen through each quadrant is what creates the complexity.
The nature of Orange perspective is Liberalism at its core. Mearsheimer describes how Liberalism is enacted from each quadrant from Blue which first countered Orange in the Industrial revolution as we mention next, to Orange politics of corporate democracy, and finally to Green Liberalism which became much more impactful over the last several decades.
Mearsheimer states that liberalism began in America in the late 1800’s as a function of three things:
1) The industrial revolution
In the US in the late 19th and early 20th century there were huge industrial enterprises which had great affect and created the necessity for social engineering around common goods (i.e. labor unions, labor problems, and child labor problems)
“The original progressives in the United States were not Democrats, they were mainly ‘Republicans’. Herbert Hoover was a social engineer par excellence, Teddy Roosevelt was a social engineer par excellence.”
The Nation is organizing people for administrative reasons, economic reasons, and military reasons to help create one coherent nation of people loyal to the state. These loyal people then often demand something done for them in exchange for their national loyalty.
3) Huge wars that were fought
The government was needed for running and organizing the wars, though also to do social engineering after the wars to reward the people who fought (Mearsheimer references the G.I. bill).
What is important to remember is that these quadrants represent our individual and collective development. Over one hundred years ago, the most ‘left-leaning’ party was the Democratic party whose ideology at the time was the most developed for the time (for the general population). This means that they supported what were mostly Orange policies as Green simply wasn’t around enough to substantially impact politics. The ‘right-leaning’ Republicans were the party then which was more focused on the collective bottom quadrants as evidenced by Mearsheimer’s comments about two republican Presidents who were the ‘progressive’ social engineers of the time. They, although not embodying the most developed ideology of the time countered the standard corporate free market nature with social engineering as the ‘night watchmen state’.
As time has progressed, as we first discussed a couple years ago in “The 21st Century Political Horizon”, Green is now more of a political force. This now moves the most developed end of the ‘left-leaning’ people to a Green perspective. It has really taken the bi-polar nature of politics and created a third understanding. Where conservatives have not moved away from some core beliefs, they have updated with the times themselves, many republican politicians are more in-line with corporate liberal democrats today than they are with the religious conservatism of the past. Even the fracturing of the Democratic party these days and the ideological lines along which they are fracturing is very telling. There is a group of Democrats who wish to continue with corporate donors and crony capitalism for a continued corporate governing party of a ruling class [Orange]. And there is a group of Democrats who wish to focus on being funded by the people and work for the people to provide greater social engineering for the masses [Green]. These are the ideologies believed, though how they are believed is another story.
In short, How Liberalism is believed is what Mearsheimer is talking about when he separates out Realism, Nationalism, and Liberalism into three aspects of Liberalism as a whole. This would be how Blue, Orange, and Green respectively see and enact the ideology of Orange Liberalism.
What is also interesting, and we will dive into in a future post (Part 2) is then how Mearsheimer applies this to International Relations and how these ideologies and their implementations affect international policy.
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“Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.”
This quote above is from one of the most prominent value investors of all time, and one of the richest people in the world, Warren Buffett. A person, like all of us people, who is still somewhat limited. We fundamentally frame our world through our personal understanding of it and not Warren Buffett, yours truly here, or even Peter Schiff is immune to the limitations of perspective. What is of greater value is to not only understand what someone is saying, though to see from where they are saying it. From what reference point or perspective do they colour their understanding of the world around them. This helps to tease out the very real truths they present from the limitations which are inherent in their perspective. It is a way of understanding what they don’t include in their mental model such that if it were, would they update their perspective or would their conclusions be drawn any differently? What follows is my best perspective of a conversation on the JRE podcast #1145. Inherent in my following views are the limitations of not knowing these people personally and only hearing a couple hours of communication. Please take my perspective for the very real partial truths they present. Additionally, I would like to be up front and explicitly state that I have some Bitcoin which will be talked about, and it is because of my views on Bitcoin that I own some. Like Peter Schiff, I put my money where my mouth is. These clear biases are important to point out, but we’ll talk more about this later.
What I see as the inherent limitations of Schiff’s Orange perspective which clearly does not include the systems which govern the interactions of the individuals, yet he can clearly define the individual actions. This tends to lead Schiff to a habit of cherry picking examples and only defining them as far as needed to make his desired rational point before hitting his own limitations. The main theme here is that the partial truths that Peter Schiff brings forward are valuable. These should be respected and considered. They need also to be put into a larger context which Schiff glaringly lacks, or simply doesn’t apply. So let’s dive in to see Orange perspective and how it plays out in real world interaction.
An Orange worldview and perspective would generally be understood as people who are focused on achievement through rational means. These are pragmatic, facts and numbers based objective measurers. On the American political spectrum they would tend to fall as Libertarian, or independent; not fully identifying with the Blue Conservative right nor the Green Liberal left. (As discussed here - in Blue Babies in a Green World or mentioned here - The 21st Century Political Horizon)
So not to cut out context from statements I will insert an indicator [#] of a mentionable point, comment below, and additionally add a link the the section of video such that if there is any error in my honest transcription or you wish to hear it straight from the horse's mouth, you can. Now that we revisited our understanding of Orange, let’s see how it plays out.
PS - "It's all about feeling good. That's what the liberals are about. It's about feeling that they are better than everybody else because they're higher up on this moral pedestal because they don't care about money. They just care about, you know, people. But when you talk about rich people, they don't hoard money. I mean, the way you get rich is not by hoarding. The way you get rich is by trying to figure out what problems people have that you can solve, right. Whether it's inventing something that makes their lives better, or providing a service that makes their lives better because the customers are in charge, individuals. That's what's going to allocate wealth. If somebody is better than somebody else at satisfying the desires that people have, right. If I can come up with something that you like, that you want to buy, that's cheaper and better than what somebody else has come up with, then you're gonna buy from me. And so the person who ends up with the most money is the person who satisfied the most desires, the most needs in the most efficient way possible. And that's what's benefiting society.”
 Not that Schiff doesn’t care about people, I’m not looking to be hyperbolic, however, it does show the Orange tendency to value objective measures and achievement initially whilst the morality of people take a back seat. This is partially because Orange sees their truth, objective achievement, as the truth and does not necessarily integrate morality in a balanced way.
 He talks of the general principles of a free capitalistic market and defines it well. This definition inherently does not include morality (subjective). Nowhere is there a moral check on the desires to be fulfilled. Military contracts for example are the free market answering the call for the best solutions to kill people. In a more benign or less extreme way, the market also produces whatever the fuck Honey Boo Boo is as consumable content. And in Schiff’s words, ‘that is what is benefiting society’. I use these examples somewhat comedically, though again, not to be extreme, it does also produce all the positive fulfillments of a society like food, healthcare, education etc. The important point to make is simply that it is amoral. Not immoral by nature nor moral by nature. Though when only dealing solely in objective terms the subjective simply doesn’t come into play; a big limitation of Orange despite the very real value it does present.
JR - "So when you say let the bubble crash, what would that entail?"
PS - "Well, the basic problem is with the US economy and this is because of monetary policy and fiscal policy, is we don't save anything, right. And because we don't save enough, we don't invest enough, we don't produce enough, we don't make enough real things. When Trump wants to say that foreigners are taking advantage of us by running these huge trade surpluses, he's got it backwards. We're taking advantage of them. Like the Chinese are sending us all these products that they worked hard to produce and they had to use real resources, land, labor, capital to make these products and they send them here and what do we give 'em? We give 'em IOUs. We give 'em a piece of paper and they buy our treasury bonds. So in the short run, Americans are just putting everything on a credit card, right. We're living a higher standard of living, because we can consume what we didn't make. But when you do that, you become poorer. See, America used to be the richest creditor nation in the world, right. The world owed us a lot of money. Today, we're one of the worlds biggest debtor nations. How did we go from the biggest creditor to the biggest debtor? It was trade deficits. Every year we keep borrowing money to consume. And what this has done, this has turned a rich nation into a poor nation, but we just don't live like a poor nation yet because we're still borrowing. And you can be a rich individual, yet maintain a rich lifestyle on debt. But eventually, debt's going to catch up with you and your lifestyle is gonna come crashing down. And this is what's gonna happen. But what we should do is instead of having a crisis imposed on us globally with a crisis in the Dollar and a crisis in our bond market we should do it ourselves. We should set these forces in motion ourselves. What we have to do is shrink government, right. You have to cut a lot of government spending. Get rid of a lot of government agencies and departments to get government out of the way so we can lower taxes, legitimately and then we have to allow the Federal Reserve to let the market set interest rates. Interest rates have to be much higher than they are now, right. Cause that's gonna encourage people to save. If interest rates are high you'll put your money in the bank to earn that high rate of interest. When money goes into a bank, it can get loaned out to businesses. Right now all that money is going to government or corporate bond market, where it's not growing the economy. The money is being used to finance stock buybacks. We need money on Main Street financing capital formation, entrepreneurship, new businesses, new jobs. So, [if] we get higher interest rates, we'll get that. And we need to get people to stop buying things they can afford. You know, you buy something if you have the money to pay for it. You don't just put it on a credit card. And if credit card interest rates went up, and if credit was contracted so credit card companies were not giving out as much credit, they're giving out a lot of credit now because the government is misdirecting it, but if we slow down our consumption[8.0], we increase our savings and investment, then the economy can actually grow.[8.1] But if interest rates go up, asset prices have to come down. The stock market has to come down a lot. Real estate prices have to come down a lot. Now, that means people are going to lose money. They're not going to be happy about that. "
JR - "Yeah, this sounds counterintuitive to everything I always heard about how to boost up the economy. The idea would be that spending and people buying things is great for the economy. We need more of that, no?"
PS - "No! That's putting the cart before the horse. You can't buy something that doesn't exist. Something has to be produced before it can be consumed. So it's the production that drives the economic train not consumption. See right now, we are just consuming what the Chinese produce. But the consumption doesn't mean anything unless you produce something first. So, you drive an economy by creating supply. It's supply that creates demand. If you just try to create demand, without the supply, it's just inflation. "
 Consuming what you didn’t make is capitalism as he just defined it earlier. This he says makes you poorer, and well, yeah. If you spend money to buy something, you do not have the money anymore. The money goes to the entity servicing the demand for a product or service. He covered this. Despite not having the money, you do have the product or service. And the seller has what is now their money.
 At the beginning of the decline from a creditor nation, the money (at that point not debt) was simply being transferred to the producers, out of country, China for example. These net outflows of money, are what are called trade deficits. This is the national language equivalent to personally spending money, net outflows from your account. You aren’t making your own shit, your spending money for what others have made. This is also partially because America has already developed into a service economy, out of a manufacturing one.
 I couldn’t agree more that there are things we can do and the notion that we should be active participants in the steps toward a solution.
 What is important to note is the end result he is seeking, rather than simply buying into the method which he sees, which is also important. His solution was higher interest rates. The goals of what he is hoping for are ‘main street financing’ in other words the people organizing money, entrepreneurship, new businesses, and new jobs. Are there any other solutions which may produce the same results? Yes. This is already happening in the crypto space. Regular people are able to organize their money to invest in entrepreneurship, new blockchain businesses, and new decentralized jobs. He doesn't seem to include these and that may be because he is thinking that these will only help produce these skilled programming jobs.
It is also interesting where he stops his use of the story of the benefit of higher interest rates on the economy. He says 'If interest rates are high you'll put your money in the bank to earn that high rate of interest. When money goes into a bank, it can get loaned out to businesses.' As good as a high interest rate is for a saver, businesses would be the borrowers in this scenario and will be less likely to borrow money to start up or expand if they have to pay high interest rates. This part of the story however does not go towards the end result he is looking for above and is not easy to integrate.
 A consistent theme, which will be seen again, is just as above. He claims credit card companies, are giving out too much credit but yet where does he see fault for and place blame for the actions of these independent free market capitalist companies, well it’s the Government of course. I agree that the government plays a role, though they are not the only aspect to consider in this system. The government helps to establish incentives, though the proposed helpful actions that Peter Schiff suggests to be taken, can be taken independently by these companies. And if they were not so bottom-line numbers focused as they are they might take them.
[8.0] What he’s trying to say is: [but if we slow down our consumption (of foreign goods / and debt backed consumption), increase our savings and investment (in the US), then the economy can actually grow.] The economy will grow if people buy American made products at a higher price as compared to Chinese goods. He would not say this directly however, because it is protectionist and anti-free market and goes against the free market belief system he holds. This is a problem of scale which we will talk about later so keep this in mind.
[8.1] The problem to cut through the fog here, is that it is so difficult to see and appreciate the real value his view brings whilst still being able to add additional information to create a more integrated perspective. We need to not get caught in either-or mentality and try to best use both-and mentality. The economy is able to grow while spending money and not saving as it has through the process of declining from a creditor nation in 1980, which he later gives as a date, to today’s biggest debtor. It is also the case that the economy can shrink if people drastically cut spending and only save money. This hoarding of money, real or fiat, can slow or shrink the economy and is exactly why back in 1933 Executive Order 6102 was issued. It stated that hard times had caused the ‘hoarding’ of gold, stalling economic growth and making the depression worse. Interestingly it was also part of a greater systemic play where “The main rationale behind the order was actually to remove the constraint on the Federal Reserve which prevented it from increasing the money supply during the depression” and beyond a 40% gold backed requirement limitation. Given that fiat currency only exist because it is debt, to get out of debt is not actually possible operating within the same system. What seems to be his suggestion then, would be something along the lines of getting the debt to a much more manageable level so that complete collapse and bankruptcy isn’t the result. This debt balancing will, however, simply delay the inevitable change out of the confines of this debt producing system of fiat and into greater modes of organization of society, economies, and mediums of exchange. He believes the path out is backward to a history of gold. I believe it is forward to decentralization and cryptocurrency.
 How can people, as he suggested, organize capital, increase savings, increase investment, create new businesses and new jobs if these same ‘people are going to lose money’? Furthermore, as mentioned above, if you are a business looking to expand or a hopeful entrepreneur looking to start up, then after interest rates get hiked for savers, it will be the worst, most expensive time to borrow. This will in fact slow the progress of new and growing business. It seems like the cycle and system of money isn’t being fully entertained. This is precisely why Rogan makes the comment he made next about spending being a boon to the economy. And spending would be good for the economy, if the money spent was within the economy we are talking about, the US economy, not to another country's economy. Again this is protectionist and anti-free market and represents a change of scale; in this case from a national economy to a global one.
 Here there are two things to notice and both revolve around a similar perspective. The perspective he is taking is a very objective one. There is a physical product or there isn’t, maybe it is simply held within the mental model he is envisioning to be able to articulate his perspective, though it seems like he is talking about something tangible but not referring to services as consumable. Where production is supply and consumption is demand then we can see these, production and consumption or supply and demand, as two co-creating aspects of an economy. He states here that it is production which drives consumption, however he early stated that it is demand which drives supply. Do you see the subtlety in the change of perspective with the changing of words. It may seem a little weird to say that supply drives demand or that consumption drives production, but they drive each other; both/and. Both can be true as the subjective desires (demand) inspire subjective innovation and novelty (production) which creates an objective product or service (supply) which in turn inspires objective purchases (consumption). As these then feed themselves in a cycle, who is to say which is ‘first’. Is Schiff right when he initially stated that demand is first when talking about rich people getting rich as they fulfill the already existing desires and demand in a society? Or, is Schiff right when he tells Joe Rogan that consumption and objective demand can only exist when there is a objectively produced supply to consume? The limitation of not seeing a systemic cycle of the co-creators of supply and demand, or production and consumption thus enables a muddying of waters with a small change in vocabulary. And thus we have our first good example of Schiff versus Schiff. One quick thing to think about is that there is a reason marketing exists and that is often to create a demand for an already existing product. At the same time, it is also true that products often get created to meet an already existing market demand, both/and not either/or.
JR - "The people that are supporting Trump, the people that are happy with the way things are going have said that him lowering taxes for corporations encourages growth and it encourages... it gets more jobs, and there's more economic activity, does that make sense?"
PS - "Well look, if we eliminate taxes, yeah that'd be great. I mean the lower taxes are the better it's going to be. But not if you borrow the money to pay for the tax cuts. So, the idea is if the government now has to go into the market and borrow money that it no longer collects in taxes, that's gonna have an impact on the economy. That's going to further deplete our savings pool. That's gonna put real upward pressure on interest rates, and obviously the Fed is trying to counteract that. But you know, what they did with the tax code though,..." 
And he goes off on a tangent to tax code tribulations.
 Here Schiff means that if you are already running a deficit you shouldn’t collect less money. That just means that you will be going into debt even faster, all else being equal.
 What’s interesting here is that we come upon Schiff versus Schiff round two. In fact it’s not a direct head on conflict, though a glancing pass. Schiff previously stated in  that America would get new businesses and jobs etc if the interest rates were high. Here the tone, although he doesn’t expressly state it, is that increasing the interest rates doesn’t seem to be desirable. Maybe the negative tone is simply coming from the greater borrowing and less saving initially or from the counterbalancing he believes the Fed will enact to counter.
JR - "Yeah, that is interesting that the customer can basically go wherever they like. And no one says 'you didn't go into this restaurant because you don't like gay people because gay people run this restaurant.' Nobody ever says that.'"
PS - "Right and they can't force you to eat there if you don't want to."
JR - "But the other way, they can. They can force you, to use... or to have someone use your services even if they don't believe in what they stand for."
/Through the mixed up words, I believe Joe is trying to state that a customer can force a business to serve them even if that business owner doesn’t believe in what the customer stands for in kind of an act of business shaming./
PS - "Yeah, and the left always tries to make it out like if you have this perspective, like, oh you must be a racist if you believe that people have the right to discriminate. Look, I believe that people have the right to say a lot of things that I disagree with I'm not going to stop them from saying things. You know, I believe in free speech even if what you're saying is idiotic or offensive. And I believe people have a right to discriminate. The bigger problem is when the government becomes the thought police, because the minute you make it illegal to discriminate, now you have to get into people's minds, right. If somebody doesn't promote somebody, or fires somebody and they happen to be black or a woman or too old or handicapped,..."
JR - "You assume their motive."
PS - "But, no. But now you're gonna say you fired that person because he's black. What if that had nothing to do with it."
JR - "Right, you're assuming their motive for firing people."
PS - "Yeah, and now I gotta prove that I didn't do something for what I was thinking when I did something, none of that... all of that to makes it so much harder for employers. I mean look at what just happened"... 
And he goes off on another related aside.
 I wish to highlight the perspective and the validity that Schiff brings in this case. He is really talking about the political left Green pluralistic relativistic perspective. As he orients from Orange, he sees this Green view as lacking what his view has, namely an ability to discern. The lack of judgment or discernment is an inherent quality of Green and it is valid to point it out. A more integrating view, however, does not simply see the either/or mentality, but the both/and one. For example, it is both the case that people should be allowed to discern and discriminate as they see fit and it is also the case that the initial discrimination should itself be judged for its level of inclusion. That is to say that people should discriminate, however, they should not use it in malicious and very limited ways. It should be inclusive of the subjective morality. Boycotts and the like should also be completely up to the discernment of consumers where they would like to spend their money. This is where increasing conscious consumerism has had and will have a greater impact on otherwise amoral or immoral corporations.
 What is interesting to note is how the responses from Schiff can more and more clearly show how little he is really listening at times and how much he values the importance of getting his ideas out.
JR - "But also, isn't it pretty arbitrary this decision that forty hours a week is the right amount of hours?"
PS - "Yeah, well everything the government does is arbitrary. That's what laws are. They have to come up with a number. But, all of this should be free for discussion. You know it's interesting you have the liberals believe 'hey, you know, two people should be able to have a relationship without the government interfering', right. They can have a sex relationship, it's none of the government's business who you're sleeping with. Well why don't they have the same, [inaudible]... believe in the same freedom when it comes to economic relationships. If an employee and an employer are having a relationship why doesn't the government just butt-out and let the employer and the employee negotiate the relationship and the terms of the relationship that they think is best for them?  Because there are a lot of workers that, oh, I don't need the overtime, but maybe there is another benefit that I would prefer to have that I could get but I can't because some government laws are requiring things that I don't want."
JR - "So you're against minimum wage. You're against essentially all these government regulations in terms of what people get paid?"
PS - "Yeah. I mean the minimum wage is probably the dumbest law. I think we talked about that one of the last podcasts. But, probably the dumbest law you can come up with because all it does is hurt the very people that you are intending to help. You're hurting the least skilled people you're preventing people from getting jobs in the first place and you're creating extra incentives for employers to eliminate jobs to try to use capital instead of labor to try to outsource. I mean, nobody is going to hire somebody if they're losing money. People have a certain amount of productivity they can bring to the table and when an employer makes a decision on who to hire they have to hire somebody that brings them at least enough productivity to cover the wages. And so what happens is, when you have minimum wage, let's say the minimum wage is eight dollars ($8) an hour and I'm an unskilled worker and I have to convince an employer to pay me $8/hour, I have to also convince him that I can deliver more than $8/hour of productivity to his organization. And if I can't do that, I can't get a job. Now what if I can only bring $5 of productivity? Well, that means you can't get hired. Well, If I only have $5/hour worth of skills and I can get a job to improve my skills, I'm stuck in unemployment forever. I mean the worst thing you can do to a guy with minimal skills is prevent them from getting a job, because it's the job that's gonna enable them to increase their skills, so they can earn more money in the future."
JR - "I know what you're saying, but the idea is that if you have a minimum amount you allow people to pay, then at least the people working for that company will have a real income where they can pay their bills and feed themselves. And that this company, because they have all the power, they have all the money, and a poor worker, who's stepping into the market for the first time, or just hasn't been able to acquire job skills that would allow them to make much more money per hour, that they would be taken advantage of by this large corporation."
PS - "Well, you know the corporations don't have all the power because they're not the only employer. I mean all employers compete with one another for labor. And, uh, they bid up wages.  You can't, you know, pay people less than the market value of their labor because somebody else will hire them, you know. So, You could talk about 'wouldn't it be great if everybody could earn more money' but..." (Joe interjects)
 He draws what he thinks is an apples to apples comparison of two people’s relationship and the relationship between two parties, one person and a business entity they wish to work for. This seems like a legit entity to entity relationship if you are considering only the externally objectively quantifiable entities. There are however, significant differences which is why Joe will shortly talk about people being able to make enough to pay bills and eat. Only one of those, paying bills, is what a corporation needs to do. When Mitt Romney or others say ‘corporations are people’ why don’t they need to eat? This is certainly a very real time-sensitive issue and if you need a job to survive, the employer is definitely in an advantageous spot. What is additionally not included in a corporations nature is morality. The amoral cold calculations of a business uses lawyer terms and contracts which void the necessity for moral behaviour. Nor is it financially effective for a company to create new individual contracts for each person they have a relationship with and thus they create one generic contract with fill in the blanks for salary or certain somewhat negotiable aspects whilst keeping the structure of the contract the same. Moreover, this may house some additional clauses like the ability for the employer to update the contract unilaterally if ‘needed’. That is absolutely not what a relationship is. Imagine you personally get into a reciprocal relationship with another person and then they just decide to start being better than you, treat you like the clear lesser, and expect you to continue to honor the relationship regardless. This doesn’t happen, because of morality. If it does happen, then you have found out what you tolerate and you found out that, as Rogan says, they’re an undercover cunt. They are actually not moral and are seeking an imbalanced, unequal, non-reciprocal relationship. This is not what most people are looking to sign up for within their relationships. Additionally, if this does go south and your relationship is ended, it usually doesn't mean that your life, safety, or ability to survive is put into jeopardy.
 To be clear, I do not believe that Peter Schiff uses the limited and partial logic he does out of malice. I believe he believes it. However, it seems to be the direct limitation of the perspective of Orange. Here, his views on minimum wage neglect the system within which they arise. He compares an $8/hour minimum wage to a potential employee who has only $5/hour of skills. This seems just as legit a comparison as before; a very simple numbers game. However, just as before he doesn’t entertain the impact the prevailing system has on setting those quantifiable objective numbers. This is where we come up against his inherent limitations of perception and what he is not including in his view. He essentially blames ‘government’ for enforcing the $8 number which they would have created with the cost of living being included to try to produce an existence of a living wage. In a fiat system, this will always increase over time. How often it gets re-negotiated is dependant mostly upon the people. He then defines the $5 number solely as an employee created number. It is solely based upon their skillset and presumably nothing more; it’s just what they bring to the table. That $5 number itself is not set by the potential employee, if so, they would simply state that their skill is worth more. Let’s look at an example. Let’s say the job seeker has no skills at all. They are simply able to do labour work. Let’s say the job is sweeping the floor as it is something I personally know well having done it. The worker’s offer to the company is not a dollar amount of money per hour as much as it is a very real world task. It is the company that values the task. They need their floor cleaned and are incentivized to pay the least amount possible. Therefore they only want to pay $5 an hour, or nothing per hour. This is how much the company values that work at a given time. Let’s say that some company is going to have an open-house or big client meeting. As this event is ever approaching, the company will value that job more and more. If it is just never worth the $8/hour cost as perceived by the company, then it never gets done. Re-enter Schiff’s very real argument, the job isn’t done and therefore people are working and jobs are not being created. This is a valid point. What is also valid is that the system does not value that skill enough to entice engagement.
If you are poor, generally you are seeking any job or source of income as a means to try to secure, or find safety and stability for yourself and maybe your family, orienting from the bottom area of Maslow’s needs. Where companies may make hiring decisions potentially on an annual or quarterly basis, the individuals need for safety plays an important pressuring role in the negotiations with the employing company. If you really need it for safety, you will be more likely to accept a shitty relationship. This is where my father had mentioned that ‘It’s easier to look for a job once you have one.’ This is also not dissimilar to looking for a sexual partner out of desperation, at this point, you’ll take anything! Even if the relationship isn’t healthy or matching of your skill and especially when stability and safety is needed. Getting hired is generally a slower process and one engaged in for a while of searching, interviewing, negotiating, training, and then finally starting a job. Where your exit, or the company’s downsizing, or making redundant, or insert general lawyer language for getting fuckin’ fired, happens mostly without much heads-up. This then sets up the next job search under initial conditions of duress.
Here are a couple big factors which merit consideration. One, we have co-created a service economy, which no longer values goods production. We have also allowed corporations with amoral values and sometimes immoral plans of action to amass themselves into powerful agents within our societies. And two, the companies that operate do so on a different scale of existence, they are global and often contract out jobs to the lowest bidder on a global stage. Thus making the western labourer, skilled or otherwise, often compete with developing countries for physical goods production and abstract service production. What cannot be outsourced globally however are physical services, like the sweeping of a companies brick and mortar facility. So increasingly more companies are providing immigration aid to bring in people from other countries to do these service jobs. When sponsoring immigrants, it is usually not the lowest end jobs like sweeping, but skilled jobs that are normally above the minimum wage such that the company can legally pay less that they would normally for a local worker with the same skill set, welders, electricians, and many other trades would fall into this position. The lowest jobs unfortunately often get fulfilled by undocumented immigrants or the legal three-job-and-still-below-poverty-line type workers. If you are undocumented then you have incentive to not use any systemic safety nets for safety, health, or general well-being for the inherent threat of deportation. If you are a legal three job worker than you probably don't have time to educate yourself on the systems which provide aid and safety, as well as not having time to apply to that system for aid or oversight.
Low supply + High demand = High price. If however, the supply of workers is now global, then there is never a short supply. Additionally, with planning, a company can predict their own upcoming demand such that they do not have any time pressure to engage an employee or contractor at a higher than desired price. So ultimately, companies are paying what they want, less and less money, though need to go elsewhere for it assuming they can.
Let’s look at an example of a fictional town, called Boomtown. This town is just exploding economically, and there is no unemployment. Even if they wanted to, people cannot move here quick enough to the point there is no housing for them. Gold rushes and large mining projects are great examples of this. They tend to be in the middle of nowhere and then need to provide all aspects of city living to a recently barron naturescape. Boomtown Coffee company simply can’t find enough workers even though the skill level required is very low. They have a high demand to fill the job yet there is simply a shortage of supply. Again, low supply + high demand = high price of wage to entice engagement into this coffee serving job; a low skill job providing a physically local service. If however, we then look at Boomtown Advertising. They try to sell their advertising service to Boomtown Coffee and they need to be able to hire marketers and designers for ad creation and digital consumption in Boomtown. This company also has a high demand for workers but yet does not have a short supply. These services Boomtown Advertising is seeking to fill can be supplied by the global market of contractors and freelancers. Thus it outsources these jobs, because they are incentivized not to hire locally and pay more than they have to. This will help the local advertiser keep costs low. These are abstract services. So you can see that depending on the type of production, physical goods, physical services, or abstract services there will be different market, systemic, or contextual pressures that will drive wages up in some cases or have an opposite effect of never creating a local job in other cases within the same economic situation.
It really starts to seem that corporations can do no wrong in Schiff’s world and he doesn’t include, and/or fails to see the cases or aspects of decision making that these corporations have and the influence they wield. For the purpose of not beating a dead horse, we will next talk about one of these cases where the above statement is true. We will not be discussing a second, the tuna canneries on American Samoa, though the corporate actions are consistent.
PS - “Like after the financial crisis happened and I was one of the few people saying it wasn't the banks, it wasn't greed, it was government, it was the Federal Reserve, it was Fannie Mae and Freddie Mac. They were the problem.”
I wouldn’t disagree that the government and governmental agencies played a role. Though to say it was not banks and was not greed seems to be ignorant of the roles they and other corporations play. But let’s get to the most glaring example of his blind bias, college tuition.
JR - "Well, it just doesn't even make sense that you can offer everyone a job.[...]"
PS - "And where's the money going to come from to pay for it, they're going to have to take the money from the private sector that would have created efficient jobs and they're gonna give it to the government to create inefficient jobs. It's a disaster. But the problem I mentioned earlier, the economy is in bad shape because of all the government. That's what, go back to my, the Occupy Wall Street is that the people are protesting because there's serious problems in the country. They don't realize that it's not capitalism, that is creating those problems, Capitalism would solve those problems, it's government interference that is causing the problems that they're protesting. And so the same thing with these socialist, they understand that their standard of living is falling, right. Like look at one of the things they want to do is they want to give free education because the Liberals are all complaining about the fact that college is so expensive and that students have so much debt. That's because of government! Before the government got involved college was cheap. I mean government drove up the cost of college by guaranteeing student loans. I mean that's how the government got the votes of students. They promised the students something for nothing, they said, 'Hey vote for me and I'll guarantee, I'll make it easier for you to get a loan to go to college', right. Well the minute colleges knew that people could get these loans they started jacking up the tuition so they could benefit from all this government money. So the colleges benefited, the banking system benefited by making riskless loans that the taxpayer was on the hook for. But the byproduct of all this cheap money being funneled at the colleges was that the colleges kept raising the tuition higher and higher and higher. And then the politicians kept increasing the amount of loans they would subsidize. And so all of this is the fault of the government. The government created the problem they're now complaining about. But, you know, the students don't understand that that's why college is so expensive."
JR - "Well, no one sees a clear way out. That's part of the problem. And it's one of the reasons why Socialism is so compelling. It's like, this seems like it's an alternative to what we are currently experiencing. So people look at that, and go, 'maybe that's the solution'."
PS - "Yeah."...
 (Caution, sarcasm alert) No greed there! Obviously the decision of “jacking up” tuition seemed to be the only option these poor easily influenced powerless private corporate entities could do after having all this “cheap money funneled” at them. I mean, what else could you do? Just deny students entry based upon some grading system ensuring consistent trends of enrollment and regular trends of increasing tuition, seems unlikely. What in the logical fuck! It is amazing how the actions taken to provide “cheap easy” money is what is seen as the problem, but not the greedy, immoral, and rapacious acts of capitalistic competition to slurp up as much of the cheap liquidity out of the trough of establishing indentured servitude. And all this happening while not giving a fuck about the people within the system they are using to ingratiate themselves with bigger quarterly profits. Amazing.
And still I don’t believe Schiff is using this flawed logic intentionally. Again, it should be seen as a limitation of a particular perspective, this very Orange corporate, achievement focused, numbers and facts based, amoral perspective. This is of course AQALly informed by his personal beliefs around some of these particular topics.
 To Joe, I’m working on it, the path is coming clearer, and integral ideology and perspective can play a massive role in a new organization of society.
Money- The Real, The Fiat, and The Crypto
PS - "You know they just did these stress tests. You ever hear of these bank stress tests? And, the federal reserve came out and they said that all the banks passed. What a shocker right, the Fed came up with a test that everybody passed. But, if you look at the assumptions that they made about the economy. Under the worst case scenario the assumed, interest rates, 10 year rates go no higher than 3%. They don't go down, they just don't go up. And they assume that inflation stays below 2%, under the worst case scenario. And they assume that the Fed is able to lower interest rates to 0% again to stimulate the economy. Now, what happens if inflation doesn't go down, what if it goes up? What if it goes up to 5%, 8%? What if interest rates go up to 5% or 8% or 10%? What happens then? All the banks collapse." [20.0]
JR - "Well, it makes sense to me. And I don't know much about gold. But it's weird that gold is one of those things that is like universally been thought of as valuable, like forever."
PS - "Yeah, I mean, that's why it's money. Gold has always been a..." (Joe interjects)
JR - "Is there anything else like that?"
PS - "Well I mean there are other metals that have been used as money."...(continues) [20.1]
[20.0] Here Schiff is stating that these conditions with a high interest rate will cause the banks to collapse. From the beginning he was stating that the higher interest rates would encourage saving into banks and allow the money to be loaned out. I really wish he had been more exact on what level of interest rates would be in that Goldilocks zone, if one does exist. This seems like a place to engage with him more, but I digress.
[20.1] He’s basically stating about money above that historically it has been the case, so why would it change? And, to that point, I don’t disagree. Gold will probably continue to be a store of value. What is notably interesting is the ethnocentric tribal way in which he fundamentally believes this to the exclusion of other options. By this I mean that, the history of use becomes the definition of what is possible creating a limit and barrier to changing perception. Once a history of use becomes the definition, nothing without a history of use could possibly succeed. There are reasons for his religiosity when it comes to gold and there are incentives which keep him focused on that particular narration. We will see later some of the motivation behind his gold-based tribalism. For now, Schiff is talking about the physical properties of the element of gold and the real world use cases for why the element has very physically real ‘intrinsic’ value; value inherent to what gold is, as opposed to any value of gold that is extrinsic or culturally created.
(The term used here 'culturally created' is somewhat limited, though here we are using it to define the cultural demand without practical use. Because all four quadrants arise together, it is not possible to separate them. Even the term 'intrinsic value' presupposes that we have a culture to make use of the nature of gold. To be clear, our culture of dentistry and technology has created demand for gold, though these would fall under the 'intrinsic value' label where real world utility is applicable. Intrinsic is from the elemental use cases where extrinsic is from the social desire to possess it.)
Let’s look at an example to see the difference of intrinsic value and extrinsic. What is the intrinsic value of an American hundred dollar bill? Well, it’s only really worth the paper it is printed on. I suppose people may find a clever way to use the ink that is also on it, though basically, If you were lost in the middle of the forest, even with all the know-how available to people today, what value does this bill possess? Basically nothing, it’s fuel for a fire, or a notepad for writing. This provides nothing else. However, if you include a culture surrounding this bill, that what can it provide? Well, it depends on the prevailing culture. In the US this would provide $100 worth of food or whatever you want to buy. In another country, especially a poorer country, this same bill may buy you much more food than it did in the US. How useful is this piece of paper towards providing you something? This inclusion of cultural context provides insight into what is extrinsic value.
He states some of the following use cases, properties, and industries in which gold is used for its intrinsic value as an element.
- Cell Phones / Computers / Dentistry
- No Tarnishing or Corroding / Malleability / Conductivity
PS - "Bitcoin, Bitcoin is trying to digitally replicate the properties of gold. I mean that's the whole selling point of Bitcoin, they say it's digital gold. Um, and it does have a lot of gold's properties that helped it succeed as money, but it doesn't have any of gold's physical properties that gave it so much value in the first place. And so you can't separate the intrinsic value of money from money. Money has to be a commodity, it has to have value and that's where Bitcoin fails.[20.2]"
PS - "I mean, I don't feel badly that some of these guys lucked into having a lot of money, or it’s luck or they took a shot and it payed off. They got in and the market exploded and they had an opportunity to cash out at a profit. But a lot of them are not cashing out. I think they're gonna go down with the ship."
JR - "When you say that, you think it's going down?"
PS - "Oh, yeah because it's not gonna succeed as money. It's not going to work. It's just a highly speculative asset. [...]... Everybody thinks I don't understand it and that's why I don't believe in it. It's because I do understand it that I don't believe in it. The people who think it's gonna work, they may understand the technology, but they don't understand money. But when I talk to these people, to me, it's very much like a cult, they believe so strongly in this. They are so caught up in the hype and the hysteria and maybe they're blinded by the money they think they're gonna make when these things are a million dollars a piece, or whatever they believe it's going."
JR - "Yeah, that's where they think it is going to. They think it is going to a million dollars."
PS - "Well, there was an article last week, some guy was saying a hundred million, 100,000,000 a Bitcoin! That's why nobody wants to sell. But the smart people are selling. The people that got in early are trying to con people into holding on so that they can get out."
JR - "You're talking about 100,000,000 and it's basically some numbers. Did they ever find out who that Satoshi Ishi guy is?"
PS - "No, Satoshi Nakamura"
JR - "Satoshi Nakamura, yeah."
[20.2] Here he states that money has to be a commodity because of intrinsic value. Where he claims Bitcoin has no intrinsic value, it cannot be money. This is a black and white tribally simplistic view. Let’s bring in the shades of gray to outline some depth on the issue. Every physical item has some intrinsic value. Even the $100 bill example in the middle of the woods. That bill, that paper, has intrinsic value. It isn’t much, but it’s there. So it makes more sense, and provides more clarity to ask how much of its value is intrinsic and how much is extrinsic? The better question to ask to see intrinsic value is what percentage is inherent in the nature of what it is, and what percentage is added by a surrounding cultural demand?
 Continuing with this idea of greater clarity and nuance, he claims he understands Bitcoin and then cannot even name the creator(s), Satoshi Nakamoto. I will not say this is crucial to understanding Bitcoin, though it prompts a better question, to what degree does he understand it?
Let’s take this opportunity to look at some information which seeks to answer these better questions above in . Let’s look into the partial truths of gold’s value. Specifically, to what degree is the current market price of gold based upon its intrinsic value?
Based upon this information for 2017 from www.statista.com (not claiming credibility, though it is somewhat in line with the next, credible, source of information). From the USGS.gov website their statistics show the following for American gold consumption.
Clearly over the decades, the use cases for gold due to its inherent nature is generally decreasing as a percentage of the market demand for it. This means that more and more, the extrinsic cultural demand for gold is increasing faster than the demand for its natural utility. If we round these numbers in Schiff’s favour, we can see that the Intrinsic demand is 20% of the reason to dig it out of the ground. Where the extrinsic cultural demand is 80% of the reason to dig it out of the ground. Now, in Peter Schiff’s words, ‘nobody is going to hire somebody if they're losing money’ means that the cost of production must be included in the market price of the good or service itself. So, then what is the cost of producing an ounce of gold? This we can easily find from public financial statements. When we look at the 2017 full year financial statement for Barrick Gold, the largest gold producer in the world, we can find our answer.
From here we find that Barrick Gold can dig it out of the ground and it can reach the open market after "all-in sustaining costs" of $750 USD per ounce. While market value at the time of writing this is $1,228 USD per ounce. Even if we round again in Schiff’s favour to make the math easy, we have $750 cost of production and a $1,250 market price. Using our rounded 20% intrinsic natured demand and 80% extrinsic cultural demand the $500 premium over the cost of production is $100 because of industrial use cases and $400 because of non-productive cultural demand. So the market price is then made up of three main factors, the cost of production, the intrinsic value inherent in its nature, and the extrinsic value created by non-productive cultural demand. $750 + $100 + $400 = $1,250 USD per ounce. Does this mean that gold should be selling at $100/ounce because its intrinsic value, or ‘actual value’, or ‘real value’, as Schiff confusingly calls it, is only a hundred bucks? No. There are other factors which add to our valuations in a market setting, namely production costs and extrinsic culturally created value demand. If tomorrow all people agreed to keep what gold they had and never purchase gold for some reason other than intrinsic use cases then gold would still only drop to about $850USD per ounce (production cost + intrinsic demand + 0 extrinsic demand). Where industry is not skyrocketing their intrinsic demands for gold anytime soon, and gold producers are incentivized to produce gold by cheaper methods every year, then there are only two ways gold prices start to skyrocket.
Case 1: A bubble like hysteria grips the gold culture and people go full tulip bulb on gold.
Case 2: The American dollar’s value plummets. Again for simple math, let’s say tomorrow it is worth 1/10th the value. If nothing else in the world changes, then gold would be valued at $12,500 USD/ounce or ten times yesterdays amount. If you are European, however, it means that gold's price yesterday of about €1,050 is the same as today's price in Euro. Gold hasn't become more valuable overnight. In real world terms, what does today’s $12,500 dollars by you? Exactly the same amount of whatever you want as yesterday’s $1,250 dollars. Think about a wheelbarrow full of German Marks in 1922.
The devaluing of a currency can be caused by creating more supply called inflation or a lack of cultural demand. Like gold, (production + inherent value + cultural value) if the production costs of a currency drops with respect to the GDP it is printed against or the cultural demand drops, the purchasing power will also drop.
Just like Schiff says at the end of the podcast, “Gold bullion is not about getting rich, it's about staying rich. It's about not getting poor. Buying physical gold is about preserving the wealth that you have.” Thus he sees gold and uses it as a store of value. Firstly, the supply is increasing (inflation is increasing or scarcity decreasing), though relatively slowly and at a high cost of production. Secondly, the intrinsic value will not go away. And thirdly, the cultural demand has proven consistent throughout history. These factors do make Schiff’s suggestion of gold as a good store of value accurate. And I do not debate this point. The reason, however, we went through the above exercise is to, as best we can, create an apples to apples comparison for Bitcoin. What can we see that he may not if we apply the same principles. Before we do, let’s let him discuss more about his views on Bitcoin.
PS - "But of course now, it's not just Bitcoin, there's 1500 to 2000 of these other cryptocurrencies."
JR - "Well not just that, there's a bunch of different ones, right. There's different variants."
PS - "Yeah, and that's part of the problem because they think 'Oh there's 21 million Bitcoin' and they think that that means they're scarce. Well they're not scarce. There's so many other currencies out there. And it's only scarce because it's coded to be scarce. Gold is scarce because it really is scarce, you know. Bitcoin is scarce because they decided to make it scarce. But it's not scarce in that Bit... there's nothing that any other cryptocurrency can't do that Bitcoin is doing."
 When talking, Schiff’s vocabulary choices make it difficult to understand exactly what he believes. Does he think it is not scarce with ‘they’re not scarce’ or they are scarce with ‘it is only scarce because it’s coded to be scarce’? So is it scarce or not? But then he throws in that ‘gold is scarce because it really is scarce’. None of these statements bring clarity forward from the muddy waters of his words. He does say that there are thousands of other cryptocurrencies, though in comparison there are also other metals rather than gold, ones more precious than gold actually. Any commodity metal from the noble metals like Rhodium, Palladium, Osmium, Iridium, Platinum, Silver, and Gold have the chemical property of non-reactiveness. This means that they will not degrade in the atmosphere or oxidize. So then any of these metals can easily serve the purpose of a store of value in a vault some place. Clearly there are other options beyond his favourite gold. This is similar to the myriad of cryptocurrencies, which bring their own differences yet all bring some value. Luckily he squeaks out a little sense when he says ‘there is nothing that any other cryptocurrency can’t do that Bitcoin is doing’. This is a true statement and finally a clear one. This however has two important points both of which show a clear distinction of perspective. Firstly, like above, there are many metals which can do what gold does for him, sit in a box where he never sees it. Secondly and more importantly, that is not a flaw within the Bitcoin system, it’s a feature. It is called open-source. To many corporate minded people, this means lack of patentability, lack of competitive advantage, something which would be able to be replicated by competition and therefore not valued by centralized companies. This is usually why the advantages brought by open-source projects just are not valued well in the business world, despite the true value they bring.
Why is this open-source a feature and why would it bring value? The open-source nature of Bitcoin, allows for the creation of trustless interactions. This is something that his system is fundamentally not able to produce. In the systems he values and the perspectives he holds, there will always be a gatekeeper, a central authority which has the last governing word over what you own, or what you can do with what you own and the big kicker to that is that you have to pay them to be there to govern you and your value.
JR - "But they're looking at it as an alternative, not to gold but to the currency we currently use."
PS - "They look at it as an alternative to both I think. A lot of them. Well some people think it's maybe a complement to gold but it doesn't have any actual value. That's where I get into a lot of arguments with these crypto guys because they say 'well gold doesn't have any actual value either'. Which is laughable because of course gold has actual value. There are lots of things that I could do with gold and that shows that it has value. There's nothing that I can do with Bitcoin other than give it to somebody else. I mean that's the whole purpose is to give it to somebody else."
 Schiff promotes gold and relies on it as having intrinsic value which exists because ‘there are lots of things that I could do with gold’. Yet, he never uses these aspects of gold. He only uses the extrinsic value of it. He has his gold hoarded away in a box where he never sees it. The only thing he uses gold for is what he claims is the only use case for Bitcoin, giving it to somebody else.
It may be time to do that apples to apples comparison to look at the value of Bitcoin in the same way we looked at the valuation of gold.
We saw that the market price of gold was a summation of the production cost, the intrinsic value inherent in the nature of what it is, and the extrinsic cultural demand driven value. Bitcoin is no different. The easiest to understand is the extrinsic cultural demand, what Schiff refers to as hype and hysteria. This also exists in for many products, and we have all seen the marketing and hype cycles for products and product lines. Despite his categorization of the extrinsic demand as being only something of lunacy, there is a growing group of people who have faith in Bitcoin and other cryptocurrencies as a medium of exchange and a medium of deferred payment. Some Wall Street analysts, predominantly Tom Lee [clip one and clip two from July 25, 2018] believe that the extrinsic valuations should track more equivalently to a social network’s value represented by the square of the number of users. And thus he sees the extrinsic value increasing over time according to non-hysterical mathematics. More plainly put, the more people who use it, the more faith in using it, thus leading to more people who will use it.
The next to check off the list is the production cost of Bitcoin. According to a popular investing website The Motley Fool we find that the average production price in the US, as different countries will very up or down, is $4,758 USD per Bitcoin.
So then lastly, the intrinsic value existing due to the nature of what it is. For Bitcoin, it is not as easy to pin down as we cannot see the use case data as we can with US gold consumption. It is also not a physical item with physical properties. However a good place to start is where Schiff does, he claims it is zero. But what is inherent in the nature of what Bitcoin is that would add to this zero dollar value of intrinsic nature. Well, these are some of the most important aspects of what Bitcoin intrinsically provides by the nature of what it is. Security, Verifiability, Immutability, Decentralization, Censorship-free or Gatekeeper-free, Borderless and provides Competitive Advantages over current systems even if not necessarily over copycat coins. If it is the case that Schiff cannot remember the creator(s) name but understands all other aspects of Bitcoin without missing these crucially important aspects, then it is the case that all of these aspects Schiff does not value at all! He literally values them at zero ($0 USD). If when looking at these you do see some value, it does not mean that you are automatically smarter than Schiff, it may simply mean that you are not as biased as he is when looking at it.
One quick way to see that there must be value, despite the tendency some of us may have to simply look at the list above and guess there must be, is to look at the money savings that this system truly produces over current centralized systems. Security, currently you have to pay a third party to protect your gold in a vault, storage fees; zero with Bitcoin. Verifiability - from what I have read from Goldmoney, you cannot actually go and hold your physical gold unless you withdraw it and protect it yourself. This entails more fees; Bitcoin zero. Immutability, in a centralized service and in this day and age of hacking, there are inherent vulnerabilities in the accounting and record keeping. Let’s say you have paid all the fees after purchasing for storage, and their records get hacked by anyone or even changed by a greedy insider or disgruntled worker; with Bitcoin it can’t happen (zero liability). Decentralization allows for the immutability of the system but also ensures access. What if the one office of Goldmoney is on holiday, gets closed, hit by an earthquake, power goes out, services go down for some reason. You’ll have to wait for them to get back online and allow you access to their service; Bitcoin is always up, and would take a literal world cataclysm to shut down - if that does happen money or gold will not be your main concerns anyway. What if some level of gatekeeper simply says no? No you can’t buy in the first place, no not from where you live, no you can withdraw if you had bought, or no you no longer own what you thought you did because of confiscation a la executive order 6102 that happened in America in 1933. This allows anyone, anywhere, banked or unbanked, within any system, to access a more free market than what Schiff is advocating for. The borderlessness also allows for the transfer of money instantly, globally at fees much cheaper than the existing remittance systems which are slower and more expensive. So at each step of the way it intrinsically brings valuable savings; value which is inherent to the nature of what Bitcoin is, intrinsic value. So what is the final dollar amount of intrinsic value Bitcoin carries, I’ll leave the details up to you. From my point of view it is at least equivalent to the $100 of intrinsic value found in gold. So all in all we have:
JR - "But our whole economy is kind of screwy. It's entirely possible that it could shift over to a crypto coin based economy, don't you think; a cryptocurrency based economy?"
PS - "Well, governments could certainly issue crypto fiat currency the same way they issue paper fiat currency and in fact most of our paper currency transactions are digital anyway. I mean how much cash do you use on a daily basis? You use your credit card and so banks are transferring, you know, they're not shipping bills back and forth mostly, it's just numbers on a computer. [...] See, right now people... there are a lot of people who like Bitcoin because they bought it real cheap and even though it's gone down, you know, 70% from its high, it got up 20 thousand and now it's at about 6400, there's a lot of people that bought it and still have big profits, but what about the people that bought it at 20 thousand, 18k, 15k, 10k, they're losing money. And if it keeps falling and it goes down to one thousand or lower, where I think it is going, you have a lot of people who have lost a lot of money. And so that's going to create a lot of problems and I think the government's gonna come in with all sorts of new rules and new regulations on transactions that try to protect us from ourselves. Again, it's just going to try to government look good and the free market look bad. But, you know, people get caught up in frenzies all the time and it doesn't mean the free market needs to be shut down just because every once and a while people get greedy and get nuts. And it's not a reason to expand the power of government, because government will do much more damage to an economy than, you know, small bubbles will do when you have a boom and a bust because you have a mania."
 So here he claims that a government could create a crypto to replace fiat. This is because any government backed denomination of value exchange, from dollars to gold coins to tally sticks [totally worth the quick read - BBC tally sticks] immediately have a built-in user base if the government will only accept taxes paid in this medium of exchange. If millions of people are forced into valuing and trading in a particular medium, than that ‘certainly’ brings value to government backed crypto. But millions of people voluntarily valuing and trading in a particular medium of exchange, no, no, no, that has no value; limitations of perception abound.
 And again a consistent viewpoint of government can do no right, and free market corporations can do no wrong.
JR - "Do you think there's any cryptocurrencies that are compelling? Is there any one other than Bitcoin you go, well this one has a different set of parameters or different set of rules?"
PS - "No, because to me, you know, you just can't have a digital token, that you just create, that's going to have...that's going to be a store of value. Money has to be a store of value, it has to be a medium of deferred payment. So what that means is, you know, I have to be able to take my money and save it for a year, 5 years, 10 years, I have to be able to make a loan. Like I can loan you, uh, money. I can't loan you a Bitcoin and you say I'll pay the Bitcoin back in 10 years because none of use know what the Bitcoin is going to be worth. So how do you know what kind of interest rate to charge? You need to have stable money. And I don't think any of these cryptocurrencies can ever be stable because there is no real value to stabilize. People say it's a store of value, but there's no value to store. So the only cryptocurrencies that would work would be cryptocurrencies that were backed by a real commodity, like gold, and that can work, but you know, what Goldmoney does is actually something better, because you don't have to have a cryptocurrency, you just have actual gold. [...] But what Goldmoney is doing is taking that old blacksmith concept and bringing it into the modern era because I can store my gold in a vault at Brinks through Goldmoney and now I can transfer any portion, I can give you a gram of my gold, a tiny amount of gold. I can just send it to you for free and now you own that gold because now the ownership register is gonna be changed and instead of being in Peter Schiff's name it's gonna be in Joe Rogan's name.
 They need to be stable to be valuable and they have no value so they won’t be stable. Did anyone else catch the self defeating logic? By the way, you can save your money for years in Bitcoin and you can make loans in Bitcoin. He’s saying you don’t know what it will be worth in 10 years so you can’t set an interest rate. The falsehood here is that you don’t know what a dollar will be worth in 10 years either, though we set interest rates which may be updated, like people’s mortgages, over regular time intervals due to the nature of uncertainty. Bitcoin currently does this, the updating time intervals are simply smaller and contract lengths are smaller while it is developing its stability. He furthermore cannot loan out his gold that he has locked in a vault which he has never seen. Sadly, the real limits of his worldview and how he acts within the world he sees are soon to be made even more clear than his above self defeating logic.
 Despite answering Joe’s question of any other crypto being compelling with a clear ‘No.’ he then says that ‘the only cryptocurrencies that would work would be cryptocurrencies that were backed by a real commodity, like gold, and that can work, but you know, what Goldmoney does is actually something better’. After a cursory search on the internet you can find dozens if not more gold-backed crypto-coins which Schiff’s criteria would classify as a workable cryptocurrency, but at the same time says none are compelling. He may ‘understand’ Bitcoin but yet has not even taken the 5 minutes to do a basic search for the holy grail of what he is nearly nutting in his pants for, a gold-backed crypto. I wonder why he has such blinders on? Enter Goldmoney doing something better, hmm interesting. Do they use decentralized systems to create a gold-backed coin as a medium of exchange? After a few minutes of research and from Schiff’s own explanations of their service, it is still not clear to me. However, either way it doesn’t bode well. Either it is a crypto which he hates, or its not the best leading technology of today.
 Because of the centralized nature of their service, when he says that they bring the old blacksmith model into the modern era, he means the 20th century kind of modern. We now have 21st century decentralized technology. This Goldmoney service he is touting allows the, ‘nearly instantaneous’ transfer of metal from one client to another so long as they use the same closed, centralized system; you have to be an account holder. Are you wondering why he is so blind to the contradiction he is making which seems so clear to an objective onlooker? Wonder no more: while doing my cursory searches and Goldmoney self-education much became clear very very quickly. In fact, it started to unravel about 5 seconds in. I simply typed into a search “Goldmoney” and saw this: In fact I didn’t even type it correctly :)
In case you can’t see, the results showed a Subsidiary by the name of Schiff Gold LLC. Wait, no, not really, it can’t be...But there’s more...
Fucker! To go back to my early admission I do have a small amount of Bitcoin. I disclosed this as a prudent expression and acknowledgement of potential bias and the perception of bias in an attempt for transparent communication. Apparently his illogical hawking of Goldmoney and it’s services as the best thing in the whole wide world which are pretty much the only way you can save yourself from the impending doom of crisis in an everything bubble which absolutely is going to hit the fan in the next couple years, seems not to be so illogical after all. He's part owner. So maybe this is what's blinding him from the better choices that are out there. He has made millions from these services, will for the next 20 years (contractually) and will continue to literally get paid for spreading positive company propaganda. FYI during the whole podcast he only stated that he had a connection to a company of his called Europe Pacific Asset Management through which he invests in other countries, therefore taking his money out of the American economy and rooting for its demise. He stated @1:27:11 that “There's a lot of bubbles that I missed out. I didn't make anything on the dotcom bubble. I made money when it came down. I didn't make any money on the housing bubble until it went down. And I missed out on the Bitcoin bubble." He makes money off of the demise of others. This is not an individual who is using there money to invest in creating newer better systems, companies, jobs, and ideas, like he claims is so desperately needed in the US, but this is an individual who simply hoards his wealth in a vault until he can use it to bet against the success of others. All while deceptively and coyly hiding the connections he has to the businesses he lauds. By the way, the other company he mentioned, the Mene jewelry, yup, you guessed it, connected. [here]
Despite all of this terribly corrupting bias, I still think a big factor in the things he says is confusion, or cognitive dissonance. Because there is more…, yeah, fuckin’ really!
He is tied to the success of this company and is incentivized to shill for them to the tune of a million shares as well as 1.4 million additional share purchase warrants. The cherry on top of this whole thing is that although he told Joe Rogan that he only owned fifty bucks worth of Bitcoin, he didn’t feel any need to express that he still makes a mint off of other people using their crypto to buy gold, in addition to fees for crypto cold storage services. Crazy! This is the inherent lack of inclusion of morality which our growing perspectives do not always integrate well.
Despite his lack of stated bias for the services he lauds, it doesn't make what he is saying less accurate. It does however inform his point of view. It also informs us about the limitations and contents of the perception he tends to inhabit (Orange).
PS - "Yes, well they had to stop the inflation. And of course Regan did some other tax reform and things like that but the Fed really finally, you know, got out in front of the inflation curve and they brought it down. But if you think about the difference between the United States in 1980 and the United States today, we were still the worlds biggest creditor nation in 1980, not the world's biggest debtor nation. The national debt was a fraction of what it is now. Maybe it was like 500 Billion. I don't know the exact amount, but well under a Trillion. But the national debt was financed with long-term bonds, like 10 year, 30 year bonds. So, when interest rates went up to 20%, that didn't affect the majority of the debt that was out there that only increased the cost to the government of the new debt that came out, right, the new borrowing. But today, the 21 Trillion dollar national debt is predominantly treasury bills, stuff that matures in a year or less. And so, if interest rates had to go up to let's say, 10 percent, the government would have to pay 10% within a few years on the entire national debt. So where would the government get all that money? And it's not just that it's the government, corporations have never been this levered up. Individuals have never been this levered up. They didn't have adjustable rate mortgages back then, you know, now you still have a lot of people that have arms where there mortgage debt would go up. So, at this point, the Fed can't really fight inflation because it doesn't have the tools because we have so much debt, if they raised interest rates to fight that inflation, the collapse would be so much worse than 2008. All the banks that they bailed out would fail again. But they couldn't bail them out a second time. Because they can't bail them out and fight inflation at the same time because you can ease and tighten simultaneously. It's one or the other. So I think when the markets see that we're going back to QE, that we're going back to zero, they're going to realize that this is not temporary. That this is permanent. That the Fed can never normalize interest rates that the balance sheet is never going to shrink that we're a banana republic that we are monetizing our debt. The Fed has no ability to drain that liquidity and no ability to fight inflation. That means the dollar is a bottomless pit. That means the dollar is going to keep falling. That means that nobody is going to want to own it. And everybody is going to want to get out of dollars. and everybody is going to want to get out of any bond that is denominated in dollars. And then the Federal Reserve, in order to keep interest rates from rising, they might have to start buying muni [municipal] bonds, they might have to start buying corporate bonds, otherwise interest rates are going to skyrocket and that just fuels the inflationary fire. And then we get a currency crisis where the dollar is plunging, prices are skyrocketing. That is real pain, who knows what they are going to do? Maybe they're going to have price controls, which are just going to backfire, then we're going to have shortages, we're going to have rationing, we're going to have civil unrest. I mean, this is going to be ugly when it hits the fan. And it's dangerous to do this in the backdrop where so many people are inclined to vote for socialists because that's going to the type of economic environment where socialism can thrive. Because socialist always want to look for a scapegoat, who can we blame this on. And it's very easy to blame it on the rich, or the businesses, or the corporations, or the Republicans and I think that's what's gonna happen if this happens sometime over the next few years. But if it doesn't happen in Trump's first term, there is no way he finishes a second term without this happening."
There were a couple other topics that they got into of interest namely Government, UBI, and Automation. However, this article is already long enough and Schiff really starts to sound like a broken record. The government should be doing all it can to start running budget surpluses which mean not giving out money whilst bringing more money in. All things that go against this like bloated government, welfare, and the Fed's financial policies seem to be a necessary evil at best and downright cancerous at worst. Though again, not to be unbalanced, he does bring truth forward.
 Please note that I am not saying Peter Schiff is wrong in his economic assessments and the potential fallout in the economy. There are aspects of his assessments which bring important truth though at times simply don't include a greater, more complete picture of the system he's describing. Because of the lack of clarity around his business dealings, it makes it difficult to know the extent to which the lack of completeness in his discussions are inherent limitations or financial bias. It is unfortunate, as Rogan had pointed out, that nobody see's a clear path forward. Schiff certainly seems focused on doing what he sees can be practically done, investing elsewhere and making people aware as much as he can about his views on what will happen.
He does explain and present valid points, it is however unfortunate that he does them with clearly unstated bias towards personal benefit. Regardless, it is the case that he can only sees a dim picture for the future. I suppose this perspective is what has lead him to invest and advise others as he does.
All in all, I do not share his views entirely. I believe where greater brighter paths forward lie is in decentralization and economies based more on sharing, giving, and anti-rivalrous businesses with an operating system which is intergrally informed. This optimistic future is what I believe in and I am currently writing, as Joe Rogan was hoping for, about a clearer path forward towards greater progress. (Stay Tuned...)
What the four quadrants tell us is that when we grow up, we have these four aspects of life which influence the journey. We are a product of our environment, as well as the tools and biology within it, as well as the culture supporting it, in addition to our personal views and narrations along the way.
We also know that our societies have changed over time. Especially in the last hundred years, the rate of change has outpaced many people’s ability to keep up. This certainly becomes more exaggerated in the elderly. Those born in a time of slower change and progress. When at the start of the twentieth century the fastest form of personal transport was still a horse. Before electricity was a common household fixture for all strata of society. When the greatest expression of mass communication was still a printed newspaper. And clearly long before the informational revolution of building-sized computers in the fifties. This environment, these tools, this culture, and surely the personal views of it all add to make a description of how a journey from this time would help to shape the developmental growth and outlook of an individual.
This industrial era of Orange corporate achieving business was already accelerating the lives of a very Blue mythic religiously fundamental people into a century of growth which will only be surpassed by this coming century, though not ever before in the history of our human memory. These people were born into a world still vastly inundated by Blue belief, culture, and social systems.
As we edged deeper into the middle of the twentieth century, after the collapse of a roaring stock market, a lost decade of depression and two world wars, the nature of good old times simply explained and guided on faith alone had significantly flown the coop. Science and technology became more greatly forced to the forefront as the demands of the times necessitated it. Needing to understand and put to greater use some chemical properties, manufacturing methods, social systems, organizational styles, and efficiencies in many aspects of life all helped society progress past the major hurdles which had existed in the first half of the century. Through this turmoil appeared greater methods for disseminating information greater interest, necessity, and accessibility to science and a shift away from some of religion’s explanations for things, towards a greater understanding of the role of science and the value gained from its implementation. Many aspects of the world quickly became much more predictable and rationally understandable for the average person. The Orange wave of development had sufficiently propagated through to a larger swath of society and necessity was certainly the mother of this progress.
These early century babies born into a mostly Blue common society had been forced towards growth into creating and aligning to an ever increasingly Orange common society. This was now a post-war peacetime and an opportunity to birth the next great wave of generational change. This generational wave of baby boomers where now born into a common Orange society as oppose to the Blue one of their parents. This seemingly small difference had big effects as we will see.
From developmental psychology, our personal internal development, we all grow through the same stage of understanding the rules and roles of society. This level of developmental mind is called concrete operational or the rule-role mind. A time around six to seven years old when developing a concrete or fixed set of rules to understand the roles of our society. An important point must be made that this concrete operational stage occurs before the formal operational stage. The concrete operational stage is one that understands the rules and roles though does not yet possess any cognitive questioning about the rationality of the rules and roles themselves. That is that the child has not yet developed the ability to think about thinking. Only in the next stage of formal operational can the growing human start to question with rational inquiry the previous stage’s rule and roles which generally starts to happen around eleven years old. This may result in a rebellious teenager questioning the rules and roles learned for society.
The concrete operational stage in the early part of the century provided people with a Blue outlook on life as the society was mostly Blue whereas babies growing up in the middle of the century grew into a rule-role mind with a mostly Orange level societal environment. Thus the pre-rational, pre-formal operational, rules and roles where learned to be Orange.
As this wave of babies continued to grow into more rebellious cognitive questioning into the sixties, the rules and roles of society where going to be questioned. The Vietnam war and war in general was a central topic around which much questioning took place. This counter-culture then grew to include use of mind expanding drugs and an embrace of a level of thinking which was radically inclusive and expressive of love for all, Green ideology. This explosion of Green ideology now became popular enough that it found solid footing into society still dominated by Blue and Orange ideology. This foothold held, though politically Green ideology was attacked in an attempt to suppress the disruptive counter-culture which embodied it. The suppression came in the form of smashing civil protests and anti-drug legislation to go after those propagating these politically counter ideas. It did have a slowing effect, though the foothold had already been established.
Thus towards the end of the century, babies being born were born into an evermore increasingly Green ideological society. Thus when these babies grew up, their stage of development of the concrete operational rule-role mind was that of Green pluralistic acceptance and inclusion.
So we have seen that what these babies believe in at the stage of concrete operational rule-role mind of development has changed from Blue to Orange to Green. What we must take into account, is also how they believe it. To form belief before the formal operational stage of development and to not question the rules and roles after that point is to never apply a rational level of questioning or thinking about the thinking of the rules and roles in life. This is really religiosity.
Religiosity, as defined here, is a level of belief about some belief or ideology which itself has been accepted by an individual or group without the individual or group rationally questioning and validating the idea. That is to say, the whole-hearted belief in an ideology from a pre-rational Blue level of acceptance. The way this religiosity is separate from religion is that one is the believed idea where the other is the way in which the idea is believed; the difference between what is believed and how it is believed.
We can see in the shifting of political alignment the sway of ideology in America over the last 20 years. The shifting of what ideologies are believed, though not how they are believed.
These groups of people fighting politically are simply using the same ethnocentric tribalism to support a different set of beliefs. They are not doing it in a rational or trans-rational way. Many of these Green supporters are not really Green within their own beliefs and actions. Green ideology is one representative of acceptance for diversity but they will ethnocentrically fuck you up if you are not on their team. Those arguing use the belief system of acceptance to not accept others. They void the rationality of their own position which is certainly a limiting characteristic of the lack of judgment Green perspective and ideology inherently comes with.
Green ideology says that everyone is equal and that all hierarchies are bad. Nobody is better or worse than others and that people should all be equal and equally accepted. People who disagree with this ideology however are then seen as worse than others and should not be accepted. This is to say that their system of hierarchy says that all hierarchies are bad; there system of accepting all should not accept those with contrary views; their system of bringing power to de-marginalized groups should be used to de-marginalize groups who disagree. These are the inherent contradictions of Green.
People who do believe Green ideology in a pre-rational Blue way do not typically use logic and reason to question these contradictions. This is the same as pre-rational Blue believers in a religious group who do not tend to apply rational questioning towards their own group or beliefs. These believers are simply switching their religion of choice, or to reiterate, what they believe has changed, though how they believe it hasn’t.
The previous graphic and the political examples of fighting help illustrate the Blue level belief of Green ideology. However, because of the left versus right mentality to politics this example glosses over the mixed ground of Orange belief and the process of development that underlies it. Just as there are Blue believers of Blue ideology and Blue believers of Green ideology there are Blue believers of Orange ideology. We did step over them, though should look at this segment also.
These Blue believers of Orange ideology, and hopefully the trend is starting to be clear, are ethnocentric team-based tribal groups for a different religious belief. Their belief is pre-rationally unquestioned allegiance to science and objective fact. This is their team and all others are simply wrong or misguided.
Richard Dawkins author of the God Delusion and The Selfish Gene is a perfect example of someone who believes in an Orange belief system in an Blue ethnocentric way. What he believes is Orange though how he believes it is Blue. The following quote from an interview with Dawkins shows his not-fully rational application of questioning and judgement onto the rational worldview:
Interviewer: “How do you prepare for death in a world where there isn’t a god?”
Dawkins: “You prepare for it by facing up to the truth, which is that life is what we have and so we better live our life to the full while we have it, because there is nothing after it.”
He does give a nice answer to the question, however where he adds ‘because there is nothing after it’ shows his belief in science although the statement itself is not scientific. It shows the religiosity with which he believes in an Orange rational worldview. What he believes is Orange, though how he believes it is Blue.
So we have seen that although people can have different worldviews of what they believe, they can have the same reasoning as to how they believe it. We have seen the religiosity of the Blue mythical worldview, the religiosity of the Orange rational worldview, and the religiosity of the Green pluralistic worldview.
This is why we see major cultural clashes between them all over the world. Specifically in the west, the biggest conflicts are seen within the following.
We have Blue traditional mythic fundamentalists valuing order from authority and living within the authority dictated rules and roles of life. The other two may be seen as lacking God or morals which they believe they are the sole purveyors of.
Then we have the Orange modern rational pragmatists looking to use logical strategy for optimal achievement in society. The other two may be seen as lacking rationality or personal accountability which they believe they are the sole purveyors of.
Lastly, we have the Green postmodern pluralistic relativists looking to accept diversity and differing views without judgement. The other two may be seen as lacking inclusion and compassion for difference which they believe they are the sole purveyors of.
Remember that none of the three above are able to really agree with any of the other two. They have fundamentally different outlooks on life, i.e. worldviews, and as such, separate themselves culturally.
As we grow up within these societies of belief, we come to the Blue level of ethnocentric rules and roles from pond #4 in our cognitive development. This happens to all of us around the age of six or seven and informs our views of how society works and how we work within it. This is a point of cognitive development which exists before the ability to apply logical rational cognition and judgment. This provides us an ability to create narrations for the explanations of life and society in a pre-rational uncritical way. This style of indoctrination happens and the environment that it happens in will play a part. Thus we can see over time that what people believe has changed, though how they believe it has not necessarily.
This also shows why the trend towards this Blue level attachment to Green ideology is really driven by the younger generations as they were born into this Green belief system though have not yet done their own cognitive work to developmentally integrate the previous stages of Blue and Orange enough to get there. Thus we currently have the ethnocentric Blue wave of babies born in a Green world.
What is the antidote to this style of Blue ethnocentric belief? Well, the escaping of this indoctrinated mentality needs the judicious application of reasoned rational questioning to the foundations of what is believed. Additionally, greater self awareness about the gaps in personal logic and the attachment to a particular level of partial truth and belief as the solely correct absolute truth and belief is also needed. We need to question and mindfully be aware of the what, how, and why of belief. It is only by easing our grasp on the narrations of self, culture, and nature can we better accept the validity that other parts of our own development and cognition can bring greater to our developing narration of life.
Hopefully it shows the real need for an Integrative Yellow perspective to be shared and valued for a greater collective embrace.
A large group of people were shocked by Trump’s success in the presidential election, and now in the aftermath, people are trying to explain what the process looked like from their standpoint. Interestingly to me, I noticed a couple examples from some outspoken people. I found the Nov. 14, 2016 edition of Bill Burr’s Monday Morning Podcast somewhat descriptive as were a couple interviews by political Slovenian philosopher Slavoj Žižek. The language they use is not integral, though what they are describing is so much more understandable and less frustrating when seen integrally.
Generally, the language people use is about the ‘Left’ and the ‘Right’ as the two sides to politics. The ‘Right’ being the conservative religious side, and the ‘Left’ being the liberal secular side. Traditionally these have been painted blue and red. Well, based upon the colour coding from Integral, I would like to talk about how to more clearly read the trends of politics.
Let’s start by redefining the voting groups with a little more clarity, there isn't simply a ‘left and ‘right’. Firstly, we can see a Blue religious conformist group of people looking to dictate law from their authority. Second, is the Orange achieving pragmatists looking for their best options forward; usually economically and numbers focused. As well as a third, Green multicultural pluralists policing cultural values and social interactions. (We could technically have a fourth, Red egoists, which we won’t look at simply because they will always vote whichever way they wish depending upon personal narratives.)
What I find interesting about Bill Burr's comments below is that he seems to be explaining the rational Orange view of the other two; Blue 'right' and Green 'left'.
(continued below the source videos)
I recommend the 10 minutes before Burr gets into his email responses
As was well pointed out by Bill Burr, the Green group just didn’t have a lot of influence in the early 2000’s though really started to pick up around the time of Obama’s presidency. The pluralistic wave of development was still approaching and was the smallest of the three groups back then. At that time, Green would have voted with the Orange group to elect Obama as they both wanted change they could believe in and during that presidency policies didn't change, though society did.
Within the 2016 election, the Green group was a more dominant force and certainly much more visible. Green was, however, the dominating value structure for a Hillary vote. Blue people are still Blue, meaning their vote is for traditional values; quite the opposition to the postmodern values of Green. Which then leaves Orange in the middle somewhat unimpressed by the two largest parties which both didn’t seem to offer a pragmatic option and to which both sides may be seen as somewhat crazy; the Blue with religion and the Green with political correctness. What’s interesting is that these three groups don’t see eye to eye, though with three groups in a two party system, the middle group will have the greatest freedom to choose. A vote for Hillary was not necessarily logical as she would be continuing the policies of Bush and Obama, which may not have been seen as a logical or pragmatic option for their vote. A Trump vote may not have been exactly logical either, though when it comes down to a ‘known’ bad choice and a potential for something better, a choice gets made and I suppose the people have spoken.
The last note is that Hillary’s campaign was trying to straddle two differing groups, while Trump's was singularly focused (probably on him). Hillary’s was a Green-Orange campaign and below is a great observation of why the campaign was somewhat counter to its own interests and potentially resulted in dividing its opposing set of voters.
She [Hillary] should not have played the role of the big unifier. Her coalition was absurd. Her coalition was Wall Street and Occupy Wall Street, Saudi Arabian money and LGBT and all those sexual liberation movements, and so on, and so on. It was a fake ideological formation. It was brutal global capitalism with a human face. - Slavoj Žižek
Not very clear on the different colours of this political wheel? Let's look at some examples of topics, in very generalizing colours, that voters could talk about from the three different camps Blue, Orange, and Green. The problems:
- Climate Change -
Blue - God will take care of it
Orange - Tech will save us
Green - We have to save Mother Gaia
- Military Stance -
Blue - War makes peace
Orange - Preemptive strikes and double taps
Green - Make love not war
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