Deus Ex Machina

"This is the generation of the great LEVIATHAN, or rather, to speak more reverently of that mortal god, to which we own under the immortal God, our peace and defense." -Thomas Hobbes: Leviathan

Hypocritical to take Advantage of Bad Laws for Personal Gain?

Question. What is thy duty towards thy Neighbour?
Answer. My duty towards my Neighbour, is to …to do my duty in that state of life, unto which it shall please God to call me.

1662 Book of Common Prayer, Catechism

This was an article I wrote a year or two back which I think would be useful and revive in the light of the Trump phenomenon.

Profiting from your Government’s Stupidity

There was an interview with a German economist some years back during the Greek financial crisis where he argues that the German government should not bail out the Greeks. Yet, on the other hand, he is still going to buy Greek bonds anyway.

SPIEGEL: In a monetary union, isn’t there a much greater danger that the crisis will spread from one weak member country to another?

Homburg: No. The contagion spreads in precisely the opposite direction, because many banks and hedge funds benefit from the following business model. Step one: They sell the bonds of the country concerned. Step two: They spread negative rumors about the country. Step three: After bond prices have fallen, they buy them back cheaply. And, finally, they take governments for a ride with this nonsense that a default would have devastating consequences. In a zero-sum game, there are not only losers, like us taxpayers, but also winners.

SPIEGEL: And what is the risk of contagion now?

Homburg: After the Greek bonds have been paid back at full value, the gamblers will turn to the next candidate, such as Portugal. If creditors suffered losses in Greece, however, they would renounce this business model. In this sense, the rescue measures are exacerbating the problem.

SPIEGEL: If there were such a business model, a lot of people would be buying Greek government bonds now.

Homburg: In recent days, I myself have invested a considerable sum in Greek bonds. They will mature in one year’s time and, if all goes well, produce a 25 percent return on investment. I sleep very soundly at night because I believe in the boundless stupidity of the German government. They will pay up.

SPIEGEL: You are not troubled by moral scruples?

Homburg: Since I involuntarily help finance the rescue packages through my taxes, I have no problem with also receiving a portion of the profits. Why should it only be banks and hedge funds that benefit?

Homburg’s position is essentially that even though he does not believe that the Germans should bail out Greece because it would lead to his “business model” whereby banks and hedge funds managers would profit from the “boundless stupidity of the German government”, he is going to participate in it anyway and get a share of the profits for himself by investing in Greek bonds.

There would no doubt be many conflicting intuitions about the integrity and honesty of Homburg in his taking advantage of this bailout for his own profit. However I wish to explaining such a state of mind which doesn’t see any problems of taking advantage of a bad system or law for personal gain.

Not my Duty, not my Problem

Homburg points out that he will be “involuntarily” financing the German bailouts through his taxes. The idea therefore is that even if he thinks that the bailouts are a bad idea, there is nothing he can do about it anyway. He has already tried to warn the German government and they are not listening. And so in the planning of his own finances, he is simply doing is what most prudent and best for himself.

We can expand the second argument as follows: Each of us, as ordinary citizens, have a set of responsibilities particular to ourselves. We have our own bills to pay, our own family to feed, etc. However, and this is the most crucial point, the care of the commonwealth is not one of them. For those of us who are neither politicians nor rulers, the organisation of the commonwealth as well as the legislation of its laws are not our responsibility. We can, using our own prudential judgement and common sense, point out that one thinks certain laws and policies are very bad ideas because of its effects on the commonwealth as a whole, we can even tell our legislators in so far as it lies within our power. However, since we are neither rulers nor politicians, the institution of these laws and policies are not our proper vocation; our proper duty and task is to adhere to these policies and laws, in so far as they are compatible with our conscience, and plan our actions and finances accordingly.

Suppose we have an analogy here. Let’s say that you disagree with the tax rate. You think that it is too high or too low or whatever. However, even if we disagree with the tax rate, we still believe that there is nothing wrong with paying for taxes, and in fact, we should, even if we disagree with the tax rate.

Democracy: Every Law is your Problem.

However by the ideal of democracy, politics is not merely the art of rulers and kings but an extension of the individual choices. Civic policies and laws are not merely instituted from the top-down by persons whose duty is the care of the commonwealth, they are “grown” from the bottom up, from the individual mass democratic action unto reception by the rulers who must “listen” to the people. As such, politics is not merely the prudential art of ordering man to their end by rulers, it becomes also an extension of our individual identity. To take advantage of civic laws and policies one disagrees with is a vice, betrayal of one’s political identity.

It is important to note that this idea of common civic participation is an activity done mostly by the leisurely classes, the literati or the aristocrats. For most other people, especially the working and merchant classes, government is the business of, erm, governments. As the ruled, we can give our own little pithy opinions on politics, but the art of politics is an art for rulers, not the masses. Political stances are not extensions of our identity but merely prudential judgements on the wisdom of various laws and policies. If our rulers are stupid and decide to implement idiotic laws, and if there is nothing we can do about it, then it is not for us to resist such laws. We simply milk their stupidity and exploit their idiocy.

In short, if we cannot beat the system, we milk it.

Conclusion: The Donald’s Taking Advantage of Bad Laws

trump

One of the most persistent criticisms of Trump is that he has taken advantage of unfair and terrible laws for his own advantage e.g. exploiting the system of lobbyists, providing funds for politicians, taking advantage of bailouts for the rich, etc.

But such criticisms are criticisms which only the literati and aristocratic classes understands. For the lower classes, they don’t see these rules or systems as an extension of political identity, they are laws imposed upon them which they need to navigate in order to maximise their self-interest. Trump is simply better at gaming the system and using it at a greater advantage than others. The types of people who support Trump don’t care that Trump has been gaming the system, everyone is. It isn’t a criticism to them.

What enamours them to Trump is that he seems to know the system from within and therefore would be able to manipulate and navigate it, now seemingly for their advantage instead of for his own personal advantage.

Observe what Trump says in his Nevada victory speech:

I want to just thank a couple of friends of mine that are here, the owner of this incredible hotel, Mr. and Mrs. Phil Ruffin, stand up. Great guy. Phil said, “Donald,”—like for the last three months he’s driving me crazy, he said—”Donald, I want to put $10 million into your campaign.” I said, “Phil I don’t want your money. I don’t want to do it. I’m self funding.” Every time I see him. It’s hard for me to turn down money because that’s what I’ve done in my whole life. I grab and grab and grab. You know I get greedy. I want money, money.

I’ll tell you what we’re going to do, right? We get greedy, right? Now we’re going to get greedy for the United States. We’re going to grab and grab and grab. We’re going to bring in so much money and so much everything. We’re going to make America great again, folks, I’m telling you folks, we’re going to make America great again.

See this is precisely the point. Supporters of Trump don’t care that Trump was greedy in the past and took advantage of the system to feed his greed. They care only that he knows how the system works and now that he can use his same system gaming techniques “to get greedy for the United States”. It is analogous to the movie Catch Me if You Can where the FBI turns a con man away from crime to work for the law to catch other cons.

Until the literati and aristocratic classes understand this logic, they would never be able to criticise or engage Trump’s supporters effectively or coherently.

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This entry was posted on October 27, 2014 by in Uncategorized.
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