B.S. and an apology for private ownership of capital

Stefano Zorzi at Ribbonfarm writes to rehabilitate Bullshit, that is, teleological speech that is at best unconcerned with corresponding to external reality (“truth”) and at worst actively undermines its very existence.

The Unapologetic Case For Bullshit

The whole idea meshes with some thoughts I’ve been having over the past few months about the role of capital, and specifically, individually privately-owned capital, of the real old-school kind.  I don’t mean capital managed by money managers, I mean real rentier-style personal wealth that produces more of itself faster than it can be spent.  I’ll call it big-C Capital for now.

This Capital can bug a (little-r) republican a bit.  One of the criticisms from the bleeding-heart type is that in a society where people still are hungry and ill-clothed, luxuriating in Capital is profligate or at least morally suspect.  Another criticism, one of my favorites, is that the logic of Capital, when it has been accumulated by an extremely capable individual through some productive activity (whether it is high-leverage labor like Michael Jordan or Michael Jackson, or by some kind of entrepreneurial new venture organization), tends to distract its owner away from their productive talents and toward managing the Capital, thereby depriving the world of the exceptional primary talent.

Technocratic types, those with “meritocracy” on the tips of their tongues, as well as the mere bootlickers of existing hierarchy, tend to be friendlier to capital when it is run by institutions or professionals.  Then, the concentration of wealth can be rationalized as serving various abstractions like the “market” and its idea [sic] of the optimal asset allocation, etc. — plus, it conveniently opens a world of jobs in capital-running for those meritocrats or technocrats (and/or bootlickers).  Even the malcontents of that system that have noisily been attacking it, like Taleb with his condemnation of the “intellectuals yet idiots,” seem to be attacking how *well* (risk-return) the Mandarins do at managing (lacking, as they do, skin in the game and hence being prone to all the principal-agent issues), rather than condemning the idea of managing capital toward some achievable optimality.

But the beautiful thing about Capital is that it is not managed toward optimality.  When it is directed by its true owners at their pleasure, they are expressing preference and exercising power — defining the optimal, not pursuing it.

Without Capital, the not-obviously-optimal (or presently sub-optimal, or facially never-going-to-be-anywhere-near-optimal) doesn’t get funded, but with Capital, it might.

What world provides more avenues for opportunity: a world of perfectly rational managed money, run by a Mandarin class self-sure of its judgment and insight?  Or a world of often irrational Capital, where a pet project of an obsessed heiress, or the greed of a spendthrift nephew, yes, as well as the calculated personal intuition of an industrialist, might be the finger on the scale deciding the funding of some ambitious entrepreneur or artist’s dream?  Certainly, if you are amply degreed and pedigreed, and have the taste of boot polish sticking to the roof of your mouth, those rational capital stewards are going to be your friends.  But what if you’re of the wrong race, or religion, or speak with the wrong accent, or have ambitions too big or too small or too long- or short-termed for the career advancement of the Mandarins?  In that case, you’re going to need someone to take a flyer on you, and Capital is uniquely truly free to do that.

Zorzi talks about Bullshit as potentially having an optimal (non-zero) level, and about some greater amount of Bullshit as being a transitional stage in reaching a higher plateau or local maximum of “real” truth.  Well, maybe the same is true here.  Too little B.S. being in circulation might tend to mean too high of a consensus around truth, which means too much ossification.  Similarly, too little of the nation’s wealth being held as rentier Capital might mean too high of a consensus around technocratic market-worship, and a similar congealing.

I’m not super proud of the fact that this reading probably means more lauding of Elon Musk (nothing against him; just that it would be nice if an idea about capitalism had the fresh characteristic of not lionizing Mr. Musk even more).  But I am happy that it doesn’t rely in any way on any strain of libertarianism or Randianism for its apology for Capital.  All it says is that as wonderful as we money manager Mandarins are, there is risk that we become merely a better dressed set of commissars, and that truly keeping the system fluid as well as providing opportunity (though not “fairness” per se) for socioeconomic advancement may benefit from some proportion of capital decisions made by truly orthogonal, market-defining instead of market-serving, principals expressing preferences with their own dough (hard-earned or not).



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