There’s a dark truth at the heart of American politics. And the consequences of it are this. The GOP is becoming something very much like America’s very own Nazi party. If you think I’m exaggerating, go ahead and see how political scientists rank it as one of the most extreme parties in a rich country, rivalling or besting even fanatical nationalists in Eastern Europe. It’s a party which has sunk to the lowest levels of depravity — nothing is too shameful, from pedophilia to open corruption to rank ignorance, precisely because it has no shame. And that’s even before we get to the violent attempted coup of Jan 6th which Americans are already being taught to conveniently forget.
Why, though, is that the case? The GOP is becoming something gruesome and perverse, unseen in a modern society since the Weimar Republic, a kind of fanatical nationalist party of hate and violence and stupidity for a very simple reason. It has no choice.
Why, in turn, is that? Because 70% of Republican voters believe the election was stolen. The vast, vast majority of Republicans believe in a series of Big Lies. One propounded by the GOP, ironically. But that, in a cruel twist of folly, leaves the GOP with nowhere to go but harder and harder right, off the charts, into the abyss. The GOP can’t be reformed, in other words, precisely because there is huge grass roots pressure for it never to be. When 70% of Republicans believe the election was stolen — what chance does the GOP ever have to become a sane party again? It doesn’t. Which is precisely why figures like Josh Hawley —who seems like a Nazi lying in wait if ever there was one — are rising, not to mention Marjorie Taylor Greene and Lauren Boebert.
The future of the GOP is to become America’s Nazi party — because that is where grass roots Republicans are making it go.
How did that come to be? It’s worth taking a moment to unpack the series of Big Lies that led to this meltdown, culminating in the utter jaw-dropping stupidity of “the election was stolen from us!!” this level of delusion and mass psychosis.
Let’s go in reverse order.
The Big Lie preceding this one was Reaganism. It went like this: the “free market” will solve everything. Therefore, you, the average American — which means “white person” — don’t need to invest socially. In anything for everyone. Healthcare, retirement, education, childcare — the “market” will take care of all these things.
America developed a bizarre, unique social contract. No other rich country — and no other poor one — had it. Everything as much as possible was handled privately. Public investment was reduced to just 15% of the economy — which is an astonishingly low number, rock bottom, a level beyond which there are no firefighters or police or roads or bridges.
How did that social contract work out? Well, it’s important to understand that none of this was based on evidence. It was based on the crackpot theories of a handful of “economists” — I put it in quotes because they were all a) Americans and b) ideologues. You can think of folks like Milton Friedman. The whole school of economics that was made of acolytes of Ayn Rand, who in turn was a disciple of Nietzsche, his only one, really.
Not being based on any kind of evidence, or even careful thinking, this social contract led to disaster. Privatizing retirement meant Americans paid huge, huge fees to Wall St for “managing 401k’s,” while the average person was left unable to retire at all. Privatizing education meant that fees shot up by thousands of percent, to the point that sending a kid to college cost more than a home. And privatising healthcare resulted in the catastrophe America’s world-famous for: hospital bills that bankrupt people, thousands of dollars on a bill just to touch your own baby, people dying because they can’t afford basics like insulin.
This idea — privatize everything — wrecked America. And the point is that it was obvious it was going to. Nobody in Europe or Canada followed America’s lead. Nobody in Asia or even Africa did. Nobody else in the world was foolish enough to believe that profit-seeking corporations were going to provide people basics like healthcare and medicine and retirement — not fleece them into poverty and despair.
So why did America choose this path?
You’re probably beginning to suspect the answer to that question.
The Reagan Revolution, as it was then called, didn’t happen in a vacuum. It was a reaction, a backlash. To what? To what had happened just a few short years before. America was still a segregated society until the 1970s. There were laws on the books until 1973 or so in Southern states preventing “miscegenation,” like “interracial marriage.” In Virginia, in 1973, I wouldn’t have been able to marry my lovely (and very white) wife. I think about that sometimes — what it would have been like to live in such a society.
The Reaganism of the 80s was a furious backlash to the civil rights gains of the 70s. America had a brief, brief period where true equality and freedom were on the radar. And then it exploded in hatred all over again. Only this time, the hatred was couched in abstract theories and high-sounding ideas. The average white suburban family didn’t need to invest socially in healthcare for all — because they could pick and choose it on “the market.” See how neatly that matches up with “I won’t pay for those dirty people’s education, medicine, retirement!”
Reaganism’s intellectual ferment, in other words, was a cover, a charade, a masquerade. It was an elaborate theoretical justification for the same old racism and bigotry and hatred which had always plagued America. Only now Americans could put it in ways that were considered not just polite, but even enlightened, smart, intelligent, sophisticated. “Hey, I’m not a racist, a bigot, a fool! I’m educated! I’m telling you the market will take care of everything.”
This way of thinking became accepted among elites, for a very simple reason. It meant as little as possible really had to change. The one things elites loathe and resist and despise is change. They would much rather sit atop social hierarchies than rip them up and create new social institutions. And so instead of thinking about any of this carefully, American elites on both the left and right simply accepted this bizarre ideology. It came to be known as neoliberalism, the idea that markets are to replace any kind of social investment in public goods, competition should always take the place of cooperation, which makes people weak, because the strong should survive and the weak perish.
Neoliberalism is Nietzscheanism in thinly updated form — all his talk of genealogy and morals has been replaced with the invisible hand of the market — but the central ideas, of power, will, and some, maybe many, deserving to suffer and perish for their weakness, are still the same.
Who was “weak” in America, in these terms? Well, it was who had always been weak. Minorities, anyone different from the conformist norm. Black People were lazy and violent and foolish. Natives, even more so. Asians were smart but unscrupulous. Brown people were jolly but naive and cunning. And so on. These racial hierarchies remained unquestioned. The idea was that the market would pick the winners, the strong ones — and if they happened to be white, well, that was only because whites were the virtuous ones.
Because neoliberalism became accepted amongst elites, America never embarked on the project of building new institutions. Think about America in the 70s. After the age of civil rights, it had two choices. It could have said: “Hey, if we really want to build a fair and free and equal society, then everyone should have the basics — healthcare, retirement, higher education, income, childcare, and so on. That’s what Europe and Canada are doing.” Instead it chose the opposite — not building any of those institutions, like, for example, an American Healthcare System.
Its age of advancement lasted less than a decade, in truth. By 1980, America had chosen regress over progress. Neoliberalism was being crafted as a thinly disguised veil for the same old racism and bigotry and prejudice. If whites “didn’t want to pay for” social investment — well, then according to the theory, they shouldn’t have to, because markets would take care of everything.
But like I’ve discussed with you, the theory was all BS in the first place. It was crafted to justify racism and bigotry — not on the basis of evidence or careful thought. “Freedom” was the right to carry a gun and deny someone healthcare — not to have it yourself. But does that make the most elementary kind of sense — or is it just idiotic?
Because nobody thought this theory through — or was ever thinking it through — by the 2010s, America had begun to collapse as society. `As even a child can tell you, after all, there’s One Big Problem with the bright idea that “freedom is the right to deny everyone healthcare, childcare, retirement, finance, education.” Everyone includes you, too.
White Americans, who voted predictably conservative, began to suffer the effects of denying everyone public goods like healthcare and education. Everyone included them, too. Their standards of living imploded. They paid Wall St huge sums for retirements they’d never have. They paid bigger sums still for healthcare that didn’t take care of much. They took out second mortgages to educate their kids. And that was if they had decent jobs at all. By 2010, America’s famed middle class had collapsed. It was a distant memory, a minority for the first time in history, Americans now living lives of poverty and despair in an emerging underclass, where everyone needed to have a “side hustle” just to pay the bills, not even the interest on the omnipresent debt Americans now lived with.
What does a society living in mass, unpayable debt predict? Fascism. That’s exactly what happened in Weimar Germany. And the average American having been reduce to poverty and despair amidst debts impossible to pay off resulted in the predictable consequence in America, too. By 2016, a budding fascist had been elected President. And the rest is history.
That brings us back to today. Now let me connect the dots. Why do 70% of Republicans believe the election was stolen? Because all the other Big Lies they’ve been told their whole lives add up to it. What are those Big Lies? This country belongs to us. Because we are supreme. We’re the master race. Everyone else is inferior. Therefore, we don’t need to invest in everyone, because not everyone deserves basics. The market will sort everything out — in our favour. Only the strong survive, and the weak perish. We are the virtuous ones, to whom the Promised Land has always belong, as manifest destiny.
The election was stolen from us. It must have been. That’s the only conclusion this logic was ever going to allow.
That’s because the logic above is essentially fascist. It’s not a coincidence the Nazis studied America’s race laws, admiring them greatly, when figuring out how to subjugate millions of people. Americans have been living among Big Lies — the big lies of an essentially fascist society — their whole lives. And many, many Americans believe them.
They can hardly unbelieve them now. They’d have to undo that whole causal chain. If the election wasn’t stolen from us…then maybe we’re not the master race…maybe everyone else isn’t inferior…maybe they do deserve investment…maybe markets don’t always sort things out…maybe the weak don’t deserve to perish, and the strong don’t deserve to trample them. All those things are linked, in direct ways, by the Nietzschean logic of will and power. The uber man is the one who can impose his “will to power” on the world — make his appetites real — and power is the only real purpose of life, which means the ability to subjugate others. The election must have been stolen, therefore — or we’re the weak ones, who deserve to perish.
Changing Republicans means changing many, many things. An essentially supremacist worldview. Built on a Nietzschean philosophy. Which creates a violent, brutal, stupid culture. It’s not going to be simple, and it probably won’t happen at all. Joe Biden’s doing a good job, trying to educate Americans — in the tiniest ways — about why the ideas above are wrong. But the fact is that Republicans are probably never going to change — they’re going to double down on the Big Lies. Because pick away at one, and the whole thread begins to unravel. And then you’d have to admit you were wrong about everything. Who wants to do that?
Nobody. That leaves a dire future for American politics. This is America’s last chance, these few, short Biden years. The GOP is hardening into a Taliban, or ISIS, or Nazi party, because ti has to. Its base has hardened into fanaticism, fundamentalism, and hate — radicalized by a series of Big Lies their whole lives. Movements like that don’t go away quietly. They don’t know how to. They keep on trying to beat you with the club of stupidity, the fist of violence, until, at last, they’re too old and feeble to lift their arms.
Foreword to Mark Spitznagel’s book Safe Haven [Amazon]
Santa Marina — Karl Popper — Herman Hesse’s Sidharta — Mutua Muli — Porsche’s no substitute
Inmy ancestral village in the Northern Levant, on top of a hill, stands a church dedicated to Santa Marina. Marina is a local saint, though, characteristically, some other traditions claim her –such as Bithynia or other Anatolian provinces of the Eastern Roman Empire.
Marina grew up in a wealthy family, in the fifth century of our era. After the death of her mother, her father decided to turn his back to civil existence and embrace a life of monasticism. His aim was to spend the rest of his life in a cell carved in the rocks, in the Connubium (Qannubin) valley, at the base of Mount Lebanon, about eight miles from my village. Marina insisted on joining him and faked being a boy, Marinos.
About a decade later, after the death of her father, a visiting Roman soldier impregnated the daughter of a local innkeeper and instructed her to accuse the defenseless father Marinos of having committed the deed. The innkeeper’s daughter and her family complied, fearing retaliation by the Roman soldiers.
Marina took the blame –yet she did not need a tough litigator, to prove her innocence. She refrained from revealing her biological gender, to remain true to her monkhood identity and what she perceived to be the holiness of her mission. So Marina was forced to raise the child, and to make penitence for an act she never committed, she lived for a decade the life of a beggar outside the walls of the monastery.
Marina faced daily contempt by her peers and the local community. Yet she stood firm, never giving into the temptation to reveal the truth.
After she died prematurely, her gender was revealed during the purification rituals. The iniquity of the accusers was exposed posthumously, and she was venerated into Greek Orthodox sainthood.
The Connubium (Qannubin) Valley (North Lebanon) with monasteries and cells carved in the rocks.
The story of Hagia Marina shows us another variety of heroism. It is one thing to commit spontaneous grandiose acts of courage, risk one’s life for the sake of a grand cause, become a hero in battle, drink the hemlock for the sake of the philosophical death, become a martyr by standing tall while being maimed by lions in the Roman Coliseum. But it is much, much harder to persevere with no promise of vindication, while living the daily grind of humiliation by one’s peers. Acute pain goes away, dull pain is vastly harder to bear, and vastly more heroic.
Ihave known Mark Spitznagel for long enough (more than two decades), enough to remember that he was once, briefly, a vegetarian, perhaps after reading Herman Hesse’s Sidharta in which the protagonist claims: “I can think, I can wait, I can fast”. My suggestion to follow the Greek Orthodox fast, where one is vegan two thirds of the year (and aggressively carnivore on the other third, mostly Sundays and holidays), failed to convince. Perhaps I should try again.
He finds ways to furtively inflict his musical tastes on his co-workers (Mahler, mainly, with performances by Von Karajan) and in the early days, as in a ritual, the conversations used to start and end with Karl Popper and central (Black Swan) asymmetries in the scientific method. There is this insistence that we are not in the business of trading, but partaking of an intellectual enterprise, that is, both applying proper inference and probability theory to the business world and, without any modesty, improving these fields according to feedback from markets. And there is all this German terminology, such as Gedankenexperiment. I suspect that there was a nonrandom geography of origin for the authors and topics that have invade the office: pre-war Vienna and its Weltanschauung.
Sir Karl Sigmund Popper
Spitz has always been hardheaded; perhaps a good excuse is that it came with a remarkable clarity of mind. I must reveal that while I am far more diplomatic and less obstinate in person than I am in print, he is the exact reverse, though he hides it remarkably well to outsiders, say journalists and other suckers. He even managed to fool the author Malcolm Gladwell who covered us in the New Yorker into thinking that he would be one breaking up a fight at a bar while I would be one to initiate it.
The atmosphere of the office has been playfully unique. Visitors are usually confused by the sprawl of mathematical equations on the board, thinking our main edge is only mathematical. No. Both Mark and I were pit traders before doing quantitative stuff. While our work has been based on detecting mathematical flaws in existing finance models, our edge has been linked to having been in the pit and understanding the centrality of calibration, fine-tuning, execution, orderflow and transaction costs.
Remarkably, people who have skin in the game, that is, self-made successful people with their own money at risk (say a retired textile importer or a former shopping center developer), get it right away. On the other hand the neither-this-nor-that MBA in finance with year-end evaluation filed by the personnel department needs some helping hand –they can neither connect to the intuitions nor to the mathematics. At the time when I met Mark, we both were at the intersection of pit trading and novel branches of probability theory (such as Extreme Value Theory), an intersection that at the time (and still, presently) included no more than two persons.
Now what was the dominant idea to emerge?
There are activities with remote payoff and no feedback that are ignored by the common crowd.
With the associated corollary:
Never underestimate the effect of absence of feedback on the unconscious behavior and choices of people.
Mark kept using the example of someone playing piano for a long time with no improvement (that is, hardly capable of performing chopsticks) yet persevering; then, suddenly, one day, impeccably playing Chopin or Rachmaninoff.
No, it is not related to modern psychology. Psychologists discuss the notion of deferred payoff and the inability to delay one’s gratification as a hindrance. They hold that people who prefer a dollar now versus two in the future will eventually fare poorly in the course of life. But this is not at all what Spitz’s idea is about, since you do not know whether there might be a payoff at the end of the line, and, furthermore, psychologists are shoddy scientists, wrong almost all the time about almost all the things they discuss. The idea that delayed gratification confers some socio-economic advantage to those who defer was eventually debunked. The real world is a bit different. Under uncertainty, you must consider taking what you can now, since the person offering you two dollars in one year versus one today might be bankrupt then (or serving a jail sentence).
So what this idea is about isn’t delayed gratification, but the ability to operate without external gratification –or rather, with random gratification. Have the fortitude to live without promises.
Hence the second corollary: