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Musings Report #36 9-5-15 Moral Authority and Morality Have Both Crumbled
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Moral Authority and Morality Have Both Crumbled
Last week's Musings on Modernism--broadly speaking, Question Everything--was well-received by you, the Inner Circle.
Despite my hesitancy to dwell on weighty topics too often, I am taking this as permission to extend the discussion of morality/authority,
Correspondent Bart D. offered these comments:
"Has authority really crumbled? Or is it being applied in more subtle ways?
I think Morality is what has crumbled. It is also often missing from the truth that each individual believes they have found."
This raises a number of interesting questions.
I think we can start by distinguishing between civil authority--the authority of law and the state--and moral authority.
No one can deny that civil authority is not only alive and well, it seems to be increasing virtually everywhere in a disturbing trend of authoritarianism.
But is there any moral authority that legitimizes this civil authority?
In the old days, moral authority flowed from the church, which often acted as the state, or from the institution of monarchy, which was explicitly presented as a God-given right to rule.
In China, this higher authority that granted authority to the emperor was contingent on the morality of the emperor's rule.
This was known as the "Mandate of Heaven:" if the emperor abused his powers and failed to serve the people (a code of ethics defined by Confucianism), Heaven could display its displeasure via earthquakes, floods, fires, famines, etc.
Natural disasters were widely interpreted as signs that the civil leadership had lost the Mandate of Heaven and therefore deserved to be replaced/overthrown.
This is quite the opposite of Dostoevsky's understanding mentioned last week: If there is no God, everything is permitted.
The emperor might imagine everything is permitted, but the Mandate of Heaven will be lost should he fail his duties.
Civil authority typically attempts to establish its legitimacy on a moral or religious foundation. The U.S. Declaration of Independence follows a Kantian approach of establishing a matrix of rights and duties--one of which is to overthrow unjust governments:
"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it."
Governments are loathe to declare themselves immoral and illegitimate, and so they dispense with moral foundations and revert to some form of "Might equals Right."
Have individuals followed the lead of their states and dispensed with morality as a foundation not just of beliefs but of actions? Bart suggested that the truths people discover in a world in which "everything is permitted" rarely have a moral aspect. That is, whatever rights and duties exist are considered aspects of self-interest and self-fulfillment.
A number of commentators have questioned the moral foundation of Classical Capitalism, in which the Invisible hand of self-interest magically organizes the system to benefit all.
Adam Smith was keenly concerned with morality. In his first book, The Theory of Moral Sentiments, he investigated the ethics and interests of the greater good.
The Invisible Hand of maximizing self-interest only functions to serve the greater good if the participants have a moral code that values others' rights and acknowledges duties to others.
Lacking this moral foundation, maximizing self-interest devolves into, well, what we have today: a corrupt system in which maximizing private gain by any means available is the primary Good and Duty.
In this system, whatever isn't explicitly prohibited and enforced by civil authorities is allowed: exploitation, gaming the system, fraud, embezzlement, collusion--these are now the norm of those with the power to maximize their private gain at the expense of the many, i.e. the greater good.
In the larger context of Modernism, perhaps what we have come to is a universe in which truth is not just relative, and not just secular, but it is stripped of any morality based on the rights of others and duties to the greater good.
It isn't just moral authority that has crumbled in a world of "Might equals Right" and "maximizing private gain is the highest good;" individual truths arising in a moral universe have also crumbled.
If there is a Mandate of Heaven, our leadership is losing it.
Summary of the Blog This Past Week
Why Capital Is Fleeing China: The Crushing Costs of Systemic Corruption 9/4/15
Will the Fed Have to Save Emerging Markets with QE4? 9/3/15
Is the Stock Market Now "Too Big to Fail"? 9/2/15
China: Doomed If You Do, Doomed If You Don't 9/1/15
5 Trends That Are Shredding the Global Economy 8/31/15
Best Thing That Happened To Me This Week
Finished my next book, "A Radically Beneficial World," and delivered the mss. to my copy editor.
Market Musings: Lack of Clarity = Make No Bets
I confess to seeing no trend worthy of a bet at this point. I doubt the "buy the dip" instinct can be extinguished on the first spike down, but I also doubt that the global economy is poised for another six years of expansion.
It's OK to stay out of markets that are in a manic stage of up-and-down indecision.
We all want clarity and to catch the top or bottom, but when there are cross-currents and conflicting trends, the safe bets vanish and leave only the high-risk bets.
Just glancing at the weekly chart of the SPX, we see a rounded top--a classic topping pattern that is not bullish.
We also see the steep decline in MACD below the neutral line--a very bearish drop indeed.
But we also note the spike way below the lower Bollinger band--an extreme move that is far larger than the supposed trigger (China adjusting its currency peg). Such extreme moves outside the Bollinger Bands typically reverse, so this is potentially constructive.
We also note the stochastics are nearing an oversold level that typically marks a reversal of trend.
Could the Fed meeting on 9/16-17 push markets up or down 5%? I think the answer is yes. The market is telling the Fed, don't raise rates, and a drop of 100 points on the SPX if the Fed ignores the market's plea is certainly possible. If the Fed doesn't raise rates, a 100 point gain could result.
The actual rate change is not very consequential, but it changes the fundamentals of a variety of interest rate swaps and carry trades. These changes cascade through the complex global financial system, setting off uncertainty that then triggers anxiety/fear that nudge players into selling.
Many technical types have long forecast a crash in September 2015. Others are looking at October for a crash. Still others expect the market to recover and trace out a right shoulder in a long-term head and shoulders pattern.
The high levels of fear in the market typify bottoms--or crashes. If central banks act in unison, I reckon they can goose a "buy the dip"/short-covering rally if the Fed does not raise rates. How high such a rally might go is unknown, as shorts will be loathe to cover since so many players expect a crash ahead.
That pool of confident shorts could push prices much higher than many currently expect.
It seems a bit too easy for the market to crash here and reward the shorts. It wouldn't surprise me if Mr. Market crushed all shorts/Bears with a manic rally to previous highs, and then crushed Bulls with a reversal that few will benefit from because the rally forced all but the hardiest Bears to cover.
From Left Field
Dirt Poor: Have Fruits and Vegetables Become Less Nutritious? --short answer: yes, by a lot....
Frederick Forsyth: I was an MI6 agent -- more of a stringer than an agent, but a good story nonetheless....
How Wall Street Parasites Have Devoured Their Hosts, Your Retirement Plan and the U.S. Economy
RSA Animate - The Divided Brain (11:47 video)
Wasp Venom Selectively Assassinates Cancer Cells
Much of China Is Now An Unrepairable Ecological Disaster -- nothing new here...
Shadow Work and the Rise of Middle-Class Serfdom -- pushing unprofitable work onto the customer...
India's air pollution is so bad it's reducing life expectancy by 3.2 years
Just the Mechanics of the Fed's Exit Strategy Could Boost the Dollar -- file under dull but important
South African team may have solved solar puzzle even Google couldn't crack -- looks practical...
Cargo Cult Science: Richard Feynman’s 1974 Caltech Graduation Address on Integrity
Who Will Pay for the Zero Marginal Cost Society? -- important critique of the "energy will soon be nearly free" idea...
"The only wealth which you will keep forever is the wealth you have given away." Marcus Aurelius
Thanks for reading--
charles
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