Pandora’s Box

‘When sitting in (the great) Sherwin Rosen’s Econ 302 course at Chicago on a cold morning in February 1982, I was startled when Sherwin’s normal rather droning delivery was interrupted by him shouting and pounding his right fist into his left palm: “And that’s the problem with inflation. IT F@*&S UP RELATIVE PRICES!!!!”’

‘Some prices are stickier than others, meaning that inflation pressures can impact some goods and services more and sooner than others–thereby causing changes in relative prices. This is a bad thing–and why Sherwin dropped the F-bomb about it–because relative prices guide resource allocation. If you f@*& up relative prices, as inflation does, you interfere with resource allocation, leading to lower incomes and growth. Inflation has adverse real consequences.’ Craig Pirrong

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In his recent post-FOMC remarks, Chairman Powell was at pains to try to assuage growing fears both that inflation was on the rise and that he and his colleagues were not taking the threat it poses to people’s well-being seriously enough.

As part of a less than convincing defence, he pointed to the recent fall in lumber as a sign that the most rapid rises would soon ‘abate’ and expressed a hope that a similar retrenchment would also be seen in used car prices before too long. Citing also the examples of airline tickets and hotel room rates, Mr Powell vouchsafed the airy prediction that once these and other escalating prices had attained pre-Covid levels, their ascent would come to a sudden halt.

High prices were simply a matter of supply and demand, he continued, and so, were elevated levels of the latter to persist, an increase in the former was sure to follow in a way that would automatically render the situation ‘transitory’, to use the phrase of the moment.

No-one thought to ask the Chairman why, if matters were so unfailingly self-corrective, his institution ever bothered to ease monetary policy in order to prevent supply from outstripping demand, hence tending to lower – not raise – prices?

Toyotas & Cherries

If, just like Chairman Powell, we carefully pick our cherries (or perhaps our cherry trees) among individual markets, we, too, will readily identify a number among them where specific factors have led to what we may loosely call ‘bottlenecks’ – and hence led to price rises. With a little  further digging, we shall certainly find some of these where, fortuitously for our case, such ‘blockages’ may already be well be on the way to being addressed.

For example, sawmills are said to be coming back to pre-pestilence capacity levels of operation while robust rail traffic data suggests that wood from them is again moving more freely to the nation’s timber yards and thence onward to its building sites and DIY stores. There are hints, too, in the trade papers, of prices feeling the force of something of a buyers’ strike in recent weeks – one perhaps reflected in weaker housing permits and lower mortgage purchasing applications, if not so far in actual construction numbers.

But, that said, for all the precipitateness of its fall from the heights, lumber is still 60% or so more expensive than it was before tools were downed last spring, an addition to the input costs of all manner of projects currently underway. ‘Inflation’ here (in the misleading sense of a higher selling price) may well be at an end, but we’d be naïve not to look for shockwaves from this sudden jump not to be transmitted further down and across the supply chain in coming months.

As reported lately, the benchmark Mannheim used vehicle index also showed some modest signs of moderation in the first half of June, leading its compilers to wonder if it indeed was about to reach its peak. A small mercy, you might think, after second-hand cars’ 60% YOY increase – a price hike which would be made all the worse, if ‘hedonically-adjusted’ for that fact that the rental car component of that aggregate not only costs more, but has, on average, nearly twice the previous mileage on the clock.

What Mr. Powell also glided over was the interrelated fact that NEW car prices were also up 12% YOY to a record average $38,255 – as per JD Power’s estimates – with a  large majority selling at only the slimmest of discounts to list prices and some at a premium thereto. Even that data might understate the degree of like-for-like price inflation as the Kelley Blue Book reckoning of the market combined a higher average transaction price with a reduced share of higher-end SUV sales in the mix.

Despite this, May’s new retail sales were up by a third over 2020’s crisis-hit levels in terms of units and – perhaps more tellingly – also stood at just over 10% ahead of 2019’s more representative tally. Calculated in dollars, buyers were on track to shell out  27% more than they did two years ago. Demand was so brisk that one third of new cars were selling within 10 days of arriving at the dealership, versus less than one in four, two years ago. And, lest you think this appetite will be sated any time soon, note that IHS Markit reckons that the average vehicle age has lately stretched to a record 12.1 years.

As Jeff Schuster, president of US operations for global consultants, LMC Automotive, put it: “…the U.S. on the verge of running out of enough sellable vehicle inventory to support the surge in consumer demand…”

So, Mr. Powell’s hostage to fortune in this area may soon be found, slumped in a ditch with a bullet through the temple, given that his ransom payment seems contingent upon an end being put to the confluence of continued easy credit and the immense supply-side difficulties being faced by the industry, particularly in relation to computer chip components, but also involving tyres and resins, which shortfalls are being further aggravated by the fact that steel, aluminium, copper, and a host of other material inputs have also required greater outlays in recent weeks.

Stacking the Deck

Still, even if we cede Mr Powell his point here, his blithe assertion that high the laws of supply and demand will spare him and his colleagues their blushes misses a number of crucial points.

The first of these is the question of just where does the high demand to which he points have its origins? Where, indeed, if not in the trillions of dollars of stimulus cheques which he has so generously underwritten? Where, too, but in the ready availability of cheap credit in whose provision his Fed shows no sign of tempering its eagerness to assist?

Then there is the question of whether the hard grind of increasing physical supply can ever rise rapidly enough to match Mr Powell’s lazy, weekly creation of new monies. He can help cheapen $10 billion of extra mortgage credit every week without out raising sweat, but can he be absolutely sure that men in hard hats and heavy boots, toiling out in the midday sun, can just as effortlessly hammer the last nail into the “For Sale” board hanging outside every one of the 23,000 average-price new homes that sum alone would buy?

Moreover, his platitudes are all well and good when an individual item rises in price because its perceived scarcity has suddenly intensified, independently of any contributory changes in the overall value of the money in which that price is reckoned.

Then, the price rise signals to consumers that, if they are to fit the extra outlay into their budgets, they either need to economise on that particular good by buying less of it, or they need to forego today’s purchases of those other goods which are now to be found lower down in their individual orders of preference, or, by deciding to save less or borrow more, to give up some of the option of having a greater quantity of goods tomorrow.

When this happens, sharp-witted entrepreneurs will take the price rise of one and the potential price decline of the other as a signal that too few resources are being devoted to providing the former and too many to bringing the latter to market. Once they have recognised the evident opportunity for profit which this misalignment presents, these entrepreneurs will act to arbitrage it away. In so remedying the market’s temporary disjuncture between these interacting combinations of bid and offer, they will justifiably earn their keep as the agents of ensuring greater customer satisfaction.

Thus, the price rise either slows transactional volumes (keeping the overall money flow devoted to this one item more or less unchanged) or the swelling stream of dollars passing through this favoured channel comes at the expense of a diminished one elsewhere. In this way, an emergent change in outlook and appetite tells both buyers and sellers, producers and consumers, that their own behaviour must undergo a suitable evolution in order to bring means and ends once more into closer correspondence. The key point to remember is that the price rise both signals the shift in preferences which is underway and naturally directs the best response to it.

Note, however, that this ever-present reshuffling of budgets, changing shopping basket compositions, and altered production plans can in no way be considered to have anything to do with ‘inflation’ – a phenomenon which, in order to avoid being embroiled in an ‘angels dancing on the head of a pin’ digression, we shall simply say involves a generalized fall in the perceived value of money vis-à-vis a substantial subset of the things which can be bought with it.

In essence, what we are arguing is that when, say, lumber, for any of a multitude of reasons, becomes more scarce, its buyers either have to make do with fewer, less capacious, wooden kitchen units or else give up the purchase of the luxury granite slabs they had intended to sit atop them. They face the choice of constructing a smaller, raised, outdoor entertainment area or buying cheaper garden furniture to adorn their now more costly decking.

As a result, there will now be a move to fell more trees and expand sawmill capacity and a concomitant decline in quarrying, stone-masonry, and wrought-iron fabrication. There will be both new beneficiaries and those who now suffer; greater gains for some, shrunken profits (or losses) for others. New supplies of wood or acceptable – perhaps newly-invented – substitutes will eventually arrive to limit the excess earnings in that sector. Conversely, the reduced turnover of worktops and sun-loungers will force their makers and distributors either to curtail their output, hopefully releasing some of the capital and labour to earn a higher return elsewhere, or to effect sufficient cost-reductions to restore the commercial viability of those resources’ existing employment.

In a free market, prices will wax and wane in reasonably harmony with changes in demand – whether on the part of end-consumers or on that of people bidding for the whatever it is they intend to put to productive use. No matter how high profile may be the goods and services becoming more expensive and how much less noticed are those which are cheapening, such shifts in relative prices should never be confused with ‘inflation’, but rather with the helpful transmission of information about the many spontaneous changes underway in a dynamic, evolving economy.

Conversely, when lumber is up and kitchen-tops are up and garden chairs are up and the houses to put them in are up and the cars to park outside them are up; when paints, paper, packaging, petrochemicals, pharmaceuticals, polysilicon, pork,  potatoes, peanut oil, pulses, and potash are up, you begin to suspect that what you’re seeing is an active case of what the hoary, old simplification describes as ‘too much money chasing too few goods’ – i.e., inflation – is being acted out before you.

The Price of Knowledge

In this case, it cannot be over-emphasised that the damage this causes is not simply a consequence of a ‘rising price level’. In fact, for all our unthinking focus on that one, convenient statistical abstract – whether expressed as ‘the’ consumer price index, or ‘the’ personal consumption expenditure deflator, or whatever else it may be – there is no such thing as a ‘price level’, but only levels of many different prices. It is in the disruption of the natural, if ever-changing relationship between each of these which is caused by disturbances in the monetary system that the true evil of inflation resides.

To see this put a little more graphically, take the passage quoted at the head of this discussion, an excerpt taken from the widely-read blog, ‘The Streetwise Professor’ and its musings on the likelihood of us having to revisit the stagflationary Seventies.

As we have already outlined above, in free markets, prices are set at the margin by the combined influence of competing demands – some of them direct, some indirect or ‘imputed’. Price setting is also affected by the many alternative goods which are in competition with any given example whether these are material substitutes, or components of different technological and organisational processes which serve the same, ultimate ends.

An important point raised here is this idea of ‘imputation’. What this means is that no-one buys heavy, earth-moving equipment to dig titanium dioxide out of the ground and leave it sitting there, in a growing heap at the mine entrance, simply to be admired. No, they buy it because – among numerous other uses to which TiO2 is eventually put – Joe wants to pack some sun-screen for his holidays and Janey wants to disport a set of clean, white teeth. The prices paid (and the profit margins earned) at that final stage help set what their retailer will himself pay for these end-consumables. Naturally, his supplier will do likewise, and his in turn, each making their own deductions as this one material moves back up what may be both a long and a widely ramified chain of distribution and production, all the way to the mine entrance and there help determine the original price of the ore.

Of course, none of this happens in isolation for each contributor to that bottle of Factor 50 will be operating on a multiple intersection of all sorts of other margins: wages, bank charges, power, rent, taxes, accounting and legal fees, insurance, packaging, marketing, transport, equipment, the cost of other components and additives, and so on and on in an intricate web whose complexity quickly passes all comprehension.

The ongoing role of the entrepreneur is to probe this near infinite matrix of prices to see if there exists some different combination of goods and services, perhaps coming together over a different time horizon or being delivered to a different place, which will yield a slightly higher return to his endeavours than is presently available to those of his peers. Moreover, it should be emphasised that this arbitrage is not a closed one since, by the very act of offering me my required caffeine fix in the form of a novel kind of tea, instead of my accustomed cup of coffee, my shift of beverage expenditures and my refiguring of my crockery set combines with his actions to alter the matrix itself and so both opens up previously unexplored seams of potential profit and seals off the shafts leading to some existing ones.

Thus, the economists’ hallowed ‘state of equilibrium’ is not only never reached, it cannot ever be reached, since the very act of trying to approach it itself changes the topography over which one is travelling toward it.

“Panta rhei”, indeed.

Fine, you say: but if everything on the network is truly this meta-computational and multi-variate, how does the market function; where does the buyer or seller even begin? Where else indeed but with RELATIVE, not absolute, prices?

Prices are the signalling mechanism par excellence on the market and the market on which they are formed is the calculating machine and distributional tool sans pareil which allows us access to the skills and resources of a multitude of people, spread all across the face of the globe – and often back in time – people of whose very existence we are ignorant and of whose contributory role in our personal want satisfaction we are likely to remain totally unaware.

Given this contention, it must quickly become evident that if we interfere with price formation, we do not merely jeopardize the provision of this or that good or service, or risk rendering useless the labour and capital involved in this or that act of production, but we start transmitting false signals all across the web of exchange and so may begin to disrupt resource allocation even in its furthermost reaches.

Now, lest your start to think we are succumbing to the fashionable paranoia, all too evident in far too many fields of thought today, about ‘tipping points’ and ‘runaways’, we should emphasise the fact that the market network is both highly ‘distributed’ (greatly decentralized) – to use the mot du jour – and also is highly redundant. These qualities make it surprisingly robust but they do NOT make it unbreakable.

Localised errors are always bound to occur upon it. Indeed, they are part of a necessary evolutionary process which tends to the emergence of higher, more efficient forms of organisation and to a wider range of often more beneficial interactions. Fortunately, the errors have a natural tendency to reduce the ability of the erroneous to influence the course of future transactions. The loss-making business will perforce reduce and then end its misallocations, while the profitable one will be furnished with a greater means to expand its reach. By parlaying its gains into an accumulation of capital, the entrepreneur at the helm can simultaneously attempt to consolidate its immediate success, acquire the means to adapt to the market’s next inevitable shifts, and to exploit new opportunities whenever he identifies them.

It should need little elaboration to see that the perpetuation of loss-makers’ activities through government transfers (which themselves must be means taken from the deserving many for the benefit of the undeserving few) or though the malfunctioning of financial markets (not least those deliberately fostered by central bank interference) is a wasteful and ultimately debilitating policy. Anyone doubting this just needs to reflect upon the experience of the past thirteen years’ (the past thirty, even) or Google the word, ‘zombification’.

The incidence of profit and loss is always the result of calculated risk taking, combined with a certain reactiveness to the inevitable vicissitudes cast up from that realm of uncertainty which lies beyond all such calculation, of the entrepreneur’s charts. We should therefore avoid any process which shrinks the charted area in which the entrepreneur can even attempt a rational assessment of risk and instead induced an expansion of his map’s chaotic, ‘Here Be Dragons’ margins.

We should not wish to move him from coolly counting the cards at the Blackjack table and force him to sit in on some nightmarish game to which he does not know the rules, the size or composition of the deck, or the scale of the available pay-offs.

In short, we should realize that anything which reduces the role of skill and makes randomness both more dominant and more severe in its consequences can only serve to hinder material progress and reduce the generation of wealth for us all.

Inflation is exactly such an affliction.

To recapitulate the argument, it is crucial that relative prices faithfully reflect real differences in supply and demand. Inflation, by corrupting the medium of exchange and thus making its epistemic transmission of such influences increasingly capricious and unrepresentative, destroys that essential linkage and, in that way, impoverishes all but the lucky – or influential – few.

Time & Money

Since all productive processes necessarily require time to bring to fruition, we must recognise that interest rates should not be utterly divorced from the contending pull between what people want today and what they would rather have tomorrow. If I will not tolerate much delay in the satisfaction of my appetite, you had better concentrate on bringing the required goods to market as quickly as possible. If, however, I am sufficiently sated now, I may be happy to spare you the resources need to fill my table with new delicacies in a more distant future. The rate of interest – the price of time – should be higher in the first instance than the second.

It may be helpful to think if this in terms of the survival manual’s ‘Rule of Three’. If I have survived my three minutes without air, and my three hours without shelter, you had still better set aside all thoughts of the three weeks needed to lead a pack-horse laden with food to me and concentrate instead on the three days you have in which to dig me a well. As each of these more insistent needs are fulfilled in turn, time becomes less limiting, less ‘scarce’ and so interest rates fall to signal that decline of urgency. Mess with interest rates, therefore, and the signals become scrambled over the temporal fourth – as well as over the first three, ‘spatial’ dimensions of the web.

Here we face the paradox that inflation usually begins with a Cantillon Effect suppression of both real and nominal interest rates via a sometimes deliberate elevation of bond prices. Next, it tends to see the former lag even as the latter finally begin to rise. Interest rates therefore tend first to encourage productive activities which are overlong in reaching viability and in amortizing their required investments and next to discourage the very monetary savings which spare the resources needed to consummate that effort. Thus, lowered rates do little to help temper the intensifying desire to swap money for present, not future, goods – a preference whose expression will disrupt longer-term plans temporally, financially, and even physically. In our ‘Rule of Three’ terms, people will find they are gasping for breath while you are out pointlessly trying to build them a fire.

As more and more people become aware of the toll inflation is exacting upon them; as money loses all correspondence to real conditions, and as interest rates are seen to provide ever less or no compensation – and even to impose losses – for ‘waiting’ (i.e., delaying purchases and saving), increasingly goods are bought simply because they can be. Any material entity, any momentary pleasure is better than holding on to cash whose worth is diminishing before your eyes.

Eat, drink, and be merry, for tomorrow your money dies.

In the final death throes of a money, nominal interest rates may reach previously unthinkable heights yet still not sufficiently compensate anyone for delaying consumption. Supply will make up for what price cannot and credit, while notionally ‘cheap’, will become unavailable in practice for anything but the briefest of terms. The visible universe of finance contracts to a point as the hapless cosmonaut heads towards the singularity of monetary collapse.

I See No Signal

But it is not just in funding that the entrepreneur faces mounting difficulties. Inflation’s generation of quasi-random fluctuations in prices across the whole gamut of raw materials, components, factors, and finished products, involving competing, non-competing, and complementary goods (by which we mean the maker of golf balls needs someone to lay out the course along which to belt them and vice versa) makes business planning well-nigh impossible.

If he cannot begin to calculate his income, or to correctly account for his capital consumption; if he cannot reckon on even a rough durability in the relation between input cost and output price; if he cannot even assume that a nominal, monetary difference in his favour will translate into a similar surplus in command over real resources as time passes, the entrepreneur becomes not so much a shrewd prospector, using his geological skills to find the most promising spot in which to start digging, as a man blindfolded, bundled into the back of a car, and handed a pick when he is eventually pushed out of the vehicle in some totally unknown location.

As if this hindrance to wealth creation, this rapid erosion of capital were not bad enough, as the inflationary disease progresses, two further sources of aggravation come into play.

Faced with mounting social distress – albeit largely of its own making – the state apparatus (and here we include that captive institution, the only-notionally independent central bank) grinds into action to try to preserve its incumbents in power. More often than not, this involves trying to contain the damage by edict while, despite a sorry record of failure stretching back at least 1700 years to the Emperor Diocletian. Thus, the temptation to introduce rent controls, to impose export tariffs and bans, to promulgate wage controls and price freezes, usually becomes too great, while every wave of mass unemployment forces an even faster running of the printing presses in order to try to buy off popular unrest.

As even Mises himself reluctantly admitted in 1919, amid the Zugzwang difficulties of post-dissolution Austria:-

“State expenditure is today considerably higher than government revenue and all effort to limit expenditure and to increase revenue until the budget is equilibrated encounter almost irresistible political difficulties. Under such conditions, there is hardly any other solution but to put the printing press directly or indirectly to the financial service of the state and to provide, by the issue of banknotes, those means that cannot otherwise be provided.“

[In his defence, he immediately went on to say that this made a mockery of basic principles of economic management through its malign, redistributive side-effects; that unless self-restraint was rediscovered, a total monetary collapse would be the outcome. It could therefore only buy time until people were made to realise that a ‘rational’ economic policy had to forego all further ‘inflationary experiments’.]

Like so much of government policy, what tends to take place is an attempt to address the symptoms, not the illness, and to do so in a manner which only aggravates it by further impairing market function as well as by undermining respect for both written law and everyday morality as it makes a mockery of property rights and turns everyone into a speculator, a spiv, or a black marketeer.

The bitter irony of all this is that the faster grows the perceptions that one needs to protect oneself against inflation, the more intense the swirl of the Maelstrom into which all economic possibilities are swept up and consumed.

Thus it is that inflation progressively degrades the information content of all price signals and, amid the growing noise which they instead transmit, coherence is lost and more and greater mistakes are made. Mistakes of excess. Mistakes of under-provisionment. Mistakes of timing, of feasibility, of accounting, of planning, of policy.

Old vulnerabilities start to become crippling: new ones develop to sicken both the Body Politic and the Body Economic. Society fractures. Empires topple. Regimes are swept away. The thrifty are ruined. The imprudent enjoy a moment of debauched indulgence. The schemers and the string-pullers, the fraudsters and finaglers alone may prosper, further poisoning the social wellsprings with their garish displays of ill-deserved success. Over all, the shadow of the guillotine  – or the Gulag – looms.

The Wolf at the Door

All very well, you say, but do we really face such a future?

To start to answer this, we must first acknowledge that, in detail, no two inflations are ever the same, only similar in broad outline. What we can say is that those driven by government spending – as opposed to the booms fuelled by private credit creation – tend to take a more easily identifiable form.

The private credit boom tends to be funnelled into either launching too many businesses and building too many factories – if it is what might call a ‘producer-led’ inflation – or in knocking up  – and bidding up – too many houses if it’s a ‘consumer-led’ one.

Though the mistakes are accumulating here, too, like dislocations in the structure of a metal subject to stress, the damage can remain hidden during the first, exhilarating stages of what is becoming an increasingly illusory prosperity. Often – since we will probably have borrowed the money with which to buy them (and so driven up their quoted valuations) – we will even tend to enjoy their rise. Lulling everyone into a false sense of security, this sort of inflation may long have only an indirect influence on the things which cause the least bearable, nagging, daily pain of having to fork out a few more bucks every time the fridge or the SUV need filling up.

Indeed, in the classic Austrian exposition of this kind of inflation, the denouement comes when you do at last find your Breakfast Special costs more in the coffee shop and that your barber’s charging more for a shave. Only now, when the cash spilling out of all those rainbow’s end crocks of gold bumps up against a stock of consumables that people were too busy chasing Leprechauns to expand, does the disparity between what people want or need to buy now and what too many businessmen have persuaded themselves they might be ready to offer in the future become critical.  The lowering clouds of the inflationary boom, piling up overhead but largely unnoticed save for the occasional rumble, now unleash a fearful deluge of unpaid bills, unfinished projects, and defaulted loans to wash away the hopes and dreams of the many and the overhyped shareholdings of the few.

At some point, even Unicorns become much of a luxury to keep and if the people have decided they need to plough up the hay-field and plant potatoes on which to sustain their hungry children, these cossetted, mythical beasts will either starve or themselves end up on the dining table to assuage the family’s hunger.

But a government-led inflation, now that’s a wholly different ball game. Remember that governments are by definition even less constrained in balancing the books than the most shiny-horned of tech start-ups, trotting blithely from owner to owner in a VC/private equity game of pass-the-parcel. Remember, too, that the state can spend an awful lot of the money provided by us taxpayers – present and future – on ‘services’ and ‘amenities’ which it can compel us to use even though these may not only add little to overall productive output but, all too often, can actively detract from it.

As the toy economist propounders of the misnamed ‘Modern Monetary Theory’ never cease to tell you – and, worse, to whisper in the ears of their readily-seduced political masters – a sovereign government can never run out of money – that its debts are someone else’s assets – and so no tedious rules of basic good housekeeping need ever apply to it.

What these Useful Idiots miss, of course, is that those ‘assets’ may become rapidly depreciating and that while the state may indeed never ‘run out of money’, it can all too easily run out of things upon which to spend it and – in the final paroxysm of its folly – run out of people who will willingly accept it as payment. There will come a day, in other words, when the state is creating truly prodigious amounts of ‘medium’ without much in the way of ‘exchange’ taking place in which it is still functional. 

The sorry experience of the previous century in ‘developed countries’ – as well as of this one in any number of less advanced polities – is supposed to have provided a brake with which to stop this dreadful millstone from grinding all of the commonwealth’s property to dust in the  form of an ‘independent’ central bank, thus forcing the government to rely more closely on those willing to hold its debt if it is to live beyond its means.

But we can already see that the Fenris Wolf of governmental inflation has not only been bound to its rock with the flimsiest of chains – since the central bank’s de jure freedom always takes second place to its de facto political subservience – but that the knot holding it in place – in truth, a tangle being eagerly picked at since Lehman’s collapse and the subsequent, near-collapse of the European project – has become completely untied as part of the pandemic response. Furthermore, those who have unleashed the beast are simultaneously urging it to run wild and gobble up resources on a truly mythic scale while uttering soothing noises about how tame the monster really is to those whom they are encouraging it to devour.

The Medici Papacy

For the past year or more, we have witnessed concerted efforts, unparalleled in peacetime at least, to bolster the supply of money and credit and so, in turn, the demand for things upon which to spend it. Meanwhile, the supply  of those ‘things’ has been badly hindered, not just by the COVID restrictions, per se, but by a series of geopolitical irritants stretching from the West’s conduct of economic warfare with Russia and Iran to China’s antipathy to their arch-rival’s Pacific auxiliaries in Australia.

Compounding such follies, we have the ESG-Net Zero-‘Greening the Financial System’ triad coming into play both to stultify genuine entrepreneurship and to hijack people’s savings in order to assist this toxic mix of eschatology and nest-feathering cronyism.

It is a great enough evil that this is being driven through without any pretence at democratic endorsement but instead by the insidious agency of supranational regulation allied to a nauseating slug of sanctimonious, board-room Groupthink. But ethical outrage aside, the pursuit of this pernicious ideology means nothing less than the neglect, deliberate impairment, and even outright destruction of vast amounts of hard-won productive capital and, with it, the declaration of a sentence of virtual outlawry on incalculable quantities of human skill and experience.

A truly Olympian – or perhaps we should say, Plutonic – siphoning off of wealth into the coffers of the new Green Guards and Climate Commissars is slowly getting underway, under cover of what in so many states has been the post-COVID arrogation of emergency powers of decree and diktat which makes the Reichstag fire look like a back-garden barbecue.

Ostensibly, the burgeoning schemes to ban, penalise, and throttle funding to so many of the essential contributors to the very industrial civilisation which affords us our comfort and freedom are to be implemented in order to placate an angry Gaian deity. The darker reality, however, is that this upheaval only serves to further concentrate economic power in the handful of privileged mega-corporations peering down from the QE-crenellated ramparts of the new Commanding Heights, the Satraps of Sustainability who are all the while lining their pockets with fat subsidies as they build out a rush of mandatory, sub-marginal, economically and energetically inefficient replacements for the carefully-costed bounties of long years of hard-nosed, free market enterprise.

Conveniently, too, it also relieves the Davocracy’s C-Suite champagne-swillers of genuine accountability since the stark verdict of the bottom-line and the strict fiduciary responsibility they have to the firm’s owners is now dissolving into a pious mush of bien-pensant virtue signalling aimed at nothing higher than the placation of a mob of busybody ‘stakeholders’ and social media witch-hunters. The barefaced cheek of it all is that these Princes of the Church of the New Normal are the very people who can be heard gravely holding forth on how ‘capitalism’ needs to be ‘re-invented’ in order to better suit it to a modernity they are attempting to create – a modernity which will suit them very nicely while inflicting unnecessary privation on the rest of us as one of the most egregious of them, Mark Carney (a man not shy in protecting himself from any such hardship as he flits from job to job), casually admitted in his keynote address to the BIS AGM when he said:-

“…the Fourth Industrial Revolution (!) will lead to a long period of difficult adjustment and rising inequality long before the benefits of increased productivity, wages and jobs are widely felt…”

Look closely enough and you are sure to see the silk petticoats peeping out from under the hairshirts these Five-star Pharisees so ostentatiously disport in public. Sackcloth and ashes for the cameras: superyachts and Aspen chalets the moment the studio lights go out.

Sadly, the material components of this ‘post-capitalist’ New Order, almost without exception, are commercially unviable makeshifts which comprise the premature deployment of largely untried – in some cases, explicitly uninvented! – Ersatz technologies to the accompaniment of little in the way of realistic budgeting. Compounding this Gadarene rush of Green folly is an almost total ignorance of the deadly thrombosis of the irreconcilable, competing resource demands and irresolvable conflicts of scheduling which this will all surely trigger.

This kinder, gentler collectivisation of us Kulaks, this Green Leap Backward, Agenda-this and SDG-that, digital currencies-cum-IoT ration cards are together going to combine all the worst ‘Public Choice’ elements of political overreach, the monetary incontinence of a pliant central bank, the wastefulness of a corporate class spared budgetary rigour and shareholder oversight, and a war-socialism abandonment of individual customer satisfaction for the delivery of grandiose, centrally-planned targets.

No helpmeets in hateful poverty, but only in wealth

To sum up: deficits will explode and the printing press will hum. Savings will be commandeered and squandered. Rules and restrictions will not only proliferate but become more unpredictable in their application. Corruption will vie with incapacity as a source of loss. A rich, interlocking architecture of industrial capital will be carpet-bombed to rubble.

In its place, Dark, Satanic arrays of unsightly, unreliable, uneconomical substitutes will mar the skyline, crowd out the farmer, and despoil the sea approaches. Skilled labour will be condemned to the welfare rolls at the stroke of a bureaucrat’s pen to the unfeeling injunction: “Learn to code!”. Autarky will rise, supply chains will be sundered. Repeated biohazard alerts and vaccine drives will disrupt schedules of employment, education, association, and recreation. Horizons will shrink and borders will close – to goods and services, at least, if not to hordes of craftily-trafficked welfare-shoppers.

If you imagine that the current outpouring of millenarian, biosecurity Eco-dirigisme which all the foregoing represents is likely to prove ‘transitory’, then maybe – just maybe – you can also convince yourself that price rises will indeed soon moderate, just as our Lords and Masters are working so hard to try to persuade us they will.

If, however, you think that, having not just been freed from confinement, but promoted to WEF Young Global Leader, it will take a while to strip Pandora of her “circular economy” Green armband, confiscate her genetech syringe, de-activate her UBI Crypto-tokens, and lock her safely back in her box, you might want to plan for the opposite.