In my childhood, there were still shopkeepers who warned clients with signs that if they broke something, or damaged it, they were obliged to pay the listed price. At the same time my parents were not insured, as far as I know. So they instilled a notion in us to be responsible, and that they would extract punishment if we were not. That arrangement served me well on my way to adulthood. It could be that my parents *were* insured, but never mentioned it to us, because they wanted us to become responsible adults. The outcome is the same.
Anyway, insurance was not common, and before 1970 you were not required to get a car insurance in Holland. Gradually insurance became more common, deferring responsibility for stupidity or clumsiness to a collective. The collective consisted of those who paid the premiums, but the costs were eventually carried by all customers equally through higher prices of the goods and services covered. These days, whenever a thief breaks into your car, the police isn't even interested in you reporting it. They refer you to your insurance. The best way to keep crime figures low.
One particularly intriguing insurance, which existed when I was young, but was gradually expanded, and changed in various ways over time, while it is now set to shrink exponentially, was 'social security'. Without going into great detail, governments covered the general population out of tax-revenues, or obligatory premiums, to cover certain risks considered debilitating, or unfair to defer to the individual. Health risks, losing your job, accidents leaving you unable to work, that kind of thing. On top of that, countries came up with schemes to 'save for retirement' as a collective. Depending on the design, people were actually *saving* money, or they were handed a 'right' to extract money from the working population. In Holland, where I live, and worked all my life, we've got both. Back to back. Part of my 'retirement package' comes from premiums paid by the active population, but a much larger portion, in my case, comes from actual savings. A fund exists which manages the collective wealth, built on premiums received, and which pays me, retiree, a monthly income for as long as I live. Still, I was *obliged* to take part, and the government, through the Central Bank, sets rules for this fund. If the fund-managers are anxious about the bond-market, and decide to get into gold, or something like that, the Central Bank says 'No!' This set-up serves governments well, as these funds are *huge*, and obliged to prop up the 'bond market', which those governments turn to for their needs to finance the war in Ukraine, for instance.
The Dutch government issuing laws to create a 'market' for insurance firms, and shedding collective responsibility to private firms, created a bonanza for the 'service industry'. Meanwhile, as the developments around the 'Credit Crisis' of 2008 revealed, when insurance firms and banks drop the ball, the tax-payer is left with the tab. Society drifted away from instilling responsibility in people, but this was not a design fault related to the construction of a 'welfare state' as such. Even Adam Smith, who 'invented' capitalism, acknowledged the need for a government to look after the people. He identified basic schooling, large infrastructure projects, collective defence, safety and security (the military, police and the justice system) as responsibilities of a government. With the aim to grow the wealth of the *Nation*.
That frame of mind *does* offer plenty of room for expansion of collective expenditures as the wealth of the *Nation* grows. Thus forms of 'social security', aimed at lifting all boats, preventing the burden of poverty to drag a country down, was not a failure of capitalism, but the actual *goal*. And if we reached this stage where automation and robotisation are taking over from us, humans, that is not a threat, as long as the government handles it well. Yesterday I posted my take on that interview with Elon Musk, in which he predicts that humanity will be replace by 'AI' in machines and robots of all kinds. And *real* soon. Three to five years. And how this will lead to all kinds of spasmodic policies from governments, unable to keep up, conditioned to create and look after 'jobs' to keep the grift going through taxation. We are already witnessing how incompetent our governments are as they struggle to 'transition'. Especially in the West, I should add.
Let me take you back to this 'Grand Vision' of 'going electric', in Europe the centrepiece of all policy-making until recently. (Today it is war with Russia). On this blog, and especially on the Dutch language version, over many years, I kept arguing that *everything* about that endeavour was wrong, because the argument used to promote it was false. I also wrote many articles about how 'behavioural economics' emerged from the ruins after vetted economists went public with statements and research which identified the widely held beliefs within our Western 'School of Economics' as a sham. The assumption that people *always* pick the option which is best for them, is false. In a funny way revealed in a tiny booklet 'The Five Universal Laws of Human Stupidity', published in 1976, and later confirmed in research by Kahneman and Tverski. Subsequently 'scholars' did not reinvent economics as a science, as you would expect, but proceeded to create the condition in which their falsified theories *would* work, by 'tweaking' the system through 'nudging'.
'Nudging' is a technique where you do not reveal your ultimate goal, but you start looking for 'baby-steps' to take people there, assuming that you understand what is best for them. In part as 'revealed' by that dysfunctional set of theoretical assumptions which formed the foundation of 'economics' as a science up till then. Which included that idiocy touched upon in that joke Elon Musk told in that interview. The obvious problem is that this form of institutional lying and manipulation to obscure your goals and failed hypotheses offers a host of possibilities to end up in disaster. So, if you want to lay the groundwork for automation and robotisation, but you can't sell it to the people, afraid of what would happen if they lose their access to a source of income, and you switch to telling people stories about the need to 'Save the Planet' in order to get the funding, you are bound to end up eating piles of shit, to abuse that joke Musk told.
Nothing wrong with replacing human beings in factories and offices, as long as you find a way to guarantee access to the immense wealth this will generate. Which is where Musk comes out in favour of 'Universal High Income', sufficient to keep the people happy. Only superficially akin to what the 'World Economic Forum' adopted when it issued this plan to take away all your possessions, while guaranteeing your happiness. Not at a national scale, but at a universal scale. With people like Christine Lagarde offering calculations of how high that 'baseline income' would be, which was simply impossible to sell to Europeans. Or Americans. Or even the Chinese these days.
Musk, and others like him, consider Europe 'lost', and it saddens me more than I can say, but the evidence is everywhere. Our 'leadership' bet on a whole range of horses which will never even reach the finish. In large part because they were not 'straight up' with the people, nor countries they traded with, about envisioning a world where work as a source of income would be gone. Worse! They now understand that mass unemployment cannot be avoided, as hidden unemployment, with people in millions of 'BS-jobs', created through 'regulation', cannot be sustained by what is left of the *real* economy. As we speak they are busy determining the next series of 'Lockdowns' and 'food distribution', because all these wars we are fighting are going to end up in a giant economic recession. So, they switch to schemes designed to take existing wealth in private hands from the people through 'novel' forms of taxation, switching the burden from labor to wealth, and stripping every notion of social security. Which, predictably, will lead to 'capital flight', actively fought with fresh law fare to tax people who want to leave out of everything they themselves saved, before they are granted to go anywhere. And if they are male, between eighteen and forty five, they will soon be held anyway, because they are needed as cannon fodder. Germany paved the way.
This 'harvesting of private wealth' is not to create the appropriate conditions for a 'World of Abundance', as Musk envisions. Not to create the backbone needed for that particular 'World of Plenty'. But to go to war with countries which saw into the future, and moved ahead, *while* stuffing the 'elite' with money to burn. This is the penultimate form of shortsighted Stupidity, *or* nefarious cynicism and greed. Call it 'Epstein Network'-pathology. Culling the herd. Hoarding wealth for the 'elite'. Which is going to kill that grandiose vision of Musk, and leave the survivors on a smoking pile of burned out countries, with limited lush enclaves where hugely expensive slave-like robots, not built to scale, serve their masters.
It boils down to a mindset I touched on in my article yesterday. As proposed by Musk for the form of 'AI' he wants to create. 'Truthful', 'Curious' and respectful of 'Beauty'. A pile of burned out countries, human remains everywhere, robotic machines scavenging the surface, on the lookout for life to end, as NATO is presently building in Ukraine, because the men to serve in the military are all gone, dead or fled to Europe, with an 'elite' bathing in wealth, stolen from European tax-payers, does not qualify.
A society with limited, or no insurance offering to cover damages when Stupid or Clumsy people break things, creates a different mindset. If you break it, it's gone. The thing itself is gone. Broken, unusable. But the wealth it stood for is gone as well. 'Out of pocket' loss. So, people conditioned in such a society proceed with great care, and determination once they figured out that the object of their desire is worth having, and they figured out how to produce it. Musk's vision of societies with Universal High Income (Purchase Power Parity), is not 'socialism', but wisdom, and the only road towards peace and prosperity, delivering us from the need to lie, cheat, manipulate and 'nudge' to hide our goals, while avoiding costly mistakes.
Ironically the EU in its original form, as a union of sovereign countries working to create a common market, growing the wealth of all the countries, with plenty of 'social security', was the ideal basis for a successful experiment along the line of what Musk envisions, and what I myself have been writing about for many years, after reading Raymond Kurzweil's book about the rapidly approaching 'Singularity'. I begged readers to open their eyes to the need for truckloads of energy, and associated resources, and spent many articles on Chinese advances, including 'wild' ideas like solar energy stations in space, fusion, and thorium reactors. And how the Chinese moved with ease to implement plans to improve the infrastructure across the board. And why we should abandon this fear-mongering about 'the Planet' and 'the Climate', used invariably for nefarious purposes to enrich friends of politicians only, and create fascist structures slanted towards doing war, steal, pirate, sanction, maim and kill in the service of 'Empire Builders'. Which includes the appropriation of 'AI' to do harm.
Deep down the vast majority of all humans of earth want that world Musk is envisioning, *rather* than taking our chances with the 'Epstein Network'. Which is not me saying anything about the contacts Musk had with all the people in that Network. That is the topic of another discussion. I refuse to sentence people because they met Epstein, Trump, Prince Andrew, Bill Clinton, Ghislaine Maxwell, Ehud Barak, Peter Thiel, and that lot in Hollywood which considered Epstein their friend, nor do I need to be told about his personal life, his children, wives and girlfriends, or the ideas of his dad. Hold your horses! Focus on the proposition. Don't go breaking everything within reach because the people promoting it are not perfect, within the boundaries of your fully insured life.