The investment strategy is the same irrespective of whether our socioeconomic system is now ‘Extreme Capitalism’ or ‘Technofeudalism’

In founding MacroEdgo my intention was that investment analyses and macroeconomics would be major themes of my writing along with general observations on socioeconomic and broader philosophical themes.

COVID-19 changed that as investing took a back seat to my writing to influence public biosecurity policy to elevate the primacy of protecting human life which, even though conservative politicians preach this when it comes to immigration and firearms policies, etc, was very much their secondary consideration during the COVID-19 pandemic.

The Great Reset became a major theme of my writing underpinning my view of how humanity would emerge from COVID-19 when I turned my mind towards it in March 2020 earlier than just about any other commentator. I was earliest because I did not suffer from the dissonance most others did in February 2020.

To be succinct, COVID-19 did not cause this Reset, humanity was due – in many ways overdue – for such a Reset as occurs periodically through societies as if our progress were delineated by the path of a swinging pendulum, but with it’s pivot point on a relatively steady upward trajectory.

COVID-19 was a catalyst that ensured Reset occurred at this moment in human history, and the shock to global humanity associated with it ensured that the Reset would be significant in magnitude.

(Note, I have always accepted – and acknowledged – that other and/or future analyses may time the Reset at 2008 after the Global Financial Crisis, but in that case COVID-19 was certainly a very significant accelerant).

My use of the adjective ‘Great’, however, does not only relate to the magnitude of the Reset but also to the potential for it to be great for humanity if quality leadership and broad engagement puts humanity on a more optimistic and healthy path towards truly inclusive global societies with equal opportunity to experience a reasonable standard of living in close connection with a healing natural world.

I was always clear that this outcome is far from certain.

High quality, effective leadership will nurture [The Great Reset] so that the best outcomes are realised to the benefit of humanity. Scoundrels will try to harness it to bend society to a more warped and less inclusive version. We all must show leadership and engage with the process to achieve the best outcome for ourselves and those we love, and those who succeed us. And we should all prepare to be flexible and supple in thought to make the best decisions that we can with the information that we have as we emerge from the shock of our altered existence and as our future comes into clearer focus.

“How Society Will Change If a COVID-19 Vaccine Is Elusive” 17 July 2020

Although I have devoted most of my time to thinking about how these changes will affect societies, and trying to play a thought-leadership role in helping to ensure the Reset is indeed Great for humanity, by necessity I have been contemplating broader impacts on those closest to me ranging from purely social through to financial.

Obviously a significant Reset within society has significant implications for investors. That includes every Australian due to our world-leading defined contributions retirement savings system.

In late 2023, after much internal processing, I decided on my own investment strategy and began implementing it.

Then I purchased a copy of Yanis Varoufakis’ latest book “Technofeudalism: What killed capitalism” and as I read it I found so much commonality with my own thinking that I became even more certain in my strategy.

Before I explain my strategy, however, I need to restate the salient points that I have already made in my various articles and writing including on LinkedIn, delving a little more deeply in places, and comparing and contrasting with Yanis’ thoughts.

As I have said previously on occasion, historically I have found much commonality between my investing views and those of Jeremy Grantham, so I should declare up front (again) a natural inclination to contrarianism, and I will discuss where I believe Jeremy’s base framing for bubbles is being and will increasingly be challenged.

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Like Yanis, I have been observing strange movements in markets, and the actions of those in both private and public sectors integral to their function, with increasing suspicion over the previous decades. I need to say upfront that as an Australian our residential property markets have for all of that period been especially irregular such that we have probably the biggest ever national property bubble that has been maintained by intense management that has confounded even the great bubble spotter, Jeremy Grantham (more on this later).

I, too, decided through the pandemic that our economies were now underpinned by entirely gamed markets. I had increasingly realised over those decades that our markets were far from ‘free’ – and Australia’s residential property market is a classic case in point where both public and private interventions for two decades have been aimed at keeping homes unaffordable to the detriment of anybody who did not own property before the new millennium and including, obviously, future generations – but actions became so extreme in the pandemic that it was clear that our system could not any longer be considered true capitalism.

First I must be clear that in early February 2020 I anticipated central bank interventions which I said in my Coronavirus Update of 11 February would constitute “absolutely extraordinary actions (as opposed to the already “extraordinary” actions that we have become desensitised to over the last decade)“. Moreover, in “Repeat After Me, This Is NOT Sars: COVID-19 is much worse” I was clear that such efforts were reasonable on this occasion as “a financial panic on top of a growing panic about an increasingly obvious pandemic will be devastating” and that this is “why Governments, even though they always prefer to egg on markets, will be right in trying to prevent it from happening“.

However, to a wary contrarian those measures clearly went much further than were openly discussed within the broader market, and in Australia this likely involved making sure that banks lent heartily, generously and without fear of future reprisal for speculators to continue their two decade-long obsession with residential property, and in early February 2020 I even suggested that public and private institutions were at work preventing (or delaying) corrections in stock markets in less than transparent fashion.

For me the strange stock market behaviours in February 2020, when participants stubbornly refused to recognise and price in what should have been obvious to anybody with even a basic undergraduate understanding of epidemiology and biosecurity, was the final piece to the puzzle. I am certain that internally and within the investment banking industry there were many keyed into what was heading our way which I likened to an impending tsunami on a well-known Australian fund manager’s blogsite on 18 February 2020 with links to my “Coronavirus Updates” page where on 12 February I had explained the tsunami analogy.

At that moment in time, however, I was caught up in the emotions I drew on in my (ultimately reasonably successful) efforts to get politicians to act in the interests of broader humanity, exemplified by how I allowed my frustration to get the better of me in “Politics Vs Society In The Coronavirus Outbreak” and ‘wonder’ aloud whether we were already living in an “Idiocracy”.

Thus my processing of the socioeconomic implications of these odd market behaviours was more gradual than an actual ‘Eureka’ moment as Yanis described for himself. However, in the following months I came to realise that this was the definitive evidence that I had been looking for of the totally gamed markets I had been increasingly observing over the previous 2 decades because the only viable explanation was that elites who ran the market required a period of time to get their affairs into order prior to the sharp market correction commencing so the music was made to continue until they were ready. My insignificant affairs, on the other hand, only required me to buy regular put options which I had done by 7th of February (and I made 30x on the $5K I spent on them which amply covered the cost of provisions should things really fall apart, e.g. a generator – remember in those early months the best available data yielded a potential mortality rate range north of 2% – and provided a level of surety against lost family income if it came to that).

The evolution of my thoughts on contemporary markets,  especially Australian residential property, are available in my electronic footprint including on my former blogsite homes4aussies and on the discussion board Bubblepedia, whatever remains of them, and over recent years at MacroEdgo where in May 2020 I described stock markets as uninvestable as they had been overrun by short term speculation, a view I reiterated in brief updates a year later and again in January 2022 where I spoke about other peculiarities such as SPACs – special purpose acquisition companies – and cryptocurrencies.

Another issue worthy of mention is that so-called private markets have expanded, one consequence being a drastic reduction in opportunities for everyday investors to buy early into new and emerging listed businesses whereby wealthy investors are holding these businesses longer to extract greater investment returns when they publicly list (through an initial public offering or SPAC) later at much higher valuations in large part because risk has increasingly been downplayed and underpriced.

It is true that the opportunities to invest in private markets have increased via private equity fund offerings, but this is little more than Visa and Mastercard extending conditions on platinum cards so that the ‘aspirationals’ feel special while these businesses clip the extra fund flows from expanding eligibility. Meanwhile, the truly elite clients have long moved onto other much more exclusive and rewarding product offerings.

This is also reminiscent of the situation with the private schooling market in Australia where many ‘aspirationals’ use up so much of their time and energy,  and most importantly their emotion, earning additional income to pay for middle-class private schools that offer no real benefits above (almost) free public school education, other than self-perceived status benefits.

All of these ultimately are representations of the same pervasive phenomenon – the vacuuming up of financial resources to the truly elite in society, and when it comes to private markets, it is simply an additional channel by which naive funds flow is created which can be clipped providing real and enduring privilege to the elite class.

So I have declared my hand and by now it should be apparent that I am highly sceptical of contemporary asset markets, especially those for US stocks and Australia’s residential property.

Once you consider a market totally gamed and manipulated, then you have to accept that if you allocate capital within it then your activity is not really that of an investor, and depending on what assets you buy, might in fact be outright speculation even if some are considered by many at the time to be the premier assets of the era. It is not dissimilar to gambling in a casino when you know that the odds are against you, but maintaining a delusion that you have special (legal) skills that can tilt the odds in your favour.

This is pure speculation because the most important consideration relates to the degree to which the system will be gamed in the future. Will this extreme form of capitalism, or indeed technofeudalism, persist into the future or will society resist the trend and if so, do ordinary people collectively have the power to turn the system towards one fairer to all?

In the final part of this essay I will give my views on the politics inherent in those considerations, but I do not need to do that prior to discussing the details of my investment strategy because it is just that – an investment strategy – and by definition that rules out speculation.

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Many markets are entirely gamed and overrun with speculation, and thus are massively overpriced, and chief among them in my sphere of observation are American stock markets and Australian residential property. Of course there are always exceptions, and what makes them exceptions is that they do not fit the prevailing narratives and practices of the era. In America that is a corporate structure that actually allocated capital to growing real businesses rather than borrowing to pump up share prices in concert with the narratives that the Wall St salespeople promulgate to create churn, often referred to as ‘rotation’, to create a continual flow of fees from clipping fund flows. The best example of capital allocation agnostic to the whims of Wall St is Berkshire Hathaway, and after the passing of Charlie Munger I have re-instigated a small position with the view to increasing that position with another catalyst sadly inevitable (I suspect that some of their significant organically-acquired cash pool will also be deployed at that time).

The remainder of my strategy should be seen through the lens of overlaying my views of the socioeconomic system of the times as discussed above with the 7 investment themes that I laid out in my earliest writing on MacroEdgo, those being: Emerging Asia ex-China; Product and Food Miles; Defence and Military Spending; Autonomous Vehicles; Debt Monetisation; More Time for Personal Fulfillment; and Education Revolution. Those views are amply stated and remain in tact, so I will not restate them. To this list I now add minerals and resources required for the energy transition, but in countries with high environmental, social and governance (ESG) standards.

As I discussed in 2019, my moral compass (no doubt ‘anti-wokes’ would say my ‘virtue signaling’) prevents me from seeking to profit from factors with which I vehemently disagree, so I will not invest in military spending (in Australia, America, China, or wherever), just as I decided against shorting through put options retirement homes during the COVID-19 pandemic in early February 2020 (to me it was perfectly reasonable to seek to profit from the inevitable massive impacts on entertainment, travel and general economic activity, but I did not wish to profit from the misery of vulnerable elderly people in society – I shorted Crown Casinos, Qantas and Macquarie Bank).

So my strategy is to invest heavily in equities (all with 10 years+ horizons), especially in 1) resources required for the energy transition in regions with high ESG compliance; 2) in Asia, especially developing Asia ex-China, but with more strategic allocations to China and Japan, with close observation of developing geopolitics; 3) slower-paced allocations to Australian and European equities when value relative to economic circumstances allow; and 4) very careful, very slow-paced allocation to US equity, but only when a history of capital allocation for growth rather than share price manipulation is apparent.

These investments are primarily through the lowest cost possible index tracking exchange traded funds (ETFs) with an ESG overlay. However, I do agree with the barbell approach advocated by many in that I have a ‘scattergun’ approach to making small allocations to highly speculative recent IPOs consistent with my long term investment themes in the understanding that many – perhaps most – will go to zero, but that even one that becomes a leader of future industries will have a very significant positive affect on the overall portfolio performance over a 20 year period.

I expect elevated inflation for at least the next decade, as central banks are well past their peaks in independence from prevailing politics of the day and will baulk at imposing the societal pain Volcker did to tame inflation, and will likely see positives to Government debt being monetised by a period of higher inflation. For this reason, and because I see bond markets as not far behind equity markets in the degree to which they are gamed, I am cautious of deploying capital to fixed interest and instead prefer allocation to precious metals to hedge against inflation and also against the potential for increasing civil unrest which is possible if this Reset is not great for humanity in that society becomes less inclusive and the climate crisis worsens with continued political resistance to implementing necessary responses.

This actually marks a change in strategy for me personally and that is primarily based on my views on the developing socioeconomic circumstances.

I was right out of the Jeremy Grantham mold of contrarian investing, alert to bubbles and prepared to wait out highly speculative periods to invest in the bust when better value emerges – even before I began reading Jeremy’s brilliant insights – e.g. I went to cash in 2007 and managed to get fully invested just a few weeks before the US indices bottomed in the GFC.

However, I have come to believe that markets have become so gamed that even the boom-bust cycle has been disrupted, as we have witnessed very rapid busts since the GFC when even Jeremy regretted not managing to get fully invested as markets did not get as cheap as he forecast. Since then the corrections have become shorter and shorter.

My belief that the nature of bubbles and their busts has fundamentally changed is heavily influenced by my observation of the Australian residential property bubble which has lasted two decades. Jeremy has never given an answer to why the Australian residential property bubble has lasted as long as it has. For one, I think he disliked being called out for his predictions of a bust by voracious local commentator, something that has been a feature of this bubble whereby self-interested individuals fiercely protected the bubble by trying to discredit and embarrass, often through challenging them to wagers, those who pointed to the irrationality of residential housing markets where median prices have consistently been 7 to 10 times median incomes in virtually every major city in a nation with so much available land that a historical national anxiety has been the low population density over the landmass. (These men, full of bravado, and lacking in self-awareness, also have a habit of tediously and immaturely labouring on about their ‘exploits’ even years later.) Perhaps, also, Jeremy didn’t like the only answer he could arrive at to explain essentially the only bubble that he has identified which has not returned to historical long-term relationships over a two decade period.

I explained my own views in “[RESET]> The ‘Great’ Australian House Price Bubble” which essentially boil down to it being a totally gamed market where the public and private sectors are hell bent on preventing the bust within a system of Extreme capitalism where society has been convinced that this is either the best situation for them (the ‘aspirationals’) or at least it is an insolvable problem (the ‘vulnerables’).

Importantly I pointed out the complicity of the highest financial bureaucrats, a major distinction from the US housing bubble where they were blissfully ignorant of the potential for and damage from a bursting housing bubble which caused the GFC. The most recent previous Reserve Bank of Australia (RBA) governor, Dr Phil Lowe, actually wrote a research paper when at the Bank for International Settlements, before the GFC, on the desirability of ‘leaning against’ property bubbles to reduce these risks and the RBA governor at the turn of the millennium, Ian Macfarlane, has bragged about using that approach to address a period of rampant speculation in 2003. Moreover, it is likely that it was Dr Lowe who wrote to me from an email account using his nickname of (Rin) Tin Tin to provide me with a paper empirically proving the degree of distortion to our markets caused by tax benefits to property speculators as he was rising through the upper ranks at the RBA and while I was blogging intensely on the housing bubble, suggesting that he had concerns then.

Sadly, however, that technique advocated by Dr Lowe of ‘leaning against’ – or slowing – the inflation of bubbles to prevent socioeconomic damage from a bust has been used, along with other activities by private and public actors, to perpetuate the bubble longer than any bubble spotter could have predicted, so that the socioeconomic damage to society has been far greater in terms of the inequality it has caused. Moreover, I recall that after the GFC many Australians senior within private and public sectors in the financial and real estate industry visited the US, as they were “feted by think tanks and idealized in the corridors of the Federal Reserve“, and it is my firm belief that much of that was to teach the Americans how to create and protect a housing bubble.

All in all, what has been perfected has been a set of practices, in conjunction with captured bureaucracy, that within an economic system driven by narrative-based speculation has managed to quell the busts so that the boom is perpetuated seemingly into perpetuity.

Now, I do not suggest that a bust will never occur. I strongly doubt that momentum ‘investing’ (i.e. trading) based on rotation following narrative creation and recreation can continue to carry assets prices forever beyond any relationship to their real value to human society. Even Australian residential property has a utility value, and even if Extreme capitalists continue to conspire to restrict its supply so that both renting and buying continues to become less and less affordable, at some stage people are going to realise that they can take their savings and emigrate to Italy, for instance, and buy a home for 1/20 the price, maybe with some land, and enjoy a quality of life far superior than in Australia struggling payday to payday to afford a roof over their heads.

In fact, I expect that a consequence of this gaming of markets is that busts when they do occur are truly historic, on the scale of those in 1929 and the 1990 Japanese collapse.

The simple reality is that bubbles, by their very nature in resulting from speculative euphoria tending to mania, are never accepted as bubbles until they bust. There is simply too much money to be made from denial or at least ignorance. Well-noted bubble spotters like Grantham and Yale Professor Robert Shiller have become known as ‘sages’ at spotting bubbles ahead of the bust only by being rapidly proven correct.

I suggest that the situation has changed, in no small part due to vested interests learning from the success of these two luminaries in particular, so that timing of the bust is far less predictable. I hasten to add that both Grantham and Shiller have always stressed that the timing of the bust is never certain, but both have been confident enough to speak up loudly and promote their views in the past. If I am correct and bubbles nowadays will behave more often like the millennium Australian residential property than the US housing or the NASDAQ dot-com bubbles, pronouncements of a bubble’s existence based on simplistic 2 sigma indicators of deviation from normal trends or relationships, while not incorrect in my view, will remain unproven by the bust for long periods which will allow the vested interests to undermine credibility and use the stopped analogue clock being briefly correct twice a day analogy more and more effectively.

Certainly global and regional events, and especially geopolitical events, will continue to cause reactions and even ructions in global markets just as COVID-19 eventually did. However, recent evidence suggests that the underlying market dynamics that I discussed above now act to reduce the duration, if not necessarily the depth of these ructions, so that confidence is rapidly restored to markets. Afterall, the worst outcomes for elites, and thus to be prevented at all costs, “is a dead market where nobody talks about asset prices and that will only be created by the depths of despair that are associated with a prolonged bear market“.

Others have and continue to take the opposite position to mine allocating to these momentum-based speculative markets, and have profited (at least on paper), so much so that the long record of price appreciation has reinforced the perception of the gaming of the system. For example, any deep discussion with an Australian residential property speculator will inevitably arrive at the underlying proposition that no government can afford for the bubble to pop on their watch so that it will be protected at all costs. In other words, in the speculators perception it is impossible for them to lose.

That clearly is not investing on the basis of the likelihood of future profits. That is speculating that the current inequitable system will be protected out of political and/or financial self-interest so that irrespective of profitability – and, in point of fact, because of Australian taxation laws, profitability of residential property ownership is actually discouraged – so that someone will pay more for the asset in the future.

That is not investing; it is certainly not efficient capital allocation; and thus, it is not authentic capitalism.

It seems appropriate, on many levels, to include here a favourite comment by Charlie Munger at the 2023 Daily Journal Corporation annual shareholder meeting when the then 99 year old legendary capital allocator (i.e. investor), and long time Republican supporter, highlighted just how far American politics and the socioeconomic system had shifted to the right in his lifetime. This is how I relayed it on LinkedIn:

In my opinion the best question asked of Charlie – on the basis that it elicited the most useful response from him, amongst a field littered with gold nuggets of valuable insights actionable to those able to decipher them – was sent in to Becky Quick from Peter Furland (?) from Oakville, Ontario after he had asked ChatGPT to devise the question:

“Mr. Munger, you’ve spoken about the importance of avoiding mental biases in decision-making. In your experience what’s the most challenging bias to overcome and how do you personally guard against it?”

Charlie answered, “denial”.

To prove his point on denial he used a common complaint from he and Warren Buffett; the example of fee collection by fund managers and other custodians of wealth.

His point was that 95% of money managers are “living in a state of denial”, “used to charging big fees and so forth for stuff that is not doing their clients any good” and he described it as a “deep moral depravity”

For me, however, the most critical point was made when he summed up by concentrating on how capitalism done properly is not selfish!

He highlights how he was careful not to misuse his various positions for personal gain, not even drawing directorship fees.

He and Buffett are famous for seeking to align their interests totally with those of the other owners of the business.

Furthermore he provided the example of how he provided an incentive share plan to employees of DJCO by providing his OWN stock, crediting the founder and Chairman of BYD [the chinese battery and electric car manufacturer] by saying he inspired him to follow his own generous actions.

Charlie concluded saying “so there is some of this old fashioned capitalist virtue left at Daily Journal, and there is some left at Berkshire Hathaway, and there is some left at BYD, but in most places everybody is just taking what they need without rationalising whether it is deserved or not“

In other words, the antithesis of Extreme capitalism. But it is exceedingly rare…

In recent years Charlie frequently expressed doubt in his ability to outperform the market if he started out as a value investor under these market conditions, and while Warren Buffett disagreed slightly, he only did so on the basis that there are a lot more people doing dumb things now which is how opportunities arise. Both arguments actually support my argument in that I suggest that in this Extreme capitalism there is a well developed strategy that permits stupidity to run a whole lot longer, delaying the consequences of that stupidity being revealed, and that is why value investors have had difficulty in getting fully invested over now very long periods.

To conclude, and inspired by that late great man Charlie Munger, for the same reasons I did not short retirement homes leading into the COVID-19 pandemic, and I will not invest in military, I will not invest in technofeudalism, and I will not invest alongside and support someone who seeks to use their technology-derived privilege to gain a level of influence over humanity that has never before been possible.

And boy will I miss Charlie’s frequent cutting take downs of Elon Musk…

Now I have to admit that, like everything, the changes spawned in America are being exported within their sphere of influence, and also in the increasingly separate Chinese sphere of influence in a cold war (which I spotted earlier than many others, only 20 years into it!) for technological supremacy, so if this trend continues it will increasingly be a feature also in the equity markets in which I am allocating capital towards and technofeudalism will be increasingly difficult to avoid.

Thus I must now discuss what I sincerely hope will happen from here, and to do that I will critique Yannis’ thoughts on his alternative ‘now’ and contrast them with my own views in an extension on my “Reset” writings.

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I commend Yanis for proposing an alternate ‘now’, a different reality had humanity taken different paths in our progress, as I did myself in “Reset“. Moreover, I applaud him for developing a new authentically left idea which I concur is absolutely critical to progress from here because our politics has been dragged so far to the right that many of the most influential contemporary actors who declare themselves on the left of politics, such as the famous banker Jamie Dimon (long time CEO of JP Morgan), in reality express views which may be considered further to the right of even luminary rightwing leaders Margaret Thatcher and Ronald Reagan.

Topically, another who very recently insisted their politics are not rightwing is Bill Ackman after he played a major role in dislodging the first black Harvard President Claudine Gay from that position, after which he wrote 4,000 words which he posted on social media and included a view that diversity, equity and inclusion (DEI) initiatives amount to racism because “reverse racism is racism, even if it is against white people.” (I apologise for not including the primary source but I do not use or promote that particular platform because I am especially concerned about the mental state and motivations of that particular technofeudalist.)

Of course, the lie of reverse racism is swiftly dismissed by anybody capable of a modicum of objective thought. That some implicitly understand the fallacy of reverse racism, while other intelligent individuals with broad life experiences do not, for me is patent evidence of the degree to which systemic racism blinds many in society to their own biased and prejudiced viewpoints, and often that is tied closely with aggression.

It is by no accident that there are just as many wealthy elites who declare allegiance to the left of politics, but I mention the JP Morgan CEO intentionally because I do consider it the main learning of JP Morgan Jr from his experience under President Franklin Delano Roosevelt that it is not good for business elites when their wealth provides influence over only the right of politics. If wealthy elites are to continually influence policy irrespective of which side of politics is in power then there must be many who support and favour either side of the political spectrum, openly with rhetoric, and explicitly through sizeable donations.

I enjoyed reading Yannis’ ideas, and while I advocate their wide dispersal and debate, ultimately I am not anti-capitalist and I don’t accept that capitalism is doomed.

I do, however, absolutely agree that people power is necessary to break the connection between wealth and political power – in fact, it is the key to stable sustainable societies – and I believe that this is possible with much simpler modifications to our socioeconomic systems than Yanis outlines.

Of course donation reforms must be a key focus. All donations by individuals or organisations to any organisation, from political parties to education to non-profit, should be limited to very reasonable levels (perhaps a certain percentage of the median income so that targeted donations are ‘affordable’ to the median income earner).

Note carefully, this does not limit the amount that can be donated to a particular aspect or issue within society. However, there is no justification for favouring one entity or organisation above another within a sector. Whenever a choice is made to favour one institution over another it is done for self-interested reasons such as to promote one self and/or to buy influence.

Those who believe in a functioning democracy and want to contribute to it should do just that rather than weaken it by self-serving donations.

Those who believe deeply in the value of education or research can support education and/or research, generally, but not use their privilege to buy influence and ego-driven rewards from targeting donations to achieve maximum return to them.

Large donations to particular aspects of society – a healthy democratic system through to NGOs – should be encouraged, but cannot be allowed to be directed at the discretion of the donor, but instead should be pooled and allocated to all relevant organisations on the basis of fair and objective criteria.

On such a basis, political donations will certainly take an enormous dive due to the lack of opportunity to extract a return to the donor, and no doubt vested interests such as media organisations will moan at the certain reduction in revenue from political advertising, which will serve to prove the point that such measures are critical to cut the link between wealth and influence.

The other great deficiency in modern democracies is the lack of leadership.

Around two decades ago political leaders in capitalist democracies began acting like the private sector could and would solve all problems and so they stopped leading and instead concentrated on winning the political battle which centred around a continually shortened news cycle – from daily down to instantaneous (as social media grew in prominence).

Surprisingly, former rightwing government Treasurer of Australia and Ambassador to the United States, Joe Hockey, likely to the chagrin of former colleagues, admitted as much in February 2020 in an interview with Leigh Sales on television on the Australian Broadcasting Corporation (ABC).

Of course this leaves plenty of time for politicians to attend lavish galas and cheerlead for billionaires who are inclined to support ultraconservatives (in this case, Trump in the US as well as ultraconservatives groups in Australia) in some sort of mutual lovefest.

Now it is increasingly clear that the rudderless ship creates anxiety within society due to its inherent directionless/meaninglessness – the gap filled by people who provide certainty and strength of viewpoint but absent logic – and societies are paying a very high price for that lack of authentic leadership over several decades.

At the same time it is entirely unsurprising that politicians numbers and remuneration have not declined commensurate with their self-perceived diminution of role in leading society.

In fact these politicians still argue for greater benefits to attract and reward their individual ‘talents’, but it is not clear to me on what basis many of these individuals are talented. For example, if we look at the Australian treasurers over my lifetime – from the 70’s – I would suggest that the best by far was Paul Keating in the 80’s (others rode the coattails of his reforms and were more fortuitous with their timing than skillful). Keating is the only one among them to have not been university educated, in fact he left school at 14 and was a pay clerk for a utility company prior to entering politics.

It simply is untenable that we continue to accept ‘followship‘ from those we elect and pay to provide leadership to society. It is time that society imposes real key performance criteria on these individuals, beyond the ballot box, which are linked over the short, medium and long term to performance and outcomes, thereby aligning their self-interest fully with that of the society that elects them to privileged positions of influence.

To do this politicians generous benefits and privileges acquired both during and post their political careers should be closely linked to the outcomes experienced by broader society and those especially related to the affairs over which they had greatest influence. For example, all of those politicians who had influence over housing policy would be assessed on criteria relevant to outcomes in housing over the medium and long term, as well as to other areas of responsibility, and to a broad measure of societal welfare which would extend to all members of parliament.

Since this would necessarily encompass income and privileges received in their post-political careers – which in itself is more often than not directly linked to the privilege and influence that was enjoyed during their political careers – all income above that which sitting members of parliament receive would be paid directly into their ‘superannuation account’ where the balance would be adjusted on the basis of assessment of societal outcomes against those KPIs.

I am certain that such a plan would result in a great deal of complaining by current parliamentarians. I simply say that we will quickly learn who truly thinks they have talent and something to offer society as those who are there mainly out of self-interest will recognise that only those who achieve outcomes for broader society will be well rewarded, and even that will be assessed over the long term.

Let me be clear, in conclusion, that I really do mean well rewarded for achieving KPIs. For example, one of the most intractable problems in Australian society is disadvantage of our First Nations peoples which results in wide gaps in life expectancy and other life outcomes relative to non-First Nations people. Who really could argue that a group of people who came together and made a real contribution towards closing that gap do not deserve to be well rewarded financially for that? Certainly not me.

The reality, however, is that those who will achieve real progress will be driven by much more than financial rewards. But the simple fact is that having long-term rewards linked to long-term outcomes will decrease the likelihood of individuals driven by self-interest occupying positions which would be better held by individuals not driven primarily by self-interest, thereby creating conditions conducive for achieving inclusive progress.

We need to free our members of parliament from any whiff of impropriety, of any potential links between views they express and positions held by major donors to their electoral campaigns which leave them open to insinuation that they would support actions causing human suffering over doing right by those who elected them, or for broader humanity including groups on the other side of the world, such as the linking of higher levels of political donations to those who have supported actions which have led to over 23,000 innocent victims in Gaza, which some are labelling genocide and arguing as such in the United Nations International Court of Justice.

The only real way to protect parliamentarians from such poor perceptions of acting with callous disregard for human rights and societal wellbeing is to definitively and explicitly cut the link between wealth and influence over their actions.

If the ideas laid out above were our ‘now’, there would be no opportunity to suggest a level of self-interest by parliamentarians in supporting actions which hurt so many innocent and vulnerable human beings. Moreover, the longer these links remain eminently plausible without these reforms, the more trust in elected officials and bureaucracy will continue to erode thereby undermining social cohesion and, ultimately, the health of our democracies.

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I cannot leave this discussion without picking up on one major point that Yanis misses – besides his decision to sidestep providing views on the personalities of high-profile technofeudalists and on whether the irregular market behaviours of 18 September 2022 perhaps were a part of an agenda to out a newly installed Prime Minister and at the same time elevate an elite of their own (a former investment banker) to the most powerful position in the UK – and this one is absolutely critical in this contemporary world.

In “Technofeudalism: What killed capitalism” Yanis essentially infers that capitalism, prior to being killed itself by technofeudalism, largely killed off the authentic left via the continual weakening of collective actions by workers. While that is correct, it lets the left off much too easily in terms of the major issues it chose to leave unaddressed.

Chief amongst those issues the left refused to address is racism, prejudice and bias.

Today this inability of the left to lead towards diverse, equitable and inclusive workforces in a globalised world is it’s major historical shortcoming, and this deficiency has left humanity weak and vulnerable to opportunism from the extreme right which is further eroding the left’s blue collar base. So in Chapter 7 ‘Escape From Technofeudalism’, where Yannis says “bigotry is technofeudalism’s emotional compensation for the frustration and anxiety we feel in relation to identity and focus“, he sidesteps the truth that the left put leading on diversity in the too hard and too risky basket and thereby sowed the seeds of their own demise. Earlier in Chapter 5 Yanis does express regret that “solidarity between the workers of the North and the South remains an entirely unfulfilled dream“, but he fails to identify the real cause – the workers of the North had no interest in global equality if it meant any reduction in their privilege.

The unavoidable sad reality for humanity is that xenophobic populism has been a force too tantalising in rapidly globalising societies for almost all political actors to resist and all too often it has been harnessed by the left to achieve political ends, also, from labour relations to trade to environmental issues (even in “big empty Australia“, in Sir David Attenborough’s words)… and even with regard to, you guessed it, Australian residential property.

The left needs to learn this lesson for once and for all and provide authentic leadership within this continual race and inclusion vacuum, and never sidestep or slide back from leading on it.

Yannis is entirely correct that the left has been an utter disappointment over the past half century. As strange as it seems to me, the political centre of most democracies has been pulled so significantly right of the 1960s/70’s centre that it has unleashed even more radical actors amongst the far right whose rhetoric suggests that the opposite has occurred, that our democracies have moved dramatically to the left. These actors have then used this political momentum to create coalitions of ultraconservative interests to attack ‘lefty woke agendas’ in a fear-riddled campaign with an underlying message that white masculinity is in a battle not just for relevance but for survival. Their campaign is so broad and clever to appeal superficially to large groups brought into this ‘anti-woke’ movement, for example black men concerned about a perceived challenge to patriarchy, without noticing that they, themselves, are hurt by the attacks on DEI measures to address inequality which is another aspect of the anti-woke agenda.

My prediction from the moment that I realised that we were in a Great Reset has proven accurate to a greater degree than I could foresee at the time, that the battle for hearts and minds would be incredibly intense. I have written optimistically that the goodness at the core of the human experience would triumph over hate and division, and my concept of how Resets occur in society being like the change in swing of a pendulum allows for a period where all seems uncertain as the direction appears undetermined.

I am concerned, however, that those of us on the left who love and believe in inclusive and open-hearted humanity perhaps have too much optimism in it so that we almost believe it is inevitable that it will endure and overcome. While I have a deep belief that goodness always prevails, we also need to recognise that humanity has shown on innumerable occasions that it is capable of inflicting untold sorrow upon itself before enduring progress is achieved.

The far right is well organised and has an enormous head start in the tussle for hearts and minds, and if it weren’t for the goodness at the core of the human existence, we would be in so much worse a position.

But it is time that we stop taking for granted the triumph of good over bad, love over hate, and unity over division.

It is time that the left coalesces and develops a grand coalition that will dwarf the true ultraconservatives – which is really only limited to the minority of human beings belonging to the straight white male demographic group who choose to remain closed off to connection with themselves let alone broader humanity and the natural world – and lead humanity towards that more inclusive and compassionate future that offers the only real chance at achieving stable and sustainable lives for ourselves, those we love, and those many beautiful human beings yet to enter the world we leave for them.

Each day many more understand the interconnectedness of all of these issues and, while it is critical that responsible traditional media shares these critical insights, the net actions of every individual living human being will determine just how Great this Reset is for humanity!

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© Copyright Brett Edgerton 2024