My latest Epsilon Theory note is live. A quick teaser:
If ever you find yourself struggling to keep the difference between Narrative and narrative straight, think of John Carpenter’s 1988 sci-fi action flick, They Live. No doubt it’s a goofy movie. The basic premise will be familiar to anyone who’s seen movies like Dark City or The Matrix. Reality, as we perceive it, is an illusion. But, if you obtain the gift of special sight, you may see the world as it is. In the case of They Live, you put on a pair of special sunglasses only to discover the world is, in fact, controlled by hideous aliens, which use mass media to shape our behavior with subliminal messaging. […]
It’s a wonderful visualization of how symbolic abstraction operates in our world. And who knows, maybe Jerome Powell and Janet Yellen really ARE hideous aliens.
But this isn’t a note about your Friendly Neighborhood Central Bankers, or even how symbolic abstraction can be weaponized to sell you a new refrigerator. This is a note about how symbolic abstraction is used to shape your investment behavior. Both your behavior and your clients’ behavior.
I’m quite pleased with the way this note turned out. Even more so because this is an instance where a little editorial input went a long way toward improving the final product. Some ideas more or less show up on the page fully formed. Others require a bit of workshopping. Still others end up being workshopped, killed and then harvested for their vital organs. I’m glad this one not only survived, but flourished!
I had never heard the name NYARLATHOTEP before, but seemed to understand the allusion. Nyarlathotep was a kind of itinerant showman or lecturer who held forth in public halls and aroused widespread fear and discussion with his exhibitions. These exhibitions consisted of two parts—first, a horrible—possibly prophetic—cinema reel; and later some extraordinary experiments with scientific and electrical apparatus. As I received the letter, I seemed to recall that Nyarlathotep was already in Providence…. I seemed to remember that persons had whispered to me in awe of his horrors, and warned me not to go near him. But Loveman’s dream letter decided me…. As I left the house I saw throngs of men plodding through the night, all whispering affrightedly and bound in one direction. I fell in with them, afraid yet eager to see and hear the great, the obscure, the unutterable Nyarlathotep.
–H.P. Lovecraft
Nyarlathotep (try saying that 10 times fast!) was inspired by a dream. Lovecraft dreamed his friend Samuel Loveman wrote a letter encouraging him to see the “itinerant showman”:
Don’t fail to see Nyarlathotep if he comes to Providence. He is horrible—horrible beyond anything you can imagine—but wonderful. He haunts one for hours afterwards. I am still shuddering at what he showed.
Nyarlathotep is a perversion of the Wizard! archetype: a twisted incarnation of the mad scientist futurist.
In the Cthulhu Mythos, Nyarlathotep serves the Great Old Ones. He’s a kind of messenger. The guys over at Epsilon Theory would call him a Missionary. In fact, Nyarlathotep is the archetypical Evil Missionary. He most definitely does not respect our autonomy of mind. The notion of pathetic, insignificant humans exercising autonomy of mind and spirit would be utterly incomprehensible to him. To Nyarlathotep, we’re no more worthy of autonomy of thought and feeling than cockroaches. Typically, whenever one of Lovecraft’s unfortunate protagonists encounters him, the result is either insanity or death.
Nyarlathotep’s nature is never entirely clarified in Lovecraft’s fiction. Some commentators think of him as a lesser god, subordinate to the Great Old Ones. My preferred interpretation is that Nyarlathotep isn’t a discrete being with his own conscious will, but rather the manifestation of the Elder Gods’ power and influence in our world. He’s a vessel for the Old Magic. For Dark Magic. He channels the Elder Gods’ power for their cults here on Earth.
But Nyarlathotep isn’t simply a purveyor of cosmic horror. No, he’s also a purveyor of science. Scientism, to be precise. Nyarlathotep’s special blend of scientism is occult magic, gussied up in the trappings of science and technology, with some religiosity thrown in for good measure. It’s occult scientism.
So what the hell does any of this have to do with economics, geopolitics, or investing?
Well, once you start looking for Nyarlathotep, and his particular brand of occult scientism, you’ll see him everywhere. I made a snarky nerd joke about Nyarlathotep at Davos on Twitter the other day, and received a rather evocative reply:
Indeed. And we see his handiwork everywhere.
It’s the Gaussian Copula.
It’s eugenics and racial pseudioscience.
It’s Soviet collectivized agriculture.
It’s esoteric securitizations of risky assets and byzantine structured products.
It animates the Chinese social credit system; the Intellectually Superior Davos Man; the Cult of MMT-Enabled Economic Management; the Cult of Supply-Side Economics; the Divine Order of the Ever-Wise and Benevolent Central Banker; the erstwhile Caliphate of the Islamic State; the Malthusian Society of Self-Loathing Climate Warriors.
Occult scientism is powerful stuff. It combines the memetic power of symbolic abstraction with a veneer of scientific (“rational”) credibility, then underscores it all with religious fervor. Occult scientism topples governments. It launches revolutions, wars and genocides. It shapes our perception of our world and ourselves in a way that scientism and religion, taken in isolation, cannot. When we encounter it, we’re transfixed.
He is horrible—horrible beyond anything you can imagine—but wonderful. He haunts one for hours afterwards. I am still shuddering at what he showed.
Wherever our most powerful missionaries congregate, look carefully for Nyarlathotep and his miracles. He may not be preaching front-and-center, but he’s almost certainly there, lurking in the shadows, whispering in the dark.
