Investing in the Classics

Nietzsche’s On the Genealogy of Morality: On the Ascetic Ideal – Part II

Please note that for the purposes of this analysis, I use the Maudemarie Clark and Alan J. Swensen translation of Nietzsche’s On the Genealogy of Morality. I use the notation (X:N) to cite passages, where X refers to the essay number and N refers to the chapter. Please refer to previous analysis which I build upon.


In the Third Treatise of On the Genealogy of Morality (German: Zur Genealogie der Moral) Nietzsche turns his attention toward the ultimate end of his self-ascribed polemic, that of the value of our current morality itself. Nietzsche posits that today’s morality is one of the asceticism; which can be loosely described as a lifestyle characterized by abstinence from worldly pleasures, often for the purpose of pursuing spiritual goals as it is employed in the Judeo-Christian and Buddhist religions. With the exception of the philosopher, undoubtedly a small minority, Nietzsche derides the ascetic ideal as the most deleterious and pervasive force in world history. He asserts that it is responsible for the degeneration of mankind into a lame, tame, weak, and sick species. Nietzsche lambasts the ascetic priest as the deviant facilitator of the negation of life. In keeping with the spirit of this polemical work, I assail the economists and academics as today’s Nietzschean-equivalent ascetic priests; with their unintelligible models and infrangible faith in the intelligibility of human behavior, they have tried to manipulate reality to bend to the iron-laws of their speculative soft-science, namely that of monetary policy.  


The ascetic priest is one who negates life, according to Nietzsche. What he means is that the ascetic priest devalues life, the here-and-now, by elevating the afterlife as external and incalculably more important, life is treated as if it is an error that must be corrected. As Nietzsche states, “in the case of an ascetic life, life is held to be a bridge for that other existence. The ascetic treats life as a wrong path that one must finally retrace back to the point where it begins” (III:11).  The academic economist is not that much different, though they have a different victim in mind. The academic economist detests volatility. He sees it as his nemesis, but this is also his greatest misunderstanding and his most perilous error. ‘Everything is in flux,’ the academic economists correctly observes, ‘therefore I must create stability,’ he incorrectly muses.  The academic economist believes volatility equates with risk, but it is not identical. Hence, the academic economist’s syllogism is immediately rendered an error.


The ascetic priest commits a similar error when they equated suffering with sin. The rest is history, it is said, for both the ascetic priest and the academic economist. Their ideologies has been as alluring for the speculative mob as they have been false; the seductive idea of stable, steady, visible growth with de minimis volatility and no business cycle. As Nietzsche muses:

“Such a monstrous manner of valuation is not inscribed into the history of humankind as an exception and curiosity: it is one of the broadest and longest facts there is. Read from a distant star the majuscule script of our earthly existence would perhaps tempt one to conclude that the earth ” is the true ascetic star, a nook of discontented, arrogant, and repulsive creatures who could not get rid of a deep displeasure with themselves, with the earth, with all life and who caused themselves as much pain as possible out of pleasure in causing pain: – probably their only pleasure” (III:11).

According to Nietzsche, the ascetic ideal impressed its message that life is an error, that pain and suffering were the obverse of sin, something that was necessary for redemption. Viewed from the outside, one would think that a species that subscribed to such a system of values would be taken as a masochistic civilization. Similarly, an outside observer of the history of the financial markets would likely concluded much of the same; an endless repetition of saturnalia followed by annus horribilis. The academic economist, seeking to break this waltz, only repeats it; they extend the measure and change the scale, but only to heighten the peak and deepen the trough. In other words, through extraordinary monetary policy they are themselves the greatest source of pent-up volatility.


One of the fundamental tenets underpinning the psychology of the ascetic priest is hubris. Hubris is not just confined to the ascetic priest, in our case the academics and economists, but is also pervasive amongst layman speculators, Wall Street analyst, pundits, value pretenders, and celebrity-activists. With their ‘assumptions’ these sects effectively believe they can divine the future; they do not realize the sheer arrogance and folly involved in the trading of securities – for they are truly all traders in the genuine sense of the term! On hubris, Nietzsche writes:

“Hubris is our entire stance toward nature today, our violation of nature with the help of machine and the so thoughtless inventiveness of technicians and engineers; hubris is our stance toward God, that is to say toward some alleged spider of purpose and morality behind the great snare-web of causality… hubris is our stance toward ourselves… today the ones who make us sick appear to us more necessary than any medicine men and ‘saviors.’” (III:9).

Man’s hubris deceives him into believing that he is more than he is in reality and that he can unlock the unintelligibly of life, nature, and existence, according to Nietzsche. Such over-extension of reason violates reason itself, or as Nietzsche coins it, “a much higher kind of triumph, a violence and cruelty to reason” (III:12). The ascetic priests, in their proclamations of the afterlife and man’s position in the universe are for Nietzsche, the epitome of such hubris, and through such deceit these ‘saviors’ only made man sicker. For investors today, one has to look no farther than the academic economist who from their ivory towers believe in the strong efficiency of the market, who would rather devolve into ten-, even twenty-factor models before admitting the futility and arrogance of their presumptions.


The hubris of the ascetic priest stems largely from their overestimation of truth. As Nietzsche states, “[t]hese two, science and the ascetic ideal, they do, after all, stand on one and the same ground… namely on the same overestimation of truth (more correctly: on the same belief in the inassessibility, the uncriticizability of truth)” (III:25).  The ascetic priests not only believe that there is a single, unchanging truth, but that they also have access to it and comprehend it. For Nietzsche, this is among the greatest errors one can commit. Nietzsche blatantly rejects the notion that humans are capable of “disinterested contemplation”, or objective knowledge or pure reason, calling it “a non-concept and absurdity” (III:12). To inquire is to will, which means to be prejudiced at the most fundamental subconscious levels. In a famous passage, Nietzsche concludes:

“There is only a perspectival seeing, only a perspectival ‘knowing’; the more affects we allow to speak about a matter, the more eyes, different eyes, we know how to bring to bear on one and the same matter, that much more complete will our ‘concept’ of this matter, our ‘objectivity’ be. But to eliminate the will altogether, to disconnect the affects one and all, supposing that we were capable of this: what? would that not to be to castrate the intellect?” (III:12).

For philosophers and investors, it is an invaluable lesson to remember. There is no pure and objective knowledge, if it exists, we are incapable of accessing it. Every inquiry is an act of the will, hence there are vested interests in the pursuit of knowledge at the conscious and unconscious levels. It is imperative that investor attain a degree of self-awareness of these prejudices. Moreover, the investor must remain humble enough to recognize all other opinions and incorporate them into his analysis, whether it is management, mid- and low-level employees, competitors, analysts, suppliers, or customers. No one opinion is correct, but by understanding the matter at hand from as full of a three-sixty degree view, the investor will have the most complete mosaic from which to form his or her opinion.


The ascetic priest is unlike the philosopher just as the academic economist is unlike the investor. The ascetic priest, and the academic economist by extension, “will seek error precisely where the true life instinct most unconditionally posits truth” (III:12). For the ascetic priest, they deny their own reality; they deny the body, physicality and the senses deeming to be an illusion and ephemeral. As Nietzsche states:

“This is all paradoxical in the highest degree: we stand here before a conflict that wants itself to be conflicted, that enjoys itself in this suffering and even becomes ever more self-assured and triumphant to the extent that its own presupposition, psychological viability, decreases” (III:11).

The ascetic priest commits “violence and cruelty to reason” and “turn[s] reason against reason” (III:12) when he becomes more confident in his claim to truth when he turns farther and farther from reality. The academic economist is no different in this regard. Theoretical mathematics, not reality and the lessons of history, is their guide. The farther they remove themselves from the reality, from empirical evidence, the more they retreat to their ivory towers, the more confident they grow that they can manipulate and control reality.


Contrary to the hubris of the ascetic priest, the philosopher has “no right to be single in anything: we nay neither err singly not hit upon the truth singly” (P:2). The philosopher, and the investor by extension, believes in Nietzsche’s progressive perspectivism. Nevertheless, the ascetic priests are most deleterious because their claim to truth is incompatible with perspectival, ‘objective’ knowledge. As Nietzsche asserts:

“Only now that we have gotten the ascetic priest in sight do we seriously begin to tackle our problem: what does the ascetic ideal mean? – only now does it become ‘serious’… The ascetic priest has not only his faith in that ideal but also his will, his power, his interest. His right to existence stands and falls with that ideal: no wonder we run into a terrible opponent here” (III:11).


“The ascetic ideal has a goal – it is general enough that all other interests of human experience appear small-minded and narrow measured against it; it relentlessly interprets ages, peoples, human beings according to this one goal, it rejects, negates, affirms, confirms solely in accordance with its interpretation… it submits to no power, rather it believes in its privilege over every other power, in its unconditional distance of rank with respect every power” (III:23).

The ascetic priest rises and falls with the ascetic ideal as the ascetic priest is not a proponent of objective knowledge, as they claim to be, but narrowly pursues its knowledge. Individuals engaged in the enterprise of acquiring objective knowledge (to the extent that is possible) have been colloquially referred to as philosophers since the time of the Ancient Greeks. Were the ascetic priests to concede their claim to truth, the ascetic priests would find their current establishments undermined and their power-hold loosened. Similarly, the utility of the academic economists is a direct relationship to the numbers and magnitudes of the problems they claim to be able to solve; inflation, unemployment, GDP growth, social welfare, et cetera. Were they to admit that they can only reasonable reign in unduly inflation, they would surely find their extraordinary powers and numbers decreased. These individuals claim to understand the psychology of the markets, but in reality they merely hide their own motives…


The obverse of the ascetic priests is their sheep, which we knowers refer to as the herd and the mob. The ascetic priests are to the physiologically weak as a shepherd is to sheep, Nietzsche muses. These sheep are too weak-minded to think for themselves; unlike the philosopher they find comfort only in consensus. On the relationship of the ascetic priest to the psychologically defunct contemporary man, Nietzsche writes:

“the ascetic ideal springs from the protective and healing instincts of a degenerating life that seeks with every means to hold its ground and is fighting for its existence… The ascetic priest is the incarnate wish for a different existence somewhere else, and in fact the highest degree of this wish, its true fervor and passion: but the very power of this wishing is the shackle that binds him here; in this very process he becomes a tool that must work at creating more favorable conditions for being-here and being-human – with this power he ties to existence the entire herd of the deformed, out of sorts, short-changed, failed, those of every kind who suffer from themselves, by instinctively going before them as shepherd” (III:13).

The ascetic priest is an alluring figure for the layman individual. The easy claim to truth seemingly alleviates the layman from the burden of thinking and discovering for himself. “For man is sicker, more unsure, more changing, more undetermined than any other animal, of this there is no doubt – he is the sick animal” (III:13), Nietzsche describes. This is the ascetic priests’ opportunity and claim to power. Similarly in financial markets today, any thought, let alone independent thought, gives the layman speculator a migraine. Thus, they look to the academic economists for their Fed minutes for guidance, knowing full well that their report card of market manipulation is a myriad of failure. Nevertheless, looking to one another, sheep-to-sheep, they pray that if they all chew the same chud that it will be different this time.


Herd formation is a natural reaction among the psychologically weak according to Nietzsche. This breed of man, equally endowed by nature with an able intellect, prefers not to use it. Thinking is too laborious, independent action even more dangerous. Moreover, this herd animal is of the slave morality the First Treatise, as Nietzsche states, “[t]hey are all human beings of ressentiment, these physiologically failed and worm-eaten ones, a whole trembling earth of subterranean revenge, inexhaustible, insatiable in outbursts against the happy” (III:14). Their ressentiment stems from their disgust with themselves. Hence, herd formation. As Nietzsche explains, “herd-formation is an essential step and victory in the battle with depression. With the growth of the community a new interest also grows strong in the individual, one that often enough lifts him above and beyond that which is most personal in his ill-humor, his aversion to himself” (III:18). This is a natural phenomenon, according to Nietzsche:

“Out of a longing to shake off the dull listlessness and the feeling of weakness, all the sick, the diseased strive instinctively for a herd organization: the ascetic priest intuits this instinct and fosters it; wherever there are herds it is the instinct of weakness that willed the herds and the shrewdness of priests that organized them. For do not overlook this: the strong strive just as naturally and necessarily away from each other as the weak strive toward each other” (III:18).

To be strong is to be independent, to have a will of one’s own. Thus it is necessary that the strong repel one another if they are to genuinely strong individuals. The weak, however, necessarily strive toward each other if they are to be genuinely weak individuals. The ascetic priest is curious middle character, strong enough to lead the herd, but too weak to ignore the aegis of the mob. In this way, the ascetic priest equivalent is much like the celebrity-activist.


There is a fly in the ascetic priests’ ointment, and the sheep know it. It is obvious, Nietzsche begins, that the ascetic priest cannot cure the sick because the ascetic priests are “physicians and nurses who are themselves sick” (III:15). The ascetic priest “combats only suffering itself, the listlessness of the one suffering, not its cause, not the actual state of sickness” (III:17). As Nietzsche elaborates:

“He brings along ointments and balm, no doubt; but he first needs to wound in order to be a physician; as he then stills the pain that the wound causes, he poisons the wound at the same time – for in this above all he is an expert, this magician and tamer of beasts of prey, in whose vicinity everything healthy necessarily becomes sick and everything sick, tame” (III:15).

There is a fly in the ointment that is of no doubt. In his medicine, the ascetic priest convinces the layman that it is his sin that is the cause of his suffering. Thus the ascetic priest poisons and weakens his herd in order to nurse it back to a perverse state of lameness, tameness, and weakness. However, “[t]he alleviation of suffering, ‘comforting’ of every kind – this turns out to be his very genius” (III:17). It creates the herd’s dependence on the ascetic priest.


For investors today, the layman speculators are too cowardly and arrogant to accept any comeuppance. They expect, no… they demand the speculative, inflationary appreciation of irrational exuberance but recoil in horror and pout with the utmost impetuousness at the thought of the obverse; the necessary and subsequent deflation back to levels justified by fundamentals. Though they know deep down that such deflation is necessary, they seek out those who will make them sicker for our society has an addition. And who provides this heroin? None other than the academic economists of the Federal Reserve with their easy credit, followed by Wall Street, private equity, celebrity activists and the pundits with their promises of easy returns. Down at the subterranean levels of consciousness, the layman speculators suspect how flawed and pernicious these despotic influences are, yet they are too weak-minded to escape the lure of easy credit and promises of easy returns. Once they are hooked, it is impossible to them to stop until the system involuntarily collapses upon itself.


The herd finds relief in the monotonic repetition of mechanical activity. It relieves the sheep of having to think for themselves whilst allowing the ascetic priest, especially the academic economists, more and more ability to manipulate reality through their herd. Nietzsche writes:

“training against conditions of depression, one that is in any case easier: mechanical activity. That this relieves a suffering existence to a not inconsiderable degree is beyond all doubt: today this fact is called, somewhat dishonestly, ‘the blessing of work.’ The relief consists in this: that the interest of the sufferer is thoroughly diverted from the suffering – that it is continually doing and yet again only doing that enters into consciousness and, consequently, that little room remains in it for suffering: for it is narrow, this chamber of human consciousness! Mechanical activity and that which belongs to it – like absolute regularity, punctual unreflected obedience” (III:18).

Through mechanical activity, the ascetic priest in ensured unwavering obedience. Similarly, for the academic economists of the Federal Reserve, they distort the fundamentally-justified real rate of interest to achieve the equilibrium of their algorithms. However, they demand that their sheep listen closely to their Fed minutes for guidance as to when they will raise and lower rates. They expect obedience so that the herd will not push up interest rates to reflect reality.


An irony of the ascetic ideal is that it is intent on producing a kind of stoic effect on the herd in preparation for the otherworldly, but in actuality it is a fervor of emotional excess. By turning reason against itself, the mind resorts to emotional euphoria to justify its beliefs. As Nietzsche writes:

“The ascetic ideal serving an intent to produce emotional excess… to free the human soul from all its moorings for once, to immerse it in terrors, frosts, blazes, and ecstasies… anger, fear, lust, revenge, hope, triumph, despair, cruelty; and indeed the ascetic priest has unhesitatingly taken into his service the whole pack of wild dogs in man and unleashed first this one, then that one… Every such emotional excess exacts payment afterwards, that does without saying – it makes the sick sicker” (III:20).

The ascetic priest makes mankind more docile, according to Nietzsche. Emotional excess becomes a cannon with no safety valve for the ascetic priest, one that can hoist them with their own petard. All-too-eerily, investors today have seen the pernicious effects of the academic economists and their quantitative easing. It has led to a plethora of global irrational exuberance. Bubbles build on a wish; hope that the academic economists can deliver their promise to control the corrective forces of the market. Each period of euphoria, each rung that markets move away from reality, the more lethal the pent up countervailing forces becomes.


Nietzsche was a true contrarian when he asserted that the contemporary value system of Western Europe that pervaded over most of the last two centuries was a great error in the history of mankind. Most of his contemporaries believed that the ascetic ideal improved man. To this, Nietzsche’s rejoinder: “If by this one intends to express that such a system of treatment has improved man, then I will not contradict: I will only add what ‘improve’ means for me – the same as ‘tamed,’ ‘weakened,’ ‘discouraged,’ ‘sophisticated, ‘pampered,’ ‘emasculated’” (III:21). With the rare exception of the philosopher, the ascetic ideal has resulted in the degeneration of mankind, Nietzsche concludes. The genuine philosopher is the exception for they are strong individuals who were able to use what parts of asceticism were useful for their ends, namely that of the acquisition of ‘objective’ knowledge and pursuit of ‘truth.’ Indeed, the asceticism of the philosopher seems closer to a kind of stoicism than the proclamations of the ascetic priests. But for the rest of humanity, Nietzsche surmises:

“To put it bluntly, the ascetic ideal and its sublime-moral cult, this most ingenious, most unsuspected and most dangerous systematizing of all the instruments of emotional excess under the aegis of holy intentions, has inscribed itself in a terrible and unforgettable way into the entire history of man… without any exaggeration one may call it the true doom in the history of European health” (III:21).

Is this not an all-too-similar account of our academic economists today? Human, all-too-human.

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