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From Fancyclopedia 2, ca. 1959
One of the cutenesses of modern decadence is unuse of capital letters. This is strengthened by the fact that distinction between caps and lower-case is unnecessary. Sometimes it stems from a pun on distaste for capitalism by Bohemians, but considerable vers libre, as well as beardmuttering and other art forms, habitually appears in solid lower-case. A practice of damon knight's is to spell his own name without caps, and in the mock wars -- First Staple War and FooFooism vs Ghughuism -- omission of capitals in referring to the enemy was practiced by some of the combatants.
From Fancyclopedia 2 Supplement, ca. 1960
Another use for this custom is as an implied apology for using stock phrases or, conversely, to pretend that a phrase is stock; e.g., Real Artistic Writer. Speer dislikes this custom, because he always feels impelled to stop and see if the initials spell something.