Tag: Of Two Minds

Of Two Minds: What’s Behind the Global Erosion of Civil Liberties, Privacy and Property Rights?Of Two Minds:

Charles Hugh Smith at Of Two Minds blog writes What’s Behind the Global Erosion of Civil Liberties, Privacy and Property Rights?

Hierarchical power structures like city-states arose as problem-solving solutions, not just for the elites who benefited from the concentration of wealth and power but for the citizenry. This dynamic underpins the analysis presented in my recent book Global Crisis, National Renewal: when nation-states and global hierarchies no longer solve the key problems of their populaces, they dissolve and are replaced by some new arrangement.

It’s easy to see how hierarchies benefit the leaders / elites at the top, but there’s always a trade-off to the populace ceding power/control to elites: we will cede control over our lives in exchange for benefits we cannot gain by ourselves, starting with security from invasion and starvation, i.e. the existential threats posed by Nature and other human organizations.

Over time, as energy surpluses and knowledge increased, city-states aggregated into nation-states and empires. These larger organizations were able to solve problems on a larger scale than city-states.

When these entities could no longer solve existential problems (surpluses diminished, elites failed to provide successful leadership, etc.), they eroded and then collapsed, and were replaced with some other more successful organizational arrangement.

Over time, the citizenry of some regions began expanding the benefits nation-states and their elites were expected to provide in exchange for power: the state was expected to secure the rights to individuals’ property and various civil liberties relating to the free exchange of ideas and knowledge, freedom of worship, and having a say in national decisions.

Globally, these basic human rights are being eroded by state-elite over-reach and consolidation of power beyond what the citizenry agreed upon. For example, the citizenry ceded power to the state to protect individuals’ privacy from the surveillance and information-gathering of both the state and private interests.

As Richard Bonugli and I discuss in our podcast on Eroding Civil Liberties and Property Rights, these privacy statutes are still on the books but they are routinely disregarded by both state agencies and private-sector interests with little functional enforcement by state agencies tasked with protecting the citizens’ rights to privacy.

Big Tech routinely harvests private data for profit with little oversight, state agencies collect private data beyond their mandated scope and mobile phones gather private information which others manage to collect or access.

Property rights are also being eroded.Civil forfeiture enables local and national governments to expropriate individuals’ private property without due process, in effect declaring them guilty and effecting punishment (taking their money/property) and then forcing them to prove their innocence via a lengthy, costly, Kafkaesque process.

War by other means now includes sanctions and expropriation of individuals’ assets, not just the assets of other states or state entities (central banks, state-owned corporations, etc.)

What is driving this global erosion of the most basic civil liberties and property rights? As I describe in my book Resistance, Revolution, Liberation, all states share the same ontology, which is to respond to any threats or challenges by increasing their reach and control.

In other words, all states share the same teleological Prime Directive: always expand the state’s control and power. No state has the institutional memory or means to reduce the state’s reach, control or power.

The only limit on state expansion is the citizenry’s resistance to the loss of civil liberties, property rights and having a say in decisions which affect the entire citizenry. If the citizenry do nothing to protect their rights as individuals and communities, the state will nibble away at these until they exist only in name, not in the real world.

The first essential step is to recognize the erosion as real and consequential. Richard and I do our best to further this in our podcast Charles Hugh Smith on Eroding Civil Liberties and Property Rights (31:35 min).

The second essential step is to recognize how the spectacles of “news” and entertainment distract our attention from this erosion of basic rights. Before we know it, we’re in prisons without bars and grateful to get a questionnaire about how we like the torture (i.e. the “entertainment”)…(continues with pictures and more links)

Of Two Minds: The Fourth Turn, Turn, Turn

Charles Hugh Smith discusses the fourth turning.

The cycles of The Fourth Turning, Fischer and Turchin are all in alignment at this point in history..

The 1997 book The Fourth Turning: An American Prophecy proposed a cyclical pattern of four 20-year generations which culminate in a national crisis every 80 years. The book identifies these dates as Fourth Turnings: 1781 (Revolutionary War), 1861 (Civil War) and 1941 (global war). add 80 years and voila, 2021.

I use the term Fourth Turning generically to describe an existential crisis that decisively changes the course of national identity and history.

In other words, we don’t have to accept the book’s theory of generational dynamics to accept an 80-year cycle. There are other causal dynamics in play that also tend to cycle: the credit (Kondratieff) cycle, for example.

While each of the previous existential crises were resolved positively, positive outcomes are not guaranteed: dissolution and collapse are also potential outcomes.

David Hackett Fischer’s book The Great Wave: Price Revolutions and the Rhythm of History proposes another cycle: humans expand their numbers and consumption until they’ve exploited and depleted all available resources.

As resources become scarce, societies and economies unravel as humans do not respond well to rising prices generated by scarcities.

The unraveling continues until consumption is realigned with the resources available. In the past this meant either a mass die-off that drastically reduced human numbers and consumption (for example, The Black Plague), a decline in fertility that slowly reduced population to fit resources, mass migration to locales with more resources or the discovery and exploitation of a new scalable energy source that enabled a new cycle of rising consumption.

The 14th century Black Death reduce Europe’s population by roughly 40%, enabling depleted forests to regrow and depleted agricultural land to restore fertility.

Once the human population regained its numbers and consumption in the 17th century, wood was once again under pressure as the key source of energy, shipbuilding, housing, etc.

The development of steam power and the technologies of mining enabled the exploitation of coal, which soon replaced wood as the primary energy source.

Oil and natural gas added to the energy humans could tap, followed (at a much more modest level) by nuclear power. Despite gargantuan investments, the recent push to develop solar and wind energy has yielded very modest results, as globally these sources provide about 5% of total energy consumption. (See chart below)

It’s self-evident that despite breezy claims of endless expansion of consumption, the global human population has now exceeded the resources available for practical extraction. Energy, fresh water, wild fisheries and fertile soils have all been exploited and the easy/cheap-to-extract resources have been depleted.

(The chart below of global CO2 emissions is a proxy for energy / resource consumption.)

So once again it’s crunch-time: either we proactively reduce consumption to align with available resources, or Nature will do it for us via scarcities.

Peter Turchin proposed another socio-economic cycle of 50 years in his book Ages of Discord: in the integrative stage, people find reasons to cooperate. In the disintegrative stage at the end of the cycle, people no longer find much common ground or reasons to cooperate. Political, social and financial extremes proliferate, culminating in a rolling crisis.

In Turchin’s analysis, the previous 50-year age of discord began around 1970, and the current era of discord began in 2020. Those who lived through the domestic terrorism, urban decay, stagflation and political/social/legal crises of the 1970s recall how inter-related crises dominated the decade.

In my analysis, the last period of discord in the 1970s was “saved” by the supergiant oil fields discovered in the 60s coming online in the late 1970s and early 1980s. That oil enabled a 40-year boom which is now ending, with no new scalable source of energy available to replace oil, much less enable an expansion of consumption.

In other words, the cycles of The Fourth Turning, Fischer and Turchin are all in alignment at this point in history. We have proliferating political, social and financial extremes and a forced transition to lower consumption to align with declining energy.

Turn, turn, turn. Right when we need to cooperate on transforming a high-consumption, bubble-dependent “waste is growth” Landfill Economy to declining consumption / Degrowth, we’re beset by discord and demographic pressures, as the promises made to the elderly back when it was expected that there would always be 5 workers per retiree cannot possibly be kept now that the worker-retiree ratio is 2-to-1 and there are no limits on healthcare spending for the elderly.

Humans are happy to expand their numbers and consumption and much less happy to consume less. They tend to start revolutions and wars in vain attempts to secure enough resources to maintain their profligate consumption and expansion.

Today’s extremes of wealth and income inequality are optimized to spark political discord and revolts. The wealthiest 20% will be able to pay higher prices, but the bottom 40% will not. The middle 40% will find their disposable income, i.e. their income left over after paying for essentials, will drop to near-zero.

When 80% of the populace are crunched financially, revolutions and the overthrow of governments follow.

As I’ve outlined in previous posts, global inequalities are widening as the Core exploits its built-in advantages at the expense of the vulnerable Periphery.

Core nations will be much better able to maintain their consumption at the expense of the Periphery nations, which will experience sharp declines in purchasing power and consumption.

Previous Fourth Turnings have been resolved one way or another within 5 to 7 years. If this Turning began in 2020, we can expect resolution by 2025 – 2027.

As I explained in my book Global Crisis, National Renewal, those nations that embrace Degrowth will manage the transition, while those that cling to the endless-expansion, bubble-dependent Waste Is Growth model will fail.

This is why I keep talking about making Plans A, B and C to preserve optionality and reduce financial commitments and consumption now rather than passively await crises over which we will have little direct control.

As I’ve endeavored to explain, those anticipating decades of time to adjust are overlooking the systemic fragilities of the current global financial/supply systems. Tightly bound systems of interconnected dependency chains have been optimized to work perfectly in an era of expansion. They’re not optimized to gradually adjust to contraction; they’re optimized to break and trigger domino-like breakdowns in interconnected chains.

We don’t control these macro-trends, we only control our response.

Of Two Minds: Is 2021 an Echo of 1641?

Charles Hugh Smith from Of Two Minds wonders Is 2021 an Echo of 1641?

If you don’t discern any of these dynamics in the present, what are you choosing not to see?

The reason why history rhymes is that humanity is still using Wetware 1.0 and so humans respond to scarcity, abundance and conflicts over them in the same manner.

I am struck by similarities between the conflict-torn mid-1600s and the present: global climate change (The Little Ice Age in the 1600s), political upheavals and wars which intertwined civil and imperial conflicts. Global Crisis: War, Climate Change and Catastrophe in the 17th Century is a fascinating overview of this complex era which disrupted regimes and empires from England to China.

Climate change (The Little Ice Age) generated scarcities of grain in a time of burgeoning human populations. As in the present day, everyone assumed ample harvests would continue forever–expanding abundance is the New Normal. Alas, Nature is not a steady-state system and cycles are not tamed by our desire for ever-expanding abundance.

Humans respond to scarcity by assessing who’s getting the biggest pieces of the shrinking pie. When hunger begets desperation, various dynamics are set into motion as those without agency and capital, i.e. political and financial power do whatever they can to get enough to survive while those holding the majority of political and financial power, jockey to maintain or expand their power.

These dynamics are fluid and prone to non-linear flows in which relatively small actions unleash enormous consequences that are not predictable. If we squint, however, we can discern some repeating patterns in this chaotic swirl:

1. Private owners of capital (i.e. elites) seek to influence the state to protect / expand their holdings.

2. The dispossessed / disenfranchised masses seek redress / succor from the state.

3. The geopolitical balance of power becomes increasingly precarious as competition for control of resources and political power heats up.

4. The state’s resources are diminished by famine, decline of trade, etc. as pressures from geopolitical rivals, elites and the masses are spiking, reducing the state’s ability to respond to the multiple challenges / overlapping crises.

5. The overlapping crises reveal and exploit the weaknesses in the political, social and economic structures, and in the competing elites.

6. Leaders concentrate centralized power in the hands of the few as a coping strategy by reducing the influence of broad-based councils, assemblies, etc. This concentration of power at the expense of the many (including lower-level elites who were accustomed to holding some consequential power) increases resistance of those being cut out of the decision-making and increases the odds of catastrophic errors of judgment in the few at the top.

7. As the state falters or divides into warring factions, the most powerful elites take control of resources and power from the state, both as a defensive measure and as a means of exploiting the crisis to their own advantage.

8. Populist leaders arise demanding a fairer distribution of resources and power. The more repressed the masses, the greater the disorder created by this emergence of long-silenced voices.

9. Each node seeking to defend or expand its share of resources and power projects and amplifies persuasive rhetoric, symbols and beliefs to unify its supporters around deeply held values and aspirations.

10. With so many loyalties in play–local, regional, linguistic, political, social, religious and economic–each node / faction seeks to decisively cement loyalties by establishing all-or-nothing hard lines via ideologically “pure” rhetoric that demonizes competing factions, effectively dividing the populace into us-and-them camps that leave little middle ground for compromise or negotiation.

11. In this fevered competition for loyalty and trustworthy followers willing to sacrifice for the faction, leaders view every advance as evidence that compromise is unnecessary as total victory awaits the next “win.”

12. Given the grievous losses and potentially devastating consequences of competing factions gaining ground, the victors of each battle hasten to take revenge on the losing faction, laying waste and inflicting cruelties that harden the hearts of the surviving losers and inciting their own determination to exact a full measure of revenge when fortunes turn their way.

13. Only when the land, people and treasure are all exhausted does the promise of total victory fade, and the factions seek some negotiated settlement that leaves whatever power they still have intact lest they lose everything.

14. The eventual settlement could have been reached in the initial stages of disorder, but the leaders of the factions were too myopic, too confident in their own judgment and power, too greedy for more and too hubris-soaked to appreciate their own weaknesses and the immense pitfalls ahead.

If you don’t discern any of these dynamics in the present, what are you choosing not to see?

Of Two Minds: What We Don’t Elect Matters Most – Central Banking and the Permanent Government

Charles Hugh Smith from Of Two Minds talks about the people in government for whom we are not allowed to vote. These bureaucrats in various administrative agencies make much of the law that governs us, but they are not in the legislative branch and they are not representative.

What We Don’t Elect Matters Most: Central Banking and the Permanent Government

We’re Number One in wealth, income and power inequality, yea for the Fed and the Empire!

If we avert our eyes from the electoral battle on the blood-soaked sand of the Coliseum and look behind the screen, we find the powers that matter are not elected: our owned by a few big banks Federal Reserve, run by a handful of technocrats, and the immense National Security State, a.k.a. the Permanent Government. These entities operate the Empire which hosts the electoral games for the entertainment and distraction of the public.

The governance machinery controlled by elected representatives is tightly constrained in what it can and cannot do. It can’t do anything to stop the debasement of the nation’s currency, which is totally controlled by the Politburo of the Fed, nor can it do much to limit the Imperial Project, other than feel-good PR bits here and there.

The president wields vast powers but even the president is powerless to stop the debasement of the nation’s currency and the enrichment of bankers, financiers, corporations, etc., who fund the campaigns of the gladiators, oops I mean politicians.

If we set aside the term Deep State and simply call it the unelected machinery of governance (Permanent Government), we get a clear picture of its scope and power. Presidents, senators and representatives come and go, but the machinery of Empire grinds on, decade after decade.

A great many people and places in America don’t matter to the Fed or the Permanent Government, and so they’ve been abandoned to their fates. The darlings of the Fed and Empire are clustered in Silicon Valley and other urban hubs where the technological and financial machinery of global hegemony are fabricated and maintained.

Those far from these centers of banking, finance and Big Tech have little to no stake as owners of meaningful capital. All they have to sell is their labor, and that’s been losing purchasing power for decades as financialization and globalization have stripmined rural America and enriched the bankers, financiers and speculators who serve the Fed and unelected Permanent Government.

The Fed and the Permanent Government have been very, very good to the few at the expense of the many. Look at the chart below at America’s complete dominance when measured by the soaring wealth of its top 1% power elite: We’re Number One in wealth, income and power inequality, yea for the Fed and the Empire! And we don’t have to elect them–they elect themselves.

Of Two Minds: Corruption Is Now Our Way of Life

Charles Hugh Smith at Of Two Minds writes Corruption Is Now Our Way of Life on the collapse of the USA.

Systemic corruption and the implosion of the social contract have consequences: It’s called collapse.

Social and economic decay is so glacial that only those few who remember an earlier set-point are equipped to even notice the decline. That’s the position we find ourselves in today.

Many Americans will discount the systemic corruption that characterizes the American way of life because they’ve known nothing but systemic corruption. They’ve habituated to it because they have no memory of a time when looting wasn’t legalized and maximizing self-enrichment by any means available wasn’t the unwritten law of the land.

If you don’t yet see America as little more than an intertwined collection of skims, scams, frauds, embezzlements, lies, gaming-the-system, obfuscation of risk and exploitation of the masses by insiders, please read How Corruption is Becoming America’s Operating System. (nakedcapitalism.com, via Cheryl A.)

Here on oftwominds.com, you might want to read No Wrongdoing Here, Just 6,300 Corporate Fines and Settlements. (May 2015)

When JP Morgan Chase engaged in fraud and was fined a wrist-slap $1 billion, nobody went to prison because nobody ever goes to prison for corporate fraud and criminal collusion: JPMorgan to pay almost $1 billion fine to resolve U.S. investigation into trading practices.

Simply put, corruption is cost-free in America because most of it is legal. And whatever is still illegal is never applied to the elites and insiders, except (as per Communist regime corruption) for a rare show trial where an example is made of an egregious fall-guy (think Bernie Madoff: whistleblowers’ repeated attempts to expose the fraud to regulators were blown off for years. It was only when Madoff ripped off wealthy and powerful insiders did he go down.)

There are three primary sources for the complete systemic corruption of America. One is the transition from civic responsibility for the social contract and the national interest to winner-take-most legalized looting.

This transition is visible in the history of empires in the final stage of collapse. The assumption underlying the social order slides from a shared duty to the nation and fellow citizens to an obsession with evading civic duties: military service, taxes, and following the rules are all avoided by insiders and elites, and this moral/social rot then corrupts the entire social order as elites and insiders lean ever more heavily on the remaining productive class to pay the taxes and provide the military muscle to defend their wealth.

That corruption is now everywhere in America is obvious to all but those adamantly blinded by denial. The JP Morgans pay fines as a cost of doing corrupt business, while “public servants” game the system to maximize their pensions with a variety of tricks: colluding to boost the overtime of the retiring insider; finding a quack physican to sign off on a fake “heart murmur” so the insider pays no taxes on their “disability” check, and so on in an endless parade of lies, scams, skims and insider tricks.

The excuse is always the same: everybody does it. This is of course the collapse not just of the social contract but of morality in general: anything goes and winners take most. Insiders look the other way lest their own skims and scams be contested, and elites and insiders view those who aren’t skimming and scamming as chumps to be pitied.

The second dynamic is that financialization has completely corrupted the American economy, and that corruption has now spread to the political and social orders. Once the financial sector conquered the real economy, it began siphoning 95% of the economy’s wealth to the top .01% and their toadies, lackeys, apologists, enforcers and technocrats.

As they hollowed out the real economy, distorted incentives and made moral hazard the guiding principle of the American way of life, the recipients of financialization’s domination gained the wealth to buy political power from the pathetically corruptible political class.

The corruption that we call financialization corrupted democracy and undermined the social contract by eviscerating the value of labor and creating a pay-to-play political order that’s a mockery of democracy.

The third factor is the decay of America’s institutions into fronts for personal gain. While Higher Education insiders are masters of self-serving PR, the truth is they’re not concerned about their debt-serf “customers” (students) learning the essential skills needed in the tumultuous decades ahead–they’re worried that the revenues needed to pay their enormous salaries and benefits might dry up.

“Education” is nothing but a front for the corruption of self-enrichment by the elites and insiders at the top.

The same is true of “healthcare.” The concern of insiders isn’t the declining health of America’s populace, it’s the decline in revenues as fewer “customers” come in for the financial scalping of emergency care.

“Healthcare” is nothing but a front for the corruption of self-enrichment by the elites and insiders at the top.

Thanks to the Federal Reserve’s endless free money for financiers and endless federal borrow-and-blow deficits, the unstated belief is since there’s endless “money”, my petty frauds and skims won’t even dent the feeding trough–there’s always another trillion or three to skim and scam, and there will never be any limit to the feeding trough.

There is no limit until the system implodes. Then the collapse becomes limitless.

Ironic, isn’t it? The oh-so convenient belief that America’s wealth and power are eternal and godlike in their glory fosters the crass corruption that has weakened America to the point of no return: systemic fragility and brittleness.

American Exceptionalism has been turned on its head: America is now as perniciously corrupt as any developing-world nation we smugly felt so superior to, and with extremes of wealth and income inequality that surpass even the most rapacious kleptocracies. This destabilizing “exceptionalism” is now the defining characteristic of the American economy, society and political order.

Systemic corruption and the implosion of the social contract have consequences: It’s called collapse, baby, and the rot is now too deep to reverse.

Of Two Minds: Isn’t It Obvious We Need a New System?

From Charles Hugh Smith at Of Two Minds, Isn’t It Obvious We Need a New System?

Why do we tolerate such a corrupt, undemocratic, exploitive, elite-dominated system? Because we have no other choice? No, we do have a choice.

Isn’t it obvious that we need an alternative economic system that isn’t controlled by corporations, the government and the central bank for the exclusive benefit of insiders and elites? Isn’t it obvious that the current system has failed the majority of participants, and hence the ubiquitous sensations of:

1) being ignored by the insiders / elites who run the current system to their own benefit

2) being trapped in an economy that’s been stripped of social / upward mobility

3) being stripmined / exploited by domestic and globalized elites

4) disgust / frustration with the self-enriching political class that serves corporate/elite/insider interests above all else.

My 50 years of work have given me a ringside seat in how the economy has changed from inclusive to extractive. My jobs have ranged from agricultural field worker to running my own yard service to hospitality to construction to print media (free-lancer) to financial services (quant shop) to non-profit education to political rabble-rousing (unpaid) and my current profession as marginalized, misfit author-blogger (my specialty appears to be getting shadow-banned by Big Tech monopolist extractors).

My colleague Mark Jeftovic explains how systems can be inclusive or extractive. Systems that automatically bail out the greediest, wealthiest socially-useless speculators via the Federal Reserve are not just extractive, they’re exploitive and predatory. The Reversion Will be Mean.

Extractive systems are also intrinsically fragile in crises as the trapped / exploited behind the oars tend to abandon ship at the first chance, and the real-world sinews of the economy have been weakened by the bailouts and financial engineering. In effect, the fragile, brittle shell doesn’t need much of a shock to implode. (If you want to see this process in real time, look around you.)

Yes, finance was extractive in 1970, but it was a much smaller part of the economy. Back then, finance was less than 5% of the economy. Now, by some measures, it’s a third of the economy.

Yes, corporations bought political influence and exploited everything within reach but their reach wasn’t as global and their rapacity not quite as refined. Sociopathic exploitation such as stock buybacks and Big Pharma advertising directly to consumers were illegal.

The economy was not dependent on endless asset bubbles and bailouts of the most venal speculators. The Federal Reserve whines that it has to bail out the greediest scum of the nation again and again and inflate one asset bubble after another because otherwise this sucker’s going down.

Over the past 50 years, the ladders of upward mobility have splintered. Now making all the sacrifices to follow the conventional script (get a college diploma, etc.) don’t lead to secure employment. The fundamental backdrop of the economy is that labor’s share of the economy is in permanent decline: the value of labor has been in a freefall, a freefall masked by bogus “low inflation” and other trickery. (See chart below)

In 1970, costs for essentials were low and regulatory burdens on small business were modest. You could rent an apartment for a week’s pay or less. (Even in expensive Honolulu I could rent a studio apartment for half a week’s pay.)

Even in the mid-1980s, I could get a building permit for an entire house in one day; now the process takes weeks or even months.

Now costs and regulatory burdens have soared to crushing levels. This plays perfectly to government bureaucracies, which have monopolies on the power to raise junk fees, penalties, etc. at will, and Corporate America, whose core drive is eliminate any and all competition so profits can soar on the basis of monopoly, not on superior products or services.

People feel ignored because they are ignored. People feel trapped because they are trapped. People feel stripmined because they are being stripmined. People feel angry at the political Establishment because they no longer live in a democracy.

Can we be honest for a change and admit that ours is an extractive system in which anything goes for the wealthy and powerful and winners take most?

The few pockets of the economy not under the thumb of corporations, government or the central bank– for example, the cash / informal economy–are still dependent on corporations, government and the Fed for their currency, government subsidies and products/services.

Isn’t it obvious that we need an alternative system that isn’t run for the benefit of elites and insiders? What would such a system look like?

One, it would be voluntary / opt-in. Nobody would be forced to participate. All anyone would need to bring is a willingness to be useful and belong to something doing good work on behalf of the community rather than a bunch of parasitic, predatory billionaires.

Two, it would be self-organizing, meaning there is no ruling body that can be corrupted. Bitcoin is a real-world example of a self-organizing system. There is no cabal at the top who can be corrupted; bitcoin is distributed and decentralized. It is self-organizing, as is Nature.

Three, the operations of the system would be automated so human bias would have few opportunities to carve out unearned privileges. Note that most of the systems you interact with are fully automated. (Try reaching a human being in customer service.) The only difference is these systems are secret “black boxes” designed to maximize the profits of cartel-monopoly corporations, not serve the nation or its communities. They only serve the owners, 2/3rds of whom just so happen to be the top 0.1%.

Open-source software runs a great many enterprises and systems and does so without secret “black box” algorithms known only to the exploiters.

Four, it would have its own money, a cryptocurrency that comes into being in only one way: as payment for useful, purposeful labor that benefits the community in some way. All the technology for such a labor-backed cryptocurrency is already in hand.

My 50 years of work in a variety of sectors and jobs has made such a system “obvious” to me, and so I’ve written a book ( A Hacker’s Teleology) to explain how such a system would work and why it’s “obvious.” You can read excerpts of the book in this free PDF and read the story behind the book and the Introduction.

Why do we tolerate such a corrupt, undemocratic, exploitive, elite-dominated system? Because we have no other choice? No, we do have a choice. The first step to outline the values, processes and goals of an alternative system that actually works for everyone and our planet.

I’ve taken a stab at outlining such a system, so why not check it out? If you can come up with a better one, then get it out there for the rest of us to study.

We do have a choice. But we have to take it. If we’re unwilling to make any systemic changes, then we truly are trapped–not by them (whomever they might be) but by our own unwillingness to accept that systemic change is now necessary if we’re to have a future that’s beneficial to all.

 

Of Two Minds: Intolerance and Authoritarianism Accelerate Disunity and Collapse

From Charles Hugh Smith at the Of Two Minds blog, Intolerance and Authoritarianism Accelerate Disunity and Collapse

Scapegoating dissenters only hastens the disunity and disarray that accelerates the final collapse.
Authoritarianism is imposed on us, but its sibling intolerance is our own doing. Intolerance and authoritarianism are two sides of the same coin: as intolerance becomes the norm, the intolerant start demanding that the state enforce their intolerance by suppressing their enemies via increasingly heavy-handed authoritarian measures.
Intolerance and authoritarianism increase as instability takes hold and living standards decline. In good times, dissent and differences of opinion are not only tolerated but celebrated, as this freedom to hold a variety of beliefs serves to unify society.
In bad times, dissent and differences are viewed as mortal threats to the social order. Perhaps there is a human instinct when times become troubled to insist “we must all row together,” i.e. to seek a unity enforced by a rising intolerance that demands more authoritarian action by the state.
For example, in wartime, pacifist views that were previously tolerated become criminal offenses.
The irony here is this forced conformity doesn’t generate unity–it fractures society into bitterly warring camps as the middle ground vanishes into either/or extremism that sees authoritarianism (in support of our side, of course) as not just justified but essential.
Intolerance and authoritarianism undermine and ultimately destroy the unity that was generated by tolerance and a wide variety of beliefs and dissenting views. As our own insecurities increase, we fall all too willingly to the temptation to see others’ recalcitrant refusal to join our camp without reservations as the source of our insecurity.
In this mindset of insecurity, the “solution” is to force compliance by any means available so everyone is in our camp. And since some might be hiding the insincerity of their devotion to our righteous cause, the need for an Inquisition becomes pressing, so the insincere or closet traitors can be unmasked and punished.
But the Inquisitors themselves inevitably come under suspicion, and an Inquisition of the Inquisitors soon lays waste to those who hubristically held themselves as the arbiters of conformity. There is no way to escape this drive to dissipate insecurity by forcing conformity except the complete collapse of the social, political and economic orders.
This is the path to madness and complete social breakdown. But such is the power of insecurity and uncertainty that history records our self-destructive urgency to abandon the middle ground and a diversity of viewpoints and beliefs for the totalitarian uniformity of forced conformity.
But once rooted, intolerance knows no bounds and the snake of intolerant authoritarianism ends up eating its own tail. In an era of intolerance, ideological purity is a constantly shifting landscape of quicksand. Those at the top passing judgment on others’ ideological purity soon find their own purity is under attack.
Increasingly intolerant, repressive authoritarianism marked the final days of the Roman decline and fall. Rather than face the profound and novel crises directly and unify around the sacrifices needed to resolve the crises favorably, it is so much easier to blame everyone who doesn’t agree with our position as the source of the crises.
This is delusional, of course: crises have real-world sources, and scapegoating dissenters only hastens the disunity and disarray that accelerate the final collapse.

Of Two Minds: Pandemic Accelerating Trends That Disrupt Foundations of Economy

From Charles Hugh Smith at the Of Two Minds blog, The Pandemic Is Accelerating Trends That Are Disrupting the Foundations of the Economy

The problem is the economy that’s left has no means of creating tens of millions of jobs to replace those lost as the 1959 economic model collapses.

Fundamentally, the economy of 2019 was not very different from the economy of 1959: people went shopping at retail stores, were educated at sprawling college campuses, went to work downtown, drove to the doctor’s office or hospital, caught a flight at the airport, and so on.

The daily routine of the vast majority of the workforce was no different from 1959. In 2019, the commutes were longer, white-collar workers stared at screens rather than typewriters, factory workers tended robots and so on, but the fundamentals of everyday life and the nature of work were pretty much the same.

Beneath the surface, the fundamental change in the economy was financialization, the commodification of everything into a financial asset or income stream that could then be leveraged, bundled and sold globally at an immense profit by Wall Street financiers.

This layer of speculative asset-income mining had no relation to the actual work being done; it existed in its own derealized realm.

For decades, these two realms—the structure of everyday life (to borrow Braudel’s apt term) and the abstract, derealized but oh so profitable realm of financialization–co-existed in an uneasy state of loosely bound systems.

If you squinted hard enough and repeated the mantras often enough, you could persuade yourself there was still some connection between the everyday-life economy and the realm of financialization.

The two realms have now disconnected, and the real-world economy has been ripped from its moorings, as patterns of work and every-day life that stretch back 70 years to the emergence of the postwar era unravel and dissolve.

The trends that are currently fatally disrupting retail, education, office work and healthcare have been in place for years. When I wrote my 2013 book about the digitized future of higher education in a low-cost union of high-touch and low-touch learning, The Nearly Free University, all these trends were already clearly visible to those willing to look beyond the models embedded in the economy for decades or even centuries.

Visionaries like Peter Drucker foresaw the complete disruption of the education and healthcare sectors as far back as 1994. Post-Capitalist Society.

The problem with this disruption is it eliminates tens of millions of jobs–not just the low-paying jobs in retail and dining-out, but high-paying jobs in university administration, healthcare, and other core service sectors.

The last real-world connection between everyday life and financialization was the over-supply of everything that could be financialized: the way to reap the big profits was expand whatever could be leveraged and sold. So retail and commercial space ballooned, colleges proliferated, cafes sprang up on every corner, etc.

Meanwhile, financialization’s unquenchable thirst for higher profits stripped everything of the redundancy and buffers required to stabilize the system in times of crisis. So hospitals no longer kept inventory because by the logic of financialization, all that mattered was maximizing the return on capital–nothing else could possibly matter in the derealized realm of speculative profiteering.

Now healthcare finds itself trapped between the pincers of financialization’s stripmining and the collapse of retail in-person demand–the financial foundation of the entire system. Under the relentless pressure of financialization’s stripmining and profteering, healthcare only survives if it can bill somebody somewhere a staggering amount for everything from office visits to procedures to hospital stays to medications.

Once that avalanche of billing dries up, the entire sector implodes: a sector that accounts for almost 20% of the U.S. economy.

Higher education is also imploding, and for the same reason: its output no longer justified its enormous cost structure. The same can be said of overbuilt retail and commercial space: the financial justification for sky-high rents have imploded and will never come back. The over-supply is so monumental and the collapse of demand so permanent, the gigantic pyramid of debt and speculative excess piled on all these excesses is collapsing.

A bailout by the Federal Reserve won’t change the fundamentals of the collapse of financialization; all the Fed can do is reserve scarce lifeboat seats for its billionaire banker-financier pals. (Warren, you know Bill, have you met Jamie, Jeff, Tim and the rest of the Zillionaire Rat-Pack?)

Despite the record highs in the stock market–the ultimate expression of financialization disconnected from the real-world economy–financialization is also imploding. Financialization still claimed a connection to the real world of income streams and the value of the collateral underlying all the speculative profiteering: the high rents paid by the restaurants on the ground floor and the businesses for office space above justified the high value of the collateral, the commercial building.

Foundational swaths of the real-world economy have been swept away, and so the collateral is largely worthless. Lots of people want their employer to start paying for business-class airline seats again so they can jet around the country on somebody else’s dime, staying in pricey hotels and attending conferences, but these activities no longer have any financial justification.

The economy of 1959 is finally expiring. The enormous time and money sinks of transporting humans hither and yon no longer have any financial justification.

The problem is the economy that’s left has no means of creating tens of millions of jobs to replace those lost as the 1959 economic model collapses. We all know that automation is replacing human labor, but the real change is the collapse of the financial justification for the enormously costly systems we now depend on to generate jobs: healthcare, retail, tourism, dining out, education, working downtown, and all the professions dependent on managing all this complexity.

While the elimination of low-skill jobs–a longstanding trend–is attracting attention, the implosion of the 1959 economic model and financialization will soon sweep away millions of high-paying professional jobs that no longer have any financial justification.

As the 1959 economy implodes, so does the tax system based on payroll taxes and property taxes. This article sketches out the perverse incentives for employers to invest in automation rather than hire workers: Covid-19 Is Dividing the American Worker (WSJ.com)

There are alternatives, but they require accepting the implosion of both the 1959 economic model and its evil offspring, financialization.

I sketched out an alternative way of organizing work, everyday life and finance in my book A Radically Beneficial World. There are alternative ways of organizing civilization other than the insanely wasteful and exploitive system we now inhabit.

 

Of Two Minds: Surviving 2020 – Plans A, B, and C

Charles Smith at Of Two Minds has an article on Surviving 2020 – Plans A, B, and C

As the bogus prosperity economy built on exponential growth of debt implodes, we all seek ways to protect ourselves, our families and our worldly assets. There are any number of websites, subscription services and books which offer two basic “practical recommendations:”
1. Buy gold (and/or silver) and don’t worry about timing the market as everything else will become worthless.
2. Establish a heavily armed and well-supplied hideaway before everything implodes.
My problem with these suggestions is that they are predicated on a decisive “end of the world as we know it” collapse of civilization.
While I am alive to the possibility of this cataclysm, an analysis of the many feedback loops which will slow or counteract such a decisive collapse suggests other alternatives are even more likely: my term for the slow, uneven decline of the credit/speculative-bubble era is devolution.
I cover feedback loops, historical cycles and why a lengthy devolution is as least as likely a scenario as abrupt collapse in my book Survival+ (free downloadable version is linked below).
In other words, I do not see planning for eventualities as “either/or.” I look at it in terms of three levels:
Plan A: dealing with devolution: government services are cut back, prices for essentials rise over time, fulltime paid jobs become scarce, the State (all levels of government) becomes increasingly repressive as it pursues “theft by other means,” i.e. the stripmining of private assets to feed its own fiefdoms and Elites; most assets fall in purchasing power (value) as the system’s financial props erode.
Plan B: When things become rationed/unavailable, services become sporadic, pensions stop being paid in full, spontaneous homeless encampments arise in heretofore “nice” areas, cities go bankrupt, small businesses go underground to survive the ever-higher taxes being levied on the few remaining productive enterprises, etc.
Plan C: if things fall apart: either move to communities where you or your family have roots (tough luck for all the millions of rootless Americans shifted around by corporate “relocations” the past 50 years) or turn to your neighborhood, town, friends, family, church and other social networks for cooperative strength.
The problem with putting all your resources into a “bug-out” strategy (Plan C) is that it might not come to pass, in which case you’ve misallocated your assets.
This is why I focus Survival+ on structuring a prosperity which will work on all levels. This prosperity has five basic parts:
1. Prepare for hybrid work by developing multiple skillsets, interests and contacts and understand that being productive and reciprocal is more important than getting paid (as I put it: “to take care of Number One, first take care of numbers 2 through 9.”)
2. Develop sustainable, overlapping social networks (self-organizing networks) in which you have more than one place to interact with the same person, i.e. at church or in the neighborhood. I call these non-State, voluntary networks transparent non-privileged parallel structures because they are independent of the State and Monopoly/Predatory Capital Elites.
3. Cut expenses to the bone so you no longer need a large income to “survive.” Consider lowering your taxable income by working less so you’re no longer working so hard just to pay taxes generated by high incomes. (Thanks to correspondent Stephen A. for noting that barter that results in gains is generally taxable. As always, check with the I.R.S. or a licensed tax advisor to confirm what income is taxable/nontaxable.)
4. Reach a new understanding of “prosperity”: health and social wealth are the “treasures” which money cannot buy. Yes, we all need some money, and preserving/growing whatever capital you do have will be difficult and time-consuming. There is no easy “one size fits all” solution.
5. Understand the importance and strength in building and maintaining personal integrity, the one asset we each control in totality and that no one can take from us. All reciprocal networks (financial, political, religious or social) depend entirely on trust, and the bedrock of trust is complete personal integrity.
Much of the devolution we now face is a direct result of the degradation of integrity. This moral/ethical component of financial implosion is glossed over by the corporate media because the Power Elites have implicitly undermined integrity and morality as a means of soldifying their control of the media and of the national income.
Yes, I know this all sounds wonderful, but how do you do it in real life? Well, life is and always has been a do-it-yourself affair. With 200 million+ employable people in the nation, what advice or recommendations can I possibly give to any one individual, when only that person knows their own interests, strengths and potential customers, clients, allies, competitors and mentors?
Let’s start with one simple truth: nobody knows the future. Thus everything we discuss now is contingent on a number of unpredictable interactions. To base our planning on one scenario is to risk misallocating our scarce assets and resources…(continues)