Wednesday, October 5, 2011

The Future

None are more hopelessly enslaved than those who falsely believe they are free.
Johann Wolfgang von Goethe

If you want a vision of the future, imagine a boot stamping on a human face - forever.
George Orwell

When I saw the headline of Thomas Friedman’s latest column, “How Did The Robot End Up With My Job”, I assumed that he was also jumping on the bandwagon of writers finally starting to wake up to the realities of automation. After a short preamble about how efficient it is to be prepped for a video interview (??), he wanders off into his usual apologia for unrestrained free-market corporate globalism – and the results are horrifying. While robots are taking over every routine and repetitive task that exists, creative work is now outsourced around the world to the lowest bidder, as every worker in the world, no matter how well-educated, must compete with every other worker for the few scraps of capital falling from the table of the corporate monopolies. As in every Friedman column, there is some twaddle about how Facebook and Twitter constitute some sort of “new” economy, and how everyone will work for themselves somehow by starting their own business on a credit card (??). He then describes in vivid detail the race to the bottom, using as his example a Web site where work is performed by the lowest bidder: a dune buggy design is provided for $268, an architectural design for $168. One CEO proudly describes his own employees as PHD.’s – poor, hungry and desperate (he uses ‘driven’, but ‘desperate’ is more accurate). As usual, he peppers his column with quotes from the uber-elites telling us that this is the new reality, and that we’d better get used to it because there is no alternative:
In the last decade, we have gone from a connected world (thanks to the end of the cold war, globalization and the Internet) to a hyperconnected world (thanks to those same forces expanding even faster). And it matters. The connected world was a challenge to blue-collar workers in the industrialized West. They had to compete with a bigger pool of cheap labor. The hyperconnected world is now a challenge to white-collar workers. They have to compete with a bigger pool of cheap geniuses — some of whom are people and some are now robots, microchips and software-guided machines.

I wrote about the connected world in 2004, arguing that the world had gotten “flat.” When I made that argument, though, Facebook barely existed — and Twitter, cloud computing, iPhones, LinkedIn, iPads, the “applications” industry and Skype had either not been invented or were in their infancy. Now they are exploding, taking us from connected to hyperconnected. It is a huge inflection point masked by the Great Recession.

It is also both a huge challenge and opportunity. It has never been harder to find a job and never been easier — for those prepared for this world — to invent a job or find a customer. Anyone with the spark of an idea can start a company overnight, using a credit card, while accessing brains, brawn and customers anywhere. It is why Pascal Lamy, chief of the World Trade Organization, argues that terms like “made in America” or “made in China” are phasing out. The proper term, says Lamy, is “made in the world.” More products are designed everywhere, made everywhere and sold everywhere.

The term “outsourcing” is also out of date. There is no more “out” anymore. Firms can and will seek the best leaders and talent to achieve their goals anywhere in the world. Dov Seidman, is the C.E.O. of LRN, a firm that helps businesses develop principled corporate cultures, and the author of “How: Why How We Do Anything Means Everything.” He describes the mind-set of many C.E.O.’s he works with: “I run a global company with a global mission and one set of shared values in pursuit of global objectives. My employees are all over the world — more than half outside the U.S. — and more than half of my revenues and my plans for growth are out there, too. So you tell me: What is out and what is in anymore?”

Matt Barrie, is the founder of freelancer.com, which today lists 2.8 million freelancers offering every service you can imagine. “The whole world is connecting up now at an incredibly rapid pace,” says Barrie, and many of these people are coming to freelancer.com to offer their talents. Barrie says he describes this rising global army of freelancers the way he describes his own team: “They all have Ph.D.’s. They are poor, hungry and driven: P.H.D.”

Barrie offered me a few examples on his site right now: Someone is looking for a designer to design “a fully functioning dune buggy.” Forty people are now bidding on the job at an average price of $268. Someone is looking for an architect to design “a car-washing cafe.” Thirty-seven people are bidding on that job at an average price of $168. Someone is looking to produce “six formulations of chewing gum” suitable for the Australian market. Two people are bidding at an average price of $375. When Barrie needed a five-word speech to accept a Webby Award, he offered $1,000 for the best idea. He got 2,730 entries and accepted “The Tech Boom Is Back.” Someone looking for “a rap song to help Chinese students learn English” has three bids averaging $157.

Indeed, there is no “in” or “out” anymore. In the hyperconnected world, there is only “good” “better” and “best,” and managers and entrepreneurs everywhere now have greater access than ever to the better and best people, robots and software everywhere. Obviously, this makes it more vital than ever that we have schools elevating and inspiring more of our young people into that better and best category, because even good might not cut it anymore and average is definitely over.

“There is no ‘in’ our ‘out’ anymore.” “Good may not cut it anymore and average is definitely over.” 2,730 bidders for a five word slogan. Got it? So much for education and creativity filling the void left by deindustrialization. In Friedman’s brave new world, the gap between the rich and poor is stratospheric, and billions of desperate workers compete with everyone else for what few jobs remain after the robots take over. Anyone who is not above average is left with no economic security, no job, and no future. Isn’t globalization wonderful? No wonder people are longing for collapse. It seems Friedman has read this prescient column over the weekend about the rise of the Super People. Capitalist Social Darwinism has been carried to its logical extent:
A BROCHURE arrives in the mail announcing this year’s winners of a prestigious fellowship to study abroad. The recipients are allotted a full page each, with a photo and a thick paragraph chronicling their achievements. It’s a select group to begin with, but even so, there doesn’t seem to be anyone on this list who hasn’t mastered at least one musical instrument; helped build a school or hospital in some foreign land; excelled at a sport; attained fluency in two or more languages; had both a major and a minor, sometimes two, usually in unrelated fields (philosophy and molecular science, mathematics and medieval literature); and yet found time — how do they have any? — to enjoy such arduous hobbies as mountain biking and white-water kayaking.

Let’s call this species Super Person.

Do we have some anomalous cohort here? Achievement freaks on a scale we haven’t seen before? Has our hysterically competitive, education-obsessed society finally outdone itself in its tireless efforts to produce winners whose abilities are literally off the charts? And if so, what convergence of historical, social and economic forces has been responsible for the emergence of this new type? Why does Super Person appear among us now?

Perhaps there’s an evolutionary cause, and these robust intellects reflect the leap in the physical development of humans that we ascribe to better diets, exercise and other forms of health-consciousness. (Stephen Jay Gould called this mechanism “extended scope.”) All you have to do is watch a long rally between Novak Djokovic and Rafael Nadal to recognize — if you’re old enough — how much faster the sport has become over the last half century.

Or maybe it’s a function of economics. Writing in a recent issue of The Chronicle of Higher Education, John Quiggin, a visiting professor of economics at Johns Hopkins University, argues that the Great Academic Leap Forward “is both a consequence of, and a contributor to, the growing inequality and polarization of American society.” Nearly 25 percent of the annual income in America goes to 1 percent of the population, creating an ever-wealthier upper class. Yet there’s no extra space being made in our best colleges for high-achieving students. “Taken together,” Professor Quiggin points out, “the Ivy League and other elite institutions educate something less than 1 percent of the U.S. college-age population” — a percentage that’s going to shrink further as the population of college-bound students continues to grow.

Preparing for Super Personhood begins early. “We see kids who’ve been training from an early age,” says Charles Bardes, chairman of admissions at Weill Cornell Medical College. “The bar has been set higher. You have to be at the top of the pile.”

And to clamber up there you need a head start. Thus the well-documented phenomenon of helicopter parents. In her influential book “Perfect Madness: Motherhood in the Age of Anxiety,” Judith Warner quotes a mom who gave up her career to be a full-time parent: “The children are the center of the household and everything goes around them. You want to do everything and be everything for them because this is your job now.” Bursting with pent-up energy, the mothers transfer their shelved career ambitions to their children. Since that book was published in 2005, the situation has only intensified. “One of my daughter’s classmates has a pilot’s license; 12-year-olds are taking calculus,” Ms. Warner said last week.

Even the most brilliant students have to work harder now to make their nut. The competition for places in the upper tier of higher education is a lot tougher than it was in the 1960s and ’70s, when having good grades and SAT scores in the high 1200s was generally sufficient to get you into a respectable college. My contemporaries love to talk about how they would have been turned down by the schools they attended if they were applying today. This is no illusion: 19 percent of applicants were admitted to my Ivy League school for the class of ’71; 6 percent were admitted for the class of ’15.
Graduate and professional school statistics are just as daunting. Dr. Bardes told me that he routinely interviewed students with perfect or near perfect grade point averages and SATs — enough to fill the class several times over. Last year 5,722 applicants competed for 101 places at Weill Cornell; the odds of getting in there are even worse than those of getting your 3-year-old into a New York City private school.

“Applicant pools are stronger and deeper,” concurs Stephen Singer, the former director of college counseling at Horace Mann, the New York City private school renowned for its driven students. “It used to be that if you were editor of the paper or president of your class you could get in almost anywhere,” Mr. Singer says. “Now it’s ‘What did you do as president? How did you make the paper special?’ Kids file stories from Bosnia or El Salvador on their summer vacations.” Such students are known in college admissions circles as “pointy” — being well-rounded doesn’t cut it anymore. You need to have a spike in your achievement chart.

AND it doesn’t hurt to be from an exotic foreign land. “Colleges are reaching out to a broader range of people around the world today,” says William R. Fitzsimmons, Harvard’s dean of undergraduate admissions. “They go to Africa and China. If you want first-class mathematicians, try looking in Bulgaria.” In case they miss someone, many colleges now have recruiting agents in other countries who are paid commissions — by both the parents and the college — to help “place” those students. Globalization comes to the college admissions world.

Just as the concentration of wealth at the very top reduces wealth at the bottom, the aggressive hoarding of intellectual capital in the most sought-after colleges and universities has curtailed our investment in less prestigious institutions. There’s no curricular trickle-down effect. The educator E. D. Hirsch Jr. has pointed to a trend he labels the Matthew Effect, citing the Biblical injunction: “ ‘For unto every one that hath shall be given and he shall have abundance: but from him that hath not shall be taken away even that which he hath.’ We’ve lifted up rich kids beyond their competence,” he says, “while the verbal skills of the black underclass continue to decline.”

Affluent families can literally buy a better résumé. “In a bad economy, the demographic shift has the potential to reinforce a socio-economic gap,” says Todd Breyfogle, who oversaw the honors program at the University of Denver and is now director of seminars at the Aspen Institute. “Only those families who can help their students be more competitive will have students who can get into elite institutions.”

Schools are now giving out less scholarship money in the tight economy, favoring students who can pay full freight. Meanwhile, Super People jet off on Mom and Dad’s dime to archaeological digs in the Negev desert, when they might once have opted to be counselors in training at Camp Shewahmegon for the summer. And the privilege of laboring as a volunteer in a day care center in Guatemala — “service learning,” as it’s sometimes called — doesn’t come cheap once you tote up the air fare, room and board.

Colleges collude in the push to upgrade talent. “It’s a huge industry,” Mr. Breyfogle says. “Harvard has a whole office devoted to preparing applicants for the Rhodes and Marshall scholarships.” At its worst, this kind of coaching results in candidates who are treated as what he calls “management projects.”

“They’ve been put in the hands of makeover experts who have a stake in making them look better than they are, leveraging their achievement,” Mr. Breyfogle says.

“We are concerned about that,” confirmed Jeff Rickey, head of admissions at St. Lawrence University, whom I tracked down at the National Association for College Admission Counseling conference in New Orleans. “If they joined a club, when did they join it? Maybe they play 15 instruments, but when they list them out, the amount of time they spent on each isn’t that much.” Mr. Breyfogle is also on the alert for résumé stuffing. “They’ve worked at an orphanage in Katmandu, but it turns out it was over Christmas break,” he gave as an example. “It’s easier to be amazing now.” All you need is money.
Again and again things like this reinforce my choice to not have children. What Friedman is describing is very similar what John Robb described in his concept of the Hollow State:

Most analysts (at least the ones that are worth reading) contend that the sovereign default crisis (Greece, Portugal, Spain, etc.) in the EU is about the collapse of a system that created monetary union without a political union. It isn't. That's actually a narrow, parochial view. Instead, the current sovereign debt crisis is about something much more interesting: it's another battle in a war for dominance between "our" integrated, impersonal global economic system and traditional nation-states. At issue is whether a nation-state serves the interests of the governed or it serves the interests of a global economic system.

Who's winning? The global economic system, of course. The 2008 financial crisis, the first real battle of this war (as opposed to the early losses in skirmishes in Russia, Argentina, the Balkans, etc.), generated a very decisive outcome. It was a resounding defeat for nation-states. The current crisis in the EU will almost certainly end with the same results.

When this war ends, and it won't be long, the global economic and financial system will be the victor. Once that occurs, the nation-states of the West will join those of the global south as hollow states: mere shells of states that serve only to enforce the interests of the global economic system. These new states, more market-states than nation-states, will offer citizens a mere vestige of the public goods they offered historically. Incomes will fall to developing world levels (made easy to due highly portable productivity), and wealth will stratify. Regulatory protections will be weak. Civil service pensions will be erased and corruption will reign. The once dominant militaries of the West will be reduced to a small fraction of their current size, and their focus will be on the maintenance of internal control rather than on external threats. The clear and unambiguous message to every citizen of the West will be:

You are on your own. You are in direct competition with everyone else in the world, and your success or failure is something you alone control.

For those that think that this will bring about a surge of peaceful economic vigor, you will be wrong. It will fragment society and lead to perpetual stagnation/depression, endemic violence/corruption, and squalor. For absent any moral basis (a social compact), stability, or (widely shared) prosperity: new sources of order will emerge to fill the gap left by the hollowing out of the nation-state. These new sources of order will be first seen in the rise of the criminal entrepreneur, whether they be the besuited corporate gangster or the gang tattooed thug. For in the world of hollow states (without a morality that limits behavior) and limitless connectivity to the global economic system, these criminal entrepreneurs quickly become dominant, violently coercing or corrupting everyone in the path to their enrichment.

Thanks, John Robb, whose Web site Global Guerrillas is a must-read. Google “Hollow State” for more information. As Robb so aptly notes, this arrangement will not lead to a golden age of creativity and innovation as Thomas Friedman would have us believe from his perch at the Times, rather it leads to what Robb describes: perpetual economic stagnation/depression, endemic violence/corruption, squalor and despair. The social contract is abolished, and society becomes a war of all against all (bellum onmia contra onmes) for money. Arts, culture and literature decline as everyone is forced to struggle just to get by, much as happened after the fall of the Roman Empire. Whatever technical advancements there are are only accessible to the elites, while the majority see their living standards decline. All power is vested in corporations, whose interests are completely divested from the nation state, which is rendered impotent, and only serves a small hyperelite. Services are privitized - designed to earn profits for the elites, and those who cannot pay will simply have to go without. That’s the reality. How do I know this? Look at what we’re already seeing around the world right now:

Exhibit A: Mexico, where the state has always been weak, poverty endemic, and class structures hereditary. In this country, home to the world’s wealthiest man (Carlos Slim Helu), severed heads are left outside elementary schools, mutilated bodies are left hanging from bridges for daring to use Twitter, and cartels boldly extort money from small business owners to prevent being then from tortured to death. All within the veneer of a normal, industrialized first-world nation of elections, banks, skyscrapers, highways and movie theaters.

Exhibit B: Somalia, where ragtag militias manage a country without a central government, prevent starving people from eating, suicide attacks are commonplace, and the major source of economic activity is piracy (and not the software kind).

Exhibit C: Russia, where oligarchs rule over a lawless economy, the same people are “elected” year after year, and hitmen can be cheaply hired to eliminate people who become inconvenient.

Soon, the entire world will look like these counties. America is already pretty much there already. This is Friedman’s new reality: only the Super People have jobs and live with the best of everything while the masses live in a perpetual state of misery, and the rule of law applies only to the elites. Socialism for the rich, capitalism for the poor. As Robb notes, we are entering a new barbaric Dark Age. Just look at “popular” culture. This hollow state leads to what political scientist Sheldon Wohlin has termed “Inverted Totalitarianism.” Wikipedia has a good summary that I have edited below:

There are three main ways in which inverted totalitarianism is the inverted form of classical totalitarianism. First, whereas in Nazi Germany the state dominated economic actors, in inverted totalitarianism corporations and their lobbying dominate the Superpower, with the government acting as the servant of large corporations. This isn't considered corruption, but "normal".

Second, while the Nazi regime aimed at the constant political mobilization of the population, with its Nuremberg rallies, Hitler Youth, and so on, inverted totalitarianism aims for the mass of the population to be in a persistent state of political apathy. The only type of political activity expected or desired from the citizenry is voting. Low electoral turnouts are favorably received as an indication that the bulk of the population has given up hope that the government will ever help them. Third, while the Nazis openly mocked democracy, Superpower maintains the conceit that it is the model of democracy for the whole world.

Wolin calls this form of democracy, which is sanitized of the political, managed democracy. Managed democracy is "a political form in which governments are legitimated by elections that they have learned to control". Under managed democracy, the electorate is prevented from having a significant impact on policies adopted by the state through the continuous employment of public relations techniques.

This brings us to one major respect in which Superpower resembles Nazi Germany without an inversion: the essential role that propaganda plays in the system. Whereas the production of propaganda was crudely centralized in Nazi Germany, in Superpower it is left to highly concentrated media corporations, thus maintaining the illusion of a "free press". Dissent is allowed, although the corporate media serves as a filter, allowing most people, with limited time available to keep themselves apprised of current events, only to hear points of view which the corporate media deems to be "serious".


In 2003, Wolin wrote in The Nation magazine:

Representative institutions no longer represent voters. Instead, they have been short-circuited, steadily corrupted by an institutionalized system of bribery that renders them responsive to powerful interest groups whose constituencies are the major corporations and wealthiest Americans. The courts, in turn, when they are not increasingly handmaidens of corporate power, are consistently deferential to the claims of national security. Elections have become heavily subsidized non-events that typically attract at best merely half of an electorate whose information about foreign and domestic politics is filtered through corporate-dominated media. Citizens are manipulated into a nervous state by the media's reports of rampant crime and terrorist networks, by thinly veiled threats of the Attorney General and by their own fears about unemployment. What is crucially important here is not only the expansion of governmental power but the inevitable discrediting of constitutional limitations and institutional processes that discourages the citizenry and leaves them politically apathetic.

No doubt these remarks will be dismissed by some as alarmist, but I want to go further and name the emergent political system "inverted totalitarianism." By inverted I mean that while the current system and its operatives share with Nazism the aspiration toward unlimited power and aggressive expansionism, their methods and actions seem upside down. For example, in Weimar Germany, before the Nazis took power, the "streets" were dominated by totalitarian-oriented gangs of toughs, and whatever there was of democracy was confined to the government. In the United States, however, it is the streets where democracy is most alive--while the real danger lies with an increasingly unbridled government.

Or another example of the inversion: Under Nazi rule there was never any doubt about "big business" being subordinated to the political regime. In the United States, however, it has been apparent for decades that corporate power has become so predominant in the political establishment, particularly in the Republican Party, and so dominant in its influence over policy, as to suggest a role inversion the exact opposite of the Nazis'. At the same time, it is corporate power, as the representative of the dynamic of capitalism and of the ever-expanding power made available by the integration of science and technology with the structure of capitalism, that produces the totalizing drive that, under the Nazis, was supplied by ideological notions such as Lebensraum.

In rebuttal it will be said that there is no domestic equivalent to the Nazi regime of torture, concentration camps or other instruments of terror. But we should remember that for the most part, Nazi terror was not applied to the population generally; rather, the aim was to promote a certain type of shadowy fear--rumors of torture--that would aid in managing and manipulating the populace. Stated positively, the Nazis wanted a mobilized society eager to support endless warfare, expansion and sacrifice for the nation.

Thus the elements are in place: a weak legislative body, a legal system that is both compliant and repressive, a party system in which one party, whether in opposition or in the majority, is bent upon reconstituting the existing system so as to permanently favor a ruling class of the wealthy, the well-connected and the corporate, while leaving the poorer citizens with a sense of helplessness and political despair, and, at the same time, keeping the middle classes dangling between fear of unemployment and expectations of fantastic rewards once the new economy recovers. That scheme is abetted by a sycophantic and increasingly concentrated media; by the integration of universities with their corporate benefactors; by a propaganda machine institutionalized in well-funded think tanks and conservative foundations; by the increasingly closer cooperation between local police and national law enforcement agencies aimed at identifying terrorists, suspicious aliens and domestic dissidents.

What is at stake, then, is nothing less than the attempted transformation of a tolerably free society into a variant of the extreme regimes of the past century. In that context, the national elections of 2004 represent a crisis in its original meaning, a turning point. The question for citizens is: Which way?
I think we’ve seen which way we went. Protesters against Wall Street are being pepper-sprayed and arrested en masse in New York City. Major banks are donating millions to the New York City police force, which now claims the ability to shoot down airplanes. American citizens are being assassinated by remote control. And over a year before the “election”, pre-approved candidates (Obama, Perry, Romney, etc.) are raising millions from donors as the nation continues to crumble. Social programs are eliminated while corporate welfare is safe and sound. Rick Perry even wants to send troops into Mexico.

This leads in to my own observation of where we are headed: the era of Authoritarian Capitalism.

In the past, there was perceived to be a contrast between nominally Communist countries which engaged in political repression and imprisonment of its citizens, and capitalist democracies which allowed free expression without persecution. The implication was clear – capitalism represented freedom and was a system born of consent to all underneath it, while Communism was favored only by a narrow elite which used the mechanisms of the state to force everyone to go along with the system, whether they wanted to or not. There was no consent of the governed.

Now, over twenty years after the fall of Communism, we are seeing something different emerge; we see capitalism becoming more and more authoritarian. There is an idea among the general public that capitalism is synonymous with “freedom” and cannot be authoritarian. This is emphasized by the use of terms like “free market” and “free enterprise” for the consumption of the citizenry. But instead, we’ve seen every western capitalist democracy come to resemble more and more the politically authoritarian regimes of Eastern Europe. Some, like China, took up capitalism while keeping their repressive political systems in place.

The reasons for this are the fact that, like Communism, an entrenched and politically-connected oligarchy manipulates the system for their own benefit, while living standards decline year after year for the vast majority of the population. To force consent into this system, the population needs to be kept in a constant state of fear. Rather than fear imprisonment, as in the Soviet system, the populace fears utter destitution from unemployment. They are also kept in line by debt servitude (a collusion between corporations and the educational complex), and by the withholding of medical care from those without employment. As with the Soviet system, people who keep their heads down and do not question the system are left alone, while dissenters are blacklisted. Even with these control systems in place, the United States imprisons more of its population than even the Soviet Union at its height. It does this by selectively criminalizing certain activities to lock up undesirable portions of the populace (e.g. drug possession), and selectively enforcing those laws (e.g. Blacks more likely to be jailed for drug possession, etc.). America has fully 25 percent of the world’s prisoners, with only 5 percent of the world’s population.

In all Western democratic countries, vast surveillance states are being constructed, ostensibly to keep the population “safe”’ from a shifting and ever-present terror threat (something Orwell predicted with uncanny accuracy). Police are everywhere, and better-equipped. More and more of GDP goes into military and law enforcement, often using private for-profit contractors. Prisons and jails are run for profit, and prisoners are used as cheap labor. Worker’s rights are demolished. Trade unions are suppressed, just as they were in Communist countries (e.g. Solidarity). Workers are watched and monitored constantly, and even forced to give up bodily fluids at their employer’s discretion to keep their jobs, something even citizens under the Soviet regime did not have to tolerate. Background checks are conducted to filter the shrinking pool of employable candidates. The rest are blacklisted and abandoned by the state to private charities and to their own devices.

While the Red Army is no more, America’s military has only grown in scope and cost. One third of the government’s budget is devoted to the military, even as the nation’s education and infrastructure literally fall to pieces, with levels of spending even higher than the Cold War. Aggressive wars of expansion and nation-building are fought to force the system (Communism in the Soviet case, corporate capitalism in the West’s case), on non-participating states. Capitalism turns out to be as aggressively expansionist as Communism was supposed to be.

The media, while not controlled directly by the government, is in the hands of big corporations who control what is reported, and what opinions are presented to the populace. Dissenting media is suitably marginalized and ignored (or manipulated). Protesters are herded into “free speech zones” and ignored by the mainstream media outlets. Political apathy is widespread, as both major parties seem to be identical on many issues. Indeed, there is often more dissent among the members of one-party systems than in our two-party system. Disagreements are just about which team holds power, not substance. Language and rhetoric are manipulated (again, a la Orwell): “Free enterprise”, “tax burden”, “class warfare” “they hate our freedom”, etc. Constant patriotic displays and invocations about national superiority are designed to distract the populace from falling living standards, and the military are regaled as “heroes”.

There are two major differences: dissenters are not jailed but ignored, free to shout to the wind as long as they don’t present a real danger to the system, to maintain the illusion of freedom, and religion is not abolished but encouraged, as a means to control and distract the populace from economic issues that actually affect them. Phony “cultural” issues are used to win over religious people to support repressive control systems. An economic ideology of libertarian competitive free enterprise and “pull yourself up by your bootstraps” pluck is preached, no matter how contrary to reality, and accepted by a populace indoctrinated since childhood (with Hayek and Rand in place of Marx and Lenin).

The widespread perception among the general public that somehow the economic system and political system are interrelated keep people from recognizing these trends. The idea is that only Communism can be repressive, and Capitalism cannot. This is, of course, untrue: you can have democratic socialist systems like Scandinavia, and repressive capitalist systems. China is a perfect example of how one can have a capitalist economic system with political repression. Concentrated economic power is as tyrannical as concentrated political power.

I’ll end with a recent article by economist Jeffrey Sachs, whose description of the American political scene perfectly captures the concepts of the Hollow State and Inverted Totalitarianism (he uses the term corporatocracy):

On issue after issue, Washington is presently bucking the public's values, rather than respecting them. A majority of the public wants to preserve social programs, but they are being cut anyway. A majority wants higher taxes on the rich, but they are being cut rather than raised. A majority wants to end the wars, but they continue anyway.

The reason is the following. America is losing its democracy as our politicians trade their votes for campaign contributions from the corporate lobbies. We have a corporatocracy rather than a democracy, and Ryan stands at the center of it. The Wall Street Journal, which commissioned Ryan's review of my book, is the leading print mouthpiece for the corporatocracy.

Since entering Congress in 1999, Ryan has helped to prevent effective oversight and regulation of the banking sector. ... Ryan's re-elections have been consistently funded by the insurance, banking, and homebuilding industries. Banks such as the Bank of America and Citigroup, two of the largest bailout recipients, have been high on Ryan's contribution list; so too have major lobbying groups for the financial industry, such as the American Bankers Association and the Securities Industry & Financial Market Association.

America's corporatocracy is governed by vested interests rather than moral or economic principles. After financial deregulation led to the 2008 collapse, Ryan's enthusiasm for free enterprise suddenly took a second place to his new enthusiasm to rescue the banks through a giant taxpayer-funded bailout. The "free-market" Wall Street Journal similarly defended the bank bailout, all of a sudden lecturing its readers about market failures and the limits of the free market.

As soon as the banks were saved with public money, Ryan, the Journal, and most of the political class swung back to deregulation. Ryan voted against reforms of Wall Street. He inveighed against taxing or otherwise controlling the bonuses received by the CEOs and senior managers of the bailed-out banks. When it comes to the poor, however, Ryan has a different response: slash Medicaid spending, come what may. ...
My views ... run to the very idea of America: a democracy of the people, by the people, and for the people, not a government of the corporations, by the corporations and for the corporations. ...

http://www.huffingtonpost.com/jeffrey-sachs/paul-ryan-american-values_b_991817.html

P.S. We’ll talk a little about what can be done about this situation in a bit, but first we need to take a short detour through the works of a little-known Austrian philosopher names Leopold Kohr.

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