Local Economies and Authoritarian Capitalism

This is a continuation of these posts:

Automation and the Future of Globalization
Efficiency and Unemployment Reconsidered

As the economy decays, because it provides less and less ways for people to earn money, it will undergo a transformation. People will not roll over and die, they never have; the instinct to survive and pass along something to one's heirs is too great. They will do what they always have: form parallel, underground, off-book, black-market economies divorced from the money/finance economy, because the "formal" economy will function only for a shrinking elite. In essence, this is a parallel folding of history - in the past most people lived and died totally outside the money/finance economy (as most of the rest of humanity still does). Eventually, the money/finance gobbled up the entire economy - we now all depend on banks, credit, wages, etc. As Richard Heinberg put it in The End of Growth, quoting the historian Fernand Braudel: "In his marvelous book The Structures of Everyday Life: Civilization & Capitalism 15th-18th Century, historian Fernand Braudel wrote of the gradual insinuation of the money economy into the lives of medieval peasants: 'What did it actually bring? Sharp variations in prices of essential foodstuffs; incomprehensible relationships in which man no longer recognized either himself, his customs or his ancient values. His work became a commodity, himself a ‘thing.’"

See this:  Inside the Trillion-Dollar Underground Economy Keeping Many Americans (Barely) Afloat in Desperate Times (AlterNet)

Without solutions coming from Washington or local governments, it continues to be up to working people to find a way to negotiate the rough economy. Price argued, “People shouldn't have to give up fundamental human rights like access to income in retirement or safety on the job because they need work. But in a society like ours, which tolerates high levels of unemployment, the underground economy is often the next best alternative to starving.”

In addition to economies going underground, economies will also shrink, becoming more local. This is what has always happened in times of economic decay, from the Western Roman Empire to the Lowland Classic Maya to the former Soviet Union. The experts all agree. Here's Charles Hugh Smith (emphasis mine):

[...] The solution is localism. By creating cheap housing with its own modest tax resources, then the village attracts young families, whose children will keep the village school from closing, and the commerce brought to the village and its post office will keep it above the "closure" threshold.

Passively hoping that centralized concentrations of wealth and power will return to pre-eminence is a losing strategy, the equivalent of a cargo cult ritualistically hoping for a return to World War II-era bounty. Focusing local resources on obvious bootstrap solutions is the winning strategy, not just in the U.S. but globally.



That old mill town could do worse than to gather its resolve and institute a tax on all retail stores with more than 50,000 square feet of sales area. That would levy a special tax on one retailer, Wal-Mart. As long as the tax was modest, Wal-Mart would resist and threaten but it would be highly unlikely to close a profitable store.

Then the town could use that revenue to begin condemning all those empty buildings downtown via eminent domain and leasing them out for $1 a year to entrepreneurs. With no prospect of tenants, the buildings are essentially worth zero, so the owners would be lucky to get any sum. Most of the businesses would fail, as do most small businesses, but with nothing to lose, why not trust to capitalist energy and experimentation? Maybe something good would start happening as creative juices were given a chance to flow. Something would be much better than nothing.

When the devolution of the Central State and central bank (and indeed, all centralized concentrations of wealth and power) picks up speed, as it has in Greece, then people migrate back to where localist solutions are possible.

Breaking the mindset that Central State subsidies is the solution to every problem is difficult, but as reality intrudes then clinging to broken models of the past is not the way forward.

In many minds, Greece is a failed state and the U.S. is successful. To my mind, Greece is a state in a positive transition to dealing with reality, and it is the U.S. which is the failed state, borrowing and blowing 10% of its entire GDP each and every year to fund its bloated, corrupt Status Quo ($1.5 trillion in Federal borrowing annually, plus state and county borrowing and corporate/consumer borrowing).

Failed states depend on endlessly rising debt to prop up their bloated, corrupt Status Quo. That no longer described Greece, but it still describes the U.S.

Here's Nicole Foss (as a side note, I had the privilege of seeing Nicole speak in person last week - if you get the chance I highly recommend it)

[...] We will not, of course, be able to provide for the level of wants our societies were previously able to cater to, but we can provide the most basic necessities if we prepare in advance. The key aspect is to align our expectations with reality, because the essence of our psychological conundrum is our sense that business as usual is a non-negotiable state of affairs that must continue.

It will not continue because it cannot. Business as usual is only non-negotiable in the sense that reality will not negotiate, it will dictate, and we will have to live within its parameters.

There are many forms of decentralization - of opting out of the herd before it goes over the cliff. What they have in common is local resilience, a focus on local self-reliance and a thorough grounding in relationships of trust. As economies contract, so does the trust horizon.

Where there is no trust, systems cease to function effectively. Local initiatives work because they operate within the social space where trust still exists, and as they function, they reinforce those foundational relationships.

We need to be thinking in terms of local currencies, time banking (ie bartering skills), small transport networks, basic local healthcare, neighbourhood watch programs, adapting properties to multiple dwellings and permaculture initiatives that can rebuild soil fertility over time.

Here's John Robb:

It should be clear, as we watch the gyrations and excesses of global markets, that no organization/state/group has any meaningful control over its direction. The same is true for almost every other aspect of globalization, from the environment to transnational crime to energy flows. In short, we've lost control and our collective future is in the hands of a morally neutral system that is operating in ways that we don't fully understand (nor will we). The best defense against this emerging situation is not to call for new Manhattan projects or global treaties or Marshall plans, which won't work since we can neither marshal the resources necessary nor collectively agree on anything other than the most basic rules of connectivity, it is to slowly introduce organic stability into out global system. The concept I've latched onto as a solution is what I call the resilient community.

This conceptual model creates a set of new services that allow the smallest viable subset of social systems, the community (however you define it), to enjoy the fruits of globalization without being completely vulnerable to its excesses. These services are configured to provide the ability to survive an extended disconnection from the global grid in the following areas (an incomplete list):

Energy.
Food.
Security (both active and passive).
Communications.
Transportation.

The resilient community has broad applicability beyond just improving the ability of those of us in developed economies to preserve wealth and a quality of life despite severe system shocks.

But, as the system spirals downward, there will inevitably be pushback. As people take steps to get the things they need outside of the money system, that system will take steps to preserve itself, using the mechanism of the state, which it has entirely seized. Hence the concept of Authoritarian Capitalism, which I believe is as necessary a concept to understanding where we are heading as resilient and local communities. As I pointed out in my post on worker-owned businesses, if the powers that be see these parallel systems as a threat, they will take steps to crush it. For example, worker-owned businesses will be made illegal or regulated out of existence if enough people start buying into them. And resilient communities provide even more of a juicy target. Nicole Foss gets this, and the remainder of her essay excerpted above articulates this (as she does in her speech):

It is important to realize, however, that we are not going to be left in peace to do that which needs to be done. Solutions do not come from the top down, but interference does, because decentralization represents a threat to wealth concentration at the centre, and that is the goal of all human political systems.

Wealth is extracted from the periphery in favour of the centre, and the centre has an inexhaustible appetite. We are expected to pay our dues to that system, however onerous, not to try to reduce our own burden or that of our community.

As the centre seeks continually to solve the problems raised by excess complexity with more complexity, it also raises the cost (in terms of money and resources) of doing everything it touches. The periphery is then expected to cover the cost of the regulation that makes its own existence more precarious.

That regulation may even make life so expensive and difficult that parts of the periphery are driven towards a very marginal existence or out of an area altogether. Cumbersome, impenetrable and poorly communicated regulations are a recipe for raising revenues through fines for non-compliance, therefore we can expect worse governance to be implemented in the interests of the centre.

Fines may be completely disproportionate to the scale of the 'offence'. Where such regulations are devised with no transparency or accountability, but plenty of discretion on behalf of enforcement personnel, they may also become an engine of corruption. This is a very common circumstance in many parts of the world.

This makes doing the things Charles Hugh smith suggested extremely difficult. The central powers want us dependent upon them, and they need us to preserve their power (we are where the true wealth resides anyway; they just appropriate it). Nicole mentions several examples, from raiding raw milk cooperatives to taxing home gardens to outlawing local seed banks (to spread GMO seed, natch). She doesn't point this out, but all of these have something in common - they are uses of government power to preserve the status-quo. As such, they are antithetical to freedom. This is what I mean when I use the term authoritarian capitalism. This is exactly what happened under communism - forced buy-into the system by central authorities. By contrast, our government is supposed to be democratic- "we the People". Of course, it is anything but. "Democracy" is a sham - our institutions are controlled by elites. It is the financial system, not the political one, that governs us. See this: If you want more local food, stop criminalizing family farmers (Common Dreams):

On Wednesday January, 11 Wisconsin dairy farmer Vernon Herschberger must appear before a county judge in Baraboo, WI. His crime? Providing unpasteurized dairy products from his small herd of about twenty pastured cows to members of his own buying club. Half way across the continent in Maine, Daniel Brown, another family farmer with a small livestock herd was notified last November that he was being sued by the state for selling food and milk without a license. At the time he was milking one Jersey cow.

In Valencio County, New Mexico, the Hispano Chamber of Commerce was forced to cancel its popular Matanza Festival set for Jan. 28th under pressure from the USDA which said the centuries old tradition of processing and serving pigs on site could no longer be done outside of a federally certified slaughter facility. Last July in Oak Park, Minnesota bureaucrats threatened Julie Bass with up to three months in jail for daring to grow vegetables in her own front yard. In September, Adam Guerroro was ordered to remove his kitchen garden because it was deemed a “public nuisance” by Memphis, Tennessee officials. Apparently, Michelle Obama’s victory garden at the White House falls under a different jurisdiction.

This government crackdown on family farmers is absurd given the current sordid state of our food/farm system and the urgent need to relocalize agriculture for the sake of our health, as well as that of the planet. Study after study has shown that the most dangerous food is usually that which has endured the most processing and traveled the furthest.

Of course, consolidated Big-Ag most definitively, does not want more local food. Just like with increasing police state measures, it's all about "keeping us safe". Libertarians often point out that this is why we should eliminate or curtail government power. They erroneously assume that our dealing with corporations is somehow 'choice'. In fact, any power vacuum left by receding government will be filled by predatory monopoly corporations. Look no further than our health care travesty to see what I mean. If you think medicine is expensive now, wait until you see how much it costs in a libertarian paradise.

And while some are optimistic about the Internet and new communications technologies to get around restrictions imposed by the state, to me they seem like the ultimate tool of repression. The internet is not small or local; it is a complex system owned and run by elites (government and corporations), and it monitors where you are at all times and everything you do. It is the ultimate panopticon, one with no escape or recourse. I'm glad somebody is finally realizing this:

UCLA electrical engineering prof John Villaseno thinks the growing capacity of computers to collect, store, and analyze data will enable governments to assess, track, and draw connections between dissidents on a scale previously not seen.

"These regimes will store every phone call, instant message, email, social media interaction, text message, movements of people and vehicles and public surveillance video and mine it at their leisure, according to "Recording Everything: Digital Storage as an Enabler of Authoritarian Government," written by John Villaseno, a senior fellow at Brookings and a professor of electrical engineering at UCLA."

As the cost of computer disk storage and other storage media continue to plummet the amount that governments can record goes up. Storage costs have fallen so far that the amount that can be captured about each person and kept long term has gotten pretty detailed. In the future the amount that can be recorded and stored per person will undergo more doublings. Every phone conversation that takes place will be able to be captured and stored for decades.

Since today even handheld smart phones can translate spoken words into text it is reasonable to expect governments will be able to capture all spoken conversations, translate them all into text, and then use sophisticated software to analyze the conversations for meaning.

When a government decides someone is of interest as a potential trouble maker that government will be able to quickly analyze every phone conversation (and a large fraction of all online text conversations) that person ever participated in . Then threat assessment software will assess the threat posed by the citizen who is critical of the regime. A retrospective approach is not the only possibility of course. A political threat profile could be maintained that gets continually updated with the latest movements, utterances, and purchasing decisions.

 Some have speculated that tecnologies like Facebook and Twitter are psychologically conditioning us to expect zero privacy. And see this:

Dirty cops will love SOPA. Ken at Popehat examines Google's report on the number of police departments and governments that have requested removal of police brutality videos shot by citizens, and asks what will happen once the Stop Online Piracy Act makes spurious takedown even easier.

On New Year's Eve, president Obama signed the National Defense Authoraization Act (which he had earlier promised to veto).

This past New Year’s eve, President Obama signed the 2012 National Defense Authorization Act, or NDAA. In doing so, he extended the Guantanamo transfer restrictions, while also codifying the indefinite detention without trial of suspected terrorists. In the statement he issued with that signature, he said:

“I have signed this bill despite having serious reservations with certain provisions that regulate the detention, interrogation, and prosecution of suspected terrorists.”

The pledge to seek repeal and oppose expansion of transfer restrictions had melted into a watery “reservation.”

The president’s Saturday statement also makes a new promise.

“I want to clarify that my Administration will not authorize the indefinite military detention without trial of American citizens. Indeed, I believe that doing so would break with our most important traditions and values as a Nation.” Although the Obama Administration has consistently claimed the power to kill U.S. citizens without charge or trial in the war on terror, as it did to the radical cleric Anwar al-Awlaki in Yemen, the president now promises not to imprison them.

Of course, a future president still might.

And the ability to shut down the internet is already passing through the legeslature, in the name of "copyright protection" and backed by large, undemocratic institutions (even unions!). Naked Capitalism comments, Chinese Style Internet is coming to America:

SOPA and PIPA (Protect IP Act) use nuclear-weapon-to-kill-a-mouse scale solutions to Internet piracy. David Carr in the New York Times, in an rather anodyne article given what is at stake, gave an overview of what is wrong with the bills, namely, a lot. Even if you accept the proponents’ dubious claims about the losses from “rouge” foreign websites ($58 billion!), the bills probably won’t fix that problem and will create a host of new ones. Despite assertions that it would create jobs, it would actually deter technology startups, undermine scientific journals, and could fragment the Internet domain name system. It’s tantamount to making the public wear ankle bracelets to combat shoplifting.

So why is the American Bankers Association one of the sponsors of a bill that seems awfully remote from its terrain? The bill allows anyone to send a complain about a purported SOPA violation and get the site disappeared. This faster and more brutal than the execution of Wikileaks via cutting off its access to payment networks. From TechDirt in December (emphasis theirs):

I wanted to call out one key point that was really made clear by an amendment offered by Rep. Jared Polis late in the day yesterday, which hasn’t received nearly enough attention. As you may recall, with the “manager’s amendment” version of SOPA (i.e., SOPA 2.0), the “notice-and-shut off funding” section of the private right of action in Section 103 was removed. This was good, because we’ve seen how the notice-and-takedown provision of the DMCA has been widely abused.

However, what most people missed was that the bill effectively sneaks this back into the bill in a much worse form in Section 105, which supposedly grants “immunity” to service providers for taking voluntary action to stop infringement. The true impact of this section was only made clear by Rep. Polis’ attempt to limit it, as he highlighted how this broad immunity would likely lead to abuse. That’s because this section says that anyone who takes voluntary action “based on credible evidence”: basically gets full immunity. Think about what that means in practice. If someone sends a service provider a notice claiming infringement on the site under this bill, the first thing every lawyer will tell them is “quick, take voluntary action to cut them off, so you get immunity.” Even worse, since this is just about immunity, there are no counternotice rules or anything requiring any process for those cut off to be able to have any redress whatsoever…

End result: SOPA 2.0 contains a crazy scary clause that’s going to make it crazy easy to cut off websites with no recourse whatsoever. And this part isn’t just limited to payment providers/ad networks — but to service providers, search engines and domain registrars/registries as well. Yes. Search engines. So you can send a notice to a search engine, and if they want to keep their immunity, they have to take the actions in either Section 102(c)(2) or 103(c)(2), which are basically all of the “cut ‘em off, block ‘em” remedies. That’s crazy. This basically encourages search engines to disappear sites upon a single notice. It encourages domain registries to kill domains based on notices. With no recourse at all, because the providers have broad immunity.

Oh no, this isn’t crazy at all, it’s authoritarian. Imagine how long Goldman666 or Matt Taibbi or Karl Denninger or yours truly would be around with this rule. Wikileaks demonstrates that even Swedish domiciled sites are not safe.

And it isn’t just the banks that favor SOPA. So too does the AFL-CIO.

The Internet lets people talk to each other. What this bill does is go after that feature in the name of attacking crime. Does crime require that people talk to each other? Yeah. So does everything else. Legacy organizations, be they banks or music companies or Big Pharma or the AFL, are willing to sabotage open communications if they think it will help assure their survival. And given how banks’ ability to loot depends on ignorance of how extensive and nefarious their abuses are, their motivation to shut off information is high indeed.

And the government is already actively monitoring the Internet in America for "threats": Homeland Security watches Twitter, social media

(Reuters) - The U.S. Department of Homeland Security's command center routinely monitors dozens of popular websites, including Facebook, Twitter, Hulu, WikiLeaks and news and gossip sites including the Huffington Post and Drudge Report, according to a government document.

A "privacy compliance review" issued by DHS last November says that since at least June 2010, its national operations center has been operating a "Social Networking/Media Capability" which involves regular monitoring of "publicly available online forums, blogs, public websites and message boards."

The purpose of the monitoring, says the government document, is to "collect information used in providing situational awareness and establishing a common operating picture."

All of these moves are under the radar, getting no coverage whatsoever from the mainstream media. As Nafeez Ahmed, author of "The Crisis of Civilization" describes the measures of state militarization against its own citizens:

The subliminal, unstated ideological assumption of this sort of analysis is simply this: the current global political economic order must be sustained, maintained, perpetuated at any cost; it cannot be permitted to undergo deep-seated structural reforms, because it is already perfect – we have already arrived at Francis Fukuyama’s End of History, the “unabashed victory of political and economic liberalism” in the West, and “the end point of mankind’s ideological evolution”, discounting all possibility of alternatives to neoliberal capitalism. Therefore, resistance against the neoliberal system is illegitimate, and deserves to be crushed without remorse.

But Fukuyama was dead wrong. We are currently facing not simply one crisis, but a converging multiplicity of global crises – the global financial crisis, the global water crisis, the global food crisis, the crises of terror, war & militarisation – each of which is merely an interconnected symptom of a deeper Crisis of Civilization. Even the International Energy Agency now warns that we have a maximum of five years before we enter an unpredictable era of dangerous, irreversible climate change heading toward an uninhabitable planet, driven by a global industrial machine which privileges unlimited economic growth for the benefit of a tiny elite minority, against the needs of the vast majority of the human population.

Yet what we are facing is not simply a process of civilizational collapse, but more fundamentally, a process of civilizational transition, the outcome of which remains to be seen. For the first time in human history, we face a civilizational crisis of truly planetary proportions. With it we are witnessing the self-destruction and decline of an exploitative, regressive and harmful industrial civilizational form within the next few decades, and certainly well within this century. With all this, we have an unprecedented historic opportunity, as this regressive civilizational form undergoes its protracted collapse, to push for alternative ways of living, doing and being – economically, politically, culturally, ethically, even spiritually – which are potentially far more conducive to human prosperity and well-being than hitherto imaginable.

I'll leave the final word to Umair Haique:

In a sense, that sentiment is the common thread behind each and every movement in the Metamovement — a sense of grievous injustice, not merely at the rich getting richer, but at the loss of human agency and sovereignty over one's own fate that is the deeper human price of it.

It's one thing for institutions to fail — as in fail to deliver the goods — but for them to punish people for attempting to pursue prosperity reaches beyond failure. To get a visceral feel for this, please stop for a second and visit We Are The 99 Percent. This is not merely nonfunction, but malfunction.

The Metamovement isn't just a faint, transient echo, but the increasingly resonant reverberation of people challenging this brutal state of malfunction, this Great Splintering of institutions and social contracts. Their truth, I suspect, might be this: there's no one left to turn to — and so the Metamovement has turned to each other. Not for yesterday's notions of "solidarity", or the corporatist ideal of "inspiration, "but as nodes in a pulsing network whose coherence defines it: to demand institutions which can literally deliver the goods of enlightened social contracts. That enshrine in the people, first and foremost, the inalienable right to be authors of their own destinies — instead of condemning them to be mute puppets.

It is, of course, this sense of autonomy that is the cornerstone of eudaimonia, the belief that a good life is a life lived meaningfully, and that it ought to be possible to both live meaningfully and make a living. And in that foundational sense, I'd say the Metamovement is the first glimmering of a larger revolution that will burn over the globe like Bouazizi's fire. No, not every revolt ends in revolution — but every revolution begins with revolt.

And make no mistake, this is revolt — an insurrection against a monstrous status quo that's failed too many, too deserving, for too long, while serving too few, too undeserving, far too well. It is not in the nature of man or beast to stay yoked to the gleaming machines of their own economic, social, and moral annihilation. Better — as perhaps Bouazizi thought — to commit the ultimate act; to choose. To choose to let loose a brutally human cry, one whose echoes might come to define a defining decade