Techno-Fixes Are Counterproductive and Mad

This article is about all of the high-tech ideas that are tossed out every so often to clean up the ocean and deal with things like the giant plastic garbage patches floating out there (larger than the state of Texas by now!). You’ve probably seen these in TED talks, the pages of Wired Magazine or promoted by the Long Now people and other “bright green” environmentalist types. You know the story – brave, earnest, high-achieving high school student invents magic super-machine that will solve (_insert problem here_). Now we can all relax and forget about all the problems, because “they” have solved them.  It's a sign of our easy quick, cargo-cult, techno-fix culture that refuses to ever question the secular religion of growth, innovation and technological progress:

 Every so often, somebody comes up with a plan for finding and removing the particles of plastic that litter our oceans and accumulate in "garbage patch" gyres. These plans meet with great acclaim ... from everybody except the people who know the most about garbage patches and plastic pollution.

Why do marine scientists and non-profits like The Ocean Conservancy speak out against ideas like 19-year-old Boyan Slat's ocean cleanup technology? Primarily, it's because plans like Slat's tend to be based on a really simplistic understanding of both the problem and ocean systems and, as a result, wouldn't actually work in the real world.

But there's a bigger issue here as well. This isn't a matter of mean old scientists talking dirt on the big ideas of a brave, smart kid. Great-sounding-but-not-actually-effective ocean cleanup plans have real consequences. They divert limited money and time away from the actually useful work. Worse, they inadvertently help prop up an unsustainable system where it's totally okay for us to keep letting plastic get into the oceans ... because we can just come back later and clean it up. But that's simply not true, writes Stiv Wilson, policy director of the ocean conservation nonprofit 5Gyres.org.

    "I find debating with gyre cleanup advocates akin to trying to reason with someone who will argue with a signpost and take the wrong way home. Gyre cleanup is a false prophet hailing from La-La land that won’t work – and it’s dangerous and counter productive to a movement trying in earnest stop the flow of plastic into the oceans. Gyre cleanup plays into the hand of industry, but worse, it diverts attention and resources from viable, but unsexy, multi-pronged and critically vetted solutions..."

There are real solutions to the problem of plastic pollution, but they don't come in the form of feel-good gadgets that will sift the particles out of the water. And if we convince ourselves otherwise, then we're going to ignore the stuff we should really be doing

Plastic pollution in oceans can't be solved with a gadget (BoingBoing)

Teen invents device to clean giant ocean garbage patches (Treehugger)

This is a point I've tried to make too - these techno-fixes divert time, money and resources from real, honest solutions that will have less blowback and achieve a more permanent resolution. But they wont preserve the wealth and power of the elites, and so they are ignored in favor of the latest wonder gadget, will will just cause more (profitable) problems down the road.

Not only do these techno-fixes not actually deal with the underlying problem, they are actually counterproductive. What they do is give people the false idea that there is a quick fix with some sort of gee-whiz technology and that the status quo is sustainable. This allows the people who benefit from the status quo to keep it going, to deflect criticism, to head off any uncomfortable questions, and to prevent any significant, meaningful change that will tip their apple cart. Instead, they assure us that there is a techno-fix for every imaginable problem. You name it, air pollution, resource scarcity, peak oil, climate change, topsoil erosion, droughts and falling aquifers, etc.; for example, electric cars, carbon sequestration, geoengineering, carbon trading, putting prices on “ecosystem services,” genetic modification , desalinization, and so on. Even social problems like inequality and unemployment will magically disappear with technological progress (Vote online! Computers will magically create jobs! Online courses!).

My favorite recent example is colony collapse disorder. This seems like a  parody straight out of The Onion, but as we know, there is no way to make the culture we live in any more ridiculous and insane than it actually is. People are now proposing to build millions of tiny flying robots to pollinate the crops to replace all the bees we’ve killed off with (most likely) neonicotinoid pesticides (which also, by the way, are killing birds). I swear I am not making this up!:

Honeybees, which pollinate nearly one-third of the food we eat, have been dying at unprecedented rates because of a mysterious phenomenon known as colony collapse disorder (CCD). The situation is so dire that in late June the White House gave a new task force just 180 days to devise a coping strategy to protect bees and other pollinators. The crisis is generally attributed to a mixture of disease, parasites, and pesticides.

Other scientists are pursuing a different tack: replacing bees. While there's no perfect solution, modern technology offers hope.

Last year, Harvard University researchers led by engineering professor Robert Wood introduced the first RoboBees, bee-size robots with the ability to lift off the ground and hover midair when tethered to a power supply. The details were published in the journal Science. A coauthor of that report, Harvard graduate student and mechanical engineer Kevin Ma, tells Business Insider that the team is "on the eve of the next big development." Says Ma: "The robot can now carry more weight."

The researchers believe that as soon as 10 years from now these RoboBees could artificially pollinate a field of crops, a critical development if the commercial pollination industry cannot recover from severe yearly losses over the past decade.

Tiny Flying Robots Are Being Built To Pollinate Crops Instead Of Real Bees (Business Insider)

So we’re going to spend millions of dollars to develop robotic bees which still aren’t even viable (“But RoboBees are not yet a viable technological solution. First, the tiny bots have to be able to fly on their own and "talk" to one another to carry out tasks like a real honeybee hive”) instead of, you know, trying not to kill actual bees that have co-evolved with plants over millions of years. That might impact profits, after all. Because one good technofix (synthetic pesticides) deserves another (robot bees!). I’m sure our artificial solution will be even better and cheaper than the original, right? I can’t think of a better example of what I’ve been saying on this blog over the years – most innovations today are just trying to solve the problems caused by earlier innovations.

In fairness, they do note, “Although Wood wrote that CCD and the threat it poses to agriculture were part of the original inspiration for creating a robotic bee, the devices aren't meant to replace natural pollinators forever. We still need to focus on efforts to save these vital creatures. RoboBees would serve as "stopgap measure while a solution to CCD is implemented," the project's website says.” Sure. But somehow stopgap measures have a way of becoming permanent solutions in our modern industrial global civilization. I wonder how many resources will go into building millions of these robot bees. But those resources will spur economic growth! More profits for robotics companies! After all, that’s the main purpose of human society, isn’t it? Surely that will be the new “green” solution.

I also love how the execrable business tabloid Business Insider (have those ads crashed your browser, too?) calls this a “game changer” and lumps it in with all the other high-tech intensification “game changers” being touted by global mega-corporations and Silicon Valley  – Frankenmeat, insect ranching, and “Future Food: How Scientists And Startups Are Changing The Way We Eat.” Future food, eh? Somehow, I don’t think "future food" is going to be as good as "past food" and I don’t think "changing the way we eat" is going to end up well for us. It hasn’t historically – obesity sits side-by-side with starvation. Will we even get a choice in the matter? Somehow, I’m guessing that the rich and powerful will get to stick with the old way of eating the past foods that the rest of us won’t be able to afford anymore. They probably won’t suffer from the same diseases and die prematurely either. But the corporate media won’t tell you that, or course, they’re busy flogging the newest techno-fix (water from clouds!, Robot farmers!, artificial leafs!)

What’s the alternative? Less growth, less profit, less technology, and more sanity that takes into account the quality of human life and the realities of our planetary ecosystem.. But you won’t read about that in “Business Insider” or see it at TED anytime soon.

Let Them Eat Beans!

Let Them Eat Beans: Tyler Cowen’s Neofeudal Dystopia – coming to a shantytown near you.

I’ve mentioned the Book Average Is Over many times before, and here, finally, is my review. The author of the book, Tyler Cowen, is an economics professor at George Mason University, and is affiliated with the Mercatus Center, a neoliberal/market oriented think tank (and yes, there is Koch brothers money involved here). He is also maintains the excellent Web Site Marginal Revolution (with Alex Tabarrok), one of the few libertarian blogs worth reading, and considers himself a “small-L” libertarian.

Despite these dubious affiliations, he is an idiosyncratic thinker, and not afraid to wander off the libertarian reservation, which makes him worth reading, unlike many of his peers who are simply courtiers and propagandists. He is best known before this book The Great Stagnation, which argued (against the libertarian party line*) that slower American economic growth results from harvesting the low-hanging fruits of innovation, and new inventions are useful, but don’t add up to as much GDP growth as past innovations**. However, he has the obligatory silver lining, arguing that this is only a temporary rough patch and things will get better in the future (a standard in his work; he will make the same argument in Average, as we shall see). He is usually mentioned in the context of stagnationist arguments, although economists like Robert Gordon have stolen much of his thunder, following such conclusions much further, and being much more pessimistic about future growth.

About that title. It comes from a column by "the pope of globalism," Thomas Friedman (which ought to tell you something right there). I can’t do better than this wry commentary on Thomas Friedman: Tom Friedman: A New Ayn Rand for A Dark Digital Future

 Consider this passage from Friedman’s column:

“In a world where, as I’ve argued, average is over — the skills required for any good job keep rising — a lot of people who might not be able to acquire those skills can still earn a good living now by building their own branded reputations, whether it is to rent their kids’ rooms, their cars or their power tools.”

This paragraph reads like a Zen koan pieced together from cast-away fragments of motivational sales speeches. We’re left to infer the meaning of its more obscure phrases from their context, the same way World War II code breakers cracked particularly difficult passages in enemy telexes. So let’s try to tease out its meaning, phrase by phrase:

“In a world where, as I’ve argued, average is over …” (Emphasis from the original.)

“Average is over”?  Averaging is a mathematical function, inextricably woven into the fabric of reality as we understand it. How can it be over? It’s like saying that subtraction is over, or means and medians are null and void.  (Watch yourself, standard deviation. Thomas Friedman has his eye on you.)

What’s he really saying here? The “as I’ve argued” offers one clue to motivation, if not meaning: Anything self-referential from this author – and that’s a lot – is a signal that he’s floating another potential “The World Is Flat” book title.

But what’s he saying?  Our context-driven code-breaking takes us to the next phrase:

“… the skills required for any good job keep rising …”

Ah, I see. “Average is over” is connected to job skills. Friedman apparently means that you can’t get a good job anymore if your skill level is only average.

Why didn’t he just say so?

Well, Tyler Cowen used the book title, not Tom Friedman, and that is exactly what he's saying. Since most of us, by definition are average (I know I am), we are “over.” What he means is that anyone who is not “above average” can kiss any kind of stable, prosperous existence goodbye in the new world of corporate libertarian capitalism. That is the core message of the book. I found this comment to a recent MR post a good summary:

Consider the bell curve distribution of IQ in the general population. Now consider a curtain being drawn across that graph from stage left. As that curtain, which represents technological advance, blankets a population segment, it renders them useless in terms of economic competitiveness. 

We didn’t much care when this impacted those with an IQ < the mean, but the curtain's leading edge is now at 1 σ above the mean, and accelerating to the right. How long till you and your family are also rendered useless? You will mistakenly overestimate that value.

Basically in addition to Friedman, it rides on the back of the work of MIT economists Brynolfsson and McAfee (and to a lesser extent David Autor), arguing that automation will disrupt much of the workforce through robots and smart machines (the self-driving car gets particular mention). The book dismisses starry-eyed notions of a singularity or post-scarcity, and instead makes the case that people laboring complementarily with machines is the wave of the future, using something called “freestyle chess” as an example*** where teams are allowed to make use of computers in tournaments, yet still make the executive decisions themselves****. Computers will also lead to a lot of low-cost or free services like education. The book claims that people who are conscientious, disciplined, and highly social will prosper due to these developments, while those who are not will experience falling living standards and precariousness. The book provocatively argues that women, who generally rate higher on conscientiousness (I would say docility and malleability) and are generally more sociable will be the big winners and men the big losers (also indicated by falling rates of men graduating from college). In other words, the way he sees it, the benefits of digital technology will not be broadly shared among the American people, as some optimists claim, but instead accrue to a tiny elite that owns the machines, in line with the more pessimistic vision.

"It's clear: The world is demanding more in the way of credentials, more in the way of ability, and it is passing along most of the higher rewards to a relatively small cognitive elite. After all, the first two categories of earnings winners--namely those with advanced degrees--account for only about 3 percent of the US population"

What this means is that a small slice of the American workforce will be wildly successful, living “like today’s millionaires”  – Cowen puts this number as 10-15 percent of the American workforce. As for the rest of us, well, the outlook is not so good. While he never uses the new portmanteau term “precariat” this is exactly what he’s describing. The vast majority will be marginally attached to the workforce with intermittent and temporary employment, enjoy few or no benefits, no upward mobility, little chance to accumulate wealth or savings, or even gain a modicum of stability or job security. Shared prosperity will be a distant memory. Some workers will even be "zero marginal product" workers - unable to be hired at any price. Cowen speculates the arrival of vast shantytowns and slums outside American cities, including “off the grid” living in tents and mobile homes for many. The middle classes will be hollowed out leading to a society of spectacularly rich and oceans of desperate poor, very similar to Latin America or Southeast Asia. In other words, Inequality, already at Great Depression levels, is just getting warmed up, says Cowen.

"We will move from a society based on the pretense that everybody is given an okay standard of living to a society in which people are expected to fend for themselves much more than they do now. I imagine a world where, say 10 to 15 percent of the citizenry is extremely wealthy and has fantastically comfortable and stimulating lives, the equivalent of current-day millionaires albeit with better health care."

"Much of the rest of the country will have stagnant or maybe even falling wages in dollar terms, but a lot more opportunities for cheap fun and also cheap education. Many of these people will live quite well, and those will be the people who have the discipline to benefit from all the free or near-free services modern technology has made available. Others will fall by the wayside."

"It will become increasingly common to invoke "meritocracy" as a response to income inequality, and whether you call it an explanation, a justification, or an excuse is up to you. Since the self-motivated will find it easier to succeed than ever before, a new tier of people from poor or underprivileged backgrounds will claw their way to the top. The Horatio Alger story will be resurrected, but only for those segment of the population with the appropriate skills and values, namely self-motivation and the ability to compliment the new technologies...This framing of income inequality in terms of meritocracy terms will prove self-reinforcing. Worthy individuals will in fact rise from poverty on a regular basis, and that will make it easier to ignore those who are left behind....what does that mix of values mean for actual social choices? We'll pay for as much of a welfare state as we can afford to, and then no more."

There are a few things computers can’t do, he says, and one is come up with good marketing ideas to sell to the new rich class. Because only a small slice of America will have a job or reliable income, everyone will want a piece of them, so Cowen sees marketing to this new elite as a major job of the future. Due to vast disparities in power and wealth, people will be aggressively clamoring for any moment of time or spare dollar from the wallet of the elites – he uses the analogy of a billionaire rolling in a limousine through the streets of Calcutta, and anyone who has stepped off the plane in a poor country and been immediately inundated with salesmen and con artists can relate (except those people will now be us).

"Despite all the talk about STEM fields, I see marketing as the seminal sector for our future economy...If you imagine two wealthy billionaire peers sitting down for lunch, their demands for the attention of the other tend to be roughly equal. After all, each has a billion dollars (or more) to spend and they don't need to court each others for favors so much...Compare it to one of those same billionaires riding in a limousine, with open windows, through the streets of Calcutta. A lot of beggars will be competing for the attention of that billionaire, and yet probably the billionaire won't much need the attention of the beggars. The billionaire may feel overwhelmed by all of these demands, and yet each of these beggars will be trying to find some way to break through and capture but a moment of the billionaire's attention."

"This is in short what the contemporary world is like, except the billionaire is the broader class of high earners and the beggars are wealthier than in India. Instead of begging, there is a large class of people trying to command our attention using modern technologies such as email, spam, AI-targeted advertisements, coupons, Groupons, direct mail, advertising supplements in your credit card bill, and flashing ads on the Internet, among hundreds of other techniques...getting attention will continue to be a critical function in the new world of work and is likely to require ever-greater effort and sophistication."

Billionaires and beggars? Nice analogy for the new economy. Millions clamoring for their attention and table droppings. Doesn't sound like a very "efficient" economy now does it? Does that seem like a good use of natural resources or human capital? Are you ready for even more intense advertising (is that even possible?)

The other thing digital technologies aren’t very good at is human interaction and motivation. Thus he sees the rise of a new servile class of motivators and coaches to motivate the one percent to “achieve” even more, along with educational tutors, personal chefs, personal trainers, event planners, and other assorted toadies to the new aristocracy as a major job growth field for the new underclass - just like Downton Abbey, except you live alone and have to pay for everything yourself.

"High-skilled performers, including business executives, will have some kind of coach. There will be too much value at stake to let high performers operate without a steady stream of external advice, even if that advice has to be applied rather subtly. Top doctors will have a coach, just as today's top tennis players (and some of the mediocre ones) all have coaches. Today the coach of a CEO is very often the spouse, the personal assistant, or even a subordinate, or sometimes a member of the board of directors. Coaching is already remarkably important in our economy, and the high productivity of top earners will cause it to become essential."

Pervasive automation will have other knock-on effects. Everyone will be continually monitored and tested by digital overlords, from birth to death. Your productivity will be ruthlessly monitored 24-7 and regularly tested, so that even a slight trip up will cast you down into the underclass if you can’t keep up. If you have visions of a fluorescent-lit digital cubicle sweatshop where employees labor away under a tireless all-seeing eye watching every move for the benefit of the owner class in the executive suites, well, so do I. Since this affects his class, Cowen manages to muster a bit of sympathy for these workers, unlike the rest of us. Even the “winners” will be losers in this new system. I imagine much higher rates of drugs to keep up and ameliorate the psychic effects of this digital tyranny (Adderall, Provigil, Paxil, etc.). This measurement and sorting of the economic sheep and goats will begin frightfully early, so your economic destiny will probably be determined by age 7-8 or so, if not earlier, so if you aren’t a genius by age 7 or don’t fit well into the school system from an early age, well, get ready to stack shelves or work the deep fryer. While obscure prodigies will rise to the top thanks to this (Cowen relies on a sole example of an obscure Mongolian math genius), for most of us, Cowen warns ominously, there will be “far less second chances.” Our “permanent record” will follow us from birth to death, determine everything about our lives, and be uneraseable and inescapable.

"Another development is this: The better the world is at measuring value, the more demanding a lot of career paths will become. That is why I say 'Welcome to the hyper-meritocracy' with a touch of irony. Firms and employers and monitors will be able to measure economic value with sometimes oppressive precision."

But there’s a silver lining here, Cowen assures us. Digital technology means lots of opportunities for “cheap fun and cheap entertainment” for a new class of digital bohemians and vagabonds. Couchsurfing, AirBnb, Uber, Reddit, Wikipedia, Khan Academy, Netflix, Hulu, blogs and podcasts, - there’s plenty to do inside your tarpaper shack or parents’ basement, thanks to the Internet, provided by free municipal wireless. It could even be culturally vibrant, just like Latin America. After all, America’s cultural hub, New York City, has the same income inequality as sub-Saharan Africa. It’s rather bizarre to see a libertarian economist suddenly do a 180 and invoke the “experiences are worth more than money” argument, since libertarian capitalism has depended upon the fact that it provides mountains of inexpensive food and consumer crud for people to buy as its main justification for a century or so. One is reminded of the eighteenth-century English aristocrats who rode through starving villages in their carriages with a perfumed kerchief over their noses, remarking on the jollity of peasant life with their harvest festivals, drinking and merrymaking, ignoring the fact that the peasants also lived in hovels, slept in straw, ate nothing but gruel, and died prematurely.

Extensive in-migration to the Sunbelt leads Cowen to conclude that Texas is the future of America – cheap automobile-dependent suburban sprawl, dilapidated infrastructure, lousy schools, threadbare public services, high user fees, and low, low taxes. Because people are “voting with their feet” by moving to Texas, he concludes that people prefer “more money in their pockets” thanks to low-cost suburban sprawl and low taxes, rather than good government services (or even honest, competent government). I would interject that the increasing “Dixiefication” of America means people have less choice in this matter than ever before. The “race to the bottom” means that states with this philosophy have a comparative advantage, and people will move where the jobs are, regardless of what they may really want, especially if the weather is good. The explosive growth of San Antonio/Ciudad Juarez is touted as an example of how economically vibrant cities attached to impoverished shantytowns can lead to the successful cities of the future.

"Since there is considerable net in-migration to Texas, I conclude that a lot of Americans would rather have some more cash than better public services...Many Americans will end up living in areas with cheaper housing and lower-quality public services, if only to give themselves more cash in their pocket. Some of those areas might be a bit ugly to the eyes, again as a trade-off for lower costs. As a cross-country moving proceeds, and changes what we are, the United States as a whole will end up looking more like Texas."

"When I visit Latin America, I am struck by how many people there live cheaply. In Mexico, for instance, I have met large numbers of people who live on less than $10,000 a year, or maybe even less than $5000 a year. They hardly quality as well-off but they do have access to cheap food and very cheap housing. They cannot buy too many other things. They don't always have the money to bring the kid to the doctor or to buy new clothes. Their lodging is satisfactory, if not spectacular, and of course the warmer weather helps."

"What if someone proposed that in a few parts of the United States, in the warmer states, some city neighborhoods would be set aside for cheap living? We would build some "tiny homes" there; tiny homes that might be about 400 square feet and cost in the range of $20,000 to $40,000. We would build some very modest dwellings there, as we used to build in the 1920s. We would also build some makeshift structures there, similar to the better dwellings you might find in a Rio de Janeiro favela. the quality of the water and electrical infrastructure might be low by American standards, though we could supplement the neighborhood with free municipal wireless (the future version of Marie Antoinette's famous alleged phrase will be "Let them watch Internet!"). Hulu and other web-based TV services would replace more expensive cable connections for those residents. Then we would allow people to move there if they desired. In essence, we would be recreating a Mexico-like or Brazil-like environment in part of the United States....Many people will be horrified at this thought. How dare you propose we stuff our elderly into shantytowns? Maybe they are right to be upset, although recall that no one is being forced to live in these places. Some people might prefer to live there...

"The most extreme low-rent move is to go 'off the grid.' For all the technological progress we have seen, a growing number of Americans are disconnecting from traditional water and electricity backups and making their own way, often in owner-built homes, micro-homes, trailer parks, floating boats, or less elegantly in tent cities, as we find scattered around the United States, including in Portland, Seattle, and Los Angeles. Some of these options are gruesome, but many people are doing it by choice. New technologies, such as powerful local generators and solar power, are making it easier to strike out on one's own."

"There is one final way we will adjust to uneven wage patterns and that is with our tastes. Many of society's low earners will reshape their tastes--will have to reshape their tastes--toward cheaper desires. Caviar is an expensive desire and Goya canned beans is a relatively cheap desire. Don't scoff at the beans: With an income above the national average, I receive more pleasure from the beans, which I cook with freshly ground cumin and rehydrated, pureed chiles, Good tacos and quesadillas and tamales are cheap too, and that is one reason they are eaten so frequently in low income countries."

"Just as some poorer people will do without fancy infrastructure, so will others do without advanced health care. Since we won't be willing to pay for full-benefit Medicare and Medicaid for everyone who will need it, some people will see cut benefits or rationed access to doctors. Our political system will try to construct that rationing so that voters blame the doctors rather than the politicians, but one way or another rationing will increase. Imagine many more millions of people wishing to see a doctor and having to wait weeks or months to do so."

So slums, sprawl and shantytowns with decaying infrastructure will be where people "prefer" to live. Funny how very few Americans "preferred" to live in dilapidated shantytowns and favelas from 1950-1979. Well, I guess tastes change. Remember, nobody's forcing you to sell your plasma to pay the rent.

As the rich get richer they will become even more influential. The political class will increasingly cater to their needs while turning a blind eye to the exploding poverty of most Americans, pretty much as they do now. The realities of automation and robots causes Cowen to be much less hostile to redistribution than most of his libertarian brethren, but he nonetheless doesn’t think it will happen due to the influence of the rich on politicians. Throughout the book, he makes reference to this realpolitik dynamic, saying that, even though it may not lead to the best outcomes, the needs and desires of the elderly and wealthy elites will rule the day to the detriment of everybody else.

Throughout the book, the right-wing belief in ‘Meritocracy” is constantly invoked. This is a standard article of right-wing libertarian belief, arguing that the winners at the top of society deserve their wealth and position through superior talent or merit, and the losers (the vast majority), are less talented, conscientious, motivated, etc.. Thus, it is a just world where people earn exactly what their talents give them, no more and no less, with the most talented benefiting most of all,  Interestingly, on his blog, Cowen has been waging a one-man crusade against Thomas Piketty’s new book, Capital in the Twenty-First Century. This may seem bizarre, since they both paint a picture of the future that is very similar – a tiny fantastically wealthy elite lording over a precarious and immiserated working class, with ever-increasing disparities in wealth. The crucial difference is that Cowen depends on his elite being “deserving” of their elevated status by being smarter, more talented, harder working, etc., while Piketty claims that inherited wealth will be the prime determinant of the new overclass. Cowen’s inequality is caused by income, not wealth as in Piketty, and income is earned by their awesome marginal productivity, and not because of inherited wealth or systemic advantages. Thus, Cowen is not overly bothered by the new social order, since it is a true "hyper-meritocracy."

Two points should be made here. One, Cowen is an academic who, as far as I can tell, has been in academia his entire life. The academic world he has lived his entire life in, and has played so well, is much closer to this meritocratic ideal then most of society (outside of the military), so I think Cowen has a major blind spot here. For example, see this: Secret Handshakes Greet Frat Brothers on Wall Street. American society is based on realities of class and wealth, and the biggest determinant for most people will not be talent (which will play some role, certainly), but who your parents are, leading to a much more sclerotic society with low social mobility, in line with Piketty’s predictions. After all, without jobs, what ladder rungs will there be to raise your status? Somehow I doubt “online classes” will fix this. And, as Thomas Frank has pointed out, colleges, which were designed to ameliorate class distinctions, are now the chief enforcer of class distinctions in America. The stratospheric cost of higher education will make sure that the jobs of the future will only be available to the already wealthy, and a few rare exceptions will be thrown in our face to “prove” this is not the case.

Second, even if we are headed to the meritocracy that Cowen claims, Christopher Hayes' Twilight of the Elites: America After Meritocracy points out that this will probably lead to more incompetence, inferior leadership and corruption, just as it has for the past few decades. The “best and the brightest” have presided over an unprecedented erosion of society, institutions and social trust, along with increasing chaos, wars, dissolution and poverty around the world. Because they are insular, these meritocrats feel that what’s good for them is good for everybody. And because they have been told that they are “superior” their entire lives, they believe they are infallible and entitled to everything. Plus, as Hayes points out, elites will rig the system to keep themselves and their friends and family on top - in other words, to "pull the ladder up after them." We can see that this is already happening.

And won’t the newly impoverished formerly middle classes rise up and revolt in their favelas? Nope, says Cowen, and although I find his arguments incredibly depressing, I also find them convincing. First, the baby bust means that the population is getting older, and older people don’t fight the system. Since America gives benefits disproportionately to the elderly (free health care, social security, etc.), they will have more invested in the status quo. Second, the crime rate has been going down, not up, even as income and wealth inequality has skyrocketed over the past thirty years. Finally, people don’t envy the rich, according to Cowen, they envy their immediate friends and neighbors. Facebook has caused more consternation over inequality than anything else, he claims. The poorest areas of the country are becoming more conservative, he points out, seemingly oblivious to the millions of dollars spent every year to maintain this result.

"For all the prognostications about the American future, the most important single fact, and the easiest to predict, is simply that we will be a lot older. That will make us more conservative, in this case referring to the literal rather than political sense of that term. Revolutions and protests are the endeavors of young hotheads, not sage (or tired) sixty-four year olds. The societies with lots of unmarried young men are the most vulnerable to sudden revolutions and major political changes...Societies have a strong staus-quo bias, particularly if they have high status relative to other parts of the world...If you're trying to measure the scope or potential for social disorder, look at the rate of crime. In the United States crime rates have been falling for decades and in recent times they have surprised researchers by falling even faster than expected. Yet over those same decades income and wealth inequality have been rising significantly in the United States....It's again worth seeing what is happening, politically speaking, in the parts of the United States with relatively stagnant incomes. Political conservatism is strongest in the least well-off, least educated, and most economically hard-hit states...As Richard Florida puts it, 'Conservatism, more and more, is the ideology of the economically left behind.'...If you think about it, we really shouldn't expect rising wealth inequality to lead to revolution and revolt. That is for a very simple psychological reason: Most envy is local...Most of us don't compare ourselves to billionaires."

Obviously, the U.S. government does not share Cowen’s placidity. Since 2001, we’ve witnessed the construction of a vast and unprecedented police/surveillance state in the U.S. and around the world. Many have made the obvious point that governments seem to be preparing to face their own people as adversaries much more than any foreign invasion, and they have pointed to the extreme inequality that Cowen is describing as the chief culprit. For example: Defence officials prepare to fight the poor, activists and minorities (and commies). (The Guardian) And see this:

After the U.S. Postal Service finalizes its purchase of "small-arms ammunition," it will become only the most recent federal agency to make a large purchase of bullets for its armed agents (who are perhaps more numerous than the public realizes). In the last year or so, reports have surfaced that the Social Security Administration ordered 174,000 hollow-point bullets, the Department of Agriculture 320,000 rounds, Homeland Security 450 million rounds (for its 135,000 armed agents), the FBI 100 million hollow-points, and even the National Oceanic and Atmospheric Administration 46,000 rounds. (In May, the Department of Agriculture added an order of submachine guns and body armor.) [Newsmax, 4-14-2014] [Washington Times, 5-16-2014] 

Cowen has been accused by many of “moral indifference” due to his clinical and calloused description of America's future. Cowen argues that a prognostication of the future based on what’s actually happening is best served just by an unemotional interpretation of the facts without trying to interject one’s personal opinions. In this interview, for example, he says:

...I think 'pessimistic' and 'optimistic'--they are words everyone in this debate is applying too quickly. I think in this debate the radical thing to do is to write a book which isn't trying to be too normative; just try to think through what will things be like. And by keeping the evaluation at much more of a distance I think we'll actually get further with the analysis. ... I've had people confront me in outraged fashion: How can you accept all of this? But look: as a writer the point is to try to figure it out as best you can, and at the end of the book if one wants to say, let's not go that route, well that's worth a discussion. But the notion that at every intermediate point you have to inject your emotional outrage I think has become one of the worst features of this whole debate.

I’m sympathetic to this view. I write about a dark future all the time, and it’s not things I want to happen. In fact, it’s mostly things I don’t want to happen. To be fair, Cowen never states that this new world he’s describing is ideal or desirable, just that it’s the scenario that he sees as most likely if current trends continue. I agree, which is why I’m reviewing the book.  It is, however, difficult to escape the conclusion that Cowen’s lack of agitation at this future is due to his class position. This new digital future will be great for him and his family. I imagine the target audience for this book are right-leaning pro-market libertarians who will see themselves as the big winners in the new economy, and naively believe that they and their families will escape falling into the underclass by staying ahead of the curve by following Cowen's sage advice.

But in the end, it will all turn out okay, he assures us, once we've finished sorting ourselves out into our new permanent caste system and fully integrated the new technologies into our social order. The nouveau-poor will learn to live with less and enjoy all the new digital distractions, while the rich, well, they'll be the new benevolent ruling class.

"The American polity is unlikely to collapse, but we'll look back on the immediate postwar era as a very special time. Our future will bring more wealthy people than ever before, but also more poor people, including people who do not always have access to basic public services. Rather than balancing our budget with higher taxes or lower benefits, we will allow the real wages of many workers to fall and thus we will allow the creation of a new underclass. We won't really see how we will stop that. Yet it will be an oddly peaceful time, with the general aging of American society and the proliferation of many sources of cheap fun. We might even look ahead to a time when the cheap or free fun is so plentiful that it will feel a bit like Karl Marx's communist utopia, albeit brought on by capitalism. That is the real light at the end of the tunnel. Such a development, however, will take longer than I am considering in the time frame of this book...One day soon we will look back and see that we produced two nations, a fantastically successful nation, working in the technologically dynamic sectors, and everyone else. Average is over."

Reactions have been predictably hostile from both the left and the right. The left's reaction is obvious. After giving his description of future America on NPR's On Point, the host incredulously asks whether his vision is exactly what European Americans' ancestors came across the ocean to escape. It's a valid question, especially since social mobility and middle class living standards are now higher in "socialist" Europe then in America.

The reaction on the right has been more complicated. A standard tenet of libertarian belief is that 1.)Inequality is not happening, and/or 2.) Capitalism always makes the average person better off, and if it fails to do so, it is always and everywhere due to some sort of government interference in the infallible market (taxes, regulations, subsidies, etc.). In the interview cited above with another libertarian economist from George Mason University (Econtalk is also part of the Koch Brother's empire), the host says early on, "So, I think you know I'm somewhat of a skeptic about the inequality data--that I think it's distorted by changes in family structure, immigration, and other factors...."  One wonders how sheltered a life this man leads. It proves Upton Sinclair's adage that "It is difficult to get a man to understand something when is salary depends on him not understanding it." But the biggest challenge is that Cowen's book makes the case that the natural workings of the capitalist economy, without major government interference, will make most people far poorer and worse off, rather than some big-government bogeyman. It's a direct challenge to the standard right-wing tenet that allowing the rich to accumulate without bound will lead to better lives for all. Hence the hostility.

One of the most hostile reviews came from, or all places, The Wall Street Journal. The reviewer writes:

If this were Swiftian satire, Mr. Cowen could retire the Best Deadpan Award. But it isn't. It's a prediction coupled with the injunction that resistance is futile. There's nothing we can do, says Mr. Cowen, to avert a future in which 10% to 15% of Americans enjoy fantastically wealthy and interesting lives while the rest slog along without hope of a better life, tranquilized by free Internet and canned beans.

Bread and circuses is not the policy of a republic, but rather of an empire entering moral senescence. Nonetheless, Mr. Cowen seems untroubled by his hyperpolarized vision....Whether by accident or design, Mr. Cowen's book represents a fundamental challenge. To government-hating, market-worshiping conservatives, it poses a question: If this is the consequence of your creed, are you prepared to endorse it? To liberals and progressives: What are you going to do about it? And to all of us: Is this a country you would want to live in? I know I wouldn't.

Finally, I have been struck by certain similarities between Cowen’s vision of the future and Ran Prieur’s latest thoughts on the future of America. It’s hard to think of two more different prognosticators, yet their visions seem to be converging, although to be sure Ran places much more emphasis on Peak Oil and resource scarcity, while Cowen has apparently bought into the shale-gas and fracking revolution hype.

Both predict continual improvement in digital technology and automation, with most people getting poorer and poorer, as the middle class vanishes. Both predict a future in which downtrodden Americans will live on a few thousand dollars a year in Latin-American style poverty in slums and shantytowns at the margins of society, yet have access digital gadgets straight out of Star Trek. Both predict a future of mass unemployment where people work outside the money system to survive via barter, tent cities, and dumpster diving. Both predict that the system is locked down tightly, and mass uprising is unlikely, if not impossible. Both predict a future where working a “conventional” job gets more and more oppressive as digital technologies monitor workers like feedlot cattle. Both predict that people will be desperate to somehow sell stuff to, get the attention of, or become some sort of servant, to the upper class, because they will be the only ones with money. Both predict that accumulating "stuff" will fall by the wayside compared to experiences, and that digital technology will lead to a new class of bohemian/hippie types who will live on the fringes of society using the Web to entertain themselves and seek out low/cost free stuff. Both predict that people will anesthetize themselves from their poor and meaningless lives by retreating into an increasingly virtual reality while turning their back on the real one which offers them so little. No word on Ran's position on canned beans, however:

I expect artificial intelligence and biotech to spice up a decades-long economic depression as the global system muddles through climate change and the end of nonrenewable resources. Low quality manufactured items and industrial food will remain affordable, but good food, transportation, and services from actual humans will be more expensive. I think the best place to live is in a small house with a big yard in a city with a seaport or railroad hub. You want to be close to the supply lines, but have enough land to grow luxury foods like blueberries and good tomatoes. As you move farther into the country, the money you save by growing more of your own food will be less than the money you spend on transportation and shipping. Total self-sufficiency would be a good thing to write a novel about.

My generation was the first in American history to be poorer than our parents. Now the Millennials are poorer than us, and this trend will continue until the global infrastructure adapts to feed from a growing base of renewable resources, maybe around 2060. Meanwhile, if you can stay out of debt and find a low-stress job to build up savings, you'll be relatively well off. "Debt" is exactly as real as we believe it is. Mostly it's a trick to make people feel ashamed that they have no political power. Not that it would work any better if we felt angry. The system is totally locked down, and the most revolutionary political change of the 21st century, the unconditional basic income, will be necessary to keep the system stable, to turn the unemployed majority from hungry militants back into consumers.

Technology will promise revolution, but in practice ninety percent of the new powers will be used to keep the remaining ten percent from doing anything dangerous. By the year 2200 there will be no poverty, no disease, and no opportunity for anyone to make a difference, except by more quickly closing off the opportunity for anyone to make a difference. Reasonable people will know that they're better off than we were, but still fantasize about living in our time. Suicide will be the leading cause of death, and by 2300, any death not from suicide will be global news. By 3000 we will either be extinct or moved to another level of reality through some technology of consciousness that would seem completely loony if you described it today.

http://www.ranprieur.com/archives/044.html#2014predictions

Ten years ago, when I imagined "collapse", it was interesting: industrial collapse means there are no factories and everything new is made by hand. Infrastructure collapse means there are no electric grids and we're riding horses on the ruined freeways. Economic collapse means the banks are just gone, cash is worthless, and economies are gift and barter. Political collapse means you don't have to pay taxes, kids don't have to go to school, and there are no police. Now it's increasingly clear that none of these things are going to happen, even slowly over 100 years...

Now, there are possible technologies that are truly revolutionary. But my fear is that they will all be stopped, that the increasing power of the tech system will be used to keep the world stable and predictable, and to make us happy in the shallowest and least satisfying way. To avoid this dreadful fate, we need a cultural shift in which we gain a deeper understanding of quality of life, and we need to apply this understanding to technology, and start using it to increase danger and pain. I know, people in Africa would love to have the problem of not enough danger and pain. Don't worry -- in a hundred years, they will, and we'll have it worse than we do now.

If the tech system can adapt to resource exhaustion, we might emerge into a high-tech utopia/dystopia, in which it's easy to be comfortable but difficult to be happy. Social class will no longer be about power or even standard of living, but valuable activity. The upper class will hold the few important jobs that still require humans. The middle class will be hobbyists, practicing difficult skills that are not necessary for society. And the lower class will be content to consume entertainment. 

 I no longer expect any kind of tech crash, except that resource-intensive benefits like driving and eating meat will become more expensive and less available to poor people. Economies will collapse as they adjust to decades of zero or negative growth, weaker nations and businesses will fail, but computers will continue to get stronger, and automation will adapt to resource decline by becoming more efficient and better able to compete with human workers. At the same time, no government that can possibly avoid it will allow its citizens to starve, so there will be even more subsidies for industrially produced human dog food.

Over the next few decades I see the global system passing through a bottleneck as it shifts from nonrenewable to renewable resources...I imagine an airtight sci-fi utopia/dystopia, where almost everything will be automated, nobody will have to do any work, everyone will be comfortable and safe, and we will have amazing powers to entertain ourselves. Other than that, we will have less power than any people in history or prehistory. The world will be lifeless and meaningless, a human museum, a suicide machine.

http://www.ranprieur.com/archives/041.html

I expect global economic collapse and decades of poverty while we switch from fossil fuels to renewable energy. Extreme poverty will cause political upheavals, but not such a deep political collapse that you won't have to pay taxes. And I expect little or no technological collapse. Even energy-intensive technologies like cars will not disappear, just shrink to serve the elite. And I think information technology will continue its present course, so people with gadgets out of Star Trek will be digging up cattail roots for food.

I'm going to say that liquid fuels continue to decline, renewable energy cannot replace them nearly fast enough, and everything that now depends on liquid fuels gets much more expensive. This contributes to decades of zero or negative economic growth. Another contributor is the de-monetization of labor: a lot of the economic growth of the 20th century came from taking labor that used be outside the money economy, like child care and food preparation, and bringing it into the money economy. This is going to reverse as people lose their jobs, do stuff at home for free instead of paying other people to do it, those people lose their jobs, and so on.

New money-making opportunities will be snatched by whoever is in the best position: mostly the already rich. So wealth inequality will increase, and the cost of good food and human labor will continue to rise, until only the rich can afford to buy much of either. Meanwhile manufactured items and low-quality industrial food will remain cheap.

So you won't be in danger of starving, but you're likely to find yourself deep in unpayable debt, squeaking by on government assistance, and struggling to find something to sell to the rich so you can afford to buy small luxuries to make your life tolerable.

http://www.ranprieur.com/archives/043.html

In summation, what fascinates me about the book is that it is so–far the best and most thought-out description of the future we have termed Neofeudalism. If you want to give someone a description of what the Neofuedal society looks like, hand them this book. Barring change in course, this is where I believe we’re headed as a society. In short:

• 10-15% fabulously wealthy, vast majority living an ephemeral, precarious existence.
• Most people desperately fighting over table scraps and crumbs dropped from the tables of the wealthy.
• A vast servant class dedicated to catering to the needs of the wealthy in some form and dependent upon their largess. (servants, coaches, tutors, gardeners, consultants, baristas, musicians, etc.). These will not be live-in servants, but wage earners in businesses that depend on the enormous incomes of a small class of privileged people - think service industries in San Francisco.
• All of society’s wealth is funneled to a small wealthy stockholding elite. Little to no savings or wealth accumulation for most people. Low social mobility enforced by stringent educational requirements, credentialism, low economic growth and saturated markets.
• No health care or retirement for most people.
• An ineffective and incompetent government that provides very little for the common general welfare, but exists mainly to uphold elite interests (armies, police, intelligence, contract enforcement, corporate subsidies, banks, patents, bare-bones infrastructure, etc.)
• The poor left mainly to fend for themselves. Slums, shantytowns, favelas, tent cities, trailer parks and hovels abound. Suburbia will become “Slumburbia”
• Urban areas either decay (Detroit, Gary, Flint) or become 'elite citadels' (San Francisco, L.A, Manhattan). Urban income inequality at sub-Saharan African levels or worse.
• Elites outside cities in gated exurban communities protected by heavily armed police.
• Weak nation states depleted of funds. Corporations will rule. Most wealth will be offshore and untaxable.
• Everything owned by wealthy elites and appropriated though the market rather than common goods. Public libraries, transportation, museums, parks etc. abolished. Most people will pay through the nose to rent these services from the 10-15% wealthy elites. Those who can’t afford them will go without.
• More social dysfunction due to lack of opportunities.
• Municipal services curtailed or abolished except in wealthy areas.
• Employees will get their needs (health care, dental transportation, etc.) by contract through their employer (e.g. Google campus and buses). Those without employers will have nothing.

Notable differences from feudalism:

• Warring corporations rather than warring states. Combat will be done in the boardroom, not the battlefield. Battles will be for market share rather than territory. Wealth will be stocks and bonds rather than land.
• Elites will be transnational and have more common interests than in the past. It will be their own fellow citizens they will need to violently contend with.
• Living standards for the poor will be higher than the middle ages. In wealthy countries, few will starve. Most will still have some sort of shelter, although less and less people will own their property.
• People will not be tied to the land, as with serfdom. They may end up tied to their jobs, however, to keep their benefits, especially since there will be few options to change jobs thanks to oligopolies, cartels, non-compete clauses, and extreme specialization. Less job mobility outside of the 10-15% due to fear of unemployment.
• Lower family formation and decreased birthrates.
• People will be watched and continually monitored (drones, cell phones, etc.) far beyond the wildest imagination of the most absolutist czar, monarch or emperor.
• Most people will be economically “redundant” i.e. they will not be needed to produce food and fodder for the elites.
• Vast prisons, which were unfeasible in medieval times, but less outright torture and general lawlessness.
• People will live longer than their medieval counterparts, but with more chronic diseases.
• Obviously, much more entertainment, activities, geographical mobility, and so on. As long as you don’t threaten elite power or control, you will be mostly left alone.
• Relations between people mediated by money and the market rather than webs of reciprocity.
• People will not live off the land – land will be owned by the wealthy.

It's not so far-fetched. Cowen himself says on pp.253-54, "There are many other historical periods, including medieval times, where inequality is high, upward mobility is fairly low, and the social order is fairly stable, even if we as moderns find some aspects of that order objectionable."

Serf's up!

NOTES

* Libertarians use as their justification for the low taxes and unlimited accumulation by the wealthy elite the fact that this leads to “growth' and that if the wealthy pay taxes like the rest of us, growth will be diminished and we all be hurled into poverty. In addition, making the pie bigger is used to avoid any question of redistribution. The richer the rich get, the better off even the poorest will be, the argument goes. Thus to question growth goes against the standard libertarian party line.

** To make his point, he initially published the book only in eBook format. eBooks are very useful – cheap to download, easy to carry around with a Kindle or Nook, but don’t really add much more to GDP than a “conventional” book.

*** This is off-topic, but Cowen picks this example because he was a youth chess prodigy. Many prominent economists are chess players. It’s easy to see why chess as the ultimate training for economic thinking. Human beings are treated simply as abstractions who behave according to predictable laws (pawns, knights, bishops, queens, etc.), and whose actions follow predicable rules. A chess game, like an economy, although it exhibits a degree of uncertainty, can be regularly determined by mathematical laws, hence chess-playing computers. Thus the kind abstract mathematical reasoning that leads people to be good at chess also motivates them to become economists, where they see the economy as one giant chess board, with all of us as mere interchangeable pieces making predictable moves that can be abstracted through sufficient mathematical equations.

**** A superior example would be from my own field of architecture. We used to draw on paper by hand. Then we drew digital lines on computers. Now, small teams can visualize and model entire buildings in 3D and build off of that. The shift is to less people with higher levels of building/construction knowledge. Consequently, there is much less need for "drafters," entry-level jobs are harder to come by, and the well-connected can do more work with less labor than ever before.

Trapped (short fiction)

Some short fiction for the holiday. I wrote this some years ago while reading Jared Diamond's 'The Third Chimpanzee' and a lot of Vonnegut. Hope you enjoy.

 How I came to be in possession of a human body is a matter of some conjecture.  Originally, I could transfer my consciousness from place to place as all the inhabitants of my planet can do, then, suddenly, and without my consent, I became confined by time and space, trapped in this form on a planet the inhabitants call earth, a small blue rock of water and gasses teeming with large, aggressive, talking apes.

     They think they are quite clever, these apes.  They walk on two legs and have opposable thumbs.  They’ve discovered written language, can count objects, and can use a few tools.

     I’ve been assigned some sort of symbol-manipulation task.  I sit in a temperature controlled room gazing at a bunch of colored dots that form pictures—symbols representing numbers, images, sounds, ideas and concepts.  I manipulate these by means of several devices, including one which lets me select and move the pictures on the screen as if they were real, and one which has dozens of printed symbols on it which look like this: ‘A’, ‘W’, ‘p’, ‘@’, ‘7’, ‘*’, ‘<’, ‘?’ and ‘$’.  The last one is especially interesting to these apes.  They punch that one over and over and over.

Bitcoin myths and realities.

Since the "creator" of Bitcoin was supposedly outed recently, this seems like a good time to post these. Yanis Varoufakis makes some good points about whether our desire for "apolitical" money is a fantasy:

The Crash of 2008 has infused our societies with enormous scepticism on the role of the authorities, both government and Central Banks. It is quite natural that many dream of a currency that politicians, bankers and central bankers cannot manipulate; a currency of the people by the people for the people. Bitcoin has emerged as the great white hope of something of the sort. Alas, the hope it brings to many people’s hearts and minds is false. And the reason is simple: While it is true that local communities have, in the past, generated successful communitarian currencies (that enabled them to improve welfare in their midst, especially at a time of acute economic crises), there can be no de-politicised currency capable of ‘powering’ an advanced, industrial society.

Since the second industrial revolution made possible the emergence of large, networked oligopolistic companies (the Edisons and Fords of the 1900s, and the Googles or Apples of today), capitalism became dependent on large credit spurts for the purposes of financing these capital corporations’ needs. Such credit spurts required large boosts in the money supply, both in order to finance the creation of new capital goods and also to support the new consumption patterns that were necessary to maintain the economy’s new productive capacity. Even when capitalist economies operated under the Gold Standard, banks found ways of creating money by lending increasing quantities against the existing, stable, stock of gold.

The 1920s thus demonstrates the impossibility of an apolitical money supply. Even though the monetary authorities were insisting on a stable correspondence between the quantity of paper money and gold, the financial sector was boosting the money supply inexorably. Should the authorities stop them from so doing? If they had, the Edisons and the Fords would have never flourished, and capitalism would have failed to produce all the goodies that it did; indeed, it would have stagnated and spawned social tensions that would put its institutions under a cloud well before 1929. So, the authorities stood by, allowing the bubbles of the 1920s to inflate, leading to 1929 and to the disaster of the Great Depression.

To the extent that bitcoin attempts to emulate the Gold Standard, if a large portion of economic activity is denominated in bitcoin, the dilemmas of the 1920s will return to plague the bitcoin economy. Finance will either have to find ways of introducing bitcoin denominated securities, 1920s-style, that will cause asset bubbles to form or the bitcoin political economy will nosedive into a deflationary spiral that either causes untold hardship amongst its users or leads them, as is more likely, to abandon bitcoin altogether.

The reason that money is and can only be political is that the only way of steering a course between the Scylla and Charybdis of dangerous ponzi growth and stagnation is to exercise a degree of rational, collective control over the supply of money. And since this control is bound to be political, in the sense that different monetary policies will affect different groups of people differently, the only decent manner in which such control can be exercised is through a democratic, collective agency. In brief, while apolitical money is a dangerous illusion, a Central Bank that is democratically controlled (as opposed to the indefensible notion of an ‘independent’ Central Bank) remains our best hope for a form of money that is for the people and by the people. Bitcoin, despite its many interesting features, can never be that.

Bitcoin and the dangerous fantasy of ‘apolitical’ money

I tend to agree. And this is also why I'm skeptical of the whole "community currencies" movement, however well-meaning it may be. As long as the main money supply, the one we have to pay our taxes in, is under control of the same people, I don't see how community currencies, which I may remind you are backed by nothing, can really make much of a difference besides making us feel better. It's incapable of funding the sorts of large, capital-intensive projects we so desperately need (like alternatives to carbon). Can anyone point out a single building built anywhere with "community currencies?" How about trains or solar panels? Anyone? Maybe I'm all wet on this one, but it seems to me like community currencies are the real distraction here.

And this leads me to an observation. Yes, it's hard to trust the U.S. government in its present form, with it's smug, incestuous circle of elite bureau/technocrats, it's armies of lobbyists, it's corrupt politicians trading money and favors with the one percent, its military/industrial/security/media complex, and its complete disconnect from the everyday realities of ordinary, non-wealthy, non-connected Americans (i.e. Versailles on the Potomac).

But this effort to discover who really created Bitcoin is telling. For all of its faults, the U.S. government is a known institution. It' won't vanish overnight, and will always exist in some form. There is some sort of democratic control and oversight (whether we choose to exercise it or not). There is some transparency (although not nearly enough). Dollars are an established, accepted medium of exchange (I'm betting you used some today. If you don't trust them, please send them all to me). It has established institutions, public and private, that have developed around it for a long time to manage it, like banking insurance and bonds.

So how does it follow that people who don't trust the current monetary systems are pinning their hopes on a shadowy, obscure individual or cabal who is totally anonymous (until last week, and he vigorously denies it), a protocol so complex that only highly-trained mathematicians and computer scientists can understand it, and a group of individual, unaccountable prospectors and privateers leaping in with no central oversight or management with the expectation of profit? A monetary system that has literally no precedent? This is somehow more trustworthy than the government? Er...what? Color me confused. If you want to reform the monetary system, how about, well, actually reforming the U.S. monetary system?

Here's James Kwak making a similar point:

Part of the underlying problem is an unwritten law of software competition: Security, performance, and reliability all cost money, but features are cheap and popular. So in the short term, it's a rational strategy to race ahead with feature development, skimp on security, and hope that you don't get caught with your pants down. This is why it's hard to expect high quality software when you're in the middle of a technological land grab, which is exactly what's going on with Bitcoin. This is especially true when the customers you're trying to attract are unsophisticated individuals sucked into the excitement of a speculative bubble. All the other Bitcoin exchanges may be safe as Ft. Knox—but that would be a surprise, given the incentives involved. Instead, we should expect shoddy development to be the norm.

More generally, there is no such thing as a technological utopia. No matter how perfect a technological concept is, when it enters the world of human beings, it becomes imperfect. Bitcoin is no exception. In addition to everything else, apparently Mt. Gox's problems are due in part to a Bitcoin vulnerability that has been around since 2011—but that humans didn't get around to fixing.

This is why we have laws, and regulators, and insurance, all of which would make Bitcoin more like ordinary money. Bitcoin may yet become a lasting part of our financial infrastructure, in part because it offers the promise of lower transaction costs. (As far as anonymity goes—well, look what the U.S. government is doing to Swiss banks.) But it will not usher in some kind of libertarian paradise.

Bitcoin and the Myth of Tech Utopia (The Atlantic) The belief that every human problem can be solved with software forgets the human element inside all software.

I don't think creating some kind of "perfect" monetary system is possible. I also think it's a distraction from the underlying economic system that they money is used in. The way money is created and distributed is intimately tied up with the economic system we live in; you cannot separate them. Bitcoin operating under capitalism still has all the underlying problems of capitalism. But we're not supposed to think about those.

The point is, institutions still matter.

Bitcoin and other oddities

Why I want Bitcoin to die in a fire (Charlie Stross)

Bitcoin, Magical Thinking, and Political Ideology (Alex Payne)

Time for a little Bitcoin discussion (Digitopoly)

In gold we trust? (MacroMania)

What's interesting to me is that you've got so many different ideas about money all floating around at the same time. I don't think that's a coincidence. I think what it indicates is a profound unease with the complexity and volatility of the system of finance that we are now all yoked to whether we want to be or not.

And what's doubly-interesting is that all of these ideas seem to be joined to certain political philosophies. That is, your preferred "alternative" to money depends on your political views.

So you've got Bitcoin embraced by the libertarian/techno-utopian set that believes that we would all just be better off if centralized governments disappeared from the earth and we built a computer-centric utopia ("all watched over by machines of loving grace"). Then, you've got the Goldbugs, who tend to be the Calvinist/Doomer set who see the nineteenth century as an idealized golden age (no pun intended) that we should return back to. Both of these groups are obsessed with "debasement" as the cause for the collapse of society. Then you've got the more pro-social policies of "community currencies" that allow people to print enough money for various enterprises at the local level without having to sell bonds or deal with the Federal Reserve or any of that stuff (i.e. Monopoly money). This is embraced by the anti-government "local solutions" crowd who believe we can build a parallel society as the old one comes apart. You've also got people recommending "demurrage" currencies, that is, currencies that are specifically designed to lose their value so that people go out and spend them instead of hoarding them (a negative interest rate is based on a similar idea). This means that people will flee from whatever currency you're proposing to use, choosing instead to hold onto other types.

The common theme here is distrust of government. Any attempt at reforming the currency we actually do use every single day - the U.S. Dollar (or whatever you use in your country of origin), is off the table. People believe that their national currencies are under control of the bankers and the bureaucrats for their own benefit and everyone else is screwed. It's sad really. All of this has gotten enough attention to be worthy of a Paul Krugman column:

Bits and Barbarism (New York Times)

[Adam] Smith is often treated as a conservative patron saint, and he did indeed make the original case for free markets. It’s less often mentioned, however, that he also argued strongly for bank regulation — and that he offered a classic paean to the virtues of paper currency. Money, he understood, was a way to facilitate commerce, not a source of national prosperity — and paper money, he argued, allowed commerce to proceed without tying up much of a nation’s wealth in a “dead stock” of silver and gold.

So why are we tearing up the highlands of Papua New Guinea to add to our dead stock of gold and, even more bizarrely, running powerful computers 24/7 to add to a dead stock of digits? 

Here's an alternative view, but it doesn't really contradict the above. There are some good comments too. This one I found especially interesting, in that you can think of money as a stand-in for time:

The value of any object or commodity is a function of its usefulness and rarity. Gold, diamonds, trade routes, waterfront, atomic bombs, dollars, cyberspace are examples of high value to different segments. Amazingly most people resist acknowledging the most truly valuable and finite commodity is time. Money is simply a method of exchanging time.

For example, I can take the time to grow a carrot (2.5 months) or I can go to a grocer and purchase a carrot (10 minutes). I could walk to the East Coast (>100 days) or I can buy an airline ticket saving 99.75 days. Money allows me to control how I spent my time of Earth.

With a finite limit of time available to everyone; how much money is appropriate or even healthy to accumulate? Obviously, that answer will elicit a bell curve of responses. Ask anyone that has suffered a debilitating or life threatening illness; they’ll tell you time healthy is vastly more valuable than any object on Earth. People that accumulate vast stores of objects such as newspapers or cats, are diagnosed as suffering from a hoarding disorder When does the accumulation of wealth tip over from mild obsession to a compulsive illness, $50 million, $100 million, $1 billion, $10 billion, 50 billion?

The dysfunctional performance of our governing bodies, the lack of infrastructure investment to support our future and the massive accumulation of wealth in the hands of so few appears crazy to many of us, maybe it really is.

And I like this statement:

"An economy is an imaginary construct. It is whatever we believe it to be. At this point in America, we are convinced that it is a winner take all game - based on survival of the fittest. And most Americans accept this definition, provided to us by the richest segment of our populace."  

I've expressed a lot of skepticism about all of these alternative currency ideas. In the past, I've recommended the ideas expressed by Chartalism (also called MMT or Functional Finance). I've also recommended a system of public banking. To me, these are the closest we can get under the current system to a resource-based economy as opposed to the clearly dysfunctional system we have now. The unfortunate thing is that for these ideas to grain traction, they need to be applied at the federal level (since only the federal government can issue currency), and the federal government is completely captured by big-money interests. These ideas might work if the United States breaks apart into smaller nations, which might be the best thing overall. But I don't see that happening anytime soon.

Personally, I think the fundamental problem with money is that the rich have too much and the rest of us not enough. People are not getting paid the value of their economic output, and the wealthy are hoarding money which just leads to expenditure cascades and rising prices for everything else in society. All of these alternative money proposals are simply reactions to that. But I don't think any one of them are going to fix that fundamental problem.

The hardening of America's heart

One might think that the deteriorating economy would produce more sympathy for the unemployed and down-on-their-luck, since more and more of us are threatening to fall into that trap. But, as it turns out, as we get poorer as a society, we become even more hostile to the poor and downtrodden. This may seem counter-intuitive, but it's bearing out, especially in America's "every man for himself" culture of sociopathy and Social Darwinism.

Richard Florida says:

The ongoing economic crisis only appears to have deepened America's conservative drift - a trend which is most pronounced in its least well off, least educated, most blue collar, most economically hard-hit states.

Indeed, research indicates that America is becoming more “conservative.” This is a misnomer, of course, as what they mean by "conservative" has nothing to do with preserving and maintaining existing social institutions, or suspicions of radical, sudden social change. It has nothing to do with  classical Burkean conservatism. Rather, by "conservative," what they really mean is politically reactionary and hostile to the poor.

Barry Rithotz wonders why:

The trend towards the hard right is most pronounced in the least well off, least educated, most blue collar, most economically hard-hit states. 

Why? 

It is a fascinating glimpse into the Human (or is it American?) Psyche — and I am very curious about it: 

• Conservative states are considerably more religious than liberal-leaning states. And, this correlation between religion is increasing. 

• Conservative states are also less educated than liberal ones; This correlation between conservative affiliation and education (percent of adults who are college graduates) is also substantially higher than before. 

• States with more conservatives are less diverse. 

• Conservative political affiliation is highly negatively correlated with the percent of the population that are immigrants or gay and lesbian. 

• There is no correlation to race or ethnicity, however, whether measured as percent white, percent black, or percent Hispanic (Fascinating). 

• Conservative political affiliation is strongly correlated with percentage of a state’s workforce in blue-collar occupations; 

• Conservative political affiliation is highly negatively correlated with proportion of workforce engaged in knowledge-based professional and creative work. 

• States with more conservatives are considerably less affluent than those with more liberals. 

• Conservative political affiliation is highly negatively correlated with state income levels and even more so with average hourly earnings.

This article speculates that the hostility to Obamacare has less to do with the feasibility of it, but rather that Americans are becoming ever more sociopathic toward their fellow Americans:

New Gallup poll numbers show Americans increasingly dispute the idea that government has a responsibility to make sure everybody can get health insurance. It's tempting to see that as an indictment against Obamacare, but it might just mean more Americans are becoming jerks. 

What's clear is that the shifting views on health care predate the Affordable Care Act. The number of Americans who think health care is the government's responsibility hovered around two-thirds for the first half of the 2000s, peaking at 69 percent in 2006. Then those numbers started falling, hitting 50 percent in 2010 and 42 percent this year. 

The shrinkage of American generosity during that period wasn't just about health care. The onset of the recession corresponded with a change in public opinion on a range of issues, and in most cases the effect was to make Americans less caring about others. 

Starting in 2007, the portion of Americans who said the government should guarantee every person enough to eat and a place to sleep started falling, from 69 percent to 59 percent last year. People who said the government should help the needy, even if it means going deeper into debt, fell from 54 percent to 43 percent over the same period. 

That increased callousness extends beyond Americans' views of helping the needy. In 2007, 60 percent of respondents agreed that people should be willing to pay higher prices to protect the environment; by last year, that figure was 43 percent. The share who said the U.S. should "pay less attention to problems overseas" rose from 76 percent to 83 percent between 2007 and 2012. 

It's not unusual for people to react to economic downturns by becoming more self-interested. The recession of 1990-1991 was followed by a drop in the share of people who said the government has a responsibility to take care of those who can't take care of themselves. Opposing welfare programs just when they're needed most seems perverse, but it may also be human nature.  

What's different today is the duration of those shifts. Six years after the 1991 recession ended, public attitudes on the virtues of helping the needy had started to move back up. Today, six years after the onset of the last recession, those numbers are still moving down.

Obamacare Shows How Americans Are Becoming Jerks (Bloomberg) Indeed, Americans blowing each other away is becoming about as common as fender-benders here in sociopath nation. What do you expect in a country where Ayn Rand is a a national hero? Remember when a crowd at a Republican debate erupted into cheers of someone dying without health insurance? Because I do. Welcome to this "Christian" country.

Here's at least one reason - as people become poorer, their attitudes become more hostile and more intense:

Marko Pitesa and Stefan Thau first manipulated subjects' perceptions of their income by inviting some to compare themselves to high incomes ($500,000 per month) and others to low incomes ($500 per month). They found that people primed to believe they had low incomes then expressed harsher judgments about violent acts than those who were primed to think themselves rich. 

This, they say, supports the idea that when people feel themselves to be poor, they feel more vulnerable to others' harmful acts, and this causes them to make harsher judgments about them. If you can afford to replace your iPod you'll be less censorious of muggers than if you can't. If you're driving your children around all the time, you'll be less hysterical about paedophiles than if your kids have to walk everywhere. And so on. 

Thanks to the work of Ben Friedman, we should know by now that economic insecurity creates intolerance. This paper provides experimental evidence of microfoundations for this. That's progress. 

Now, we should distinguish here between the extent of illiberal opinions and the intensity of them. Surveys suggest that working class folk aren't much more opposed to immigration, drug legalization or gay marriage than richer people. But this is quite consistent with them having more intense feelings. Gillian Duffy's antipathy towards immigrants is, sadly, shared by the middle class; the difference is the vehemence with which those opinions were expressed...when liberal leftists complain about working class illiberalism, they should remember that the failing here lies not (just) with the working class themselves, but in social democracy itself. This has - so far - failed to sufficiently reduce the sense of vulnerability among the poor which produces illiberal attitudes.

The economic base of illiberalism (Stumbling and Mumbling) And see this: America’s angriest white men: Up close with racism, rage and Southern supremacy (Salon)

Well, we've got a lot of poor people in this country, and more and more every single day. And as the ranks of the poor swell, their attitudes are likely to become more hostile and intense, causing the cycle to repeat itself in a viscous downward spiral as we increasingly turn on each other while the elites watch from their penthouses and offshore havens.

The only people who can stop it is us. Turning on ourselves is exactly what they want.

And see this: Let Them Eat Cake (New York Times)

 

Politics of the shutdown

 

Due to the government shutdown, there’s been a raft of soul-searching as to how American politics got to this point. In Collapse and the Sorites Paradox, I argued that collapse was impossible to speak about unless we defined a specific event that we could call a collapse. One of the possibilities I talked about was a debt default, which we are now only days away from (another one, secession, we talked about last month). So it looks like people like Dmitry Orlov might be due for a victory lap, although this crisis is entirely artificial and caused by political dysfunction rather than anything to do with oil prices.

Although these article have different perspectives, I’m going to try and summarize their conclusions below, along with some of my own, into a coherent narrative. Hopefully it’s close to the mark.

The short version is this: Wealthy elites, alarmed at the flattening of incomes that had happened between World War 2 and the 1970's decided to wage an all-out campaign to undo those policies (unions, a social safety net, good public services, progressive taxation,  environmental regulations, etc). To do so, they allied with all of the most venal, extremist, paranoid, reactionary and authoritarian elements in American society that had always been lurking under the surface but had been marginalized and kept under control by the "adults": John Birchers, Evangelical fundamentalists, Christian Reconstructionists, Southern racists, white supremacists, Dixiecrats, Posse Comitatus, "Big Mule" politicians, corrupt politicos, "sovereign citizens," "Patriot" militia brigades, libertarian Robber Barons (Koch Brothers, et. al.), Wall Street swindlers and takeover artists, Randroids, social Darwinists, and so forth, and used these elements to take over one of America's two major political parties in the name of eliminating their taxes, curtailing regulations, and busting unions. Now, having united all of the worst elements in American society under one banner for the first time (for they seem to have little else in common), organizing it, shaping it, and giving it a powerful vehicle (the reactionary authoritarian movement that calls itself the Republican Party), the business class can no longer control it, and like The Sorcerer's Apprentice, can only watch helplessly as the forces it has unleashed for it's own short-term benefit, fueled by white rage and decreasing living standards, tear the country apart (the "Corn-pone Nazis")

Here's the longer story: After World War 2, white Americans were lured by low taxes (because receipts were driven by future growth) into separatist suburban enclaves in the former cornfields surrounding now-decrepit cities made possible by the automobile. As they fled, they took economic activity and jobs with them, creating creating a vacuum in America's once-proud urban areas which promptly fell into disrepair thanks to the shrinking tax base and became minority ghettos. Coincident with this, there was a large population shift by individuals and businesses away from the “Rust Belt” states to the low wage and nonunion “Sun Belt” states of the South and Southwest, lured once again by lower taxes fueled by continuous growth, and made livable by the widespread use of air conditioning.

Subsequently, the American economy became “financialized;” America’s industrial might which won the war was packed up and shipped wholesale to China in less than a generation, leading to low-wage service jobs replacing factory jobs as the foundation of the economy.  Americans have consequently been experiencing stagnant wages for forty years, along with skyrocketing costs for healthcare, education, transportation, etc., while at the same time the tax burden was shifted off of unearned income and onto wages, and government services became "fee-based." The American public Balkanized along income lines, with wealthy Americans effectively seceding from the wider society, a society that was becoming less white and more urban over time.

A small cabal of wealthy oligarchs who had captured all of the income gains of the past forty years used part of this money to create a vast propaganda apparatus targeted to these white separatist enclaves in the suburbs, economically depressed rural areas, and the Sun Belt with things like FOX News, talk radio, think-tanks, online Web sites, etc. creating an echo chamber designed to radicalize white America. By denigrating and delegitimizing even the very idea of popular government, they hoped to create a faux-populist movement to untax themselves and undo the social reforms of the twentieth century and return to the policies of the Gilded Age. They allied with the Evangelical movement and began using divisive social issues to play “divide-and-conquer” against the lower classes.

The core of the movement is in the old Confederacy, where there is a long-standing legacy since the Civil War of undermining the authority of the Federal Government at every turn in order to keep power in the hands of local businessmen and politicians in order to maintain the system of class privilege and repression that is the legacy of Southern slavery. The South is also the nation’s stronghold of racism, ignorance, paranoia, religious fundamentalism, violence, gun ownership, social dysfunction (e.g. higher incidents of teen pregnancy, rape, incarceration, child abuse, infant morality, drug abuse, etc.), poverty and lower economic output. If Dixieland cannot control Washington, they will shut it down completely.

The untax the wealthy movement found a new life in the anger over the government bailouts, the election of an African-American president, and the economic downturn. Whites, destined to become a minority in America due to immigration and low birth rates, went into a profound psychosis, and wealthy oligarchs took advantage of this to bankroll a “Tea Party” movement, claiming that Obama was a Marxist, an atheist, a secret Muslim, was not born in the United States, will seize people's guns, etc., and laying the blame for nation’s problems directly at the feet of the victims of the economic recession (mainly poor and minority scapegoats) and “government taxes and regulations” (and not on Wall Street, corporations, or the banking industry).

To this end, they took effective control of one of the United States’ two major political parties and created a coherent worldview centered around what has been called “the paranoid style in American Politics.” for the New Right, the declining fortunes of white America were caused by an activist government determined to levy high taxes on “productive” (mainly white) citizens to give to a lazy and shiftless (mainly black) citizens in order to buy votes. They argued that America was divided into “makers” and “takers” (or ants and grasshoppers) where half of all Americans (the “47 percent”) pay no income taxes and thus are economically unproductive and entirely dependent upon government largesse (Mitt Romney: "They will never take responsibility for their lives"). They stoked rage against these “unproductive” citizens and argued that America’s massive debt burden was caused by a social safety net that had become a “hammock” lulling Americans into indolence (and not caused by tax cuts, the economic downturn, two simultaneous wars, or rising health care costs). Deindustrialization was not caused by the race to the bottom but by “greedy unions” and the housing meltdown was caused not by deregulation but by government forcing banks to make loans to poor minorities. Any form of government assistance was ”rewarding bad behavior,” and people had to be left to the mercy of the free market to "sink or swim" in a harsh, competitive world. The free market creates an ideal meritocracy; the poor, unemployed and indebted are exactly where they are entirely through their own actions, while the rich and powerful earned every penny through superior skills and talent. The poor must be made to suffer to give them the proper "motivation" to become productive citizens. As economic conditions deteriorate for most people, the resulting social dysfunction is put forward as the very cause of negative economic outcomes for the working class.

They made obscure books like “The Road to Serfdom" (which posits that government programs inevitably lead to oppression) and the works of Ayn Rand (where all economic benefits flow entirely from the efforts a small slice of wealthy elites and altruism is depicted as evil) into virtual bibles. At the same time, their media outlets portrayed all nonaligned media as “liberal” (and therefore not to be trusted), and claimed that both sides are "equally extreme,” despite a wholesale abandonment of pro-worker policies by the Democratic party (Bill Clinton: ”The era of big government is over, we must end welfare as we know it," etc.).

They also spent millions forming think-tanks and promoting the economic ideas  of the “Austrian School,” a formerly little-known economic doctrine that preached that any government interference in the market would harm the economy, that “letting the market sort it all out” was the only valid course of action, and that rather than mitigate the worse effects of the Great Depression, the New Deal actually prolonged the Great Depression. Government debt is always bad and the government must run its finances “like a household.” The Federal Reserve and “fiat currency” should be abolished and a gold standard should be reinstated to create “sound money.” All taxation is considered to be theft or “punishing success,” and goes into the hands of a government that is always and everywhere wasteful and inefficient (except for the police, security and defense industries). The private sector is superior to government in all cases, and failures of the private sector are always caused by some sort of government interference.

Because of certain political ideas inherent to the American system of government, a small, determined, well-funded minority can effectively throw sand in the gears of government when they do not get their way. This stems back from compromises made to slaveholding states, and the fear that “mob rule” would allow the majority to effectively seize power from the landholding aristocracy. Lower populated rural areas have disproportionate power over densely populated rural areas, especially in the Senate. In the House of Representatives, "gerrymandering," the practice of drawing districts to take advantage of America’s racial and income balkanization to create “safe” districts free from challenges to other parties, makes one party rule all but assured. Unlimited campaign spending has made politicians in uncompetitive districts fear primary challenges, since primary voters are the radical Jacobins of the party who will “punish” what they perceive as politicians willing to compromise. Unlike a parliamentary system, the levers of power are held by different parties both of whom claim legitimacy and can sabotage government functions through parliamentary maneuvers like filibustering and preventing votes from coming to the floor.

Now business leaders have effectively lost control over the party they took over, as the elements they unleashed with the objective of lowering their taxes and regulations has become a fanatical, radicalized, reactionary, nativist, conspiratorial, authoritarian political movement, opposed to even the very concept of government or the public trust in the name of “liberty. To them, government is always too large, taxes are always too high, and any sense of common purpose is derided as “socialism.” They see the nineteenth century as a golden age worthy of returning to, and see themselves engaged in a life and death struggle for the “soul” of the nation. They regard anyone else with a different opinion as “traitors" and opponents not to be negotiated with, but as threats to be eliminated. The right has even resorted to physical intimidation and has even formed a modern version of the Freicorps of inter-war Germany.

As whites become a minority, they increasingly look to disenfranchise large poor, minority, urban and youth voting blocks in order to retain power by any means necessary. In addition to gerrymandering, they have drummed up fear of nonexistent “voter fraud” to require ID’s at the polls, and they intentionally defund and understaff districts in poorer areas to prevent voter turnout, along with more direct vote suppression tactics such as armed "citizen monitoring" of polls. Increasingly, the focus is on electing allied candidates at the state level such as governors who have implemented identical policies around the nation (mostly written by ALEC) and followed identical lock-step agendas across a wide range of states such as cutting taxes, breaking unions, privatizing government, halting public transportation initiatives, passing “stand your ground” laws, overturning limits on campaign donations, selling off public lands and facilities, defunding social programs, and so forth.

As these policies make the white working class poorer and make the wealthy ever more powerful, the cycle is sure to keep repeating itself, making America ever more dysfunctional until it finally becomes ungovernable, ending up as a corrupt third-rate banana republic and failed state of only fantastically rich and desperate poor as the rest of the world looks on in a mixture of horror and pity at what was once the most admired nation on earth.

In addition, the following concepts are necessary to explain the world-view of the American Right-Wing:

1.) Producerism: “a doctrine that champions the so-called producers in society against both “unproductive” elites and subordinate groups defined as lazy or immoral.”

2.) The Just World Fallacy “Zick Rubin of Harvard University and Letitia Anne Peplau of UCLA have conducted surveys to examine the characteristics of people with strong beliefs in a just world. They found that people who have a strong tendency to believe in a just world also tend to be more religious, more authoritarian, more conservative, more likely to admire political leaders and existing social institutions, and more likely to have negative attitudes toward underprivileged groups. To a lesser but still significant degree, the believers in a just world tend to ‘feel less of a need to engage in activities to change society or to alleviate plight of social victims.’”

The Self-Attribution Fallacy/Horatio Alger/Fundamental Attribution Error: “Pull yourself up by your own bootstraps”

Calvinism/The Prosperity Gospel/New Thought Movement “God wants you to be rich.”

The Tytler Calumny: "A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse over loose fiscal policy, (which is) always followed by a dictatorship."

Social Darwinism: “A drunkard in the gutter is just where he ought to be”

Mellonism/Hooverism “Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate. Purge the rot from the system”

The Objectivist Movement/Ayn Rand: “Money is not the tool of the moochers, who claim your product by tears or of the looters, who take it from you by force. Money is made possible only by the men who produce. Is this what you consider evil?”

Nostalgia: “Didn’t need the welfare state/Everybody pulled his weight/guys like us we had it great/Those were the days.”

Christian Reconstructionism/Dominionism

On to the articles:

For years, political scientists have been talking about how the demographic changes in the United States are inexorably leading to a Democratic majority, with Hispanics and Asian-Americans joining African-Americans and liberal urban whites to erode the political domains of white conservatives and white racists. 

But those predictions have always assumed a consistent commitment to the democratic principle of one person, one vote – and a readiness of Republicans to operate within the traditional standards of democratic governance. But what should now be crystal clear is that those assumptions are faulty. 

Instead of accepting the emergence of this more diverse and multi-cultural America, the Right – through the Tea Party-controlled Republicans – has decided to alter the constitutional framework of the United States to guarantee the perpetuation of white supremacy and the acceptance of right-wing policies. 

In effect, we are seeing the implementation of a principle enunciated by conservative thinker William F. Buckley in 1957: “The white community in the South is entitled to take such measures as are necessary to prevail, politically and culturally, in areas in which it does not predominate numerically.” Except now the Buckley rule is being applied nationally.

The White Man's Last Tantrum? (Consortium News)

To many Americans, the shutdown came out of nowhere. But interviews with a wide array of conservatives show that the confrontation that precipitated the crisis was the outgrowth of a long-running effort to undo the law, the Affordable Care Act, since its passage in 2010 — waged by a galaxy of conservative groups with more money, organized tactics and interconnections than is commonly known.

With polls showing Americans deeply divided over the law, conservatives believe that the public is behind them. Although the law’s opponents say that shutting down the government was not their objective, the activists anticipated that a shutdown could occur — and worked with members of the Tea Party caucus in Congress who were excited about drawing a red line against a law they despise.

A defunding “tool kit” created in early September included talking points for the question, “What happens when you shut down the government and you are blamed for it?” The suggested answer was the one House Republicans give today: “We are simply calling to fund the entire government except for the Affordable Care Act/Obamacare.”

A Federal Budget Crisis Months In The Making (New York Times)

Needham was cocky and brazen, and yet Republicans — even powerful ones such as Ryan — have to take him seriously, for the same reason they must allow themselves to be pushed around by freshman Cruz: GOP lawmakers live in fear of primary challenges from tea-party candidates, so they must obey those who influence tea-party activists. Like Cruz, Needham’s group has influence. It also has a lot of cash.

The Heritage Foundation tapped Needham, a Heritage staffer, to create Heritage Action three years ago, a few months after the Supreme Court’s Citizens United decision made such 501(c)(4) organizations a new way for the wealthy to influence politics. Needham’s operation fits well with recent moves by Heritage’s new president, former senator Jim DeMint (R-S.C.), to politicize the old think tank, and it rivals another 501(c)(4), the Club for Growth, in its capacity to terrify Republican officeholders.

The shutdown's enforcer-in-chief (Washington Post)

In the 2012 elections, a little more than 59.6 million Americans voted for representatives from the Democratic party while 58.2 million voters supported the Republican candidate. But due to the way that congressional districts are organized, Democrats got 33 fewer seats than the GOP in the House of Representatives. So right off the bat, the House GOP represents a minority of Congressional voters.

But it gets worse.

How Less Than 5% Of The US Population Caused The Government To Shut Down (Business Insider)

Fear of a changing society is one thing that unites all three factions. The battle over Obamacare, write the study’s authors, “goes to the heart of Republican base thinking about the essential political battle.”

    They think they face a victorious Democratic Party that is intent on expanding government to increase dependency and therefore electoral support. It starts with food stamps and unemployment benefits; expands further if you legalize the illegals; but insuring the uninsured dramatically grows those dependent on government. They believe this is an electoral strategy — not just a political ideology or economic philosophy. If Obamacare happens, the Republican Party may be lost, in their view.

    And while few explicitly talk about Obama in racial terms, the base supporters are very conscious of being white in a country with growing minorities. Their party is losing to a Democratic Party of big government whose goal is to expand programs that mainly benefit minorities. Race remains very much alive in the politics of the Republican Party.

    They worry that minorities, immigrants, and welfare recipients now believe it is their “right” to claim [public] benefits. Tea Party participants, in particular, were very focused on those who claim “rights” in the form of government services, without taking responsibility for themselves.

They are also unified in their belief that Obama is a usurper who has hoodwinked the public into re-electing him by hiding his true beliefs, which are essentially Marxist. They also think that Democrats have won the major political battles of our time because Republican legislators in Washington didn’t put up a fight.

But there are also deep divisions within the base, according to the analysis. Evangelicals still focus overwhelmingly on social issues. They think gay rights are the biggest threat to our society, but they also worry about the loss of what they see as an idyllic small-town culture. They feel besieged as the cultural ground shifts beneath them, and see themselves as a beleaguered, “politically incorrect” minority.

Tea partiers display a libertarian streak, and are far less concerned with social issues. They are staunchly pro-business. But there’s an easy alliance between these two groups – which make up well over half of the GOP base – because Evangelicals think the tea partiers are fighting back, and vice versa.

Both groups displayed a high level of paranoia, according to the researchers who conducted the study. They noted that this was the first time, in many years of conducting focus groups, that participants worried that their participation might trigger surveillance by the NSA or an audit by the IRS. In addition to thinking that Obama is a liar, and a covert Communist, these two groups were also more likely to express the belief that he is secretly a Muslim.

To understand the shutdown, you have to grasp the mindset of the Republican base (Raw Story)

The Tea Party right is not only disproportionately Southern but also disproportionately upscale. Its social base consists of what, in other countries, are called the “local notables”—provincial elites whose power and privileges are threatened from above by a stronger central government they do not control and from below by the local poor and the local working class.

Even though, like the Jacksonians and Confederates of the nineteenth century, they have allies in places like Wisconsin and Massachusetts, the dominant members of the Newest Right are white Southern local notables—the Big Mules, as the Southern populist Big Jim Folsom once described the lords of the local car dealership, country club and chamber of commerce.  These are not the super-rich of Silicon Valley or Wall Street (although they have Wall Street allies). The Koch dynasty rooted in Texas notwithstanding, those who make up the backbone of the Newest Right are more likely to be millionaires than billionaires, more likely to run low-wage construction or auto supply businesses than multinational corporations. They are second-tier people on a national level but first-tier people in their states and counties and cities.

For nearly a century, from the end of Reconstruction, when white Southern terrorism drove federal troops out of the conquered South, until the Civil Rights Revolution, the South’s local notables maintained their control over a region of the U.S. larger than Western Europe by means of segregation, disenfranchisement, and bloc voting and the filibuster at the federal level. Segregation created a powerless black workforce and helped the South’s notables pit poor whites against poor blacks. The local notables also used literacy tests and other tricks to disenfranchise lower-income whites as well as blacks in the South, creating a distinctly upscale electorate. Finally, by voting as a unit in Congress and presidential elections, the “Solid South” sought to thwart any federal reforms that could undermine the power of Southern notables at the state, county and city level. When the Solid South failed, Southern senators made a specialty of the filibuster, the last defense of the embattled former Confederacy.

When the post-Civil War system broke down during the Civil Rights Revolution of the 1950s and 1960s, the South’s local notable class and its Northern and Western allies unexpectedly won a temporary three-decade reprieve, thanks to the “Reagan Democrats.” From the 1970s to the 2000s, white working-class voters alienated from the Democratic Party by civil rights and cultural liberalism made possible Republican presidential dominance from Reagan to George W. Bush and Republican dominance of Congress from 1994 to 2008. Because their politicians dominated the federal government much of the time, the conservative notables were less threatened by federal power, and some of them, like the second Bush, could even imagine a “governing conservatism” which, I have argued, sought to “Southernize” the entire U.S.

Turning over federal programs to the states allows Southern states controlled by local conservative elites to make those programs less generous—thereby attracting investment to their states by national and global corporations seeking low wages.

Privatizing other federal programs allows affluent whites in the South and elsewhere to turn the welfare state into a private country club for those who can afford to pay the fees, with underfunded public clinics and emergency rooms for the lower orders. In the words of Mitt Romney: “We pick them up in an ambulance, and take them to the hospital, and give them care. And different states have different ways of providing for that care.”

When the election of Lincoln seemed to foreshadow a future national political majority based outside of the South, the local notables of the South tried to create a smaller system they could dominate by seceding from the U.S. That effort failed, after having killed more Americans than have been killed in all our foreign wars combined. However, during Reconstruction the Southern elite snatched victory from the jaws of defeat and succeeded in turning the South into a nation-within-a-nation within U.S. borders until the 1950s and 1960s.

Today the white notables of the South increasingly live in states like Texas, which already have nonwhite majorities. They fear that Obama’s election, like Lincoln’s, foreshadows the emergence of a new national majority coalition that excludes them and will act against their interest. Having been reduced to the status of members of a minority race, they fear they will next lose their status as members of the dominant local class.

Tea Party radicalism is misunderstood: Meet the “Newest Right” (Salon)

What is surprising and interesting is when this conflict is experienced not as a matter of interests but of identity. It’s one thing to see urbanites as fellow citizens whose policy preferences depart from one’s own; it’s quite another to argue that their policy preferences give rise to serious doubt about whether they’re really Americans. Yet exactly this is the message of all those conservative complaints about “socialistic” Democrats who ignore our constitutional traditions as they labor to install a “nanny state.” These aren’t true Americans, resolute, independent, self-reliant; they’re feckless, faux-European traitors. (Though one, in particular, may have closer connections with Africa than Europe. You know who I mean.)

To think in this way, one must identify the country with one’s own beliefs and values. Those with different preferences then become almost definitionally “un-American.” This identification has the consequence, however, that political conflicts are often experienced as personal crises; what’s at stake isn’t simply policy, but one’s own sense of self. This releases anxieties that cluster around an intensely imagined Other: liberal, conspiratorial, seditious.

A partial answer arises directly from the sociology of rural culture. Persons who live in cities learn quickly that the world is full of different kinds of people; diversity — of race, religion, outlook, speech, etc. — is a fact of life. Because of this, they tend not to connect these personal attributes with one’s ability to be a trustworthy member of the community. If they think about the conditions of citizenship, they are more likely to associate them with general qualities of character — honesty, integrity, loyalty — equally available to everyone, regardless of background.

Many rural areas, by contrast, lack this aboriginal experience of diversity; they may be characterized by high levels of uniformity in ideology, race and religion. Given this, it may be natural to assume that “everyone” believes what you believe, or worships as you worship, or looks and speaks as you look and speak. And because these attributes characterize the community as a whole, it may be equally natural to define the latter in terms of the former — to think of these qualities as necessary for responsible citizenship, for being “one of us.” Only a small step is needed to extend this logic from one’s own community to the country as a whole.

I said this answer is only partial. That’s because it explains why the identification of self with nation arises in the first place, but not why it persists. In the America of 2013, more thoroughly colonized by communications technology than any society in the history of the planet, no community is an island; each is part of the main — and The Matrix. Geographic isolation has been overwhelmed by smart phones, the internet, cable and satellite TV and Red Box. One’s own community might be an emblem of ideological orthodoxy, racial purity or religious conformity — but there is no escaping the knowledge that the country as a whole (much less the world) is not. So if we want to know why this identification endures in some environments but not others, we’ll have to add something to our account — a mechanism to explain the stubborn insistence that some people will always be outsiders. And because the South is ground zero for the paranoia that rules today’s Republicans, our explanation will have to apply with particular force and resonance to it.

I don’t think we have to look far. The explanation lies in the South’s experience with black slavery and white supremacy...This is a fraught subject, so I want to make my meaning clear. I am not arguing that all Southerners — or all conservatives — are racists or paranoids; I’m not even arguing that all Southerners are conservatives. (I myself would personally disprove that assertion.) Slavery, thankfully, disappeared long ago, and Jim Crow is now almost two generations behind us. Racism lingers on in the South as in America generally, but for the most part must now keep its head down and its voice low; it’s the vice that dare not speak its name. (This is not to deny, of course, that it retains considerable social valence.)  What I am arguing is that a certain habit of thought, powerfully shaped by the experience of slavery, survived the passage of that curse and continues to influence some Southern conservatives to this day. It no longer takes the form of a blatant assertion that only the white race is worthy of social trust; its definition of the normative community has shifted. (Though it remains associated with racialist, or at least race-conscious, themes.) It is now more likely to define that community in ideological terms — to see it as consisting of those who endorse a particular view of government and its rightful relations with traditional mores and economic power. It has, however, retained certain aspects of its earlier, darker origins. It is still obsessed with purity — ideological if not racial — and still invests those it regards as impure with a harsh, acute animus. And it continues to equate difference with illegitimacy. Those on the outside — the liberals, the Democrats, the “socialists” — cannot be trusted partners in political life; they want only to undermine our institutions and must therefore be expelled from them.

Thus we arrive at the paranoid version of politics described above, in which policy disputes signal an insidious betrayal of “our” way of life. This is surely what animates the conduct of today’s Republicans — the reflexive rejection of compromise, the flagrant violation of long-established institutional norms, the experience of diversity as an invasion by foreign, unfamiliar powers.

The Republican belief that it would be better to suspend the government (or default on the debt) than to fund “Obamacare,” for instance, can be explained only by this kind of wrathful, embattled logic. There is a sense in which the current shutdown is the culmination of the last 50 years of Republican history. Today’s GOP is the heir of Reagan’s remark that “[G]overnment is not the solution… government is the problem,” even as Reagan embodied the strident, anti-statist dogmas of Barry Goldwater. The Party’s development since 1964 has, in effect, been one long preparation for the time when it would have to argue that no government would be better than liberal government. It would make no sense to say this if liberals were simply misguided souls with some bad policy ideas. It makes perfect sense when one sees them through the prism of Tea Party doctrine: as illegitimate interlopers from the outer darkness whose intent is to exploit and subvert the normative American community.

Modern GOP is still the party of Dixie (Salon)

Four years ago, the modern Tea Party seemed to emerge from nowhere, leaving journalists bewildered and the public with few reference points to understand seemingly spontaneous rallies by middle-class people seeking lower tax rates. A search for the phrase “tea party” in connection with “politics” in major newspapers yielded fewer than 100 mentions in 2008—and when the words did appear linked together, they suggested studied formality and decorum. The next year, they appeared more than 1,500 times, often connected to “protest demonstration.”

But little was spontaneous about the new party. “Social movements that explicitly defend the interests of the rich and the almost-rich have been a recurring feature of American politics,” Isaac William Martin, a sociologist at the University of California, San Diego, reminds us in his new book, Rich People’s Movements: Grassroots Campaigns to Untax the One Percent. “Such movements shook the American polity before the Obama era, before the Reagan era, and before Barry Goldwater ran for president—before, even, the New Deal.”

With meticulous research, Martin shows how the modern Tea Party grew from decades of efforts by American oligarchs to de-tax themselves. They relied on cranks, rogues, and a few scholars to polish the most effective ideological marketing pitches. Their goal was selling the notion that if the rich bear less of the burden of government, all of us will somehow end up better off. These pitches have worked best when some newly proposed government initiative—like President Barack Obama’s Affordable Care Act—arrives to pose the threat of major policy change. They have depended on diverting attention from obvious questions, such as just how does a smaller tax bill for the Koch brothers benefit us?

We Shall Overwhelm (The American Prospect)

Summary: The Right wing of America is active on all fronts: shutting down abortion, disenfranchising voters, and holding America’s credit rating hostage. Now we add to that list something small, but disturbing and with the potential to grow explosively: the Oath Keepers, one of the many militia-like groups, are “going operational”. 

The Oath Keepers want to give America its own Freikorps! (Fabius Maximus)

Ted Cruz, Leninist (The Atlantic) Critics think the Tea Party senator is being self-defeating, but his antics make sense if he's actually trying to remake the Republican Party in his image.

Christopher Parker and Matt Barreto, who teach political science at the University of Washington, recently published “Change They Can’t Believe In: The Tea Party and Reactionary Politics in America.” They contend that there are two major strands of conservatism in America: what they call “non Tea Party,” “traditional” or “real” conservatism; and what they describe as “Tea Party,” “reactionary” or “pseudo-conservatism.” 

In response to my inquiry, Parker wrote in an e-mail: 

Ultimately, a conservative — in the classical sense — wishes to preserve a stable society. Of course, this includes stable institutions and observing the rule of law. For these reasons (and several more), a conservative prefers evolutionary, more incremental change to revolutionary change: revolutionary change threatens the stability conservatives seek to conserve. Hence, conservatives reluctantly accept change — so long as it isn’t revolutionary. They do so for the sake of stability and order. Moreover, for the sake of order and stability, real conservatives are amenable to political compromise with their opponents. 

Conversely, according to Parker, reactionary conservatives are 

backwards looking, generally fearful of losing their way of life in a wave of social change. To preserve their group’s social status, they’re willing to undermine long-established norms and institutions — including the law. They see political differences as a war of good versus evil in which their opponents are their enemies. For them, compromise is commensurate with defeat — not political expediency. They believe social change is subversive to the America with which they’ve become familiar, i.e., white, mainly male, Protestant, native born, straight. “Real Americans,” in other words. 

Parker and Barreto conducted surveys to see if Tea Party conservatives differ from non-Tea Party conservatives. As the graphs in Figures 1-3 show, the two kinds of conservatives diverge significantly on key issues: immigration, civil liberties and in how they see President Obama. 

A newly published book, “Our Political Nature: The Evolutionary Origins of What Divides Us,” takes a different tack in exploring the contradictory ideological positions of left and right.  The author, Avi Tuschman, who earned a doctorate in evolutionary anthropology at Stanford and now works at the Inter-American Development Bank, contends that “the best cross-cultural predictor of left-right voting and party affiliation” is revealed by a 22-item test developed by Robert Altemeyer, an emeritus professor of  psychology at the University of Manitoba. You can take the test yourself on Pages 11 and 12 of this document. 

Altemeyer’s questionnaire asks respondents to estimate their agreement or disagreement with statements like these: 

• The established authorities generally turn out to be right about things, while the radicals and protestors are usually just “loud mouths” showing off their ignorance. 
• Atheists and others who have rebelled against the established religions are no doubt every bit as good and virtuous as those who attend church regularly. 
• The only way our country can get through the crisis ahead is to get back to our traditional values, put some tough leaders in power, and silence the troublemakers spreading bad ideas.
• Everyone should have their own lifestyle, religious beliefs, and sexual preferences, even if it makes them different from everyone else. 
• God’s laws about abortion, pornography and marriage must be strictly followed before it is too late, and those who break them must be strongly punished. 

Tuschman makes the case that Altemeyer’s questionnaire reveals three clusters of measurable personality traits that correlate with political conservatism or liberalism:  

1) Tribalism vs. xenophilia (an attraction to outsider groups); religiosity vs. secularism; and different levels of tolerance of “non-reproductive sexuality”;
2) opposing moral worldviews concerning inequality, one based on the principle of egalitarianism, the other based on ordered hierarchy, what people used to call “the great chain of being”; and
3) perceptions of human nature, people who see human nature as more cooperative vs. others who see it as more competitive. 

John Jost, a professor of psychology and politics at N.Y.U., uses descriptive language (language other social scientists characterize as  unflattering) to describe conservatives and flattering language to describe liberals. In “Political Ideology: Its Structure, Functions, and Elective Affinities,” a 2009 paper, Jost and two co-authors write: 

Specifically, death anxiety, system instability, fear of threat and loss, dogmatism, intolerance of ambiguity, and personal needs for order, structure, and closure were all positively associated with conservatism. Conversely, openness to new experiences, cognitive complexity, tolerance of uncertainty, and (to a small extent) self-esteem were all positively associated with liberalism.
James Sidanius, a professor of psychology at Harvard, working from a liberal perspective, uses a measure he calls “Social Dominance Orientation” to describe “the extent to which one desires that one’s in-group dominate and be superior to out-groups.” 

An individual’s social dominance orientation ranking, according to research Sidanius has conducted, derives from negative or positive responses to 16 statements. A person responding positively to the first eight (1-8) questions and negatively to the second group (9-16) would have a very high S.D.O. rating. 

First Group: 1. Some groups of people are simply inferior to other groups. 2. In getting what you want, it is sometimes necessary to use force against other groups. 3. It’s O.K. if some groups have more of a chance in life than others. 4. To get ahead in life, it is sometimes necessary to step on other groups. 5. If certain groups stayed in their place, we would have fewer problems. 6. It’s probably a good thing that certain groups are at the top and other groups are at the bottom. 7. Inferior groups should stay in their place. 8. Sometimes other groups must be kept in their place. 

Second Group: 9. It would be good if groups could be equal. 10. Group equality should be our ideal. 11. All groups should be given an equal chance in life. 12. We should do what we can to equalize conditions for different groups. 13. Increased social equality is beneficial to society. 14. We would have fewer problems if we treated people more equally. 15. We should strive to make incomes as equal as possible. 16. No group should dominate in society. 

In their book, Parker and Barreto found a strong linkage between higher S.D.O. ranking and Tea Party conservatives (“True Believers”). They write: 

S.D.O. is a reflection of one’s “preference for inequality among social groups.” Someone who has high levels of S.D.O. is likely to buy into the hierarchy-enhancing ideologies, ones that resulting in the perpetuation of inequality. People who are low on S.D.O. are more likely to promote equality. We contend that people high in S.D.O, people who are intent on keeping subordinate groups down as a means of maintaining group-based prestige, are likely to support right-wing movements and, therefore, the Tea Party. 

The following graph (Fig. 2), provided to The Times by Parker, shows that there are more Tea Party conservatives with high measured levels of social dominance orientation (39 percent) compared with non-Tea Party conservatives (30 percent).

How Did Conservatives Get This Radical? (NYT)