Markets Ignore Fundamentals And Chase Headlines Because They Are Dying

Posted on February 23, 2016 by Reid Mukai

By Brandon Smith

Normalcy bias is a rather horrifying thing. It is so frightening because it is so final; much like death, there is simply no coming back. Rather than a physical death, normalcy bias represents the death of reason and simple observation. It is the death of the mind and cognitive thought instead of the death of the body.

Ever since the derivatives collapse of 2008 the public has been regaled with wondrous stories of recovery in the mainstream to the point that such fantasies have become the “new normal”. These are grand tales of the daring heroics of central bankers who “saved us all” from impending collapse through gutsy monetary policy and no-holds-barred stimulus measures.

Alternative economists have not been so easy to dazzle. Most of us found that the recovery narrative lacked a certain something; namely hard data that took the wider picture into account. It seemed as though the mainstream media (MSM) as well as the establishment was attempting to cherry-pick certain numbers out of context while demanding we ignore all other factors as “unimportant.”

We just haven’t been buying into the magic show of the so called “professional economists” and the academics, and now that the real and very unstable fiscal reality of the world is bubbling to the surface, the general public will begin to see why we have been right all these years and the MSM has been utterly wrong.

Mainstream economists have done absolutely nothing in the way of investigative journalism and have instead joined a chorus cheerleading for the false narrative, singing a siren’s song of misinterpreted statistics and outright lies drawing the masses ever nearer to the deadly shoals of financial crisis.

Why do they do this? Are they part of some vast conspiracy to mislead the public?

Not necessarily. While central banks and governments have indeed been proven time and again to collude in efforts to cover up financial dangers, most economists in the media are simply greedy and ignorant. You have to remember, they have a considerable stake in this game.

Many mainstream economists tend to have sizable investment portfolios and they base their careers partly on the successes they garner in the annual profits they accumulate playing the equities roulette. They also have invested so much of their public image into their pro-market and recovery arguments that there is no going back. That is to say, they have a personal interest in using their positions in the media to engineer positive market psychology (if they are able) so that their portfolios remain profitable. Not to mention, their professional image is at stake if they ever acknowledge that they were wrong for so long about the underlying health of the real economy.

This atmosphere of deluded self interest also generates a cult-like collectivist attitude. There is a lot of mutual back scratching and mutual ego stroking in the MSM; a kind of inbred conduit of regurgitated arguments and unoriginal talking points, and people in the club rarely step out of line because they not only hurt their own investment future and career, they also hurt everyone in their professional circles. Meaning, no more cocktail party invitations to the Forbes rumpus room…

This is not to say that I am excusing their self interested lies and disinformation. I think that many of these people should be tarred and feathered in a public square for attempting to dissuade the public from preparing in a practical way for severe economic instability. I do not think they see themselves as being responsible to the people who actually take their nonsense seriously and their attitude needs adjustment. I am only explaining how it is possible for an entire profession of supposed “experts” to be so wrong so often. Mainstream financial analysts WANT to believe their own lies as much as many in the public want to believe them.

Like I said, normalcy bias is a rather horrifying thing.

One of the root pieces of disinformation in the mainstream that feeds all other lies is the disinformation surrounding falling global demand. MSM pundits cannot and will never fully admit to the cold hard reality of collapsing demand within the global economy. If they are forced to admit to falling demand, then the facade of a steady or recovering U.S. economy crumbles.

I covered the facts behind falling global demand for raw goods and consumer goods last year in part one of my six-part article series, ‘One Last Look At The Real Economy Before It Implodes.’ The hard evidence and numbers I presented have only become more important in recent months.

For example, U.S. inventories are building and freight shipments are declining in the U.S. as retailers cite falling demand for goods as the primary culprit. Official retail sales numbers for the holiday season of 2015 have come in flat. When one takes into account real inflation in prices, consumer sales are actually far in the negative. According to the more accurate methods the U.S. government used to use in their calculations of CPI in the 1980’s, we are looking at annual price inflation rate of around 7%. Price inflation does not necessarily equal improved sales.

Energy usage has been crushed since 2008. Despite a growing population and supposedly a growing economic system, oil consumption in 2014 according to the World Economic Forum dropped to levels not seen since 1997.

This is the exact opposite of what should be happening and it is the opposite of mainstream projections for oil consumption made back in 2003. This is why inventories and storage for oil across the globe are reaching capacity in a manner never seen before. American demand for oil is not growing exponentially as expected because Americans cannot afford to support such growth anymore. Falling energy demand at these extreme levels is an undeniable indicator of a failing economic system.

Of course, mainstream economists in their desperation to keep market psychology rolling forward and the equities casino producing profits seek to spin this problem as an “oversupply” issue rather than a demand issue. And this is where the disparity in their arguments begins to bleed through.

Here is the problem presented in the mainstream; what came first, the chicken or the egg? Did falling demand lead to oversupply and thus a fall in prices? Or, is demand remaining steady and is overproduction the cause of falling prices? Yes, let’s confuse the issue instead of looking at the obvious.

As already linked above, it was falling demand which came first in 2008, and demand which continues to fall in relation to past trends. Have producers failed to reduce oil production to match falling demand? Yes. But this does not change the fact that oil demand today is well below levels needed to sustain the kind of economic growth markets have come to expect. Mainstream economists attempt to distract by hyper-focusing on supply, or twisting the discussion into an either/or scenario. Either it is a supply problem, or it is a demand problem, and they assert it is only a supply problem. This is not reality.

In fact, both can and often do exist at the same time, though one problem usually feeds the other. Falling demand does tend to result in oversupply in any particular sector of the economy. The bottom line, however, is that in our current crisis demand is the driving force and supply is a secondary issue. Supply is NOT the driving force behind the volatility in oil markets. Period.

This same chicken and egg distraction rears its ugly head in discussions on shipping markets as well.

The mainstream claim that the historic implosion of the Baltic Dry Index is nothing more than a problem of “too many ships” operating in the cargo market has been throttled, dissected and debunked so many times that you would think that it is surely dead. But the lie just will not die.

Mainstream propaganda houses like The Economist and Forbes continue to produce articles on a regular basis which deny the issue of falling demand for raw goods and claim that oversupply of vessels is the root cause of the BDI losing around 98 percent of its value since its highs in 2008.

I haven’t seen any of these articles offer actual stats or evidence to back their claims that oversupply of ships is the culprit and that demand is not a legitimate issue. But beyond that, why does the mainstream seem so hell bent on dismissing the BDI as a reliable economic indicator? Well, because shipping rates fall when demand falls, thus, when the BDI falls, it signals a lack of global demand. This is a fact they refuse to accept. When the BDI falls by 98 percent since the 2008 highs preceding the derivatives crisis, this signals a disaster in the making.

So, let’s stamp out the “too many ships came first” disinformation once and for all, shall we?

Shipping companies like Maersk Lines have already publicly admitted that falling global demand is the core problem behind falling rates and that supply is a secondary driver. They view the current financial crisis to be “worse than 2008”.

The fact that the largest shipping company in the world is warning of falling demand does not seem to be having any effect on the mainstream talking heads, though.

So, what do major shipping companies do when demand is falling and too many ships are operating on the market? Do they field those ships anyway and drive rates down even further? No, that makes no sense.

What companies do is either leave ships idle in port or scrap them. According to BIMCO (Baltic And International Maritime Council), 2015 was the busiest year since 2012 for the scrapping of older ships to make way for new arrivals. This process of scrapping ships or storing them idle destroys the argument that too many ships are driving falling rates in the BDI. In fact, as chief shipping analyst Peter Sand of BIMCO stated last year:

“The increase in Capesize scrapping comes at a much needed time for the market. Looking at the development so far this year the fleet growth has actually been negative, with a reduction of 0.8 %.”

I hope the garbage peddlers at Forbes and The Economist caught that — NEGATIVE growth of ship supply, not massive over-growth of ship supply. The scrapping increase was also across the board for other models of ships, not just the Capsize, and the increase of cargo capacity by new ships has been negligible. Yet, shipping rates continue to plummet to historical lows. Only falling demand, as Maersk Lines admits, explains the crash of the BDI in light of this information.

China in particular has been offering considerable incentives to those companies that do scrap older ships, to the point that some are even scrapping semi-new ships in order to cash in.

Now, this is not to say there is not an “oversupply” of ships. There are indeed many ships within cargo fleets that are not in operation. But again, this is because demand has declined so completely that even with increased scrapping and idling, shipping companies cannot keep up. Falling demand OCCURRED FIRST, and oversupply is nothing more than a symptom of this root problem.

So, mainstream hacks, can we please put the “too many ships” nonsense to rest and get on with a real discussion on obvious issues of demand? Stop focusing on the symptoms and examine the cause for once.

These are just a few of the hundreds of fundamental problems plaguing the global economy today, and they are all problems that the mainstream continues to ignore or dismiss out of hand. Which brings us to the now accelerating volatility in stock markets.

Stock markets are crashing, there is no other way to paint it. They are crashing incrementally, but crashing nonetheless. When you have violent swings in equities and commodities between 5 percent and 10 percent a day, then something is very wrong with your economy and has been wrong for some time. If global consumption and demand were really steady or growing, then you would not see the kind of systemic backlash in the financial system that we are now seeing. If companies listed on the Dow were making legitimate profits due to a healthy consumer base and enjoying solid expansion, stocks would not be increasingly volatile. If investors and mainstream analysts actually looked at the real numbers in demand (among other things), then the strange behavior in markets would be easy for them to understand. They will not look at such numbers until it is too late.

Instead, markets have chosen to chase headlines, and here is where the ugly circle of normalcy bias and cognitive dissonance completes itself. There are no positive indicators within the fundamentals today to energize market faith or market investment. So, investors and algorithmic trading computers track news headlines instead. The MSM hacks now have the power (along with central banks and governments) to create massive stock rallies with one or two carefully placed news tags, such as “Russia To Discuss Oil Production Cuts With OPEC.”

Market speculators and trading computers jump on these headlines without verifying if they are true. In most cases, they end up being false or just hearsay from an “unnamed source.” And so, the markets then crash further down into the abyss, waiting for the next headline to bolster activity even for a day.

The sad truth is, if any of these headlines turned out to be legitimate, their effect would still be meaningless in the long run as the overwhelming weight of the fundamentals continues to topple poorly placed optimism. Now that the investment world no longer has the certainty of central bank intervention as a useful tool, they don’t know if bad news is good news or if good news is bad news. The fact that the system is moving into a death spiral without the psychological crutch of central bank stimulus measures should tell you all you need to know about the supposed recovery since 2008.

No society wants to admit economic failure or economic sabotage, and this is why the con-game is able to continue in the face of so much concrete truth. Ultimately, the market trends and economic trends will flow into the negative. In the meantime, expect massive market rallies, rallies which will then disintegrate in a matter of days. And, whatever happens, never take what mainstream economists say very seriously. They have failed the public for long enough.

Hang onto your wallets: Negative interest, the war on cash, and the $10 trillion bail-in

Posted on February 8, 2016 by Reid Mukai

By Ellen Brown

Source: Intrepid Report

Remember those old ads showing a senior couple lounging on a warm beach, captioned “Let your money work for you”? Or the scene in Mary Poppins where young Michael is being advised to put his tuppence in the bank, so that it can compound into “all manner of private enterprise,” including “bonds, chattels, dividends, shares, shipyards, amalgamations . . .”?

That may still work if you’re a Wall Street banker, but if you’re an ordinary saver with your money in the bank, you may soon be paying the bank to hold your funds rather than the reverse.

Four European central banks—the European Central Bank, the Swiss National Bank, Sweden’s Riksbank, and Denmark’s Nationalbank—have now imposed negative interest rates on the reserves they hold for commercial banks; and discussion has turned to whether it’s time to pass those costs on to consumers. The Bank of Japan and the Federal Reserve are still at ZIRP (Zero Interest Rate Policy), but several Fed officials have also begun calling for NIRP (negative rates) [update: Bank of Japan implemented a negative interest rate 1/29/16].

The stated justification for this move is to stimulate “demand” by forcing consumers to withdraw their money and go shopping with it. When an economy is struggling, it is standard practice for a central bank to cut interest rates, making saving less attractive. This is supposed to boost spending and kick-start an economic recovery.

That is the theory, but central banks have already pushed the prime rate to zero, and still their economies are languishing. To the uninitiated observer, that means the theory is wrong and needs to be scrapped. But not to our intrepid central bankers, who are now experimenting with pushing rates below zero.

Locking the door to bank runs: The cashless society

The problem with imposing negative interest on savers, as explained in the UK Telegraph, is that “there’s a limit, what economists called the ‘zero lower bound.’ Cut rates too deeply, and savers would end up facing negative returns. In that case, this could encourage people to take their savings out of the bank and hoard them in cash. This could slow, rather than boost, the economy.”

Again, to the ordinary observer, this would seem to signal that negative interest rates won’t work and the approach needs to be abandoned. But not to our undaunted central bankers, who have chosen instead to plug this hole in their leaky theory by moving to eliminate cash as an option. If your only choice is to keep your money in a digital account in a bank and spend it with a bank card or credit card or checks, negative interest can be imposed with impunity. This is already happening in Sweden, and other countries are close behind. As reported on Wolfstreet.com:

The War on Cash is advancing on all fronts. One region that has hogged the headlines with its war against physical currency is Scandinavia. Sweden became the first country to enlist its own citizens as largely willing guinea pigs in a dystopian economic experiment: negative interest rates in a cashless society. As Credit Suisse reports, no matter where you go or what you want to purchase, you will find a small ubiquitous sign saying “Vi hanterar ej kontanter” (“We don’t accept cash”) . . .

The lesson of Gesell’s decaying currency

Whether negative interests will actually stimulate an economic recovery, however, remains in doubt. Proponents of the theory cite Silvio Gesell and the Wörgl experiment of the 1930s. As explained by Charles Eisenstein in Sacred Economics:

The pioneering theoretician of negative-interest money was the German-Argentinean businessman Silvio Gesell, who called it “free-money” (Freigeld). . . . The system he proposed in his 1906 masterwork, The Natural Economic Order, was to use paper currency to which a stamp costing a small fraction of the note’s value had to be affixed periodically. This effectively attached a maintenance cost to monetary wealth.

. . . [In 1932], the depressed town of Wörgl, Austria, issued its own stamp scrip inspired by Gesell. . . . The Wörgl currency was by all accounts a huge success. Roads were paved, bridges built, and back taxes were paid. The unemployment rate plummeted and the economy thrived, attracting the attention of nearby towns. Mayors and officials from all over the world began to visit Wörgl until, as in Germany, the central government abolished the Wörgl currency and the town slipped back into depression.

. . . [T]he Wörgl currency bore a demurrage rate [a maintenance charge for carrying money] of 1 percent per month. Contemporary accounts attributed to this the very rapid velocity of the currencies’ circulation. Instead of generating interest and growing, accumulation of wealth became a burden, much like possessions are a burden to the nomadic hunter-gatherer. As theorized by Gesell, money afflicted with loss-inducing properties ceased to be preferred over any other commodity as a store of value.

There is a critical difference, however, between the Wörgl currency and the modern-day central bankers’ negative interest scheme. The Wörgl government first issued its new “free money,” getting it into the local economy and increasing purchasing power, before taxing a portion of it back. And the proceeds of the stamp tax went to the city, to be used for the benefit of the taxpayers. As Eisenstein observes:

It is impossible to prove . . . that the rejuvenating effects of these currencies came from demurrage and not from the increase in the money supply. . . .

Today’s central bankers are proposing to tax existing money, diminishing spending power without first building it up. And the interest will go to private bankers, not to the local government.

Consumers today already have very little discretionary money. Imposing negative interest without first adding new money into the economy means they will have even less money to spend. This would be more likely to prompt them to save their scarce funds than to go on a shopping spree.

People are not keeping their money in the bank today for the interest (which is already nearly non-existent). It is for the convenience of writing checks, issuing bank cards, and storing their money in a “safe” place. They would no doubt be willing to pay a modest negative interest for that convenience; but if the fee got too high, they might pull their money out and save it elsewhere. The fee itself, however, would not drive them to buy things they did not otherwise need.

Is there a bigger threat than a sluggish economy?

The scheme to impose negative interest and eliminate cash seems so unlikely to stimulate the economy that one wonders if that is the real motive. Stopping tax evaders and terrorists (real or presumed) are other proposed justifications for going cashless. Economist Martin Armstrong goes further and suggests that the goal is to gain totalitarian control over our money. In a cashless society, our savings can be taxed away by the banks; the threat of bank runs by worried savers can be eliminated; and the too-big-to-fail banks can be assured that ample deposits will be there when they need to confiscate them through bail-ins to stay afloat.

And that may be the real threat on the horizon: a major derivatives default that hits the largest banks, those that do the vast majority of derivatives trading. On November 10, 2015, the Wall Street Journal reported the results of a study requested by Senator Elizabeth Warren and Rep. Elijah Cummings, involving the cost to taxpayers of the rollback of the Dodd-Frank Act in the “cromnibus” spending bill last December. As Jessica Desvarieux put it on the Real News Network, “the rule reversal allows banks to keep $10 trillion in swaps trades on their books, which taxpayers could be on the hook for if the banks need another bailout.”

The promise of Dodd-Frank, however, was that there would be “no more taxpayer bailouts.” Instead, insolvent systemically-risky banks were supposed to “bail in” (confiscate) the money of their creditors, including their depositors (the largest class of creditor of any bank). That could explain the push to go cashless. By quietly eliminating the possibility of cash withdrawals, the central bank can make sure the deposits are there to be grabbed when disaster strikes.

If central bankers are seriously trying to stimulate the economy with negative interest rates, they need to repeat the Wörgl experiment in full. They need to first get some new money into the economy, money that goes directly to the consumers and local businessmen who will spend it. This could be achieved in a number of ways: with a national dividend; or by using quantitative easing for infrastructure or low-interest loans to states; or by funding free tuition for higher education. Consumers will hit the malls when they have some new discretionary income to spend.

Ellen Brown is an attorney, founder of the Public Banking Institute, and author of twelve books including the best-selling Web of Debt. Her latest book, The Public Bank Solution, explores successful public banking models historically and globally. Her 300+ blog articles are at EllenBrown.com. Listen to “It’s Our Money with Ellen Brown” on PRN.FM.

Leviathan and Behemoth

Posted on January 20, 2016 by Reid Mukai

By Chris Shaw

Source: Center for a Stateless Society

Introduction

The capitalist economy has gone through another shock, and the potential for another, larger one is on the horizon. While it’s seemingly in its death throes, capitalism continues to fuel growth. Under such a system we have seen a vast improvement in general living standards across the globe, despite rigged markets and the omnipresent power of the state. However, who is this growth for? While absolute poverty has been rolled back, and in many Western nations completely eliminated, we still see a large, indebted underclass, a Global South regularly sold out to the interests of capital and a system of vast wealth that only seems accessible to a privileged few. Economists may say that if we look at BRIC countries we see an equalisation of wealth and growth with the West, but these BRIC markets are used as cogs in a hegemonic state-corporate machine. Third World entrepreneurship isn’t encouraged, but rather sidelined for corporate dominance. This is a system that needs to end. The debt economy, big government, the corporate-state partnership and modern globalisation all need to end. In their place we need truly free markets, where cooperation and exchange are paramount and aren’t controlled by corporate or government interests.

Our neoliberal society is composed of corporate hegemony backed by state power. By corporate hegemony I mean the power modern capital has over governance. This isn’t just found within corporations, but within guild-like occupational boards (Lawyers and Doctors and their licencing requirements) and corporate trade unions that support the maintenance of wage labour at the expense of worker independence from the structure of capital. Any markets we see are rigged in favour of corporate interests. The major monopolies of government control make sure that markets are a tool of big business and the ability of workers to break free from this paradigm is limited if not impossible. The entry barriers to markets, the restrictions on self-employment and the continued lobbying of government for patronage and favourable legislation leads to a corrupt, crony system that relies on the indenture of the poor in favour of employers and business.

There are many libertarians who unfortunately see this system as just and fair. They see sweatshop labour as an excellent solution to Third World poverty. The idea of growth is given religious prescience, without realising cultural antecedents and the importance of community within the realm of the individual. They don’t understand the power dynamics at play, and the continued collusion of corporate and state interests. They fail to see the monopolisation of social institutions and the commodification of culture and life. The destruction of livelihoods all in the name of GDP growth. This is not a free market, but rather capitalism at work. To move away from this we need to understand that free, or freed, markets are economic organisations free from coercive control, where the individual and community are the key players and profit is not reliant on its exploitative features, but rather the ability to meet real demand.

We need to look at the current capitalist system from the anarchist perspective that I put forward in this paper. Modern capitalism is a state-based system, reliant on enforced hierarchies and the provision of false choice. Real choice would confer power on individuals and communities, while under today’s system real choice is in the hands of bureaucrats and corporate oligarchies. Chartier’s definitions of capitalism, “capitalism: an economic system that features a symbiotic relationship between big business and government”[1] and “capitalism: rule—of workplaces, society, and (if there is one) the state—by capitalists (that is, by a relatively small number of people who control investable wealth and the means of production)”[2] shines light on this conception. Rather than capitalism being a system of free markets as posited by some libertarians (Block, Mises, Hayek, etc.) it is instead a system reliant on big government and its institutions and the control of said institutions via capital.

The vulgar libertarians who view the capitalist economy as some form of free market do not understand the forms of power present. If a worker wants to start a collectively-owned business, can he? Not without huge capital requirements and regulatory hoops to jump through. How about setting up a mutual credit system with a different currency? Well there are legal tender laws that in the United State are enforced with more brutality than the punishments given for heinous crimes[3]. When talking of free markets, we need to understand that freedom is only relative to where the power lies. If it lies with the state and its subsidiaries, then freedom is conferred on large employers and corporate unions whom receive forms of state funding and favourable regulation. If it lay with individuals and communities, we would most likely see a move away from one-size-fits-all regulation, the processes of commodification through rentierism and arbitrary entry barriers.

The Regulatory Apparatus

The regulatory apparatuses found within the economy also benefit the capitalist structure. While generally seen as a bulwark against corporate power, the regulations found in an economy create entry barriers to markets and a form of implicit subsidy to big business, as these businesses rent-seek government for more regulation, allowing for a monopoly within particular economic sectors. We can see in the banking, energy, manufacturing and retail sectors that this is the case. Childs noted this in relation to the development of monopoly power in American business during the late 19th and early 20th centuries. He states “this, then, was the basic context of big business; these were the problems that it faced. How did it react? Almost unanimously, it turned to the power of the state to get what it could not get by voluntary means”[4]. In particular Childs saw this occurring in the rail industry in America during the late 19th century. Massive competition had begun in the rail industry, which massively sunk profits for established companies and encouraged many start ups and smaller competitors. As large rail companies weren’t competitive enough in this environment, they came to rely on government intervention, where regulatory boards were created staffed mostly by executives from the large rail companies.

This is what regulation is really about. It isn’t a way of protecting the hapless consumer from the ravages of a free market, but is rather a tool of corporate power that forms entry barriers and enforces particular dichotomies of ownership and organisation in an economy. Capitalism becomes a system of patronage, where corporations gain favour due to their money and power, which itself comes from the state in the first place. As Paul notes “the rich are more than happy to secure for themselves a share of the loot – for example, in the form of subsidised low-interest loans…bailouts when their risky loans go sour, or regulatory schemes that hurt their smaller competitors”[5]. Rifkin shows a similar process, describing how “the critical industries that made up the infrastructure…banded together in a mega lobby to ensure…financial underwriting, as well as industry-friendly codes, regulations, and standards to ensure market success”[6].

The regulatory apparatuses also have the effect of distorting economies of scale, decoupling supply from demand and favouring largesse in business and ownership models. Thus we see the development of high overhead costs which restrict market entry to best capitalised of entrepreneurs. By limiting competition, we see perverse operations occurring that favour the interests of business over the worker and consumer. Thus things like planned obsolescence, guaranteed markets and a continuation of private gain and socialised loss. As had been noted by Childs, private cartels were difficult to maintain. Even the rail trusts, themselves built in contrived, government-produced markets, were ravaged by competition from smaller rail providers[7] that favoured more local economies of scale. So these corporations looked to the government, who enshrined their demands into acts and legislation which created cartels that were much more easily enforced. We just need to look where wage laws, licensure laws and planning/zoning laws are coming from and who lobbies for them. Invariably its dome by corporations and their lobbying arms. We also forms of legal privilege, as in the case of limited liability and corporate personhood, which are really only accessible with very high capital costs and a developed shareholder clientele. These systems are purely artificial, and whether they would work voluntarily is not the question. Rather it is, if they are efficient, why do they need the government to provide these privileges and apparatuses. The answer is simple, they aren’t efficient.

Even when there are laws supposedly to ameliorate the effects of marketisation, as in the case of welfare and government-provided services, they are usually built on the back of resilient communities who developed their own systems, and usually end up allowing employers to pay subpar wages and benefits and lessen the strength of community relations. It builds layers onto a poor foundation. Or to put it another way, the corporate-state nexus is putting a cinderblock on toothpicks. Bureaucrats don’t fully understand the problem with this but realise it is unstable. So to stabilise it, they put more toothpicks under the cinderblock, thinking it will stabilise. However, the system is inherently unstable and propping it up denies the inevitable.

This assurance of market success shows that under a truly free market they wouldn’t exist, or if they did it would be on a much smaller scale. The regulatory web is just another power dynamic that allows for capture and control. To describe this as a free market is laughable. These processes are completely involuntary, reliant on extortion through taxation and allow for the redistribution of wealth from the poor and middle class to the rich and privileged.

The Money Monopoly

While regulation, which “far from coming against the wishes of the regulated interests, was openly welcomed by them in nearly every case”[8], is an important part of the corporate state, the original four legal monopolies (as identified by Tucker), money, land, tariffs and patents, allowed for the development of rent-seeking corporations. These four monopolies, or as I see them structural monopolies as they create the structure of the socio-economic paradigm, are fundamentals of capitalism.

The money monopoly allows for the restriction of credit and the development of debt-based models that destroy stores of value and make individuals slaves to the desires of governments and banks through modern forms of debt peonage. As Dowd notes, over the 20th century “the US dollar has lost almost 85 per cent of its purchasing power even by official government statistics; for its part, sterling has lost 98 per cent of its value over the last century”[9]. The restriction of credit coupled with the inflationary tendencies of modern fiat currencies mean the poorest are effectively forced into wage labour, as they rely on pitiable increases in nominal wages and are unable to gain any real credit for self-employment or collective worker-owned enterprises. What happens is a redistribution of wealth from the poorest to the richest. Long shows that “inflationary monetary policies on the part of central banks also tend to benefit those businesses that receive the inflated money first in the form of loans and investments, when they are still facing the old, lower prices”[10]. The pre-inflation money allows investors and banks to capitalise on new production and investment while the poorer elements of a society receive minimal benefits as the inflationary course makes its run, with prices rising and wages following later.

This also leads to massive levels of debt found currently throughout the globe, as credit instruments are used to make up for stagnant wages that can’t afford increasing land prices and subsequently rent prices, as well as an increase in the price of consumer goods that are a significant chunk of working people’s wages. The process of rent extraction via high interest rates follows from this, as “the money monopoly also includes entry barriers against cooperative banks and prohibitions against private issuance of banknotes, by which access to finance capital is restricted and interest rates are kept artificially high”[11]. Carson notes further that the elimination of controlled interest rates would lead to “significant numbers (of workers) retiring in their forties or fifties, cutting back to part-time, or starting businesses; with jobs competing for workers, the effect on bargaining power would be revolutionary”[12]. The current banking system leads to the necessitation of wage labour through restricted credit dissemination and debt-based forms of finance.

The Land Monopoly

The land monopoly is another lynchpin of capitalism. Most modern land is either nationalised or corporatised through state structures, leading to massive land centralisation and the process of land expropriation that is visible in much of the Third World. Alternative land arrangements, such as those organised by tribes and local networks, are swallowed up in this process. Many commons regimes that have existed for centuries are being eliminated in favour of the interests of capital. This process of enclosure of common lands began at “the end of the Medieval Age, when royal and feudal landowners began to enclose common lands, especially in Tudor England and Trastamara Spain. Through legal and political manoeuvres, wealthy landowners marked and hedged off sections of the commons for their own profits, impoverishing many villagers and ultimately destroying their communitarian way of life”[13]. The enclosures have continued into the 20th century, where “common lands have suffered a third, global wave of commodification and enclosure, ‘land grabbing’ spurred by the dominant neoliberal doctrine and competition for non-renewable natural resources and supported now by the evolutionary theory of land rights”[14]. The modern enclosures of land occur most noticeably in Africa and South America. We see the elimination of common land owned by native tribes and the raping of natural resources. The Niger Delta and its oil reserves show this acutely, with oil spills being common and almost no compensation to the farmers and workers who rely on the Delta for their livelihoods.

In effect this is a process of neo-colonialism pushed through via the Washington Consensus that is epitomised in international groups like the IMF and WTO. The plight of Bangladeshi workers is caused by this problem of neocolonial practices. In Bangladesh “wealthy and influential people have encroached on public lands…, often with help of officials in land-administration and management departments”[15] which has led to a result of “Many of the rural poor in Bangladesh are landless, have only small plots of land, are depending on tenancy, or sharecropping”[16]. What follows is a continuation of the development of a landless mass of cheap labour as a result of the nationalisation and corporatisation of land.

Then there are planning and zoning laws and property laws which act as a form of implicit land nationalisation in many Western countries. Among their many effects, they artificially inflate land prices, which has a knock on effect of making housing unaffordable and making the purchase of land extremely difficult for small businesses. This further encourages the process of rentierism and indebtedness as individuals have to get out mortgages or rent accommodation, and individuals looking to start a business are priced out, thus favouring large corporations. If you want to self-build a home or business, it becomes impossible. Instead a series of state-favoured land developers are able to land bank and rent out at extortionate rates. They aren’t subject to competition and making new land isn’t possible, so you create a system of patronage and favouritism, simply adding to the enforced necessitation of wage labour.

These processes of land appropriation lead to the development of land speculation via government-favoured industries, creating artificially high land prices which price out small businesses, community groups and anyone who isn’t able seek rent from the state. This speculation also fuels boom-bust cycles, with much of the credit used by investors and businesses being put into the easy investments of land and housing. This creates economic bubbles through the wide diffusion of mortgages and an increase in house and infrastructure building that isn’t necessarily needed. In London, we see this playing out with high-price apartments and high-rises that don’t address the needs of the wider population and are fueled, at least partially, via QE-induced credit. The development of a rentier society occurs. With land prices held artificially high, rich landowners are able to rent out their properties at high prices, creating economic precarity and stimulating the larger wage labour monopoly that is caused by a combination of this monopoly and the money monopoly.

The Larger Wage Labour Monopoly

As previously mentioned, credit is restricted thus funding options are limited for workers. Add to this high land prices, and the ability to buy a house or develop a business are severely restricted, developing the large pool of wage labour seen today. This obviously favours large-scale employers such as corporations who are able develop to their current size due to this wage labour monopoly. It leads to a means of surplus value, or rent, extraction. As Solow notes “one important reason for the failure of real wages to keep up with productivity is that the division of rent in industry has been shifting against the labor side for several decades”[17].

Alongside the two monopolies, the increase in precarious wage labour is compounded by the restriction of collective action and the development of monopolist unions that complement the centralised economic actors. The legislation governing strikes and the ability to make a union add to this problem, making it difficult for freelance workers to unionise and stopping the development of radical trade unions and company unions. Thatcher’s trade union reforms in the UK created such a problem as the majority of private sector unions are part of the corporate system of economic centralisation. The final nail in the coffin is the minimum wage. This creates a wage ceiling and simply allows corporations to price smaller competitors out of the market while subsequently limiting the hours and benefits workers receive. As most minimum wages aren’t enough to live on, many workers rely on debt-based credit which pushes individuals further into wage labour, creating debt-led wage slavery and maintaining a massive, centralising economic monopoly on the choice of workers.

As Solow explains, in the US “in the past 10 years productivity has increased 12.3 percent in the non-farm business sector of our economy while real compensation of labor has increased by only 5.1 percent”[18]. So what we see is a form of surplus value extraction, whereby the excess product of labour is captured by the interests of capital and removed from the compensation of labour. This can’t simply be explained away by using the marginalist critique. The value of a product is at least partially informed by its labour input. Marshall’s analysis shows that “price was determined, at any given time, by the balance between the demand and supply that actually existed at that moment. As the time factor came into play…price approached closer and closer to cost”[19] thus showing that the equilibrium of supply to demand moves from subjective criteria of value toward the input of labour in that value. Again looking at Solow’s productivity figures, the compensation of labour isn’t in proportion to production.

Hodgskin’s idea of a market artificially privileged with rents, profits and interest becomes a reality in the modern context. The increase in freelancing and labour market individuation means the expropriation of rent and the limitation of choice, particularly as unions are simply a representation of the corporate interest, particularly since the Wagner Act in America and the trade union reforms in Britain. The individualisation of labour serves to increase these artificial privileges, meaning can be paid less and thus become more reliant on debt instruments such as mortgages and credit cards to simply earn a living and have a roof over their head. This system is even more acute in the Global South, with the restriction of choice via the structural monopolies being almost explicitly enforced via the government as land in enclosed and regulations used to restrict microeconomic activity that doesn’t serve the interests of global value chains. Their human capital is monopolised, wages restricted, collective action completely banned and working conditions extremely poor. The main profit garnered from this is simply the mark-up created by internal tariffs and intellectual property (to be discussed later in this paper), which limits domestic market production and serves only the interests of capital and big business, as both the workers and consumers are given low wages and higher prices respectively.

What happens then is the construction of a monopsony situation in wages and labour, where the product of labour isn’t adequately paid, becoming widespread due to companies paying below this level. This is compounded by wage laws favoured by corporate interests, and an inability for the worker to capture this value through collective bargaining or through the means of owning one’s productive capacities due to market entry barriers that restrict self-employment and worker or community ownership. It constrains the real choice of workers and puts the power dynamics upon employers and bureaucrats.

Tariffs

The next two monopolies that Tucker highlighted further the centralisation of economic power toward corporations. Tariffs are simply a form of direct state intervention to favour domestic industry over foreign competitors. There are arguments favourable to this position, such as those by List and Chang. However, there is a significant time limit on the ability of tariffs to produce any sort of growth (usually artificially induced by state policies), and eventually many of the protected industries become bloated and begin to rely on further government subsidy.

The use of tariffs today is much more limited than it was during the mercantile years of the 17th and 18th centuries. However, one area where tariffs are still largely used is modern agriculture in the West, particularly the US and the EU. The Farm Bill in the US creates price distortions within food markets that favours large agribusiness over small, family farms. As Reitzig explains “the farm bill perpetuates the myth of cheap food. It subsidizes Big Ag so that BA can sell its food to the market cheap and you find it at the grocery store for less than you’d pay for it from your local farmer”[20]. However as “it costs the small local farmer about the same to produce the same food as the Big Ag farmer”[21], all the Farm Bill does is redistribute tax money toward large agricultural firms. The economies of scale thus get changed, with farmers forced into retail sector bulk sell offs that are increasingly inefficient and perpetuate the agricultural tariffs and subsidies.

There also forms of internal tariffs that protect large industry through direct subsidisation. For example “between 1973 and 2003, the US government paid out $74 billion in energy subsidies to promote R&D in fossil fuels and nuclear power”[22]. This was despite these companies having huge profit margins, which shows the actual profitability of these industries. They are reliant on institutions of theft to simply develop critical infrastructure as a result of their internal unproductiveness and their falling foul of the economic calculation problem. It creates a system of perverse incentives as these firms aren’t induced to work and develop in smarter, cleaner ways and instead produce the same limited output. This is corporatism at its finest, with government purposefully favouring large firms over small firms, and thus encouraging wasteful practices. Returning to farming, the EU holds similar policies, which in many ways restrict crop diversification and mean that certain farmers are favoured over others. This leads to artificially low prices which allows for retail monopolisation due to farmers being unable to sell their own product due to EU regulations which create this system. It is a continuation of the obstinate incentives that leads to overproduction, false demand and the entrenchment of economic disadvantages and inefficiencies.

Patents

Patents act in a similar way. They privilege large businesses in rigged markets and allow for centralisation and monopolisation. “The patent privilege has been used on a massive scale to promote concentration of capital, erect entry barriers, and maintain a monopoly of advanced technology in the hands of western corporations. It is hard even to imagine how much more decentralized the economy would be without it”[23]. Patents act to lock up innovation in a legal quagmire. It puts new technology into the hands of capital, limiting its distribution and creating a rentier system, where the privilege to use new technology and even knowledge is commodified by large corporations in collusion with the state.

This inability to access new technologies and knowledge creates a form of entry barrier, with smaller competitors being unable to afford this access. Most modern tech companies (Google, Apple, Microsoft) are in effect monopolists of knowledge and technology, limiting its accessibility and collecting the rent they charge on these products. Their market position becomes entrenched with restrictive data laws and copyrights that mean the passage of information is blocked by virtual, artificial toll gates that wouldn’t exist if not for coercive legislation.

Then there is the direct government subsidisation of research and development (R&D) spending that allows for large companies to reap “monopoly profits from technology it didn’t spend a penny to develop”[24]. Modern tech companies then are not only monopolists of patented of knowledge but also rentiers of technology they had no real part in developing. So while small inventors and start ups toil away trying to create a product that can only be sold on a rigged market, large firms benefit purely because of their power and the revolving door of government benefaction. Similar processes occur in military-based R&D spending, where corporations are given large grants and procurement contracts to develop military hardware and weaponry that on a freed market would not even necessarily be required by any customer or business. As Chomsky notes, in the US “the Pentagon system has long been the country’s biggest welfare program, transferring massive public funds to high-tech industry on the pretext of defense and security”[25]. These companies’ profits and growth are not then created in a market mechanism of competition and demand-led supply, but rather in a bubble of government-led protection, where they ride on the coattails of stolen innovation and forms of theft AKA patents and taxation respectively. “If they had to face the market, they’d be out selling rags or something, but they need a nanny state, a powerful nanny state to pour money into their pockets”[26].

Further, this process of patenting becomes a pure form of commodification as they remove products and ideas from their cultural origins. For example, the Human Genome Diversity Project used DNA from certain indigenous tribes in Central and South America. Some of this DNA was patented, and thus removed from the culture it came from without any sort of compensation by the HGDP and the beneficiaries of this knowledge. Biocolonialism and biopiracy are the best terms for this occurrence. By extracting culturally sensitive information and knowledge, a process of commodification occurs, and the whole concept of property, that of the sovereign ownership of the individual or collective, becomes redundant. Further the innovative capacities that supposedly come from intellectual property are limited if not completely negative. In fact the information that was patented was found to be 30% less innovative than the information released for full public use[27].

This analysis is backed by evidence from Scherer, who showed “a survey of 91 companies in which only seven ‘accorded high significance to patent protection as a factor in their R & D investments.’ Most of them described patents as “the least important of considerations.’ Most companies considered their chief motivation in R & D decisions to be ‘the necessity of remaining competitive, the desire for efficient production, and the desire to expand and diversify their sales”[28]. Thus patents and intellectual property “eliminate ‘the competitive spur for further research’ because incremental innovation based on others’ patents is prohibited, and because the holder can ‘rest on his laurels for the entire period of the patent.’ with no fear of a competitor improving his invention”[29].

Transport Subsidies

The fifth monopoly, transport subsidies, is one that has been identified by Carson. As Carson describes, “spending on transportation and communications networks from general revenues, rather than from taxes and user fees, allows big business to ‘externalize its costs’ on the public, and conceal its true operating expenses”[30]. These transportation subsidies allow for the development of large business operations, particularly in the retail and manufacturing sectors. By subsidising the movement of goods by heavy duty vehicles, it means they are given a state-based competitive advantage against smaller, local competitors.

Companies like Wal-Mart and Tesco are able to price their goods artificially cheaply as a result of not adding the transportation costs. Many of these companies actively lobbied for such infrastructure projects. When the interstate system was being built, it “had both an immediate stimulus effect on the industries that participated…oil companies, general contractors, cement manufacturers, steel companies…were among the dozens of industries involved in the building of the great interstate highway system”[31] showing the degree of corporate-state cooperation. It was because these infrastructure projects benefitted their products and models that they lobbied for them.

Of course Carson’s view of this quite US-centric. In much of Europe, particularly the UK, we see other regulations that create a very different kind of transport subsidy. While these nations do subsidise transport via taxation to pay for roads rather than using user fees or road pricing, they also have high fuel duties and regulation on forms of transport, such as regulations on truck design and usage. The fuel duties act as a subsidy in the sense that they destroy small transport firms and simply monopolise the transport industry as only larger companies can afford the higher prices. The forms of regulation mentioned mean that innovation into new vehicle design and competition between firms is limited and simply continues the dominance of particular transport and production companies that aren’t subject to market competition. Thus what we see are two different types of transport subsidies that both act to continue the current economic paradigm.

These subsidies serve to amplify economies of scale, creating national and international markets largely in the control of corporate interests. These large markets create systems of disequilibrium, with monopoly interests being able to develop oligopoly markets from which rents can be extracted. A modern example of this is the creation of HS2 in the UK. It serves as a vanity project for political and bureaucratic elites, who can gain well-paying jobs as political advisors and construction directors. It also allows for the continuation of the North-South divide, with large London-centric firms sucking out talent from the North and Midlands, at little expense to themselves. As Wellings describes it, it’s an example of externalised costs and internalised benefits, with vested interests serving to gain[32]. Economies of scale are created artificially, with competition in local markets suffering due to a project only favourable to London-based businesses. Local economies of scale, which are more natural and more open to individual considerations and supply and demand, are priced out by government intervention. Local transport projects, like roads linking market towns and local rail infrastructure, are ignored due to a lack of political prestige for politicians and their donors and lobbyists.

Road and rail subsidised by the state leads to the current economies of scale that favour large, centralised business entities. It also prices out and discourages private infrastructure projects that could actually make an economic difference by increasing competition and lowering prices, while maintaining local economies of scale which benefit large swathes of areas that currently don’t benefit from the subsidised corporate model. These three monopolies further the wage labour monopoly, by erecting entry barriers against small business and self-employment and by creating feudalistic patent regimes and transport systems that create favourable economies of scale. National markets serve larger companies and hierarchical organisation, and international markets continue to serve and enlarge this. It pushes real costs onto the consumer/taxpayer, and further creates illegitimate profits taken from oligopoly markets.

The Corporate Infrastructure

This wage labour monopoly, with the five structural monopolies feeding it, is the basis of the modern corporate dominated economy. As a result, modern corporations act as oppressive actors on the world stage, using wage slaves and forms of indebtedness to develop the massive growth seen in the 20th and 21st centuries. As Carson states “in a very real sense, every subsidy and privilege described above is a form of slavery. Slavery, simply put, is the use of coercion to live off of someone else’s labor. For example, consider the worker who pays $300 a month for a drug under patent, that would cost $30 in a free market. If he is paid $15 an hour, the eighteen hours he works every month to pay the difference are slavery. Every hour worked to pay usury on a credit card or mortgage is slavery. The hours worked to pay unnecessary distribution and marketing costs (comprising half of retail prices), because of subsidies to economic centralization, is slavery. Every additional hour someone works to meet his basic needs, because the state tilts the field in favor of the bosses and forces him to sell his labor for less than it is worth, is slavery”[33].

Then there is the system of incentives created by this corporate-state monopoly. Infrastructures are developed that maintain the inefficiencies. Rifkin’s analysis of a series of Industrial Revolutions shows this to be the case. The Second Industrial Revolution, the current economic system we live in according to Rifkin, is reliant on state-invested infrastructure and subsidisation[34]. The subsidisation of natural capital is one example of this. Roberts shows that “the total unpriced natural capital consumed by the more than 1,000 “global primary production and primary processing region-sectors” amounts to $7.3 trillion a year — 13 percent of 2009 global GDP”[35]. The term natural capital is obviously a broad, all-encompassing term. The specifics are those of the production of pollutants that is subsidised by specific tax breaks and forms of limited liability. These follow from elements of the land monopoly which means pollution becomes an externalised cost upon taxpayers, furthering the inefficiencies of a particular economic paradigm, which Rifkin calls the Second Industrial Revolution but what I would call capitalism.

The maintenance of this system means most companies that are reliant on fossil fuels and the energy and transport infrastructures that follow from them have no incentive to divest into new market ventures, but instead have an interest in resource and capital accumulation. It creates ‘revolving door’ government, where lobbyists persist in convincing policy makers for subsidies here and tax breaks there all the while relying on the rent extraction they gain from state intervention.

This process within resource extraction and energy use is more widely seen in the general production processes of capitalism. The levels of overproduction and continued consumption are fed by the structural monopolies, as well as justifying the wage labour monopoly. To fund the levels of consumption needed to continue production means people are put into a paradigm of working longer to buy more things to enjoy. Its paradoxical as you spend more time at work, thus limiting the amount of time you have to actually enjoy consumer goods. Further, as goods become more expensive due to increasing cost mark-ups and inflationary policies, and housing prices and rents go up due to land speculation and monopoly ownership, more people become reliant on debt instruments to fund their everyday lives and their increasing consumer spending. This has created a precipitous debt bubble as Steve Keen’s work has shown. It has also meant that much of the current growth seen since the Great Recession has been on the back of consumer spending, as Blanchflower has documented.

Incentives are created which lead to increasing, unnatural growth and increasing levels of debt. In particular, levels of corporate debt have skyrocketed during the recession of 2008. This is due to systemic overproduction and waste that has developed due to mass production systems used by most multinationals. The structural subsidies create this system where large production facilities with forms of guaranteed profit are needed for massive market areas, usually on a national or international level. Carson has pointed out that modern markets are hardly an example of spontaneous order and aren’t reliant on supply and demand[36]. Rather the system is reliant on a system of planning, with codified relations between suppliers and distributors and systems of guaranteed consumption through external market control in the form of internal sales tariffs and the financialisation of the economy.

Internal sales tariffs limit what stores/areas products can be sold in, and are only viable as a result of intellectual property regimes that allow for increased costs and a further disconnect between production and consumption. Financialisation on the other hand simply maintains the production systems as well as processes of commodification. It makes corporate debt a commodity, and puts value into meaningless products, which allows for more accumulation and overproduction as business isn’t rewarded for genuine wealth production and creation, which comes from artificial processes, but is rewarded rather by debt financialisation, unsustainable growth in bureaucracy and the continued expropriation of surplus value, or human capital. This also represents a commodification process, as the social relation of debt, as identified by Graeber and Martin, is put into an economistic context, with debt serving the purposes of profit and capital. The debt relationship, that’s shaped by community relations and gift-giving and receiving[37], is taken as a value of capital. And this debt is allowed to build up and shape other economic activity. Consumer purchase after consumer purchase represents this. It is encouraged, and when it slows the government takes over and funds through quantitative easing programs, allowing for the construction of bigger, more complex bubbles. It shows that corporation and government are two sides of the same coin.

We have to remember that as much as governments, corporations are just as likely to be effected by the knowledge problem. To get around, every relationship and process is effectively planned. Business to business relations, as seen in distribution and supply chains, are maintained for decades by large manufacturers so as to continue guaranteed buyers of their products. In other cases, the supply and warehousing operations are subsumed by the manufacturer, owning every process from production to sale. Global value chains are an outgrowth of this hierarchalised control and planning, with much of their success being guaranteed by government. It is dictatorial governments in the Global South (who usually have the backing of the US government and its interests) that ban collective action among labourers through extraordinarily harsh measures, it is trade agreements with their backing by Western governments that maintain artificial property rights such as patents and it is government that externalises the cost of global transportation of these goods onto the taxpayer, thus distorting economies of scale to favour the large corporations and forms of state-corporate economic planning. In other the words, the commodification and Sovietisation of the economy.

Culture Under Capitalism

A paradigm that enforces this economic hierarchy is created, where life is work and your main identity is around the soul-crushing job you inhabit. Social relations are commodified and local economic activity is strangled. The whole idea of community in the 21st century is being replaced by a centralised state and economic activity that has no interest in that community, but is inward looking, determining profit margins rather building strong societal relations. The ability to escape this paradigm is extremely limited by the coercive hand of the state. It restricts collective organising, eliminates common and private property and develops extremely insufficient systems of economic organisation.

What we’ve seen is the disembedding of markets from their cultural and social origins[38]. Relations of debt and consumption, which were as much in political institutions and based around social relations, have been expropriated by capital. Thus instead of markets forming one of many different idea of economic organisation of which it could complement, we see the neoliberal discourse of praising markets and even seeing marketisation in what have been social relations up to this day. Thus public services such as health and energy are wrapped in discourses of competition and corporate ownership. However, markets aren’t actually like this. If we look to genuinely free markets, which are few and far between, we don’t see large production and corporate ownership. Instead we see markets crafted around local institutions and genuine demand for certain goods and services. Ownership is much more decentralised. However, due to government-based price and scale distortions, culture and its institutions are brought into the marketised economy, creating the marketised society.

It leads to the development of modern consumerism, creating warped identities based around products. It kills culture and intelligence in favour of an advertised individual. Carson shows that “mass production divorces production from consumption. The rate of production is driven by the imperative of keeping the machines running at full capacity so as to minimize unit costs, rather than by customer orders. So in addition to contractual control of inputs, mass-production industry faces the imperative of guaranteeing consumption of its output by managing the consumer”[39]. The consumer is separated from the producer. Mass production means a consumer culture. Rather than supply meeting demand, demand is made to compensate for oversupply. It also creates forms of consumer inequality that mean Third World workers have almost no access to the products they help produce. The development of domestic markets in consumer goods is massively restricted via patents and tariffs.

Within the Western world there is similar consumer inequality, with a creation of an underclass who desire consumer goods that their limited wages can hardly afford. Bauman’s analysis of the London Riots in 2011 saw an element of this consumer yearning, with products like high-end trainers and flat-screen TVs being taken. Bauman notes that “from cradle to coffin we are trained and drilled to treat shops as pharmacies filled with drugs to cure or at least mitigate all illnesses and afflictions of our lives and lives in common. Shops and shopping acquire thereby a fully and truly eschatological dimension”[40]. The cultural backwater caused by modern consumerism creates a form of stigmatisation and symbol status, with haves and have nots developing into distinct classes in a consumer culture. As Bauman states “for defective consumers, those contemporary have-nots, non-shopping is the jarring and festering stigma of a life un-fulfilled — and of own nonentity and good-for-nothingness. Not just the absence of pleasure: absence of human dignity. Of life meaning”[41].

The processes of commodification amplify this systemic crisis. The divorcing of production from consumption leads to the most atomistic forms of individualism. It becomes a process of overconsumption and hoarding, without any appreciation of the product development. Cultural and societal obligations and considerations get uprooted by what is wanted and what can be bought. It puts value squarely into the hands of capital, with the determination of worth being decided in social hierarchies that follow from the enforced economic hierarchies of modern capitalism. It is a symptom of the false choice of employment or death, of work creating one’s value in life and of a market shaped not by workers, communities and cultures but by the interests capital and the state that props it up.

Conclusion

This system is massively unsustainable, and becomes more and more reliant on tax revenues to make it profitable. The price system becomes distorted, encouraging the mass production that “leads to ever-increasing demands on state services”[42]. This then shows the inefficiency of large corporations. They are as much subject to the economic calculation problem as the state. Their reliance on the theft of individual income via the taxation system means in anarchist society they are completely unviable. As a system of economic organisation “capitalism could not have survived at any point in its history without state intervention. Coercive state measures at every step have denied workers access to capital, forced them to sell their labor in a buyer’s market, and protected the centers of economic power from the dangers of the free market”[43].

In systems of anarchy, there would be an end to corporate dominance due to their inability to seek state rent and thus collapsing in their inefficiencies. As noted by Carson, there were two paths that could have been taken to organise industry and the economy. The one that was followed was “centralized production using expensive, product-specific machinery in large batches on a supply-push basis”[44]. However a better system was possible. One of “decentralized production for local markets, integrating general-purpose machinery into craft production and governed on a demand-pull basis with short production runs and frequent shifts between product lines”[45]. This would have required localised industry, networked communities and what Rifkin calls lateral, distributional, collaborative markets. Workers would be independent of capital, and have an ability to take back their surplus value. It would involve voluntary governance structures and self-organised communities. It would be an end to the corporate-state nexus.

By having this centralised system, we open the floodgates to the continuation of boom-bust cycles through monopoly government control. Since the delinking of production from consumption, there has been a development of mass production and the apparatuses that prop it up. Marx noted this particular phenomenon, with “the birth of large-scale industry this true proportion had to come to an end, and production is inevitably compelled to pass in continuous succession through vicissitudes of prosperity, depression, crisis, stagnation, renewed prosperity, and so on”[46]. This process in the end favours the capitalists. It destroys real value in an economy and allows for more government involvement. Further, it leads to capital accumulation through government subsidisation and the monopoly position many modern corporations hold within their respective markets.

It’s a process of artificial wealth accumulation and creation, backed by the five monopolies previously mentioned. High land prices, restrictive credit access and the use of interest rates to effectively distort the value of currency, the use of market entry barriers through regulations and patents and the use of transport subsidies all favour the main monopoly, that of wage labour. Because of the diminishing returns that many of these companies are finding, they are becoming increasingly reliant on the extraction of surplus value from their workers. As mentioned earlier, wage laws allow them to eliminate smaller competitors and the development of varied, precarious work contracts mean a diversification of their workforce, which allows them to reduce hours paid and thus reduce their labour costs. However, the compensation of a worker’s product isn’t necessarily met. Thus the accruing of capital simply means the extraction of rent from workers, which is enforced by the limitation of worker’s to pool their labour value and capital and develop their own industry in a truly free market.

Government is the glue which holds capitalism together. Without it, the economies of scale, the appropriation and centralisation of land and the distortion of inputs and outputs would be impossible. Without a central bank, the destructive tax of inflation wouldn’t be feasible in a competitive currency market. The redistribution of wealth and malinvestment couldn’t occur on the same scale as markets would act as a corrective against these activities. The use of tariffs and patents to lock up technology and create artificial wealth couldn’t happen without the state’s coercive power. Economic organisation is a fluid concept, that changes from place to place and people to people. What is right for one community or tribe is not what is necessarily right for another. A freed market would reflect this, as it would embed markets in pre-existing cultural/social structures and stop the developments of commodification and neo-colonialism that persist presently. This is a world free of state-action and corporate control. This is anarchism.

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Solow, R. (2015). The Future of Work. Available: http://www.psmag.com/business-economics/the-future-of-work-why-wages-arent-keeping-up. Last accessed 16th Sep 2015.

StopHS2. (2013). “Classic Example” of Vested Interests. [Online Video]. 18 November. Available from: https://www.youtube.com/watch?v=r94VP3USOuE. [Accessed: 31 October 2015].

Vivero Pol, J. (2015). Transition towards a food commons regime. Available: http://poseidon01.ssrn.com/delivery.php?ID=9851100240740070870950101221090931190350100270460840350111130010740820980970930810660540551030481120240140671180910151151060840400590600730100851021250261111. Last accessed 15th Sep 2015.

Notes:

[1] Chartier, G. 2010, 1

[2] Chartier, G. 2010, 2

[3] Dowd, K. 2014

[4] Childs, R. 1971

[5] Paul, R. 2009, 70

[6] Rifkin, J. 2011, 134

[7] Childs, R. 1971

[8] Childs, R. 1971

[9] Dowd, K. 2014, 85-86

[10] Long, R. 2008

[11] Carson, K. 2002

[12] Carson, K. 2002

[13] Vivero Pol, L. 2015, 9

[14] Vivero Pol, L. 2015, 9

[15] Richman, S. 2013

[16] Richman, S. 2013

[17] Solow, R. 2015

[18] Solow, R. 2015

[19] Carson, K. 2007, 50

[20] Reitzig, L. 2014

[21] Reitzig, L. 2014

[22] Rifkin, J. 2011, 134

[23] Carson, K. 2002

[24] Carson, K. 2002

[25] Shorr, I. 1996

[26] Shorr, I. 1996

[27] de Ugarte, D. 2015

[28] Carson, K. 2002

[29] Carson, K. 2002

[30] Carson, K. 2002

[31] Rifkin, J. 2011, 134

[32] Wellings, R. https://www.youtube.com/watch?v=r94VP3USOuE

[33] Carson, K. 2002

[34] Rifkin, J. 2011

[35] Roberts, D. 2013

[36] Carson, K. 2010

[37] Martin, F. 2013

[38] Polanyi, K. 2002

[39] Carson, K. 2010, 50

[40] Bauman, Z. 2011

[41] Bauman, Z. 2011

[42] Carson, K. 2010, 111

[43] Carson, K. 2002

[44] Carson, K. 2010

[45] Carson, K. 2010

[46] Carson, K. 2010, 256

Two for Tuesday

Posted on January 19, 2016 by Reid Mukai

Negativland

A Unified Theory of Corruption – The Deep State

Posted on January 14, 2016 by Reid Mukai

LongTime Capitol Hill Insider Exposes the Kind of Government We Really Have

By Jeff Schechtman

Source: WhoWhatWhy.org

The Holy Grail of physics has always been to find what Einstein called a Unified Field Theory, or, as we’ve come to know it today, a theory of everything. One idea, one set of equations that could explain the physical universe.

Imagine if such a thing existed in government and politics. If we could look at the last 40 years of upheaval, change, and political dislocation, and find the one thread that explains it all.

The term “The Deep State” originated in the Ottoman Empire — where the Turks recognized that their leaders owed allegiance to elites, and placed the opportunities and prerogatives of nationalism, corporatism, and elites over the interest of its citizens.

Today, the term is just as apt. Those same allegiances on the part of today’s leaders may just be responsible for income inequality, perpetual war, the dominance of Wall Street, and a Military/Homeland Security Complex far greater, deeper and stronger than anything that President Dwight Eisenhower could ever have imagined. Many thinkers have looked at this, including people like Peter Dale Scott, who has written much about it here on the pages of WhoWhatWhy.org.

Now, Mike Lofgren — a long time Capitol Hill insider, Senate and House Budget Committee staffer — shares 28 years of up close and personal insight which has led him to similar conclusions.

Lofgren thinks he has found the unifying theory. From his Washington perch,he has observed deep and intricate connections between Wall Street, the military, defense contractors, political operatives, the treasury, elected leaders, and unnamed others. And he has perceived the presence of a shadow government.

This complex web was made even stronger by 9/11 and the 2008 financial meltdown. And it leaves out ordinary citizens — the patsies — as more and more money is sucked out of the system and denied to those looking for even the most basic government infrastructure and services.

Lofgren is out with a new book and, in this week’s podcast, he’s interviewed by WhoWhatWhy’s Jeff Schechtman. He talks the nitty gritty of the Deep State, showing once again that WhoWhatWhy is your Deep State Headquarters.

The book is called The Deep State: The Fall of the Constitution and the Rise of a Shadow Government, and it is published by Viking.

WhoWhatWhy Radio podcast mp3

Breaking the chains: precarity in the Age of Anxiety

Posted on January 5, 2016 by Reid Mukai

By Joseph Todd

Source: RoarMag.org

In our Age of Anxiety, society assaults us from every possible angle with an avalanche of uncertainty. How do we fight back under conditions of precarity?

An Age of Anxiety is upon us, one where society assaults us from every possible angle with an avalanche of uncertainty, fear and alienation. We live with neither liberty nor security but instead precariousness. Our housing, our income and our play are temporary and contingent, forever at the whim of the landlord, policeman, bureaucrat or market. The only constant is that of insecurity itself. We are gifted the guarantee of perpetual flux, the knowledge that we will forever be flailing from one abyss to another, that true relaxation is a bourgeois luxury beyond our means.

Our very beings come to absorb this anxiety. We internalize society’s cruelty and contradiction and transform them into a problem of brain chemistry, one that is diagnosed and medicated away instead of being obliterated at root. All hope is blotted out. Authentic experience, unmediated conversation, distraction-free affection and truly relaxed association feel like relics of a bygone era, a sepia dream that perhaps never existed.

Instead we have the frenetic social arenas of late capitalism: the commodified hedonism of clubs and festivals, express lunches, binge culture and the escapist, dislocating experience of online video games, all underlined by either our desperate need to numb our anxieties or to create effective, time-efficient units of fun so we are available for work and worry.

This is assuming we have work, of course. Many of us are unemployed, or are instead held in constant precarity. Stuck on zero-hour contracts or wading through as jobbing freelancers in industries that used to employ but don’t anymore, we are unable to plan our lives any further than next week’s rota, unable to ever switch off as the search for work is sprawling and continuous.

And if we do have traditional employment, what then? We are imprisoned and surveilled in the office, coffee shop or back room, subject to constant assessment, re-assessment and self-assessment, tracked, monitored and looped in a perpetual performance review, one which even our managers think is worthless, but has to be done anyway because, hey, company policy.

Continuous is the effective probationary period and we are forever teetering on the edge of unemployment. We internalize the implications of our constant assessment, the knowledge that we’re always potentially being surveilled. We censor ourselves. We second-guess ourselves. We quash ourselves.

And thanks to the effective abolition of the traditional working day, work becomes unbearable and endless. The security of having delineated time — at work and then at play — has been eradicated. Often this is because individuals have to supplement their atrocious wages with work on the side. But it is also because traditional 9-to-5 jobs have suffered a continuous extension of working hours into out-of-office time, enabled and mediated by our laptops and smartphones. These gadgets demand immediacy and, when coupled with the knowledge that you are always reachable and thus available, they instill in us a frantic need to forever reply in the now.

And with this expectation comes obligation. Hyper-networked technologies gift our bosses the ability to demand action from us at any moment. Things that had to wait before become doable — and thus are done — in the now. If you are unwilling, then someone is ready to take your place. You must always be at their beck and call. From this, our only refuge is sleep, perhaps the last bastion of delineated time against frenetic capitalism, and one that is being gradually eroded and replaced.

For those that are out of work the situation is no better. They face the cruel bureaucracy of the Job Centre or the Atos assessment, institutions that have no interest in linking up job seekers with fulfilling employment but instead attempt only to lower the benefits bill through punitive, arbitrary sanctions and forcing the sick back to work. Insider accounts of these programs betray the mix of anxiety inducing micro-assessment and surveillance they employ.

Disabled claimants — always claimants, never patients, insists Atos — are assessed from the moment they enter the waiting room, noted as to whether they arrive alone, whether they can stand unassisted and whether they can hear their name when called. Compounding this is the hegemonic demonization of those that society has failed: if you are out of work, you are a scrounger, a benefit cheat and a liar. Utterly guilty of your failure, a situation individualized in its totality and attributable to no system, institution or individual but yourself.

We are surveilled, monitored and assessed from cradle to grave, fashioned by the demand that we must be empirical, computable and trackable, our souls transformed into a series of ones and zeros. This happens in the workplace, on the street and in various government institutions. But its ideological groundwork is laid in the nursery and the school.

These institutions bracket our imaginations while still in formation, normalizing a regime of continuous surveillance and assessment that is to last for the rest of our lives. Staff are increasingly taken away from educating and nurturing and instead are made to roam nurseries taking pictures and recording quotes, all to be computed and amalgamated so authorities can track, assess and predict a child’s trajectory.

It is true that this does not trouble the child in the same way traditional high intensity rote examination does. But what it instead achieves is the internalization of the surveillance/assessment nexus in our minds; laying the groundwork for an acquiescence to panoptical monitoring, a resignation to a private-less life and a buckling to regimes of continuous assessment.

Britain is particularly bad in this respect. Not only does our government have a fetish for closed-circuit television like no other, but also, GCHQ was at the heart of the Snowden revelations. Revelation, however, is slightly misleading — as what was most telling about the leaks wasn’t the brazen overstep by government institutions, but that few people were surprised. Although we didn’t know the details, we suspected such activity was going on. We acted as if we were being watched, tracked and monitored anyhow.

In this we see the paranoid fugitive of countless films, books and television dramas extrapolated to society writ large. We are all, to some extent, that person. Our growing distrust of governments, the knowledge that our technologically-integrated lives leave a heavy trace and the collection of “big” data for both commercial and authoritarian purposes contributes to our destabilized, anxious existence. An existence that impels us towards self-policing and control. One where we do the authority’s job for them.

Many individuals offer the amount of choice we have, or the amount of knowledge we can access at the click of a button, as the glorious consequences of late capitalist society. But our rampant choice society, one where we have to make an overwhelming number of choices — about the cereal we eat, the beer we drink, or the clothes we wear — is entirely one sided. While we have an incredible amount of choice over issues of little importance, we are utterly excluded from any choice about the things that matter; what we do with the majority of our time, how we relate to others or how society functions as a whole. Nearly always these choices are constricted by the market, the necessity of work, cultures of overwork and neoliberal ideology.

Again we find this ideology laid down in primary education. Over the years more and more “continuous” learning has been introduced whereby children, over a two week period or so, have to complete a set of tasks for which they can choose the order. This is an almost perfect example of how choice functions in our society, ubiquitous when insignificant but absent when important. The children can choose when they do an activity, which matters little as they will have to do it at some point anyway, but cannot choose not to do it, or to substitute one kind of activity with another.

Why does this matter? Because meaningful choices about our lives give us a sense of certainty and control. Avalanches of bullshit choices that still have to be made, as study after study has shown, make us incredibly anxious. Each of them takes mental effort. Each contains, implicitly, the multitude of choices that we didn’t make; all those denied experiences for every actual experience. This is fine if there are only one or two. But if there are hundreds, every act is riddled with disappointment, every decision shot with anxiety.

Compounding this orgy of choice, and in itself another root cause of anxiety, is the staggering amount of information that assaults us every day. Social media, 24-hour news, the encroachment of advertising into every crack — both spatially and temporally — and our cultures of efficiency that advocate consuming or working at every possible moment all combine to cause intense sensory overload. This world, for many, is just too much.

Although we’ve talked mostly about work, surveillance, assessment and choice, there are a multitude of factors one could add. The desolation of community due to the geographical dislocation of work, the increased transiency of populations and the growing privatization of previously public acts — drinking, eating and consuming entertainment are increasingly consigned to the home — shrinks our world to just our immediate families.

Camaraderie, extended community and solidarity are eroded in favor of mistrust, suspicion and competition. Outside of work our lives become little more than a series of privatized moments, tending to our property and ourselves rather than each other, flitting between the television shows, video games, home DIY and an incredible fetish for gardening with no hint towards the thought that perhaps these experiences would be better if they were held in common, if they appealed to the social and looked outward rather than in.

In the same way we could mention the ubiquity of debt — be it the mortgage, the credit card or the student loans — and the implicit moral judgment suffered by the debtor coupled with the anxiety-inducing knowledge that they could lose everything at any moment. Or we could consider the near-existential crises humanity faces, be it climate change, ISIS or the death throes of capitalism; all too abstract and total to comprehend, all contributing to a sense that there is no future, only a grainy, distant image of lawless brutality, flickering resolutely in our heads.

But the crux, and the reason anxiety could become a revolutionary battleground, is that neoliberal ideology has individualized our suffering, attributing it to imbalances in our brain chemistry, constructing it as a problem of the self, rather than an understandable human reaction to a myriad of cruel systemic causes. Instead of changing society the problem is medicalized and we change ourselves, popping pills to mold our subjectivities to late-capitalist structures, accepting the primacy of capitalism over humanity.

This is why “We Are All Very Anxious”, a pamphlet released by the Institute of Precarious Consciousness, is so explosively brilliant. Not only does it narrate the systemic causes of anxiety, but it situates the struggle within a revolutionary strategy, constructing a theory that is at once broad and personal, incorporating one’s own subjective experience into an explanatory framework, positing anxiety as a novel, contemporary revolutionary battleground, ripe for occupation.

It is, they claim, one of three eras spanning the last two-hundred years where we have progressed between different dominant societal affects. Until the postwar settlement we suffered from misery. The dominant narrative was that capitalism benefited everybody; while at the same time overcrowding, malnourishment and slum dwelling were rife. In response to this appropriate tactics such as strikes, mutual aid, cooperatives and formal political organization were adopted.

After the postwar settlement, until around the 1980s, a period of Fordist boredom ensued. Compared to the last era, most people had stable jobs, guaranteed welfare and access to mass consumerism and culture. But much of the work was boring, simple and repetitive. Life in the suburbs was beige and predictable. Capitalism, as they put it, “gave everything needed for survival, but no opportunities for life.” Again movements arose in opposition, positioned specifically against the boredom of the age. The Situationists and radical feminism can be mentioned, but also the counter-culture surrounding the anti-war movement in America and the flourishing DIY punk scene in the UK.

This period is now finished. Capitalism has co-opted the demand for excitement and stimulation both by appropriating formerly subversive avenues of entertainment — the festival, club and rave — while dramatically increasing both the amount and intensity of distractions and amusements.

In one sense we live in an age of sprawling consumerism that avoids superficial conformity by allowing you to ornament and construct your identity via hyper-customized, but still mass-produced products. But technological development also mean that entertainment is now more total, immersive and interactive; be it the video game or the full-color film watched on a widescreen, high-definition television.

Key to this linear conception is the idea of the public secret, the notion that anxiety, misery or boredom in these periods are ubiquitous but also hidden, excluded from public discourse, individualized and transformed into something unmentionable, a condition believed to be isolated and few because nobody really talked about it. Thus to even broach the subject in a public, systematic manner becomes not just an individual revelation but also a collective revolutionary act.

I’ve seen this first-hand when running workshops on the topic. Sessions, which were often argumentative and confrontational, became, when the subject was capitalism and anxiety, genuinely inquisitive and exploratory. Groups endeavored to broaden their knowledge of the subject, make theoretical links and root out its kernel rather than manning their usual academic ramparts and launching argument after rebuttal back and forth across the battlefield.

But more than this, there was a distinct edge of excitement, the feeling that we were onto something, a theory ripe with explosive newness, one that managed to combine our subjective experiences and situate them in a coherent theoretical framework.

However, we must be critical. To posit anxiety as a specifically modern affect, unique to our age, is contentious. What about the 1950s housewife, someone mentioned in one of the sessions, with her subjectivity rigidly dictated by the misogyny and overbearing cultural norms of the time? Didn’t this make her feel anxious?

Well, perhaps. But if we take anxiety to mean a general feeling of nervousness or unease about an uncertain outcome — with chronic anxiety being an actively debilitating form — then we can draw distinct differences. Although the housewife was oppressed, her oppression was codified and linear, her life depressingly mapped out with little room for choice or maneuver. Similarly with the slave — surely the universal symbol of oppression — hierarchies aren’t nebulous but explicit, domination is ensured by the whip and the gun, the master individualized and present.

This is in stark contrast to the current moment. While it is obvious that oppressions are distinct and incomparable, we can nevertheless see that the fug of the 21st century youth is of a different nature. Our only certainty is that of uncertainty. Our oppressor is not an individual but a diffuse and multiplicitous network of bureaucrats, institutions and global capital, hidden in its omnipotence and impossible to grasp.

We aren’t depressed by the inevitability of our oppression, but instead are baffled by its apparent (but unreal) absence, forever teetering on the brink, not knowing why, nor knowing who we should blame.

Similarly it is bold to claim that anxiety is the dominant affect of Western capitalism, tantamount to pitching it as the revolutionary issue of our age. Yet if we analyze the popular struggles of our time — housing, wages, work/life balance and welfare — they are often geared, in one way or another, towards promoting security over anxiety.

Housing for many is not about having a roof over their heads, but about security of tenure, be it via longer fixed-term tenancies or the guarantee that they won’t be priced out by rent rises that their precarious employment can’t possibly cover. In the same way struggles over welfare are often about material conditions, but what particularly strikes a chord is the cruel insecurity of a life on benefits, forever at the whim of sanction-wielding bureaucrats who are mandated to use any possible excuse to remove your only means of support.

Anxiety is also a struggle that unites diverse social strata, emanating from institutions such as the job center, loan shark, university, job market, landlord and mortgage lender, affecting the unemployed, precariously employed, office worker, indebted student and even the comparatively well-off. Again we find this unification in the near-universal adoption of the smartphone and other hyper-networked technologies. All of us, and especially our children, are beholden to a myriad of glowing screens, flitting between one identity and another, alienated and disconnected from our surroundings and each other.

This is not to say a movement against anxiety itself will ever arise. Such a rallying cry would be too abstract and fail to inspire. Instead, anxiety must be conceptualized both as an affect which underlies various different struggles, and a schema within which they can be assembled into a revolutionary strategy.

So, what is our tangible aim here? In part it must be to reduce the level of general anxiety so as to increase quality of life. Yet if we are to take a revolutionary rather than a mere humanitarian approach, this drop in anxiety must in some way translate into a rise in revolutionary disposition. In certain ways it obviously will. If there is a public realization that large swathes of the mentally ill are not as such because of their unfortunate brain chemistry but instead because of a misconfiguration of society, people are already thinking on an inherently challenging, systemic level.

Similarly, conflict with the state or capital — be it on the street, in the workplace or inside one’s own head — tends to be high-impact and anxiety-inducing. A drop in general anxiety will make it more likely that individuals will engage in such moments of conflict and, crucially, experience the intense radicalization and realization of hegemonic power that can only be achieved through such visceral moments. But a second part to this, hinted at already and integral to giving the struggle a revolutionary edge, is to emphasize that there is a public secret to be aired. As well as combating the sources of anxiety, we must say we are doing so; we must situate these struggles within larger frameworks and provide education on its systemic nature.

Thus, any strategy would need to be both abstract and practical. On one hand we must explode the public secret by raising consciousness. This would require a general onslaught of education, including, but not limited to, consciousness-raising sessions, participatory workshops, articles, books, pamphlets, leaflets, posters, YouTube videos and “subvertised” adverts. The emphasis would be to educate but also to listen, to intermingle theoretical understanding with subjective experience.

The second part would be to strategically support campaigns and make demands of politicians that specifically combat anxiety in its various different guises. When it comes to work, the abolition of zero-hour contracts, the raising of the minimum wage in line with the actual cost of living, and the tightening of laws on overwork as part of a broader campaign to assert the primacy of life over work, of love over pay, would be a good start.

For those out of work, underpaid or precarious, the introduction of a basic citizen’s income would represent a revolutionizing of the job market. In one move it would alleviate the cultural and practical anxieties of worklessness — ending the bureaucratic cruelty of the job center while removing the anxiety-inducing stigma associated with claiming benefits — while simultaneously allowing individuals to pursue culturally important and revolutionary activities such as art, music, writing or (dare I say it?) activism, without the crushing impossibility of trying to make them pay. When we look to housing obvious solutions include mandatory, secured five-year tenancies, capped rent increases and a guarantee of stable, suitable social housing for those who need it.

There are many more reforms I could list. You will notice, however, that these are indeed reforms; bread and butter social democracy. Does that mean such a program is counter-revolutionary? A mere placatory settlement between capital and the working class? No, it does not. Revolution does not emerge from the systematic subjection of individuals to increased misery, anxiety and hardship as accelerationist logic demands. Instead it flourishes when populations become aware of their chains, are given radical visions for the future and the means to achieve them. It is when leftists critique but also offer hope. It is when the population writ large are included in and are masters of their own liberation; not when they are viewed as a lumpen, otherly mass, of only instrumental importance in achieving the glorious revolution.

Look at the practicalities and this becomes obvious. How can we expect individuals to launch themselves into high-tension anxiety-inducing conflicts if the mere thought of such a situation causes them to have a panic attack? How can individuals, in the face of near panoptical surveillance and monitoring, combat the overwhelming desire to conform if they aren’t awarded some freedom from the practical anxieties of life? How are we to think and act in a revolutionary, and often abstract, manner if the very real and immediate anxieties of work, home and play fog our minds so totally?

This is not to say freedom will be given to us. It must always be taken, and we must not rely on electoral politics to hand us the revolution down from above. Nor will true struggle ever be an anxiety-free leisure pursuit. Genuine conflict with the state and capital will always entail danger, stress and the possibility of intensified precariousness.

Nevertheless, the dismissal of electoral politics in its totality represents abysmal revolutionary theory. The pursuit of reforms by progressive governments being bitten at the heels by sharp, vibrant social movements can produce real, tangible change.

It was what should have happened with Syriza, and it is what will hopefully happen with the new Labour leadership in the UK. And if, as individuals and communities, we are to puncture the distress, precariousness and general sense of cruel unknowing so particular to the moment in which we live, if we are to overcome the avalanche of bullshit and reclaim our confidence, if we to construct and disseminate a distinctly communal, hopeful revolutionary fervor, such changes are imminently needed.

Joseph Todd is a writer and an activist. Find more of his writings here or follow him on twitter.

The Santa Claus Syndrome

Posted on December 25, 2015 by Reid Mukai

By Ethan Indigo Smith

Source: ZenGardner.com

The Santa Clause: Lying is OK, so long as everyone else is doing it.

The Santa Claus Syndrome is the effect of societal complicity in, and/or complacency to, lies and the belief that’s ok.

Take a moment to imagine yourself an outsider and visitor to a new culture. Imagine if you will an annual global celebration so fantastic that people excitedly await it all year long. Imagine the celebration correlates the winter solstice. Imagine the celebration is so spectacular and grandiose that it spurs the sales of products worldwide and some businesses exist solely because of it. Imagine that nearly all businesses profit from it and promote it. Imagine that the main part of the celebration, for most people, aside from sparkling decorations and elaborate gift giving, is openly lying to young children!

Most everyone celebrates the holiday, but those who do not celebrate it are expected to go along with the tradition of broadly lying to children and accepting the excessive materialism out of consideration for cultural tradition.

Conjuring, Consumerism and Conditioning

Although some call Christmas today a ‘Pagan’ holiday, in reality it is nothing of the kind. The pagans I know want nothing to do with it.
Christmas is a children’s consumption holiday. They look forward to it the most. Well, children and the profiting corporations, of course. Children receive countless presents, rewarded for accepting as truth impossible fictions about a fat man from the North Pole, an omnipotence external being who “sees you when you’re sleeping”, who judges children, and who withholds or grants material incentives accordingly.

It is better to give than to receive, they are told.

Celebration and happiness is in the receiving, they observe.

Reward is earned by modelling behavior and suspending critical thinking, they learn.

Generally speaking, telling children fiction as fact is counter-productive to their developing minds. But children do of course eventually inquire of their parents and strangers alike about the phenomenon of the holiday and the fat man. For a period of time after that first enquiry, many children are lied to further – to prolong the “magic”. Finally, they get their answer and find that majority of adults are in on the lie. Even institutions like schools lie, and local and national news. And now they will lie, too. And it’s all okay… so long as everyone else is doing it.

And that, kids, is the magic of Christmas!

Other celebration rituals involve cutting down young trees for indoor decorations, wrapping gifts in paper from other trees and putting them under the dying, decorated tree on the last night of the celebration and saying the fat man did it. The children are told the fat man traverses the world on an inadequately sized sled powered by flying reindeer (the lead one featuring an inexplicable glowing nose) and stops by the homes of children, entering through chimneys yet staying crispy clean, having cookies at each house as he drops off plastic weapons and impossibly thin dolls.

And the fat man, old Santa Claus, he isn’t just generous, he’s mysterious. He doesn’t simply give because it’s better than receiving. He and his elf workers in the North Pole watch all the children of Earth all year long. He decides which children receive the promise of abundance based on who’s been naughty and nice.

Sounds a bit like the other Big Guy, who decides who receives the promise of abundance in the ‘afterlife’, based on who’s been naughty and nice.

First Lies

The Santa Claus story is an unnecessary social conjuration of a blatantly un-sacred holiday. Those of us who grew up in in ‘Christmas’ homes were all influenced by it in one way or another; even the ‘not Christmas’ kids were openly encouraged to withhold the truth from the ‘Christmas’ kids – to prolong the magic.
Abstract and nuanced, it is the first load of garbage young humans in Christian-influenced societies have to mentally digest. For many kids, it is the first time they come to doubt their parents on a point of truth, and the first time they are knowingly lied to if their suspicions are deflected. Then, once entrusted with continuing the Santa Claus myth with younger children, it is the first time they learn that the caveat to the long held ‘no lying’ rule is … ‘so long as everyone else is doing it’.

Just play along kids, and you’ll still get the gifts.

Amid all the Christmas hoopla, which starts to build in stores as early as October, children are normally so occupied with shiny lights and the prospect of gifts that there really is no impetus to question it. Eventually, despite the enticements on offer, the lie is realized of course, for some kids much sooner than others, and the specifics and nuances come undone as a natural function of their maturing minds.

Tradition or Parody?

Regardless of any magical intention, the blunt reality is that parents, teachers, strangers, radio hosts, and local weathermen are deceiving children in perfect synchronization, steering them into immense emotional and material attachment to a collective (unnecessary) illusory figure that withholds from the ‘naughty’ and rewards the ‘nice’.

The holiday in its current formation gives us all practice at complicity, passing on cultural fictions because they were passed onto us, and because that’s what adults do. It is effectively a child-friendly celebration of the doctrines — It’s better to receive than to give, and you’re expected to lie so long as everyone else is doing it — proudly brought to you by your favorite sugary drink, Coca-Cola.

The worst part of the celebration of this vile conjuration is not the lie itself, but the results of it. Lying to kids in this way creates a parody of genuine human tradition, substituting meaningful ritual with an illusory commercial mockery. But that’s only stage one of the Santa Claus Syndrome…

Learning the Santa Clause is the the first test of adulthood. Left unresolved, the experience can manifest to varying degrees, in a number of ways.

The Santa Claus Syndrome

The Santa Clause: Lying is OK, so long as everyone else is doing it.

If you don’t question what you’ve been told, accept incomplete information, and don’t proceed with your natural impulse, you quite likely have the Santa Claus Syndrome to some degree. Quite simply, it makes people ignore serious issues.

The Santa Claus Syndrome manifests in a number of stages:

Stage One:
It manifests as insistence on celebrating lies posing as tradition, elaborate intent on the deception of youth including distraction with sparkling decoration and gifts, and instilling ‘the Santa Clause’ in children.

Beyond that, ;the Santa Clause’ teaches us to conform to widely-accepted untruths.

Stage Two:
Stage two is the acceptance of adult lies, servitude to authority and unquestioning belief in whatever the ‘proper authority’ states. The childhood belief in Santa Claus and trust of authority leads to an adulthood belief that the government, corporate and religious institutions they trust do not lie.

Just like a kid sees the local weather reporter tracking Santa’s flight path, an adult with stage two Santa Claus Syndrome will see as real other fictions in the news and media (such as chemically treated food is just as healthy as organic, or nuclear is a safe energy system).

Stage Three:
Telling adult lies. Stage Three Santa Claus Syndrome is also indicated by people who continue adult likes, such as nuclear is safe… or cannabis has no medicinal value… or insert any number of lies here _____ that many people perpetuate on behalf of our corrupted institutions.

Stage Four:
In Stage Four, one has all the symptoms of stages One through Three. Further, those in Stage Four are likely to lash out at those who question the status quo or expose lies (and forcing change) in anyway. Stage Four can involved the conjuration of adult lies, instituting great and broad fictions for trifle and temporary gains, often as a way to psychologically rationalize not just with others but themselves, to believe what they are doing – and who they are – is ok.

Trading why for what

It is no coincidence that around the time when young children begin to ask the eternal why, a series of ‘whys’ in regard to every subject, they are taught ‘the Santa Clause’, which teaches them, teaches us, to replace the endless series of why into an endless series of what. Where the Santa Claus fiction is concerned, knowing is less important than obtaining. It is the first true test of our ‘adulthood’; once you are entrusted with the truth of the lie, adults check that you repeat the lie to those younger than you; those who aren’t to know.

Then in adulthood, we are exposed to big and sometimes seriously dark and disturbing lies. And adult lies – lies told by authorities – are often backed up by the local news reporters and retailers, just like Santa Claus. And just like the children we were, and the children we raise, we adults too stop asking why in exchange for what.

The materialistic enticement of ‘the Santa Clause’ has contributed to a culture where understanding is inhibited, and truth undervalued. We teach our children not to tell the truth so as not to make the babies cry. We reward materialistic impulses, confusing gratification with what is right and wrong. But worst of all, we teach little people to accept that we are lied to, and to contribute to broadly accepted lies — as long as we have bright shiny things.

Evidence of the Santa Clause Syndrome is everywhere in our society. Many personal and societal problems can be theoretically traced to it, but also many institutions can be rationally broken down as disturbingly negative or outright useless when considering it. Most evidently, Santa Claus Syndrome does not promote individuation, but conformity – at a very impressionable stage of childhood development.

Santa Claus is Dead

Christmas today doesn’t celebrate the humanity nor the amazing world around us – in other words, anything real – and that is a direct reflection of our sick society. Although I risk being accused of some ridiculous thinking here, I believe we need to heal and re-create our culture through sacred, nutritious traditions grounded in love, simplicity and gratitude.

In contrast, the fiction of Santa doesn’t encourage a sense of gratitude in children. Children “earn” gifts from Santa Claus by adhering to social norms – naughty or nice – and any innate sense of gratitude a child may feel for this annual abundance is intentionally misdirected at a magical, fictional patriarch, until a comprehensive deception is finally realized. Sadly, that realization is where, for most kids, their broader sense of magic is hindered a learned distrust of their developing senses.

Arguably the most underestimated and psychologically disturbing rites of passage for children in Christian-based cultures today, ‘the Santa Clause’ is another failing institutionalization, much like the religions that spawned it. And so, many of us are now facing the decision to keep perpetuating ‘the Santa Clause’ within our family circles, or begin the process of transforming this ritualized nonsense into a genuinely sacred, annual celebration of peace, renewal and gratitude.

This year Santa is dead to me. There will be no false idol. This year, children will learn the truth if they come around here. And with that, healing from the Santa Clause Syndrome can begin.

This holiday season, be sure to not tell your kids a pack of lies and cater only to their material desires – no matter the tradition.

Let’s create a new holiday.

Peace on Earth… only for real.

Merry Christmas!

Saturday Matinee: Branded

Posted on December 12, 2015 by Reid Mukai

Branded (2012) is a Russian-US sci-fi parable written and directed by Jamie Bradshaw and Aleksandr Dulerayn. Much of the story is told in flashbacks documenting the rise, fall and rebirth of top-level advertising executive Misha (Ed Stoppard, son of playwright Tom Stoppard). Upon being scapegoated for a marketing disaster, Misha withdraws to the countryside where in a trance state he’s compelled to perform a bizarre ritual. Shortly after, he finds he has a unique ability to “see” strange parasitic creatures which are the embodiment of corporate influence. Horrified, Misha sets out to destroy the creatures of his visions, a quest which could ultimately liberate society but at the expense of his personal and professional life. Though the film is hindered by uneven tonal shifts and occasionally stilted performances, Branded is notable for its relevant social critique which mixes elements of Putney Swope, They Live and novels of Philip K. Dick.

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After the Crash

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Category Archives: Consumerism

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