Aug 102012
 August 10, 2012  Posted by at 5:29 pm Finance


1909. "Mme. Diss-DeBarr," a.k.a. "the noted and notorious Ann O'Delia Dis Debar, of many aliases, a number of husbands and several prison terms," according to a 1909 article in the New York Times. The headline calls her an "ex-priestess of fake spiritualism." 8×10 glass negative, George Grantham Bain.

The word "counterfeit" is defined as "an imitation intended to be passed off fraudulently or deceptively as genuine". Some counterfeits are bad and easily detectable, while others are very convincing. I would argue that the structures of modern society have evolved into almost indistinguishable counterfeits. Of course, in terms of the economic and political cultures of human societies, there must be a genuine model encompassing virtuous qualities of humanity for there to be a counterfeit of that model. So what is the genuine model?

There is reasonable room to disagree on the specifics, but most people would generally agree that this model should embody the following virtues – caring/providing for others (selfless orientation), equal treatment, equal rights, equal opportunities, personal freedom, proportionate justice, economic security, social and political stability and universal peace ("the virtues"). These are lofty virtues that have never been perfectly attained, but they provide the framework of the goals which should guide our thoughts and actions.

We don't need to agree on exactly what should be done to achieve those goals in order to articulate some basic principles of what their counterfeits would look like. Using the general principles that follow (in no particular order), I believe we can look at a society or culture, and specifically at the promises of groups of people operating within them, and discern whether they are serving as counterfeits of the virtuous model we would all like to see in reality.

1) Maintains exclusive understanding of the virtues

2) Superficially in favor of the virtues

3) Slightly alters or puts conditions on the virtues using propaganda

4) Marginalizes those who are critical of their prescriptions

5) Promises seductive benefits to followers and delivers on many of those promises

You may have noticed that many of these principles apply to what we call "cults", or sects of religious culture that exalt virtuous ideals while using the above methods to deceive and control their members. This is very similar to what occurs in other "sects" of our society and cultures, such as economics/finance and politics. In fact, many of these counterfeit groups truly believe that they represent the genuine and virtuous model for society.

When I started writing this article, I had planned on picking and choosing several different examples of influential groups/organizations that embody counterfeit virtues – ones that we must continuously be on guard against. But, as fate would have it, Ilargi put up a recent post focusing on a near perfect example of such an entity – Eurodystopia: A Future Divided. In this post, he explained Freddy Heineken's vision for the nation states of Europe, or what he called "The United States of Europe, a Eurotopia".




The general idea behind this vision was a "decentralization" of nation-states into autonomous regional units, combined with a simultaneous federalization of those units into a centralized Union – something akin to what we have with the 50 states of the United States. As explained by Peter Jan Margry in the quoted article, such a transition had already began to occur in the run-up to establishing the European Union, even though it never became a fully realized reality (yet).

"As early as the late 1960s, as a result of the European Communities, a process of growing regional autonomy had slowly got under way. The converging supranational and diverging national forces would, it was supposed, bring Europe more to its 'natural state', preserving the various regional identities. Because of regionalist tendencies the nation-state network was breaking down, and within various member states regions were gaining far-reaching autonomy."

Given the fractured economic and political situation in the Eurozone right now (which will only get much worse), as well as the predictable responses of disenchanted populations and desperate central authorities, it is quite likely that proposals for this Eurotopia will be renewed as a sort of last ditch effort. As Philib Ebels wrote in an article for the EU Observer – "But radical times call for radical measures. And the way things are going, I prefer utopia over dystopia" – and I'm sure many others feel the same way.

Can we really blame these Europeans for seeking a higher ideal that will divert them from the current unstable and agonizing path they are on? I certainly don't think that we can. Yet, we must also remember that what is promised to us by powerful groups is not always (almost never) what we end up getting. The charismatic politicians and officials who come to us in sheep's clothing will no doubt act as counterfeits of our idealistic virtues for society.

Maintains Exclusive Understanding of the Virtues



When the "compromise" of national decentralization in exchange for complete European federalization is proposed by ambitious leaders, they will claim that it is the ONLY solution to the current Eurozone financial crisis and all of the attendant social and political consequences. They will say that there is only one door to economic stability and security, as well as renewed peace and prosperity, and that they hold the key.

What's more is that they will be RIGHT in a limited sense. In the short-term, some sort of federalization scheme, i.e. debt pooling and centralized fiscal control, is the only thing that will keep the Eurozone intact. And the only way that is acceptable to both the Eurozone core and periphery is if some level of decentralization occurs to maintain "regional autonomy", even if it is largely symbolic.

Philip Ebels, as quoted in Ilargi's article, gives us a very matter-of-fact statement of the problem and solution:

"The European welfare state has multiple functions. It needs to protect its territory from outside, uphold the rule of law, provide healthcare, education, take care of the roads and the forests and – to a more or lesser degree – distribute wealth.


The problem is that each of those functions has its own optimal size and that, as the world continues to change, they continue to diverge. The result is not that the state does not work anymore – it just does not work very well. Like a pen as big as a broom or as small as a splinter – you might still be able to use it, but it is not very practical.


It is a trend that will continue as long as technology continues to progress. China and other rising giants will continue to rise; the ruled will continue to undermine their rulers. And then there will come a day – or has it come already? – that the European states of today do more harm than good [..]


Heineken called it "Eurotopia" – a contraction of Europe and utopia. He was well aware of the skepsis the idea would garner. But radical times call for radical measures. And the way things are going, I prefer utopia over dystopia."

Superficially in Favor of the Virtues



This aspect of any Eurotopia proposals/promises is pretty self-evident. As stated before, it is likely that many of the people involved in such a proposal will genuinely believe that they are leading their people, and the European people in general, to stability, peace, prosperity and personal freedom, as well as some modicum of equality over time. Margry comments on this notion of "revitalizing and reframing" Europe:

"Initially, as a hypothetical response to this, Heineken went public with his plan for a United States of Europe. This involved a union composed of 75 independent states, created on the basis of political, historical, linguistic, cultural and ethnic affinities and sensitivities. Taking cultural differences into account in precisely this way would strengthen Europe as an entity. Although nothing was ever done politically as a consequence of this idealistic proposal, the underlying analysis is not inconsistent with developments in the years that followed – on the contrary.


The proposed decentralization and federalizing of Europe on the basis of smaller geographic units proceeded from the central idea that it would prevent conflicts and promote stability and equality. This assumption was based, on the one hand, on the theory of the British historian C Northcote Parkinson that smaller national units could be less centralized, more efficient and therefore more stable, and, on the other hand, on the thesis of the Austrian sociologist Leopold Kohr (1957) that 'bigness is a problem'. In effect, both embroider [Denis] de Rougemont's initial preference for a regionalized, federalist Europe."

Slightly Alters or Puts Conditions on the Virtues using Propaganda



We have already seen that the initial condition placed on reaching any virtues of human society in Europe is the federalization of European nations and regions. While much of the analysis is correctly focused on the problems with centralization of authority and "bigness" (complexity at large scales), it is also clear that there is absolutely no political decentralization without some attendant centralization of key economic and political processes. The propaganda is captured well in this sentence from Margry:

"The converging supranational and diverging national forces would, it was supposed, bring Europe more to its 'natural state', preserving the various regional identities."

The idea here is that Europe must use two competing forces in order to attain a natural equilibrium point at which the virtues can be realized. Indeed, such an idea appeals to our superficial sense of "balance" and "fairness", just as it did to the somewhat skeptical founders of the United States who ultimately agreed on a Constitutional federation of the states. What the Americans living in these states were promised, though, was certainly not what they got over the course of decades and centuries.

Marginalizes Those who are Critical of Their Prescriptions



When these Eurotopian proposals are floated, there will certainly be people who are very critical. They will claim that the supposed decentralization of nation-states will be symbolic and ineffective at promoting local autonomy, while the federalization will predictably transfer more power to centralized institutions of governance and policy-making, including an unaccountable shadow executive. They will also say that the resources to back up such a federalization scheme simply do not exist, and that the scheme will only provide very short-term benefits before structural crises re-emerge.

No doubt they will point to the United States as a prime example of federalization gone awry, where the states lack any real sovereignty over their economic or social policy and the federal government has encroached into every sphere of the lives of individuals and local communities. They will also point out that the United States finds itself in an entirely unsustainable financial and fiscal situation, despite its ability to monetize sovereign debt and provide all types of monetary and structural support to the states.

These critics and their criticisms will be dealt with adeptly and harshly. They will be portrayed as the people who are resistant to any form of change and simply want to perpetuate the destructive status quo. Indeed, they may even be identified as shills of the powerful elites who are afraid of anything that may challenge their wealth, power and control. Every attempt will be made to convince the masses that anyone who is critical of Eurotopia is simply standing in the way of everything that is good and virtuous about European society.

Promises seductive benefits to followers and delivers on many of those promises



This counterfeit principle will be the cornerstone of any Eurotopian proposals. After all, there is really no way to convince the European population of a counterfeit system if that system does not really provide any measurable benefits to those people. Just like in many other parts of the developed world, we have a situation in which the European populations are already trained to expect a certain level of public protection and services.

As Philip Ebels notes, these traditional functions of the post-WW2 European state include protection of territory from external threats, upholding the rule of law (domestic justice), providing healthcare and education, maintaining public infrastructure and also distributing wealth in a somewhat equal manner. Some states have obviously been more effective than others at providing these benefits over time, but what's important now is that they all find themselves unable to continue with those provisions at the same scale and effectiveness as before.

That's where Eurotopia comes in – it will have to assure the European people that these things will continue and even expand over time, and it will also have to deliver some concrete examples of the benefits that Europeans can expect. Perhaps we will see proposals for a new continent-wide, universal healthcare program, or renewed efforts to construct inter-continental transportation infrastructure. Most importantly, people will have to see unemployment and debt burdens relieved to some extent before they are willing to commit themselves entirely to these "radical" visions.

When you think about it, these things can be somewhat easily achieved in the short-term. All that is required is for the ECB to commit itself to monetizing sovereign debt in its new Eurotopian role, and for Eurotopian authorities to give investors, speculators, corporations, etc. a reason to feel reassured about the Eurozone's financial situation. National politicians/officials will also have to play their parts in advocating and taking preliminary steps towards federalizing Europe, showing everyone that they are truly committed as well.

And when you think about it even more (perhaps too much), you start to wonder why any of this is such a bad thing. If the transition towards Eurotopia can actually provide some of the all-important virtues that we strive to achieve, and to a much greater extent than any of its alternatives (such as disorderly decentralization), then why should we fight it? Well, we must always remember that this mentality is exactly why the promises of counterfeit cultures are so seductive and effective, yet eventually become self-defeating and destructive.

In a way, they are starting from a fundamentally flawed premise – that the [short-term] ends justify the means. That it's OK to indulge ourselves in Utopian fantasies as long as we are provided some short-term relief from the struggles of everyday life. And while this article has focused on the situation in Europe, we will see similar counterfeit proposals all across the world, as the elite factions of global society run out of ways to placate the masses. There will be a few who remain critical all the way through, but I fear that the vast majority will be seduced by the counterfeit virtues of our global culture.

I won't claim that I have an exclusive understanding of how to achieve virtuous goals, but I will claim that there is no way these top-down centralization-disguised-as-decentralization schemes will work in the long-term. They will simply mask the structural financial, energy and environmental crises that continue to lurk beneath their thin veneers, and they will dangerously raise expectations and diminish local resiliency for the masses. The last few centuries of human history have been dominated by these types of clever counterfeits, so we must not expect to find the answers to our problems lying in there.

Home Forums The Seductive Promises of Counterfeit CULTures

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