Nov 092014
 
 November 9, 2014  Posted by at 7:56 pm Finance Tagged with: , , , , , , , , , , , ,


Wyland Stanley Peerless touring car, Bay Area 1923

As I was writing The Broken Model Of The Eurozone yesterday, I already knew there would have to be a sequel, because doing everything in one go would have been too much. And then, considerably less than two seconds later, it dawned on me that if I wanted to cover broken models and systems, a book would be the very least. But I don’t want to write a book, or, certainly, not here and now. Therefore, the best I think I can do is to sit down and let it flow, train of thought, stream of consciousness, probably the approach that suits me best to begin with.

There’s no question that the eurozone is by no means the only broken model, design, system, structure, in our world, though its built-in fatal flaws are perhaps easier to pinpoint than they are in other models. Everyone can see why having no mechanism to keep poor member nations from getting poorer must of necessity doom the eurozone, and the euro. Everyone, that is, but the people with the most vested interests.

That said, when you get to think about it, it’s hard to find a model, a system, in our ‘modern’ societies that is not broken, through similar design flaws. Just the past few days, we had the US midterm elections, and it doesn’t come more broken than that. As Ron Paul stated once again, US politics is a monopoly system, not a democracy. That part exists only in people’s dreams and in media stories. In reality, it’s pick your favorite identical twin. Yet for some reason, people still vote. Go figure.

Then there was the BLS unemployment report, which is no longer even a joke, but such an outright insult to Americans that it’s difficult to see why anyone looks at it anymore, other than for propagandistic reasons. A model designed to ignore the combined erosion in labor participation, wages and benefits that has taken place in the US since 2007, and the number of people who can’t make enough to pay their bills and feed their kids, is useless as a gauge for the American economy.

What these, and just about any other model I can think of that we use to run our world, have in common, is/are a number of flaws:

First, they were designed to operate exclusively in growing economies. Perhaps not even on purpose, but they sure don’t function in less glorious days, if only because no provisions were made for such days. It’s at least one reason why protagonists are so eager to point to growth even where there is none.

Second, whether in days of growth or of non-growth, they offer no protection from destructive exploitation of the natural world, either by nations, by corporations or by ourselves. A self defeating model.

Third, they are so far removed from the ‘human scale’ that we can’t internalize the ways they work and don’t work, other than perhaps in abstract theory. We can’t understand how the systems work that govern our lives, and therefore not why they fail.

These three characteristics guarantee inherent self limitation, self defeat and eventual self destruction. Sort of like the spy message that destroys itself 10 seconds after being read.

I was reading John Michael Greer’s recent Dark Age America: The End of the Market Economy, in which he reiterates how an increase in complexity of a society means ever more intermediaries take position in between productive economic participants, skimming off the fruits of other people’s daily labor. And how a decrease in complexity, such as the one we’re seeing today in our world, forced by diminishing economic returns, will lead to those intermediary positions disappearing, and a renewed form of feudalism taking the helm.

There are many shapes and sizes of these intermediaries active in our present societies, but none are more powerful, in more than one way, than politicians and traders/investors. The political world and financial world don’t produce anything of value, they owe their wealth and power solely to others who do.

The past century – or two – of ultra cheap fuels, which have enabled one single human being to produce as much as a thousand of her ancestors, created the space in which the financial and political intermediate powerholders operate. The debt machine gone haywire of the last few decades either created even more of that space or made up for what was lost due to rising fuel prices. Both fossil fuels and debt now stumble on their last legs, and society will need to be remolded, along principles that may indeed well resemble feudalism more than anything else.

To be sure, Greer doesn’t define feudalism along the lines of the bad rap it has gotten, but simply as a system in which rights and obligations for both lords and servant are clearly defined.

What he doesn’t specify, but I will, is that the feudal model operates on a human scale. That points to another aspect: the servant – for lack of a better word – in a balanced feudal system knows his master. We, today, do not. We only know a bunch of people pushed forward for their gift of gab and telegenic faces. The way our leaders are (pre-) selected is not much different from seeing how many second hand cars or tupperware bowls they can sell on a TV sales channel.

But then those leaders are (s)elected to head entities so far beyond the human scale it should be obvious to anyone that they cannot function properly no matter how much growth there is. Leaders of entities like the US, the EU or China have little in common with the people they supposedly represent, and they don’t have to, nobody expects them to. The US midterms were mostly a a battle of the bulge, as in candidates’ bulging wallets.

And on top large scale national politics we have created yet another, even more anonymous layer of power. UN, World Bank, IMF, NATO, there’s an ever growing collection of supra-national organizations that keep on guzzling up more power and more money every single day.

Like ‘smaller’ entities such as the US and EU, only more, the supra-nationals attract a certain kind of people, those that like to assert power without being held directly accountable. In structures that far exceed the human scale, they are like fish in water. And that’s why we should never accept having them in those positions. IMF and World Bank have a history of at best disputable and at worst very bloody interventions in nations across the globe.

We should have today celebrated the end of NATO along with that of the Berlin Wall 25 years ago. But it’s still there, and playing an active role in the flaring up of the Ukraine civil war. As for the UN, there should be a place for an organization like it, but not with the money gobbling corporate structure, serving shady interests, that it has today.

Our political systems don’t work. Our economic systems don’t work. We live on a steady – but hardly nutritious – diet of debt and propaganda. Our societies are no longer productive enough to allow for the numbers of intermediaries they have given birth to. But it’s the intermediaries who have more often than not taken up the most powerful positions in our societies. So they will fight, and initially often successfully, to keep their positions, at the cost of the more productive segments. It’s a mechanism that’s much easier to understand than it is to fight.

I tend to think that it’s easier to make the effort to get rid of things like models and systems and structures when you know they will need to go soon anyway. But that’s without counting in propaganda. Without including Freud and spin doctors and Edward Bernays and why detergent commercials work so well. When you do take all those into account, things don’t look so easy anymore.

What the EU has in common with all present day political and financial structures, bar none, is that it can, and indeed was built to, function only in times of growth. Take away growth and inherent flaws become exposed. Take away growth and panic ensues. Well, we no longer have growth, other than in our dreams and spin.

Or more accurately, there is indeed one thing that does still grow: our debt. It’s all we have left to keep up the pretense that we’re still growing. That and a pack of lies that grows more outrageous as time goes by. We run our societies on debt and propaganda. To a large extent, propaganda about why and how debt, and more debt, can’t hurt us.

Because as long as we believe that, we’ll leave our political and financial structures and power holders keep their plush seats. And as long as we believe it, they’re free to take more and more away from us. Something we feel powerless to stop, because we’re scared of what may happen when we stop believing. In broken models.

Home Forums A World Run On Broken Models

This topic contains 10 replies, has 8 voices, and was last updated by  Raleigh 3 years, 9 months ago.

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  • #16452

    Wyland Stanley Peerless touring car, Bay Area 1923 As I was writing The Broken Model Of The Eurozone yesterday, I already knew there would have to be
    [See the full post at: A World Run On Broken Models]

    #16454

    Gravity
    Participant

    Gravity is an unbreakable algorithm.

    #16461

    Charles Alban
    Participant

    this was just sent to me…it seems relevant to the present discussion.

    HUMAN BEHAVIOR EXPERIMENT

    If you start with a cage containing five monkeys, and inside the cage hang a banana on a string from the top, and then you place a set of stairs under the banana, before long a monkey will go to the stairs and climb toward the banana.

    As soon as he touches the stairs, you spray ALL the monkeys with cold water.

    After a while another monkey makes an attempt with same result — ALL the monkeys are sprayed with cold water. Pretty soon when another monkey tries to climb the stairs, the other monkeys will try to prevent it.

    Now, put the cold water away.

    Remove one monkey from the cage and replace it with a new monkey. The new monkey sees the banana and attempts to climb the stairs. To his shock, ALL of the other monkeys beat the Monkey Crap out of him.

    After another attempt and attack, he knows that if he tries to climb the stairs he will be assaulted.

    Next, remove another of the original five monkeys, replacing it with a new monkey.

    The newcomer goes to the stairs and is attacked. The previous newcomer takes part in the punishment — with enthusiasm — because he is now part of the “team.”

    Then, replace a third original monkey with a new monkey, followed by the fourth, then the fifth. Every time the newest monkey takes to the stairs, he is attacked.

    Now, the monkeys that are beating him up have no idea why they were not permitted to climb the stairs. Neither do they know why they are participating in the beating of the newest monkey.

    Finally, having replaced all of the original monkeys, none of the remaining monkeys will have ever been sprayed with cold water. Nevertheless, not one of the monkeys will try to climb the stairway for the banana.

    Why, you ask? Because in their minds, that is the way it has always been!

    This is why, from time to time:

    ALL of the monkeys need to be

    REPLACED AT THE SAME TIME!

    P. C. DISCLAIMER: This is meant as no disrespect to monkeys.

    #16463

    V. Arnold
    Participant

    @ Charles Alban

    Brilliant.

    #16464

    Raleigh
    Participant

    Charles – ditto what V. Arnold said. Thanks for posting that.

    Ilargi – great writing!

    #16465

    John Day
    Participant

    Sadly, as the Bolsheviks discovered, creating a new experiment in the monkey cage also involves suffering, group learning, mislearning, and “cultural transmission” of learned lessons.

    sigh…

    #16466

    John Day
    Participant

    Charles Hugh Smith looks at where the tail-risk-bubble is being hidden lately.
    Hey, it’s like the old “Asian Economic Crisis”, huh?

    #16467

    John Day
    Participant
    #16473

    lessof
    Participant

    I am continually surprised that when I turn the TV on (which is a whole lot less these days) That this country isn’t on fire. Especially, from the 35 and below crowd. They have been screwed on jobs, education, housing, soon the stock market, they fight in endless wars, and TPTB act if this is ok, like everything is going according to plan. They let the for profit educational system screw them over, They can’t afford a house because of inflated prices, rents high. They see sociopathic clowns posing as leaders who don’t have a clue on how to address ANY of the problems they have in their lives. I’m just waiting on the storyline on who the scapegoats are gonna be, welfare mothers, well, we didn’t give welfare mothers trillions of dollars in order to bail them out. immigrants, I see you can’t make any money off them now and because of the trade deals their countries are pretty much failed states, hell their economies/societies are in worse shape than ours is (but we’re catching up), but that’s holding us back. Minorities or the poor, I know they just came in the banks and forced you to give them a loan on a $300,000 house with no money down, and no income verification. and on top of that, they forced you to sell that crap to someone’s pension fund. Gays, women, unions, government workers? Does ANYBODY believe that any of the people who got elected to office here recently have ANY INSIGHT AT ALL!!! on how to address our current problems? Any problem ? (accumulating money to run to office doesn’t count). What is happening to this world, we have all these “educated” people and we are all riding the short bus.

    #16479

    tk
    Participant

    RE Charles Alban

    This experient might be somewhat related to “The trouble with testosterone” of Robert Sapolsky (Stanford University)(well worth reading):

    https://testosteronetrouble.blogspot.de/

    and George Carlin has also a view point to this:

    Humans are finished as it seems!

    #16481

    Raleigh
    Participant

    tk – “The Trouble with Testosterone” was an excellent read. So testosterone can make aggression stronger, but aggression must already be present.

    And George Karlin suggests that aggression is a learned behavior, passed on from father to son.

    My theory is that most things are learned from your upbringing, your environment. If a boy bonds with his father (and that father happens to be an idiot), then that boy will pattern his behavior on what he’s seen, what his father believes in, what he values. He will act aggressively because that’s what he’s observed.

    On the other hand, if the boy is frustrated, if he didn’t bond, if he is not valued, he will be angry. This underlying anger will also make him act aggressively – crazy aggressive, IMO.

    One acts aggressively because that’s what he’s been taught, the other because he has underlying anger.

    We’re not doing a very good job at raising our children. You have to get a licence and some education to be able to drive a car, and yet nothing is required to have a child.

    Thank you for the great post.

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