2011 June 09 Thursday
Eric Robert Morse Juggernaut: Decentralization Needed?
While reading Amazon reviews of David Mamet's The Secret Knowledge: On the Dismantling of American Culture (about a very successful liberal playwright's turn to the right) I came across an enthusiastic recommendation for Juggernaut: Why The System Crushes The Only People Who Can Save It By Eric Robert Morse. From the book description:
By now, everyone recognizes the severity of the 2007-08 financial crisis. But, to many Americans, the bailouts, stimulus packages, and regulatory schemes aimed at solving the problem seemed to merely pull the economy further into the mire of bureaucracy, party politics, and unsustainable debt that led to the crisis in the first place. Only the bankers and officials who caused the problem were in a position to solve it, and so fixing the system necessarily meant becoming part of it--and thus making it even harder to fix. This is the crux of the Juggernaut.
The bankers do not want a fundamental fix because that would cut the size of their banks and restrict their risk-taking with the public dime. No objective and yet competent people can possibly become influential in trying to reform the financial system. Many forces are arrayed against a sound banking system.
Is the Federal Reserve trying to manage an uncontrollable system that is going more berserk?
A sprawling, uncontrollable system that only grows larger and more berserk the more we try to quell it, the Juggernaut has become a way of life. It is not, as many would suggest, a product of the last ten or even thirty years. Rather, it is inherent in the system itself, with roots that reach as far back as Columbus and the dawn of modern times.
The writer sounds like he draws a great deal from the Austrian school of economics and also from public choice theory. But the web site for the book presents an interesting twist on what the book's about. Note the reference to the closing of the frontier and our inability to escape from a huge web of interdependencies. The Thesis of Juggernaut:
The modern system is based on alternatives. Private property, free enterprise, specialism, industry, cooperation, and all other central aspects of the modern politico-economic system are based in the ability for the participants to reject the system and make do somewhere else. Since the close of the frontier around 1890, those alternatives have become increasingly difficult to secure since it has become increasingly difficult to reject the system and move somewhere else.
Even after the frontier closed there was a sort of afterglow of its effects on American culture. The country was still sparsely populated and the beliefs the frontier engendered made Americans more independent of mind and less inclined to see government, especially federal government, as a major force in their lives. But the afterglow is fading and the world is becoming a smaller place. It is hard to get away from it all.
As a result, growing interdependency has given larger authority to those in power. Those in power are granted wider freedoms in their rule, and everyone else must acquiesce or attempt to gain positions of power to survive. As the close hardens, society sheds its free and democratic characteristics and takes on a more hierarchic or statist appearance.
The Patriot Act, anyone? Security threats emanating from abroad (or from immigrants whose religious beliefs are incompatible with a free society) get used to justify more power for central governments and more cooperation between governments to monitor and control people. Also, as governments become more powerful they attract more of the ambitious. The ambitious naturally want to make government more powerful so they can do more things from their positions of power. Seems like a vicious cycle.
Morse proposes decentralization as a solution. But aren't the same historical forces that have brought us to this point bound to keep us going even further toward centralization?
The only way to reverse this trend is to open alternatives by localizing power, denationalizing the economy, and increasing self-sufficiency.
Were the last couple of centuries in America an inherently unsustainable brief interlude between the periods which naturally characterize human societies? As the world becomes more densely populated, polluted, and resource-constrained will even our current potential for independence become an impossible fantasy?
I've downloaded sample chapters of Mamet's and Morse's books to see if they are worth a read. Anyone read either of them?
Update: The problem is bigger than just bankers and big money special interests which benefit from the Leviathan. Higher population densities, bigger impacts on the environment, and rapid movement of goods brings us into more interactions with each other. We have many more relationships to manage. We have many more reasons to object to what other people do. It is the difference between living in the country and living in an apartment building. Suddenly you share walls, sidewalks, parks, parking spaces. The number of ways we turn to government to regulate our interactions goes up as our frequencies of interactions go up.
"The country was still sparsely populated" and almost completely white among those who count. Centralization of American life was done in the name of race (and later sex). Always more of an excuse than a reason, but the hatred of whites this centralization symbolizes is very real. Can't have decentralization - white folk might start getting uppity and passing laws that actually benefit them. The next thing you know democracy might break out, and Western culture and people might actually survive in some pockets, and we sure as HELL can't have THAT! The only time you'll see decentralization in this country is after non-black minorities take over and decide it's in their people's benefit to allow it, or until the system so decays that it is unable to stop it.
'Only the bankers and officials who caused the problem were in a position to solve it...'
Well, it really wasn't a solvable problem. There were huge losses that had been deferred/hidden, and someone had to pay up. I guess if you recast it and say 'the problem was how to get the public to pay these losses instead of the bankers', then you can say there was a solvable problem and indeed it got solved.
One counterpoint to the thesis you describe (in Juggernaut) is Tainter's work on complexity and collapse. I think the forces of centralization and control are as you describe, but I also think they are straining at the limits of what they can actually do, thanks to their size as well as changes in culture and human capital. Of course, it's a lot easier to make a bunch of people miserable than to, say, rebuild the US space program, so I shouldn't be too hopeful; nonetheless I think our future is more likely to look like Italy today (huge underground economy, politics that no one takes seriously) than something really totalitarian. Though I guess there's all those SWAT teams and prisons, already :-(.
Solid post--thanks. I've read both Mamet and Morse, and must say that they are very different in their formats. Mamet's is a series of witty essays; Morse's is a systematic examination of political economy. Both are excellent in their own ways.
As to the argument that Morse makes in Juggernaut, although I can't say to have studied it, I would say that he places more emphasis on the system as the culprit (I.E. everyone involved), rather than just a few bankers or politicians or executives or unions. And that seems to be the strength of the argument since it doesn't waste time blaming one side or the other (E.G. privileged white males), but tries to get to the bottom of the problems in order to solve them.
I'll have to take a look at Tainter's work as well. It looks like a good complement to Juggernaut at least. Thanks again for the discussion.
This is pretty much the Elephant in the Room that Ron Paul has been pointing out for around 20 years now.
Get rid of the parasitic Fed Reserve and scale back Federal power by properly enforcing existing Constitutional restraints on it.
It's clever - and our Founding Fathers understood it well - but it's not exactly rocket science.
I honestly don't know which has blinded the American people more - our propagandistic public education system or the advent of television.
Either way - wake the F up and elect a constitutionalist president soon or enjoy your NAU instituted austerity program - Americans have only themseleves to blame if we go the way of the PIGS.
p.s. - anyone notice all the social networking execs at this years Bilderberg - so many citizens are playing right into their hands.
It sounds like the author was influenced by Frederick Jackson Turner. The end of the frontier was profoundly important. The frontier meant access to wealth was available to a wide swath of Americans. When wealth becomes conectrated in the hands of an elite few a republic is done. Is America over?
The questions posed at the Juggernaut website are the same that have pre-occupied me for more than a decade. I’ve come to some of the same conclusions as well as many that differ. On those that differ, the Juggernaut thesis disturbs me because the author didn’t follow history on logic all the way. Not to be too harsh, but much is sophomoric and evidentiary.
I’ll agree that the frontier served the cause of freedom by keeping the human predators off balance. Since freedom has only affected about 5% of all humans who have ever lived, then predator states are the norm for human history. The book “Predator State” by James Galbraith looks at both the market and the financial system to trace the impact of predators. Predators are those who would rent-seek, or take upon themselves special privilege, while denying others the same. Galbraith is an economist who is not an Austrian, but instead is a MMT advocate. His ideas on markets are startling:
Taking Galbraith’s ideas a little further, the market can be divided into three types: Elastic, In-Elastic, and Mixed. When you apply market mechanisms improperly, it allows predators to game the markets to their advantage. For example, Electric power is in-elastic, and thus market mechanisms overlaid onto the power industry will tend to backfire. Enron and rolling black outs in Texas, and nuclear disaster in Japan, are a good example of too much free market ideas applied improperly to this inelastic industry. Labor unions as applied to inelastic government is a good example of free market principles applied improperly to Government. Health care is mixed i.e. both inelastic and elastic. The elastic part is where you can choose your doctor and control your care. The inelastic part is when you are sick and out of your mind, and will take any care, damn the cost. Toothpaste on the grocery shelf is elastic in that you can always choose another brand. Rent seeking predatory behavior is shielded behind a façade of ideology. Enron executives transferred wealth behind market ideology, and SEIU is transferring our tax dollar wealth to them behind yet more false ideology.
So, who are the other rent seeking parasites that would deny us our freedom? The Bank of England in 1694 coined the term “debt peon.” This method of debt money finance put the population into a form of slavery and transferred wealth to private money masters. To Austrian readers, please note that the BOE was based on gold money, with credit money riding on top. The true history of specie, or gold money with credit systems is one of slavery and rent seeking. The BOE almost immediately caused the revolutionary war. Money systems and money history are obscured from our view, so predators can continue their rent seeking ways.
So, how do we keep freedom and Western Civilization viable into the future? We need to identify who the Predators are, and said predators exist on both sides of the political spectrum. Since any system predicates its output, then the system will need to be bulwarked to withstand the attacks. The attacks will come, because rent seeking predator behavior is part of the human condition, as humans are flawed creatures.
The money system is the biggest predator attack. The financial tap root of the Predators is credit money. This system would be completely undone by HR6550, which would have made money money instead of credit. Unless Americans start to really understand the money system, banking predators will continue to confuse and obfuscate and rent-seek. Private money will in turn continue to be the tail that wags our congress critter dogs. Unfortunately, the real fix to our money dilemma was completely ignored by our ruling elites and press, which would be expected in a predator state.
A direct funding mechanism of real money, not credit money, can be used to enhance Federalism. For example direct spending into states by head count, would allow states to be a laboratory of democracy. Crazy liberals can vote with their feet, and migrate to the state where they feel at home.
The answer to the loss of frontier, fix the money system and repair federalism. Humans can continue to live in freedom, but the path is narrow. MMT would have more regulation of credit money. One hundred percent reserve real money regulates itself as all risk is already accounted for. The headwaters for the money, at the treasury, are to be surrounded by constitutional law. Therefore private banking advocates, Austrians, and MMT all have flawed arguments, but seek the same "reform the system" goals.
To fix Federalism, the 17’th amendment needs to be revoked. It is easily the most damaging amendment done to us by the corrupt Wilsonian progressives.
Two fixes would have an immediate and salutary effect and send predators scurrying. HR6550 and revoke the 17’th. Juggernaut need not be our future.
The Patriot Act, anyone? Security threats emanating from abroad (or from immigrants whose religious beliefs are incompatible with a free society) get used to justify more power for central governments and more cooperation between governments to monitor and control people.
Indeed. The most natural reaction to 9/11 would have been to end immigration of Muslims completely and to repatriate those non-citizen Muslims already here. Instead we got the Patriot Act and government bureaucrats feeling up 6-year-olds. Why? Because the government wanted the power granted by the Patriot Act, while specifically targetting Muslim immigration would have been a denial of the multicult ideology our leaders embrace. The same has happened in Blairstrip One, aka Great Britain. It's had its own problems with Muslim radicals, including the 7/7 tube bombings, yet its Muslim population has increased at least 50% since 9/11.
We truly fail to understand the degree to which the supposed government mandate to end racism has enabled expansion of the police state, and the continuing breakdown of government effectiveness where it actually matters. There is no mandate in the Constitution to fight racial discrimination in private settings. The 14th A. arguably bars the government from discriminating by race but, so far as the Constitution goes, private actors are free to discriminate however they wish. Yet under the current regime this supposed mandate, created via statute, supercedes rights explicitly guaranteed by the Constitution, including the rights of speech, property, the press, and possibly even religion (see: the revocation of Bob Jones University's tax-exempt status). In the recent Supreme Court case regarding Arizona's immigration law, the 3 justice dissenting minority (which would have been 4 had Kagan not recused herself) argued that Arizona could not help enforce immigration laws simply because it would potentially subject Hispanics to racial profiling. Funny that it's never argued that the government can't arrest and punish violent criminals because most violent criminals are men.