Though Central State entitlements were designed to alleviate poverty and spread opportunity, they have had the perverse consequence of undermining the cultural ecology of enterprise which fuels upward mobility.

The long, oft-times difficult Federal effort to eliminate officially and culturally sanctioned prejudice and poverty and encourage integration has largely been successful in formalized America, but it has also had unintended consequences.

It has been successful in the Armed Forces, the government and in enlightened Corporate America. But outside these strongholds of rules and regulations, America remains highly segregated financially and ethnically. This is a verboten topic because it doesn't fit with the "official" ideology of a desegregated, upwardly mobile melting-pot society.

I know this is painful and difficult for us as a people. We prefer to believe that upward mobility (and by extension, melting-pot integration) is not just possible but inevitable, as long as "the government" "helps out" and "increases opportunity."

The terrible irony is that some aspects of "government help" have unwittingly crippled the very spirit of enterprise needed to power upward mobility by reinforcing and rewarding dependency and addiction.

The two are psychological siblings. Addicts fear the absence or withdrawal of the one "source of life" they have come to depend on to function. It can be wine, whiskey, smack (heroin), synthetic smack (oxycontin etc.), cocaine, sex, gambling, online porn, and so on.

The key trait of addiction is the atrophying of all other sources of well-being, self-worth, and stability. Almost by definition, a healthy human being draws upon a rich network of spiritual, psychological and material/financial resources; a healthy life is constructed like a pyramid, with a broad base of people who they care about and interact with, sources of income, "social capital," skillsets, and a value system which nurtures enterprise, thrift and security.

Small business is inherently reciprocal. You have to provide services and supply goods of the value promised, with integrity, or your business will be avoided by others.

In Corporate America, the equivalent is a reciprocal network of professional contacts and associates. If you help and mentor others, and take on the scutwork when asked, then you can turn to those you aided to help you get something done or find a new job.

Moochers can milk the system for a short time, and then they will be shunned. Moochers are parasites who cannot build a sustainable ecology of contacts and goodwill because they are taking without giving anything. Help will be provided grudgingly, and no one will mourn the moocher when he/she leaves or gets fired.

An ecology of enterprise is reciprocal in nature. A broad pyramid-like base of interwoven networks supports reciprocal relationships, growth and adaptation.

The addict is the exact opposite, an inverted pyramid stood on its point: totally dependent on the single source of well-being (diseased as it is, it feels like "success" to the addict), inherently vulnerable to any disruption in the inverted, unstable system. The addict's world is a scorched-earth desert with only one "spring."

The sole-source dependent offers little to nothing in return; instead, the dynamics of dependency is deeply unhealthy, breeding a psychology of resentment, entitlement and an atrophying of self-reliance and self-confidence.

The financially prosperous and secure individual in private enterprise relies on a broad base of connections, subcontractors, suppliers, clients, professional contacts and resources to help them adapt to changing market conditions.

Those of you in small business know what I mean: if you don't quickly develop an entire ecology of suppliers, clients/customers, resellers, advisors and allies, then you will fail. If you fail to perform as promised, do not provide a useful service at competitive prices, you will of course fail. But success requires a complex inter-connected network of contacts, partners, mentors, skillsets and experience.

These intertwining networks form an ecology which others call "social capital": stabilty and prosperity flow not so much from monetary capital (that can be squandered in short order), but from the ecology of social capital invested in enterprise.

Social capital can be acquired by everyone who understands its value, and who sets a goal of consistently offering reciprocity and integrity in an enterprising manner. This is not a class-specific concept: the working class individual can achieve security and prosperity from their social capital: a successful septic-system contractor, for instance, might be as well-off in terms of income and assets as an upper-middle class manager in Corporate America.

The reason that the upper-middle class individual may well earn much more income than his/her peers is not necessarily due to being smarter; the difference is usually in the quality and depth of their social capital. Going to Elite schools leads to meeting more powerful, better-connected people. Learning highly valued specific skills, and deploying those skills in service to financial and political Elites, earns one access to circles of expertise and connections which are inaccessible to those below that class.

Just having capital will not guarantee success. Rather, establishing the ecology of enterprise, acting with integrity and bringing the right mix of skills and experience will attract capital.

In contrast, State-dependent enterprises don't require anything but revolving-door contacts within the Pentagon, NSA, Medicare, etc. This is not "free market" capitalism, it is State/Corporate crony capitalism.

Crony capitalism is like an addict: if the Central State withers, so do the crony-capitalist "enterprises." All these businesses are "Federal entrepreneurs," totally dependent on State contracts, contacts and swag for their survival.

Total dependence on the State is a key trait not just of Crony Corporate Capitalism but also of Third World kleptocracies (which is why the U.S. is also a kleptocracy in key ways). Both are partnerships of the State and privately controlled cartels which skim much of the national income and redistribute it to their own benefit.

Which would you rather depend on: a pyramid with a broad base, or one stood on its point? That is the acme of instability and insecurity.

Consider the person at the bottom rung of American society: the transient homeless. Not only do they not have any assets or income other than government aid, they also have no network or ecology of supportive contacts.

Their life is an upside-down pyramid: they rely solely on the government for their survival. The network that other non-transients might have developed over time-- membership in a church, the reputation as a giving neighbor, reciprocal bonds with former colleagues, family and close friends--all of this network of support is absent.

In a similar fashion, the network of contacts of those laid off from Corporate America also atrophies over time if unemployment become semi-permanent. The longer one is out of the workforce, the fewer functional contacts and alliances one can maintain.

Thus the more "help" and "opportunity" the Central State offers through dependency-enhancing entitlements, the more it erodes the spirit of enterprise and the "social-capital" networks which enable prosperity and security.

The person who falls under the spell of State dependency unknowingly sacrifices their autonomy, and their spirit of enterprise fades with every monthly check. This dependency is pernicious on a number of fronts: it saps self-confidence, self-worth, reinforces political complicity with the Status Quo, and hollows out the recipient's integrity.

Over time, there is something deeply inauthentic about "welfare" (or "relief," as it was once called), be it individual or "corporate welfare." The dependency ontologically (that is, necessarily) creates incentives to "game the system"/ manipulate the single source of sustenance (The Central State and its fiefdoms/bureaucracies). It encourages bribery to gloss over any disqualifying factors and whatever lying and dishonesty are needed to fake compliance with requirements and statutes.

Enterprise always disqualifies the recipient, so enterprise is the first casualty of the entitlement dependency. Earning money "on the side" is forbidden, as is informal business. The incentives are all on increasing the swag drawn from the State, deepening dependency, while escaping dependency by building a reciprocity-based social-capital network is discouraged.

The key difference between "help" and dependency is that help is temporary while dependency is permanent. Unemployment was designed to be a temporary bridge between jobs. But as small business employment is gutted by systemic forces (see Solutions Part One: Informal Enterprise), then formal jobs will become increasingly scarce.

The very worst position to be in is one without any ecology of enterprise, reciprocity, contacts, colleagues, friends and family--yet this ecology is precisely what is eroded by dependency on the State.

This is why I suggested in Is Paying 10 Million People Not to Work Really a Good Idea? (September 21, 2010) that the unemployed should be required to work part-time for a non-profit, church, temple, city agency, etc., to maintain whatever social capital and skills they have, and build new layers of that ecology of enterprise.

What we as a society and economy need to do is offer "help" in building enterprise, reciprocity, adaptability, self-confidence and integrity. Never-ending entitlements erode every part of the foundation of long-term security and prosperity, and incentivize every negative aspect of dependency and addiction.

The deserted wasteland of urban America is directly related to its dependence on Central State entitlements, and the deserted "center" of the U.S. economy is likewise barren due to the dominance of highly concentrated wealth and capital in the Central State and its corporate-cartel partners.

The nation's ecology of enterprise has been stripmined, eroded and discouraged. Instead of broad, strongly grounded pyramids, the U.S. economy has been reduced to a series of highly unstable inverted pyramids, teetering in a barren landscape of debt-serfs and crony-capitalist cartels totally dependent on State largesse.

This dependency requires a fatal complicity with a doomed status quo.


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