Yet all of the above is demonstrably false.

In reality, the decline of abundant cheap oil (oil under pressure in supergiant fields) has already begun. The iron laws of demographics dictate the promised entitlements cannot be paid and that Medicare is only a few short years away from insolvency. The current financial meltdown was not only easily predictable, it was inevitable, as the consequences of systemic fraud, deception, embezzlement, misrepresentation, collusion, debauchery of credit, exponential expansions of risk, debt and speculative leverage could not be held off forever.

The devolution of American culture and values to a one-dimensional "consumerism is the highest good in the land" was not natural, and rather than produce the perfection of capitalism, it has produced the perfection of crony capitalism, monopoly capital and an ever-expanding State beholden to an Elite which owns or controls the vast majority of the productive assets, financial wealth, income and lawmaking machinery of the U.S.

Rather than being the happiest people on the planet, Americans are visibly unhappy, anxious, depressed, distracted and all too often heavily sedated with powerful psychotropic medications.

This is not to question the positive contributions made by psychiatric medications to those suffering from psychiatric disorders; but we should question the idea that tens of millions of our citizenry (including children) are suffering from serious psychiatric disorders. We should wonder if the overzealous dispensation of such drugs masks cultural rather than psychiatric disorders, and an unspoken desire to "treat" these cultural disorders in a relatively low-cost fashion by numbing the patients' awareness of their own alienation, anxiety and unhappiness.

Rather than having the finest healthcare system in the world, we have the worst, most perniciously incentivised system in the industrialized world, a system which consumes a staggering 16% of the nation's entire output but which provides little to no healthcare for tens of millions of citizens and which supplies incredibly costly but largely ineffective care to the elderly covered by a fraud-riddled and increasingly unaffordable Medicare.

Up to 40% of the entire sum spent on healthcare is paper shuffling, fraud and useless/harmful "care." Despite this vast outpouring of the nation's wealth, the health of its citizenry continues to decline in measurable ways; this vast expenditure has done nothing to stop the astonishing rise in obesity and related chronic diseases, arguably the most pressing public health issue facing the nation.

In effect, the U.S. healthcare system is bankrupting the nation even as it fails to improve the health of the citizenry at large. It is thus a stupendous failure, creating ever smaller marginal gains with ever greater expenditures for costly tests, drugs and treatments.

Rather than look to an increasingly unhealthy diet and lifestyle, the nation's "sick-care" system seeks ever more costly "treatments" and pharmaceutical "fixes" for complex chronic diseases which are simply not curable by "magic bullet" drugs.

Contrary to the constantly repeated assurances of The Powers That Be, modest policy and regulatory modifications are not replenishing the nation's fisheries or ground water, nor is tweaking the parameters of various systems reversing environmental and economic decline.

You may think these assessments are sensationalist, harsh or even offensive. That is not my intention. I believe the evidence is overwhelming that all these soothing contentions pressed upon us by the Powers That Be on a daily basis are in fact false.

If this assertion is true, the vast majority of what is "reported" and "consumed" as "news" and "commentary" is essentially propaganda, either conscious or subconscious.

If the status quo's intellectual justification for their dominance is fundamentally false, then we can anticipate the wholesale destruction of that justification as events undermine all the self-serving propaganda.

As a result, we will have to construct an alternative understanding of our world which aligns far more closely to reality than the current status quo's complacent faith in a decaying, failing system.

If this is true, then we have no time left for distracting little debates about policy tweaks, economic hairsplitting and modest adjustments; the time such modifications could have any measurable impact are long gone. We have run out of time for trivializing conversations along ginned-up ideological lines, "I'm a conservative and you're a liberal" and the mass media's entertainment-passed-off-as-analysis. We have also run out of time for the easy distractions of complexity itself, the unspoken idea that things are now too complex to modify in any meaningful way.

Reality, in contrast, has no problem adjusting complexity downward.

If all the fundamental contentions of the Powers That Be are demonstrably false, we are forced to ask why they press them so mightily and persuasively on us. The answer to this critical question can be found by asking cui bono: to whose benefit? Although we are constantly told the system benefits all of us, that it is the very perfection of prosperity, free market capitalism and thus of happiness itself, this is also demonstrably false.

This leads to the conclusion that the entire intellectual structure which supports and enables the U.S. economy, government and culture is nonsense, and those pushing it so mightily and perseverently are doing so out of a highly refined self-interest--a self-interest which does not magically better the nation or those not fortunate enough to belong to the Elite (the Plutocracy) or to its high-caste technocratic workforce.

These are troubling assertions, and they require careful analysis. Before you decide this is merely sensationalist, please read the following analysis and look into the sourced books. Compare your own lived experience and intuitions with the mass media's "happy story" that everything is just fine, minor financial perturbations have been resolved and a consumerist Utopia is still firmly in place.

It is my contention that the global meltdown has exposed the Plutocracy's over-reach via ever-larger bets, ever-riskier leverage and ever-larger redistributions of global income to its own coffers. To protect its interests and dominance, it must defend at all costs the intellectual framework which enables its dominance.

Thus there is a whiff of desperation in its campaign to convince the world that this is not at heart a global crisis which threatens to bring down the entire structure but a "normal" if slightly deeper recession which has already been repaired by the usual "fix" of State manipulation of interest rates and money supply.

We must be alert to the concentrated ownership/control of the mass media, and alert to the overwhelming need of the global Elites to reassure their restive, anxious populaces that the structure of Elite dominance and wealth is robust, secure, and in the populace's self-interest.

We must be alert to the irony that the Elite's first task is to convince the underclasses that there is no Elite, no Powers That Be and no Plutocracy. While there is no "membership" card in the Plutocracy, the simple facts of concentrated ownership, influence and income roughly define that class. Conflicts between various segments of the Elite does not mean there is no Plutocracy--it only means that greed and over-reach naturally set up some shuffling and pushing to head the line.

In actuality, the structure is not in the populace's self interest, and it is increasingly insecure, brittle, and vulnerable to decay and/or disruption on numerous levels. Much of the vulnerability stems not from Elite over-reach but from the fact that we as a species have reached the carrying capacity of the planet in terms of a high-energy consumption dependency on cheap abundant petroleum for food, transport, water, "growth," etc.

Nonetheless those who control the vast majority of assets, wealth, and tools of persuasion have the most to gain from a continuing belief in the system's soundness and stability. Thus their defense of the system which serves their interests above all else will be fierce and unremitting.

The human mind harbors a bias for what I call independent agencies, a bias which finds full flower in conspiracies both real and imagined. Ancient humans saw an independent agency of fickle gods who punished or rewarded human supplication with drought or rain. All human groups form loose confederacies, alliances and "secret societies" (such as cliques in high school) which outsiders rightly identify as conspiracies formed for the benefit of the members.

This bias to perceive independent agencies has a selective advantage: the ability to discern causal agents and agencies offers substantial advantages over a passive perception of chaos/randomness.

Why bring this up now? Only to note that The Plutocracy is not a conspiracy in the formal sense of a membership which gathers like the Bohemian Club or even an informal assemblage such as the Bilderberg Group. "Membership" is granted solely by great wealth and control of productive assets; political influence flows from that.

People who control, say, $100 million or more (via family ownership or managerial position), tend to meet one another socially or to do business, and while they jockey for advantage within a group like the rest of us, they form a small class of citizens possessing virtually unimpaired political influence.

Thus in describing a Plutocracy I am not positing a semi-formal conspiracy but simply a financial elite which controls some 2/3 of the productive wealth of the U.S. This is simply a statement of fact. Their collective self-interest is in maintaining the conceptual, legal and financial systems which enable their continued dominance of wealth and influence.

It is important to note this bias for independent agencies is founded both in our minds and in the real world; people with similar self-interests naturally band together in self-organizing networks and groups to protect those interests, and since information is power then the inner workings of various self-organizing groups are confidential as part of that self-protection.

Thus when I speak of The Plutocracy I refer not to a formal conspiracy with meetings and officers but to a self-organized Elite based on protecting their ownership of 2/3 of the productive wealth of the nation. As each acts to protect his/her wealth at the highest reaches of influence (tax shelters, tax breaks, legislative exclusions, legal rulings, etc.) then they are also acting to defend their class.

Why would intelligent people consciously or unconsciously defend and support a conceptual system which so heavily favors an Elite over the common good? Certainly self-interest plays a major role. If you are reporting events and trends which undermine your employers' wealth and power, you may well conclude that favoring the status quo in all matters will protect your career, income and status far more effectively than announcing the Emperor has no clothes.

As a free-lance writer in the mainstream media, I witnessed how such mechanisms work in the real world. Media organizations depend on large advertisers for their income, and even though "editorial" (news and analysis) is separated from "advertising/marketing," everyone is aware that negative reporting could influence income and thus eventually detract from each individual's ability to pay their kid's tuition, make the car payment, etc.

Thus stories which reflect poorly on major advertisers like realtors and builders are not killed outright--they are merely strangled by demands for more evidence, more documentation, etc., or watered down in the name of "fairness" and placed in little-seen areas of the media outlet's offerings.

In other cases, otherwise independent people have never encountered a serious critique of the status quo's conceptual foundation and thus they believe that conceptual understanding of the world is "obvious." Without a skeptical accounting of cui bono (to whose benefit?) then what is "obvious" will naturally tend to defend and support that status quo which has labored to construct and defend an "obviousness" which protects its own wealth, ownership and influence.

As its own interests diverge from those of the culture and economy at large, the Plutocracy has an irresistable incentive to foster the illusion that policies which benefit the Elites also benefit the middle class. Thus while the Plutocracy and its mass-media minions trumpet the benefits of the free market, these same Elites work with unremitting zeal to exempt themselves and their State factotums from these very same free market forces.

Lastly, the status quo understanding of the world is that any problem is inherently "fixable" with minor policy tweaks. Thus even as the global financial pyramid of highly leveraged bets and debts unravels, the status quo response is bureaucratic shuffling of oversight duties, minor tweaking of regulatory rules trumpeted as "major fixes" and behind the scenes, trillion-dollar bailouts of the Plutocracy funded by the non-Elite taxpayers.

When the non-Elite citizen comes to understand this, a new mechanism takes hold which I call when belief in the system fades.

This is how empires fall: complacency joins hands with self-aggrandizement. There are four other subtle processes at work in the dissolution/erosion of the system's intellectual foundation:

1. As we shall see in the following chapters, Elites and underclass alike respond to the visible crumbling of the empire with a sublime complacency grounded in vague appeals to some mythical past spirit which will magically arise to enthuse a torpid, self-absorbed Elite and populace. In the U.S., appeals are made to "the can-do spirit" which powered America's past confidence and resolve.

Unfortunately for both the Elite and the underclass (both of whom depend on State largesse and a vibrant middle class paying high taxes), rousing but ultimately empty appeals are no substitute for difficult choices, trade-offs and sacrifices.

2. Even as interconnected crises afflict the empire, the Elite moves deeper into an increasingly visible self-aggrandizement marked by pervasive over-reaching. Having mastered its influence over the State, the Plutocracy finds few limits or obstacles to its over-reach.

This over-reach has the characteristics of a positive feedback loop: the more wealth the Elite controls, the greater its influence, which then enables even more wealth acquisition and ever greater influence, and so on.

3. As a result, the interests of the Plutocracy and thus the State diverge from the common interests of the citizenry as a whole. This widening structural imbalance of power creates a profound cynicism and political disunity which cripples any attempt at structural solutions.

Given that any real solution would reduce the Plutocracy and State's share of the national income, both the Plutocracy and the State (including all those dependent on its various fiefdoms) resist all structural change, preferring stagnation and eventual collapse to any reduction in their income and power.

One of the single most powerful mechanisms at play is windfall exploitation. Windfalls in Nature are rare, and thus all organisms are selected to exploit them as fully as possible--gorging, to the speak, on the newfound riches. The Plutocracy's influence enables it to suppress or weaken various counterforces (such as regulatory systems) and thus open up windfalls designed to be exploited by the Elites. Having dispensed with troublesome barriers between finance and banking and nettlesome limitations on securities ratings and off-balance sheet assets, investment bankers opened up stupendous windfalls to be exploited.

A second, related mechanism is over-reach. As barriers to Plutocratic expansion fall and its share of national income rises, then a positive feedback loop forms: the more the Plutocracy expands, the greater the profits, which then fuels greater political influence, and so on. At a critical (and largely invisible) juncture the Plutocracy inevitably over-reaches. Over-reach takes many forms; it might be an unparalleled expansion into highly risky derivatives, or a domestic Plutocracy reaching into international speculations. The key point is that over-reach pushes the Plutocracy's financial speculations beyond a level of known, controllable risk into uncharted territory, a territory which promises stupendous profits along with equally stupendous but often obscured risk.

Over-reach inevitably pushes a stable system into instability. Once the Plutocracy's income, power and influence are threatened by the rising instability caused by over-reach, then the Elite resorts to propaganda, simulacrum and other mechanisms to mask the structural instability from the populace. The hope is that the system which so greatly benefits the Plutocracy can be restored to health, but the mechanisms of "recovery" are essentially inauthentic: simulacrums of reform, propagandistic manipulations of financial and economic data to mask the structural instability, and outright fraud/looting of State resources (bailouts, loans, etc.)--that is, publicly-funded exemptions from risk and free market forces that would otherwise require the Plutocracy to absorb the catastrophic consequences of its over-reaching leveraged gambles.

This failure to address the underlying cause--systemic over-reach and Plutocratic domination of the economy and political system--insures the instability will only worsen. As ever-more frantic attempts to protect the interests of the Plutocracy fail, then another feedback loop forms: the more sham reforms and State bailouts fail to restore stability, the more desperate and transparent the Plutocracy's attempts to retain power.

It is worth recalling that the average compensation for the 10 top hedge fund managers during the go-go years of the 2000s was $600 million each. That is not a typo. This is an excellent (if extreme) example of over-reach and the resulting windfall exploitation.

As it enriches itself via quasi-protected, semi-legal or simply officially sanctioned looting, fraud, deception, embezzlement, collusion, "sweetheart" State contracts, tax avoidance, environmental loopholes and a hundred other mechanisms of over-reach and windfall exploitation, the Elite inadvertently provides the lower classes with a compelling example of increasing wealth via fraud and manipulation rather than production.

Both the high-caste technocrats (who keep the State and economy running smoothly for their Plutocratic overlords) and the underclass sense their shares of the national income and wealth are diminishing as the Plutocracy redistributes both to their own pockets, and quite naturally they seek some way to maintain or grow their own declining purchasing power/wealth.

As they watch the Plutocrats in action, they learn the most effective ways to increase one's share of the income/wealth are looting ("gaming the system" of pensions, benefits, State entitlements, etc.), deception, fraud and embezzlement (accounting trickery, collusion, sweetheart contracts, etc.) and influence-peddling, known in the Third World as corruption, baksheesh, etc.

As the middle class increasingly runs afoul of the byzantine, Kafkesque regulations imposed by an ever-expanding State, they find that financial leverage and legerdemain is far more lucrative than actually producing goods and services.

(Unsurprisingly, the Plutocracy finds ways to gain exemptions, loopholes and special dispensations which greatly reduce the reach of troublesome regulations and taxes.)

As the middle class abandons thrift and production for financial speculation and highly leveraged debt (following the example of their Plutocratic overlords), tax revenues soar as leveraged speculation pyramids into bubbles, enabling vast expansions of a State which is inherently seeking constant expansion of its income and powers.

When these financial bubbles eventually deflate, then tax revenues plummet, as productive work and investment have declined. Why bother working hard when the big, easy money is made via leveraged speculation? Only fools would tolerate all the regulatory costs and high taxes imposed on producing goods and services; far easier to speculate in bubbling assets like housing, stocks, energy, etc.

The State responds to this drop in tax revenues by raising taxes on the remaining productive middle class, creating a positive feedback loop which reinforces the incentives to either drop out, move to speculation or game the system.

Though heavily marginalized, the underclass also copies the Plutocrats' lead by gaming whatever entitlements the State offers to buy the underclasses' silence, passivity and compliance. Thus petty corruption and fraud increases in all State entitlement programs as every sector of society seeks to suck off the maximum benefits while contributing the least possible to the public coffers.

Thus does a nation or empire built on the sacrifices and communal spirit of its citizenry degrade into a doomed culture of self-aggrandizement in which sacrifice is for suckers and looting, manipulation, fraud, embezzlement, exploitation of position/influence, debauchery of credit, maximization of leverage and the pursuit of speculative riches are the order of the day from the Plutocracy on down through the technocratic upper caste to the underclass.

4. In a society with what we might term an adult understanding of the world, it is understood that difficult trade-offs are a necessary part of life. One cannot pursue every path at once, acquire every desired object at once or learn every skill at once. Priorities must be established via vigorous, open-minded debate (either within oneself for one's own decisions or within the nation-State for larger issues) and a painful triage laid down in which some wants are set aside in favor of actual needs.

Broadly speaking, this is the result of a cost-benefit analysis. Items with increasingly higher marginal costs and increasingly lower marginal returns (a topic covered later) are sacrificed in favor of projects with low costs and high returns. This is, after all, mere common sense.

This painful "adult" process has been replaced in the U.S. by a permanent adolescence in which difficult trade-offs have been banished by stupendous borrowing. Infantile tantrums and various states of psychological denial have crowded out open-minded discussion; every want has been funded by breathtakingly massive borrowing by the State, private enterprise and households alike.

A pernicious, largely unexamined system of laws creates tremendous incentives for unnecessary actions designed to ward off lawsuits, feeding vast armies of high-caste technocratic parasites who produce nothing in the way of wealth-producing goods and services even as they burden the remaining productive sector with make-work rules and costly strategies to avoid potentially ruinous lawsuits.

In true Orwellian fashion, much of this parasitism is described by its practitioners as protecting the "little guy" from the oppressive Elite and State. But as the Plutocracy and State increase their share of the national wealth at the expense of the citizenry, this claim rings increasingly hollow.

Thus we have seniors covered by Medicare receiving multiple costly (and often useless) tests designed less to identify the active causes of disease than to shield the practioners from lawsuits and to enrich those administering the tests.

Meanwhile, millions of non-elderly citizens cannot obtain even a single test as they lack the benefits provided to the upper-caste technocrats in the State and upper tiers of the corporate economy.

Rather than face the impossibility of funding such a morally and fiscally bankrupt system of parasitism and profiteering, we as a nation have simply borrowed trillions of dollars to stave off any painful prioritizing or trade-offs.

Very few weapons systems are ever cancelled for the same reasons; the profiteering by a few enterprises and the contributions they make to lawmakers insure that every weapons system will receive funding, even if that requires borrowing gargantuan sums year after year.

This evasion of hard choices (and free market forces) via endlessly rising debt will eventually bring down the nation's currency and its debt-ridden State. The irony is that this seemingly care-free self-indulgent adolescent avoidance of cost-benefit analysis guarantees systemic collapse.


Let's begin our search for an integrated understanding with a look at how over-reach, windfall exploitation and the divergence of Elite/State and middle-class interests illuminate the disintegration of post-World War II America into the present Depression.

1. The great postwar income convergence (i.e the rise of the great middle class, the reduction of poverty and the relative reduction of the Plutocracy's share of national income) reverses in the early 1970s as the "true prosperity" of the postwar era ends and is replaced by income flowing increasingly to the top as stagflation, globalization and the decline of the dollar gut the purchasing power of the middle class.

2. The rising productivity of the 50s and 60s slips to the flatline through the 70s and early 80s, only picking up again as computer software and hardware revolutionize the back office, sales, manufacturing, just-in-time shipping/production, etc.

3. Concurrent with this gradual return to increasing productivity is the rise of finance as the key profit-center of corporate America. As income skews ever more heavily to the top 1%/5%, then capital (productive assets) become ever more heavily concentrated in the hands of the rentier-financial Plutocracy. The top 1% now owns some 2/3 of the nation's entire productive wealth.

4. As profits rise (from rising productivity) then the profits flow not to wages (which remain flat to down 1975-2009 for all but the top 10% upper-caste professional class) but to those who own the capital.

5. As the middle class experiences a decline in their income and purchasing power (for reasons cited above: declining dollar, rising income disparity, and wages falling due to global wage arbitrage) then they turn more and more to borrowing and ever greater debt to fund what they have been brainwashed by the media to believe is "the American dream" of imported luxury goods, bloated homes, vacuous cruises, etc.

The only other mechanism available to the middle class to increase household income is for Mom/Aunt/Grandmom to enter the workforce, which she does in the tens of millions, with sociological consequences which are still unfolding.

6. This advert/media-driven desire to borrow to fund the "good life" is hugely profitable to the money-center and investment banks, which expand rapidly into mortgage securitization, derivatives and consumer credit to the point that they come to dominate corporate profits.

7. The financial Plutocracy, observing that actually producing goods is not very profitable unless you can fix prices as per ADM (Archer Daniels Midland) or gain government subsidies and tax giveaways (oil lease depreciation, etc.) sinks its capital into the FIRE economy (finance, insurance and real estate), eschewing real-world investments as comparatively unprofitable.

Though rarely noted, this is a longstanding trait of capitalism stretching back to 1400-era Venice. When trade became less profitable than mainland farmimg, the Venetian Elite stopped funding trade and bought farms on the mainland. As a side effect, Venice ceased to be a military and trading power. But the Elite remained immensely wealthy.

8. As the tech bubble expands, middle-class investors see the Plutocracy (those with enough capital to qualify as angel investors and vulture, oops, I mean venture capitalists) reaping huge gains, and they enter the dot-com stock bubble buildup with a vengeance.

9. In a happy accident, the Soviet Empire collapses just as productivity begins its computer-fueled rise in the U.S. In a so-called Unipolar World in which U.S. military, political and financial influence is unrivaled, non-U.S. investors seek the relative safety and high returns (based on appreciation of the dollar) of U.S. financial instruments.

10. The dot-com bubble implodes in a speculative meltdown, and retail investors (a.k.a. the middle class 401K investors) are devastated. The ephemeral wealth they once possessed, however briefly, fuels their speculative desire to get into the next get-rich-quick game, which just so happens to be "something everyone understands:" real estate and housing.

11. Having exhausted the dot-com play, Plutocratic capital is seeking a new high-profit home. The miracles of derivatives (CDOs, credit default swaps, etc.) and securitized debt (mortgage tranches, etc.) open up vast new opportunities for leverage, off-balance sheet shenanigans and outright fraud/debauchery of credit. As chip wafer plants disappear from Silicon Valley (too dirty, too costly, etc.) then they're replaced with paper: mortgage-backed securities. (Over-reach and windfall exploitation writ large.)

12. Sniffing gold in them thar exurban hills, the under-capitalized and over-indebted U.S. working class and middle class reach for the chalice of easy-money gold: leveraged real estate. (Over-reach and windfall exploitation writ small.)

13. With the Federal financial regulatory agencies in a Republican/Democrat-enforced somnambulance, the coast is clear for brigands, shysters, fraudsters, con artists, liars, cheats, and assorted riff-raff in the realty, mortgage and appraisal businesses, who all feed the ravenous maw of the money-center banks' apparently limitless appetite for real estate assets to securitize and leverage in exotic and stupendously profitable ways.

14. For a wonderful five years circa 2001-2006, the game is afoot and no-down-payment Jill and $100 million bonus Jack are immensely enriched. Meanwhile, the underlying real economy is becoming ever more imbalanced and ever more fragile as real production and real productivity plummet as everyone rushes to the speculative riches of exurban McMansions and malls.

15. Elite and middle-class interests seem to converge during this speculative mania: everyone is benefitting from the real estate bubble except the poor, who are bought off with minimal social welfare programs and endless entertainment (via TV) then safely ignored, as they don't vote or spend.

But this convergence was illusory; while the Plutocracy and State functionaries benefitted (via stupendous capital gains for the former and vastly richer pension promises for the latter), the private-sector middle class is in essence the bag-holder: when the newfound 'wealth" in housing and stock market gains vanish, it is the middle class wealth which is destroyed en masse.

16. This last best speculative leveraged credit bubble pops (alas, exponential expansion of credit cannot go on forever), gutting the stock market which had grown utterly dependent on leverage, debt, gamed/fraudulent accounting and asset bubbles for its rising profits.

17. Doubly devastated by the implosion of housing and their stock investments (mostly in 401K and IRA retirement funds), the middle class faces the terrible consequences of its 26-year stupor of ever-rising debt and leverage. Alas, the Emperor's clothes are revealed as remarkably transparent.

18. Having borrowed and squandered trillions of dollars since 1981 on unaffordable entitlements, military misadventures and assorted bridges-to-nowhere pork spending, the Federal government (The Fed and the Treasury) finds that its ability to borrow its way out of its current debt hole somewhat annoyingly limited. The rest of the world has finally caught on to the con, and Chinese university students are openly mocking Treasury Secretary Geithner's Orwellian claim of "we support a strong dollar." The rest of the world shuns Treasury debt and works to create an alternative reserve currency, shutting down the "dollar con" (we take your tangible goods and give you paper in return.)

19. With the global media concentrated in a scant few corporate hands (less than 10), this pulling away of the curtain is deleted/excised from media coverage in a ruthless campaign of pure propaganda.

20. As the wheels fall off the U.S. economy and the bubbles cannot be re-inflated, fruitless attempts at holding back the tide with incantations (stop, tide, I speak for the U.S. Treasury!) and loopy sand castles (the bottom is in, buy now!) abound. Unresponsive to propaganda, the real world grinds down into a global Depression without visible end.

If we do nothing, we will be swept along with the Great Descent. Alternatively, if we want to prosper, then we must first gain an integrated understanding of all the interlocking crises we face.


New key concepts in Chapter One:

cui bono (to whose benefit?)

independent agencies

self-organizing networks and groups

high-caste, upper-caste (technocrat/government employee class)

when belief in the system fades

Any guide claiming to be practical must first present all the contexts and causes of the interlocking challenges we now face. Without such an integrated understanding, all response planning is like building a house on shifting sand.

If we are indeed entering a multi-decade Great Transformation, then as prudent as it is to stockpile a few months of food and supplies, that will obviously not get us through the Transformation, either as individuals or as communities. We need a thoroughly integrated understanding before we can fashion a response that will make the Transformation a positive one. Our goal is a sustainable, productive economy and a full appreciation of the fundamental rights to life, liberty and the pursuit of happiness.

I know it is tempting to skip ahead to the list of proposed responses, but they won't make sense unless we ground ourselves in the contexts of our planet, era, society and economy.

First, we must identify the fundamental contexts; second, critique the status-quo understanding of the "problems" and "solutions," and then third, present solutions which flow directly from our critique.

Our goal is a critique so incisive that the solutions become "obvious," that is, they are implicit in the critique itself. Not all critiques manage this; the grandfather of cul-de-sac critiques was Marx, whose profound critique of capitalism did not produce any coherent alternative system.

It is also important to understand that every "solution" benefits someone, and the key to establishing that "solution" is to frame the "problem" in such a manner that the self-serving "solution" becomes essentially inevitable. This is why we constantly ask: cui bono, to whose benefit?, and why we take such care in analyzing how "problems" are being framed by the status quo.

It is my thesis that the standard (status quo) understanding of our "problems" is heavily promoted precisely because it benefits an elite at the top of the income/asset pyramid which I call the Plutocracy.

This carefully designed and marketed understanding of the "problem" is presented in ways which can only be described as artful propaganda. The chief goal of this relentless marketing is to convince you that the "solutions" being presented are in your self-interest; that is, that they will benefit the entire nation (if not the entire planet, too), including you.

The possibility that these "solutions" exclusively serve the interests of a small Elite is rarely considered, for the obvious reason that the question itself threatens the entire understanding of what constitutes our "problems" and the Elite's "solutions."

A key feature of the current era of interlocking crises is that the interests of the Plutocracy are increasingly diverging from the interests of the society as a whole. This divergence must be masked by simulacra and propaganda, lest the citizenry become aware of the widening split and start demanding that the Plutocracy and the State relinquish some of their ever-growing share of the national income.

By way of example of such divergence, consider globalization as a catch-phrase. We are constantly bombarded with shrill warnings that any limits on globalization will cause a worldwide Depression akin to the 1930s. Yet this is disengenuous for a number of reasons.

To the degree that trade is globalization, then the world has been globalized for thousands of years; Imperial Rome, India and China were trading partners. But "globalization" covers not just wealth-creating trade but also the most one-sided exploitation of materials and labor. The one catch-phrase conveniently covers both beneficial commerce of the sort which has gone on for thousands of years and exploitive looting of local resources by global forces.

So when hardwood forests are leveled and the seas poisoned, do the local people really benefit as much as promoters of "globalization" insist? Do all the workers displaced --not just in advanced industrial economies but in Africa as well--really benefit? Or is the entire intellectual framework of "globalization" essentially a front to provide cover for the enrichment of the few at the expense of the many?

The intellectual framework which supports the Elite's dominance and makes it apparently "natural" or "beneficial" is the Plutocracy's key defense; and the limits of human language and thought make it relatively easy to undermine reasoned skepticism.

Thus a defense of "capitalism" turns out not to be an appeal for open markets but the exact opposite, an enabling of crony capitalism. The defense of globalization is not a promotion of the exchange-of-surplus-production that characterized trade for millennia but of a targeted grab-and-run exploitation of vulnerable resources and peoples.

Regulations to curb the Plutocracy are undermined by the Plutocracy pursuading the State that "these are the regulations we want," that is, a simulacrum of regulation that imposes virtually no limits on Elites but effectively strangles the middle class and keeps it "in its place."

Given the enormous benefits to be gained by this relentless obfuscation, mystification and superficially appealing framing of contexts and problems, we must prepare ourselves for a difficult analysis. Our first step is to ask cui bono, to whose benefit? Our second step is to tease apart the intellectual defenses of over-reach and income redistribution, and consider how the status quo dismisses our actual "problems" as mere bumps in the technocratically maintained road to consumerist Nirvana, i.e. "prosperity."

One often effective technique deployed to quell questions about Elites' dominance or self-interest is reduction: that is, reduce the situation to "us versus them" or an "all or nothing" conflict, or frame it as an extension of a current situation which can be addressed by modest tweaks of current policies.

Thus Peak Oil is not a problem as we have 400 years of coal, etc. Those in charge of the machinery have a huge stake in technocratic "solutions" which leave power, profit and consumption structures firmly in place.

Identity itself can be reduced; thus a once-active citizenry is reduced to "consumers." As long as "consumers" benefit in any way, then what might be lost to workers, voters, citizens, etc. can be cast aside as meaningless.

Since profits are made by selling something to consumers, it's extremely handy for all other roles and identities to be extinguished, diminished or marginalized.

The key point here is that dominance flows directly from an intellectual framework which constructs and justifies that dominance as natural and beneficial to all believers. In this sense consumerism is in effect the de facto state religion of the U.S.A., and it directly benefits the Elites who own or control the vast majority of the nation's financial wealth, income, law-making machinery and productive assets.

The second point is that it is impossible to make a clear-eyed assessment of the actual problems and challenges we face when our understanding of those realities is constantly being massaged, manipulated and "framed" out of existence by an elite-dominated media. (Most of the world's broadcast, Internet and print media is controlled by a few global companies.)

It is important to understand that the low-level conflict, confusion and anxiety created by the media (blatantly rabble-rousing entertainment such as Rush Limbaugh being passed off as political commentary, for instance) are directly in the interests of the Plutocracy.

Anything which undermines critical thinking or a sustained, coherent understanding of the Plutocracy's over-reach, redistribution of national income in their own favor and the inherent injustice and brittleness of the system which enables and supports their dominance works to the advantage of the Elites.

The third point is that many people who consider themselves smart realists nonetheless end up defending an oppressive and manipulative status quo because they have been persuaded by their salary and other benefits (such as enhanced personal status--ooh, my own Blackberry!) to defend a self-serving Elite--or more precisely, the intellectual framework which enables, supports and justifies the Elites' dominance.

This leads to the fourth point, which is the Elites' have already won the key battle once their high-caste technocratic "army" of academics, managers, majors and captains, et al. identify this intellectual framework as being in their own self-interest. This "army" of bureaucrats and technocrats forms an upper "caste" which defends and enforces the Elites' dominance over the rest of the citizenry.

Even as the economy slips into a Plantation-like structure populated by debt-serfs laboring under the illusion they are free spirits pursuing their own self-interest, the upper caste bureaucrats and technocrats labor to maintain the facade via the distraction of "entertainment," the "staging" of "news" and the dispensation of "justice" even as "theft by other means" (looting, embezzlement, fraud, collusion, etc.) is the modus operandi of an unaccountable Plutocracy.

As on a Plantation, the power and wealth owned by a small Elite indentures the majority of wage earners via the mechanism of crushing debt (debt-serfdom). Debt-serfs are managed and policed by a managerial and technocratic caste of overseers ("lunas" in the terminology of the Hawaiian plantations).

The fifth point is that this process of persuasion/gaining compliance is not a conspiracy; it is a complex mixture of conscious and subconscious realignments of incentives and disencentives to maximize attractive risk-return opportunities (i.e. windfall exploitation and exemptions from market forces) for the Plutocracy and its upper-caste workforce.

Thus the incentives for public employees to game the system to boost their retirement pay, effectively looting the public treasury in the process, are high while the penalties, thanks in part to union protection, are minimal to nonexistent.

In a similar way, the chicken farm which dumps its waste directly into the bay has a large incentive (profits) to avoid regulations which would require treatment of its vast waste. If it only costs $1 million in campaign donations to persuade lawmakers to exempt the farm from environmental regulations while the treatment plant would cost $10 million and crimp profits, the cost-benefit analysis is clear: buy the legislative loopholes and continue killing the bay.

With elections becoming ever costlier, the lawmakers have incentives to garner large contributions from enterprises who need "to present our perspective." It isn't corruption per se, simply the "rational response" to incentives and cost-benefit ratios embedded in the very structure of the system.

Once the entire system is riddled with gamesmanship, looting, special loopholes and exemptions for the Elite and secret dispensation of public funds, then belief in the supporting intellectual framework and the fairness of the system fades. The middle class outside the "caste" of State technocrats is squeezed by Plutocratic and State over-reach; as they drop out then the taxes they paid to support the ever-growing State decline, eventually leading to the State's insolvency.

The sixth point is that empires and States collapse when the costs far outweigh the marginal gains; in effect the cost of maintaining the over-reaching State and Plutocracy far exceeds the increasingly marginal benefits provided by the State and "belief in the system." Marginal benefits are low, marginal costs are high.

One example of this is medicinal. Antibiotics provide enormous benefits for low marginal costs. In contrast to this tremendous leverage--low costs produce enormous gains--modern pharmaceuticals are often staggeringly costly even as their benefits are minimal, Adding a costly medication to a senior's already long list of drugs is extremely costly (high marginal costs) even as it offers scant or even negative benefits (low marginal benefit).

The seventh point is that structures (both political and intellectual) which once made sense are extended to absurdity/non-sense as the State and Plutocracy over-reach (over-borrow, over-leverage, take increasingly large gambles/risks to sustain the status quo, increase taxation and looting, etc.) Thus regulatory systems which once controlled the Elites' excesses now smother the middle class while the Plutocracy operates beyond any accountability.

The eighth point is that a terribly ironic mechanism gathers force: since free markets are inherently risky (that is, ontologically based on risk and return and shifting supply and demand), the Plutocracy and State functionaries/parasites both have compelling incentives to escape exposure to market forces via exemptions.

Thus State functionaries buy political support for public-sector wages which are two or three times higher than market wages, and healthcare/pension benefits which are unmatched by private enterprise. Parasitic firms such as defense and healthcare contractors gain "guaranteed contracts" or other exemptions from market forces, while the Plutocracy gains exemptions via public guarantees (backstops, bailouts and low-cost loans) of private bets, tax exemptions, etc.

The irony is that neoliberal Capitalism supposedly reveres free markets: but that is mere propaganda. A simulacrum of free markets is erected for middle class consumption but behind the veils of obscure tax laws, sweetheart deals and the like, the Plutocracy and State functionaries both avoid any exposure to actual market forces which might expose them to risk or limit their share of the national income.

The ninth point is that reality does not respect the intellectual constructs of the Elite (let's call this dominant ideology Neoliberal Capitalist Democracy for want of a more accurate term). As a result, as reality increasingly conflicts with this understanding of "how our world works," then that intellectual framework must increasingly substitute carefully designed simulacrum for authentic structures (for example, elections in which 98% of all incumbents win re-election) and work to derealize any direct experience which runs counter to the Plutocracy's narrative.

This process of bridging the widening gap between what we experience and what we're being told we should be experiencing via the substitution of simulacrum for authentic structures is central to this entire analysis.

Why are the State and the Plutocracy (two sides of the same coin) substituting simulacrum for authentic structures and truthful accounts? Let's answer by asking: what would a truthful accounting of cui bono-- to whose benefit?--reveal?

A truthful accounting would reveal that the entire status quo system benefits the rentier-financial Plutocracy and the high-caste class of State employees and corporate technocrats at the expense of the rest of us: the 99% who do not own 2/3 of the productive assets of the nation and the 75% who do not belong to the State/technocrat upper-caste which serves and enforces the system for its own self-aggrandizement.

In sum: a truthful accounting of cui bono would result in the exposure of the over-reach, exploitation, deception, fraud, mismanagement, malinvestment, manipulation and self-aggrandizement of the Plutocracy and its high-caste State/corporate technocracy (two "masters," one system). A truthful accounting would result in the shattering of the illusion that belonging to and supporting the status quo is in your self-interest.

Maintaining this illusion is the key to maintaining the Plutocracy and the State's share of the national income. This explains why the Plutocracy and the State (two sides of one coin) are obsessed with creating simulacrum structures and narratives designed to lull the citizenry into the comforting illusion that they are the beneficiaries of:

-- democracy (when 98% of incumbents win re-election, can that be authentic democracy?)
-- a free press (when a handful of corporations own the vast majority of the print/broadcast/radio/web media and the State manipulates statistics without media challenge, can that be an authentic "free press"?)
-- higher education (a factory for producing high-caste overseers/enforcers for the State/Plutocracy Plantation)
-- healthcare (a quarter of the citizenry have no healthcare, another quarter have sham "coverage")
-- "ownership" (of debt and rapidly declining collateral--the perfect setup for debt-serfdom)
-- low-tax (low tax for the Plutocracy and unproductive class, high tax for the dwindling productive class) "free enterprise" (crony Capitalism of the most refined order).

To maintain their share of the dwindling national income, it is essential that the Plutocracy and State mask the devolution and insolvency of the State. The primary prop of non-elite belief in the system is the faith that the Savior State will fund everyone's retirement, healthcare and security as promised--a promise which cannot be fulfilled. (A Savior State promises to save everyone from personal responsibility via entitlements funded by demographic and financial fraud.)

As a result of this pervasive substitution of simulacrum structures and narratives/explanations, truthfulness evaporates, replaced by deception and propaganda.

Transparency is replaced by obscurity and staged entertainments are presented as "news" or "democracy in action."

Facts are replaced by carefully massaged statistics; accounting is replaced by trickery.

Common purpose is replaced by self-aggrandizement and game-the-system looting. The Elites' interests diverge from those of the society as a whole. The result is a profound political disunity of hardened, bitter camps warring over the remaining spoils of a decaying State.

Regulations are replaced by protection schemes and layers of purposefully inpenetrable obfuscation which provide the Elites exemptioms from market forces (risk and subsequent losses).

Healthcare is replaced by a highly profitable simulacrum structure in which 25% of the citizenry receive no care and another 25% pay for sham "healthcare coverage" which offers little to no actual care. The high-caste class of State and corporate technocrats is rewarded for their services to the State/Plutocracy with full coverage. (Observe the parallels to State employees' coveted positions in Third World kleptocracies.)

The unfettered free press is replaced with a corporate media tasked with protecting the interests of the State and Plutocracy which owns it lock, stock and barrel.

Truthfulness is replaced by lies, deception, trickery and a pervasive, willful obscurity in every level of society and the economy.

Simulacrums of capital are passed off as assets. A sham prosperity based on exponential growth of credit/debt is presented as sustainable "capitalism." Misallocation of capital and looting are masked as "market forces."

Incomplete, misleading, and romanticized information is presented in support of simulacrum while truthful accountings are suppressed, belittled and undermined.

Lived experience is derealized by ever-present media fantasies ("we have the finest healthcare system in the world," "the banking sector is free enterprise at its finest," "you too can be a star," etc.) and the schizophrenic gap between experience and media fantasy is papered over with drugs (prescribed, illegal and legal) and distractions (celebrity worship, entertainment/sports, narcissistic indulgences, shopping, etc.)

Dissent is filtered into distracting, meaningless simulacrum of "ideological debates" of no substance, "debates" which leave the Power Elite and State in control of the national income.

Obesity, passivity and addiction are incentivized as poor nutrition and chronic illness are the highest-return "profit centers" for the agribusiness/packaged/fast-food industry and the simulacrum "healthcare" (actually sick-care) industry.

The unavoidable failures and destructive consequences of the status quo are systematically internalized as personal failings: lack of will power, poor judgment, etc.; a simulacrum of "personal responsibility" masks the internalization of propaganda/master narratives which leave the Plutocracy and State safely unaccountable.

From the perspective of a media sustained by marketing, the ideal internal state is a deep, unresolvable insecurity which can be temporarily soothed by shopping/entertainment.

A simulacrum of citizenship reduces a self-directed populace to passive "consumers."

This process is so subtle and subconscious that it is difficult to discern. But once you understand this substitution mechanism, a type of enlightenment occurs; you no longer accept simulacrum for "the real thing," and the State/Plutocracy has lost your compliance, that is, your belief in the system's fair accounting of your self-interest.

This conflict between direct, lived experience of our ever-worsening problems and the State/Elites' "ignore reality, keep believing in our system" machinery causes a pervasive cultural and individual schizophrenia which causes participants to feel adrift, depressed, alienated, isolated and misunderstood.

The Elites' intellectual framework has a ready response to this ever-widening divide between their increasingly rickety narrative and reality: the metaphors of illness and medicine. Thus the "solution" to the deep misgivings of those who sense the divide between a false narrative and their own experience is prescription medications in quantity.

This growing gulf between lived experience and the Elites' heavily hyped narrative of how our world works eventually causes an enlightenment in some of the managerial/technocrat caste: their belief in the system fades and they drop out.

Once they realize the institutions they have given their lives to will fail, they either withdraw or begin work on an alternative framework of understanding based on their own experience. In seeking experience-based ways to understand our challenges and potential solutions which don't simply serve and enrich Elites, they become part of The Remnant, a self-selected assembly of citizenry who lead by example, not exhortation--in other words, the advance guard of a sustainable economy and free society.

The Remnant is a diverse and self-organizing group of people who are skeptical of overly simplistic contexts and solutions, and skeptical of the Elites' authority structures (the prison/drug gulag, taxation of everything and everyone but the sheltered Elites, recruitment of the poor to military service so the Elites' offspring need not serve, a food and "healthcare" system which encourages illness and chronic ill-health as the most profitable possible conditions, etc.)

The Remnant has learned that the Power Elite has essentially rendered itself unaccountable and thus the consequences of its vast over-reach will fall not on its own small membership but the ill-prepared citizenry below. The entrenched high-caste bureaucrats and other technocrats are busy looting the coffers of the State on behalf of themselves and their Plutocrat Masters, and this large caste will only wither when the State becomes insolvent--the end-game of the current borrow-and-spend debt orgy which has sustained the American economy, Plutocracy and State for decades.

Thus The Remnant is preparing for life without State largesse, because the State will no longer be able to borrow or print enough money to support its increasingly burdensome castes, entitlements and fiefdoms. In my terminology, the Remnant's goal is radical self-reliance.

Lastly, The Remnant is acutely aware that the environmental, financial and FEW (food, energy, water) dilemmas facing the planet are not ones of interpretation; they are very real and cannot be explained away or "framed" out of existence with appeals to soothingly vague future technocratic wonders.

This book is an attempt to strip away the obfuscatory intellectual framework which has cloaked and protected the Elites' self-serving over-reach. It is an attempt to speak directly to the real problems we face. Once we understand our own experience and the world directly then the messy, conflicting realities of various solutions and trade-offs will become clearer.

Then we will have to choose which trade-offs have the best chances for long-term success--not in preserving the bankrupt, unsustainable structures of the present but in constructing a sustainable, productive economy and a political culture based not on self-serving game-the-system looting but on the radical self-reliant appreciation of the fundamental rights to life, liberty and the pursuit of happiness.


End note: I know this must strike some readers as lunacy; there are no simulacrum, and the State cannot possibly dissolve in insolvency. Others will be tempted to enter the merry-go-round "debate" as to whether the State should or should not be a "Savior." It doesn't matter; the State cannot print up $100 trillion without reducing the value of the dollar to zero, nor can it fund the military/security/Empire, its own domestic fiefdoms and the Savior State entitlements now promised to 300 million citizens without borrowing/printing $100 trillion-- so however you care to calculate the end-state, it remains the same: insolvency and the complete devolution of the Empire/Savior State.


Key concepts in this chapter:

Plantation-like structures

debt-serfs

derealize/derealization

Neoliberal Capitalist Democracy (the dominant ideology)

profound political disunity

Savior State

belief in the system fades

The Remnant

The first task is replacing the crumbling intellectual framework of the present status quo system with one grounded in reality.

There are five distinct issues to sort out:

1. The elements of human nature which lend themselves to cycles and manipulation
2. The nature of the energy, financial and environmental trends/crises which are heralding the Great Transformation
3. The nature of the negative and positive feedback loops which determine the system's stability and direction
4. The responses which have a high probability of making the Transformation positive
5. The nature of future work and the skillsets best suited to prospering during the Great Transformation

If we mischaracterize the nature of the crises and fail to grasp the forces powering these trends, then we will select inappropriate responses which will not prepare us to prosper. If we fail to understand how the status quo benefits various Elites, then we will inaccurately frame the "problems" and reach guaranteed-to-fail "solutions."

You may well disagree with much or perhaps most of this book; that's fine, because the primary goal of the book is to spark a reappraisal of our situation and generate practical responses. I don't claim to have "the answer," or even answers; what I hope to present is a way of thinking about the challenges which is more productive than the status quo.

You may also find some of the ideas presented here difficult to accept. None of us like to think of ourselves as debt-serfs (yes, I have a mortgage, too), yet how can we move forward if we cannot be honest about our responsibilities and dilemmas? We are all vulnerable to groupthink, propaganda and marketing at various times; there is no shame in simply being human.

Some of you may find parts of the analysis smacking of warmed-over Marxism, while an equal number may find certain sections "right-wing." This urge to categorize any idea or analysis ideologically is part of the simulacrum of thinking we accept as "obvious"-- the largely unconscious politics of experience. That much of what we accept as "obvious" might be wrong is deeply unsettling.


Context One: Human Nature

The first context we must understand is human nature. Regardless of the era or challenge, humans remain "wired" to respond to crisis in the same basic ways. Unfortunately for us, our responses in "default mode" (our first emotional responses) and the solutions we find highly compelling in default mode (inertia/complacency, fear/panic, casting our lot with a "Big Man"/leader or fatalism/giving up) are often not constructive, and may well be highly destructive.

Even more pernicious, our default mode is extremely short-term. As small groups of hunter-gatherers, we simply walked away when we'd depleted the environment of resources; there were always other lands (or islands) available. In this fashion, ancient humans wandered the entire planet long before the first tilled crop was ever planted.

Our default ability to foresee the consequences of our actions is poor; thus time and again human societies have added population and "overhead costs" during prosperous times of ample rainfall and grain yields, only to collapse in catastrophic decline when a string of lean years inevitably came along.

In abundance, we freely spend what's "cheap" and in shortage we mourn what is now "dear" or no longer available. It's not difficult to see the same pattern repeating today.

While it is possible for humans to fashion long-term plans out of self-interest, we are peculiarly ill-equipped to make the critical distinction between relative scarcity and absolute scarcity. Thus we will hunt a species to extinction without regards to the long-term negative consequences for own diet.

To a mind selected for hunting and gathering, the local scarcity (that is, relative scarcity) of any one critical food or energy source is remedied by simply moving on to a new hunting ground with relative abundance.

In cases where humans have hunted a species to extinction, such as the woolly mammoth, then the human solution remains the same: move on.

In the event some other tribe already occupies a territory of relative abundance, the human response is to begin hunting their own species of the "other tribe." In terms of straight kilocalorie analysis, this is entirely rational: the "cost" of war in terms of lives lost and calories expended is well worth the longlasting benefits of conquering new fertile territories and elminating competitors.

Thus it is not at all specious to suggest that monopoly capital and conquest by whatever means the most attractive cost/benefit ratio have long been a human strategy to maximize gains/profits, and marking off another human group as the "enemy" is a highly useful tool to gain support of one's own tribe for the conquest/looting.

Monopoly capital is the mechanism by which capital finds elminating competition to be far more profitable than competing in a free market. Thus mature industries with high barriers to entry by new competitors (often these barriers are political or regulatory, purchased by the Plutocracy for modest sums) end up being dominated by a mere handful of enterprises. The global mass media is but one example of many.

A similar mechanism is the exempting of capital and high-caste Elites from risk--that is, from the risks inherent in free markets. Just as monopoly capital strives to eliminate "uncertainties" (i.e. losses or reduced returns) by eliminating competition, capital and high-caste Elites (public employees, technocrats/professionals, etc.) strive to exempt themselves from risk and the free market by constructing fiefdoms protected by the State.

In both cases, the goal is to lock in hefty returns without absorbing any of the risks demanded by a free market. The returns are funneled to the Elites while the risks are spread to the middle class (which still must deal with the uncertainties of a true free market for labor and capital) via high taxation.

The advent of language gave humanity tremendous powers of knowledge acquisition and storage, but it also provided methods to influence our interpretations of experience. Thus we all support "taking care of the elderly" and this automatic support has enabled a relatively small number of enterprises to reap enormous profits selling medications and care to Medicare which in many cases actively increase the elderly's suffering and dimimish their health. An estimated 100,000 people die from prescription drug errors or hospital infections, but Medicare spending continues to expand at twice the rate of the overall economy, year after year. Seniors quickly gain prescriptions to a dozen or more medications once they qualify for Medicare--a brew of drugs whose interactions are poorly understood and whose benefits are often marginal at best.

The compelling catch-phrases which are deployed to mask looting and profiteering are legion: "defending our nation," "restoring the health of our banking sector," etc. Thus we have to be especially alert to how elites deploy these powerful linguistic/emotional attractors to cloak their monopolies, influence, over-reaching and looting.

Lastly, the mind is remarkably easy to hijack via emotional reward receptors. Former FDA head David Kessler recently described how the food industry designs its products to activate these reward centers with faux-foods loaded with sugar, fat and salt (from his book The End of Overeating: Taking Control of the Insatiable American Appetite):

They aren't selling just any commodity. They've designed highly stimulating products, and consumers come back for more. Nothing sells as much as something that stimulates the rewards-circuitry of the brain. It's all about selling product.

Unfortunately, humans are prone to a formidably long and varied List of cognitive biases (Wikipedia). Those tasked with manipulating public opinion for political or financial gain are of course well-versed in these biases, which I would characterize as cognitive traps, and highly attuned to the most productive times and places to deploy them.

Despite the many traps in our default modes of thinking and our pernicious tropism toward short-term contexts, when we have no choice left then we are capable of making short-term sacrifices to further long-term gains. This is the response we need to foster to survive the Great Transformation just ahead.

Context Two: Cycles and Patterns of History

While every era of crisis is unique, authors such as David Fischer (The Great Wave: Price Revolutions and the Rhythm of History), Jared Diamond ( Collapse: How Societies Choose to Fail or Succeed ) and Joseph Tainter ( The Collapse of Complex Societies) have carefully researched how cycles of price, conflict and resource depletion/exhaustion tend to repeat as human populations rise beyond the carrying capacity of their environment.

I address these cycles in Food Shortages, Rising Prices, Stagnant Wages:
Welcome to the 13th Century (reprinted in a later chapter).

As we seek to understand long-wave cycles, we must also recognize that the crises of our era are unique even as they are manifesting within historical cycles.

A number of recent books have described the unique set of challenges we face: for instance The Long Emergency: Surviving the End of Oil, Climate Change, and Other Converging Catastrophes of the Twenty-First Century (James Howard Kunstler) and Financial Armageddon: Protecting Your Future from Four Impending Catastrophes (Michael Panzner). Other books have addressed critical environmental, energy and demographic issues: The Future of Life, Beyond Oil: The View from Hubbert's Peak, Fewer: How the New Demography of Depopulation Will Shape Our Future, The Coming Generational Storm: What You Need to Know about America's Economic Future, The Rhythm of War and The Fourth Turning.

Given this wealth of material, I hesitate to even attempt a short summary of all the interwoven structural challenges of our era. But the key context is this: financial and resource crises are not new; they are recurring features of human civilization. But many aspects of our era's crises are unique in all of human history: never before have we faced depletion of fossil fuels and the population pressures of over 6.5 billion humans to feed, house, clothe, transport, heal and care for in their old age. Never before have we as a species been so dependent on fragile supply chains and fast-depleting global resources.

Consider the overfishing of the world's oceans; what once seemed inexhaustible—the supply of fish—is now heading to near-zero.

Ironically, this cyclical nature of crisis lends itself to the emotional power of complacency: if we managed to get through those crises, then we can do it again, the power of human innovation will save us, etc. Unfortunately, there have been many times when the human populace did not "get through" the crisis; populations collapsed to mere shadows of their levels reached in the years of rising abundance.

Current structural challenges include:

1. demographics (promised retirement benefits are unaffordable)

2. global financial deleveraging (renunciation/write-off of debt)

3. high-cost advanced economies, "Planet of Slums" developing economies

4. rising interest rates (shortage of surplus capital)

5. de-scaling/disruption of entrenched industries/State fiefdoms by the Web

6. scalability traps/structural job losses in all economies

7. crippling regulation and overhead burdens on small entrepreneurs

8. fossil fuel depletion (Peak Oil)

9. "head-fake" drop in energy costs removes incentives for alternative energy

10. political disunity; elites' interests diverge from those of the society as a whole

11. rising income disparity

12. depletion of fresh water, ocean and soil resources

13. climate change (weather extremes, rising sea levels, etc.)

14. increasingly drug-resistant bacteria and viruses

15. rising chemical and industrial pollution levels (air, water, soil, etc.)

16. increasing availability of bioweapons and nuclear weapons

I summarize the four primary cycles in my book Weblogs & New Media: Marketing in Crisis:

1. Peak oil, or the depletion cycle/end-game of the global economy's complete dependence on inexpensive, readily available petroleum/fossil fuels.

2. The cycle of credit expansion and contraction (approximately 60-70 years), which is now beginning the transition from unsustainable credit expansion (bubble) to renunciation of debt (credit collapse) and global depression.

3. The generational cycle (4 generations or approximately 80 years) of American history which leads to nation-changing social, political and economic upheaval. (The American Revolution: 1781 +80 years = Civil War, 1861 +80 years = 1941, World War II + 80 years = 2021)

4. The 100+ year cycle of price inflation and stagnation of wages' purchasing power which began around 1901 is now reaching the final stage of widespread turmoil, shortages, famine, war, conflict and crisis.

Without a firm understanding of the cyclical nature of human history and the unique challenges of our era, we are hard-pressed to escape the comforting illusions of complacency and fatalism.

A key point is that the above crises (or potential crises) are not discrete phenomena which can be solved in piecemeal fashion but rather interlocking, overlapping and in some cases reinforcing problems which range from long-term depletions to volatile geopolitical tensions which could burst into conflict. Over an intermediate time scale, a weather crisis such as extended drought could cause a food shortage which might then put a match to a smouldering geopolitical tenderbox.

The complacency and misplaced confidence of the status quo render these unpredictable interactions all the more combustible because so little has been done to anticipate the potential domino effect of these global crises.


Context Three: Interlocking/Reinforcing Crises, Time Scales and Globalization

One of the factors which renders the intersecting crises of the next 15-25 years so difficult to predict is the multiple time scales at work. A global petroleum shortage, for example, could stagger the developed world in a very short time span as hoarding and govermental rationing would quickly magnify the disruptions.

Food shortages might develop over a longer period of months as drought, energy shortages and geopolitical issues caused a sharp decline in grain production and/or shipping.

A nuclear war between two long-standing adversaries such as India and Pakistan could erupt in a matter of weeks should internal crises trigger border tensions. China might suddenly deem the moment ripe to conquer Taiwan with military force, loosing a cascading crisis which could lead to limited or even nuclear war between the U.S. and China.

Any war involving the Mideast, East Asia or the U.S. might dramatically effect oil, currencies and trade which would quickly impact economies, food supplies and the psychology of instability/fear/hoarding.

Ironically, the great benefits of globalization--long oil-dependent supply chains leading from distant factories to free-spending debt-fueled Western consumers--can reverse with extraordinary speed as these very same fragile supply chains degrade or shatter in moments of energy, finance or geopolitical crisis.

Very long-wave crises are only visible to historians and those willing to root around obscure data. Thus the slow, steady redistribution of national wealth away from the middle class into the pockets of the State and Plutocracy is barely discernable. Yet just because this movement of wealth, capital and income appears glacial does not mean the effects are insignificant; on the contrary, this over-reach by the State and Plutocracy at the expense of the tax-paying middle class is in some ways as important a cause of collapse as more immediate crises such as Peak Oil and the depletion of fresh water acquifers.

That crises unfolding in different time scales will overlap is easily predictable, but the precise intersection or overlay of various crises is entirely unpredictable. Some geopolitical tension might close the Straits of Hormuz or Malacca, and the resulting restriction of sealanes and oil tankers might trigger some other unstable crisis.

It is also easily predictable that any one nation and its citizenry will have limited control or influence over a truly global crisis. We can also safely predict the complacent and/or fatalistic nations and citizens will suffer more than those who proactively anticipated the likelihood of interlocking, reinforcing crises occurring within the next decade or two.

Ideally, such proactive anticipation should involve households, communities and the nation at large. But if the State (government at all levels) is in denial or deadlock, or crippled by debt or otherwise insolvent, then households and communities will also have to prepare themselves for dwindling State aid.

Even if the State does set aside prudent reserves, these are designed to smooth short-term crises, not semi-permanent declines in the FEW essentials (food, energy, water). For instance, the 600-million barrel U.S. Strategic Petroleum Reserve holds about one month's supply of oil (20 million barrels a day consumed in the U.S. X 30 days). While this is certainly a reassuring number in a short-term crisis, it would be foolhardy to think a one-month's supply will prove to be anything more than a stopgap should oil imports plummet over the long-term.

As we shall see later, various feedback loops (both positive and negative) are at work as each crisis erupts; in some scenarios negative feedback might stem the crisis; in others, a domino effect could transpire, toppling vulnerabilities which encircle the globe.

This is why time-sensitive predictions are foolhardy, both those predicting "the end of the world as we know it" and those spouting the "it will all work out just fine" complacency favored by the mass media and Plutocracy.

What we can predict is that fragile systems without redundancy are vulnerable to disruptions which could then freeze up or degrade the entire supply chain. If these impact the critical FEW resources (food, energy, water) then the disruption can quickly expand to other systems which were previously thought secure/safe.

System prone to positive feedback (the runaway self-reinforcing crisis) are inherently more vulnerable to collapse than those with multiple negative feedbacks--forces which counteract the trend.

The problem for the complacent is that time scales, vulnerabilities, overlap and interactions differ for each crisis. Thus a fast-moving crisis with slow negative feedback (correctives) could race beyond the reach of corrective action, triggering other fast-spreading crises in its wake.

In a world so deeply dependent on cheap, abundant liquid fossil fuels for everything from transportation to food, the vulnerability and interdependency of all energy-dependent systems to shortage or disruption is acute and works across all time scales.


The Commodity Unlike Any Other: Oil

Standard-issue economists tend to treat oil/fossil fuels as a commodity like any other; when demand rises, new or alternative supplies will emerge once they become profitable. But this model is utterly misleading, for liquid hydrocarbons are special in three distinctive ways: they contain very high energy densities, they are stable at normal temperatures and they are readily transportable via pipeline, ship, train or vehicle. No other energy source possesses all these traits, and those that get close (lithium ion batteries, for instance) are very costly to manufacture and are dependent on dwindling metals/ores (in this case, lithium).

Supposedly "renewable" sources like biofuels and "unlimited" sources like shale oil require so much energy to produce, process and transport (when calculated in equivalent energy densities) that the net energy (useful energy produced minus energy used in production) is actually rather paltry.

Until very recently, oil had the distinct advantage of being cheap to extract. Super-giant fields under pressure gushed oil for as little as $1 per barrel in raw costs. But the super-giant fields which supply much of the world's oil now require costly extraction technologies such as water or gas pressurization. New production has been located offshore, in deep water or in extreme climates like the Arctic Circle. It is no longer cheap to locate, extract or process oil or oil equivalents like shale oil.

Oil's most unique charcateristic is that every other industry in the global economy depends on oil or oil equivalents: transportation, military, agriculture, tourism, and on and on. Thus a global shortage or disruption will quickly cascade into every corner of the global economy, for new supplies of oil cannot be brought on line quickly (five years would be incredibly quick, ten years would be average). Even worse, new production is not even replacing fields in decline; that is the essence of Peak Oil.

As for alternatives: currently, all alternative energy production, including both "old technology" like hydropower and new wind, solar, biofuel and tidal technologies, account for considerably less than 5% of the world's energy consumption. Thus a ten-fold increase in alternative energy--a scaling up which is not yet even technoloigically feasible, and one that in any event would cost trillions of dollars to accomplish--would leave the global economy totally dependent on petroleum for 2/3 of energy consumption.

Thus any model which views energy/petroleum/fossil fuels as subject to the same forces as other commodities such as copper is fatally flawed. Every industry and financial sector ultimately rests on cheap, abundant petroleum. Once petroleum is no longer cheap or available in sufficient quantity to meet demand, then the energy domino will topple all the rest in rapid succession.

The unique commodity petroleum is thus the very foundation of interlocking/reinforcing crises on a global scale.

For more on these topics, please read John Michael Greer's two books, The Long Descent: A User's Guide to the End of the Industrial Age and The Ecotechnic Future: Envisioning a Post-Peak World.


Context Four: Ontological Forces Which Power Trends, Reversals and History

Within each context, various forces are at work to resist and accelerate trends. These forces include feedback loops (both positive and negative), marginal returns and the illusion of incremental change. Negative feedback can be understood as systems with built-in stabilizers, while positive feedback can be understood as self-reinforcing.

I will cover ontological forces and analytic tools in Chapter Seven.


Context Five: The Environment

It is tempting to hope that all the structural environmental challenges will "sort themselves out" or be solved by some new technology that magically scales from the lab table to global ubiquity. But the realities do not lend themselves to either benign neglect (that is, just leave everything alone and it will rebalance itself naturally) or technological "fixes."

The human population has exploded in a geological eyeblink from several hundred million to 6.5 billion. In terms of energy and resource consumption, each resident of the First World (Europe, North America, Japan) has an environmental impact up to 100 times larger than that of a Third World person. As 2 billion people in China, India and elsewhere aspire to an energy-intensive consumerist First World lifestyle, the reality that the planet does not have the resources to support 3 billion middle-class consumers is readily visible.

The list of global environmental ills is well-known. Overfishing driven by insatiable demand and politically popular subsidies of national fishing industries has driven the world's fisheries to the point of collapse. The technological "fix" is aquaculture/aqua-farming, but artificial fisheries spawn another entire host of their own challenges to long-term sustainability.

The depletion of cheap, easy to reach oil is also well-known; less well-known is that all the alternative energy sources in the entire world—geothermal, hydro, solar, wind, tidal, etc.--make up less than 5% of global energy supply. While natural gas and coal can fill some of the gaps as oil supply falls, neither of those fuels is endless, either— and "clean coal" is yet another technology that is promising in the lab but not scalable globally without horrendous cost.

Fresh water aquifers are being drained everywhere from the American southwest to China, and there are no sustainable ways to compensate for this drawdown of irreplaceable fresh-water resources.

Schemes to desalinate vast quantities of seawater requires stupendous amounts of energy; a recent plan by Saudi Arabia would burn fully 1 million barrels of oil a day—1 million barrels that could no longer be exported to the U.S.

Regardless of what we believe the causes might be, glaciers are melting at increasing rates. Once the Himalayan and Andean glaciers vanish or recede to mere patches of ice, the rivers 2 billion people rely on for irrigation water will become seasonal.

Add in massive soil erosion in China and elsewhere, extended droughts in Australia, etc., and you get a picture of global resources stretched to the breaking point.

The more you know about the technical details of supposedly miraculous technological "fixes" like desalination, tidal energy, algae-based fuels, etc. etc., the more you understand that very few if any of these emerging technologies may "scale up" to global applications.

In other words, algae-based fuels can work just fine on the rooftop of a university lab, but the hard part is scaling it up to produce 1.7 billion gallons of gasoline-equivalent liquid fuel a day—which is only half of the world's current consumption of oil. (Total global consumption of oil, 80 million barrels a day, so 40 million barrels a day X 42 gallons/barrel.)

Add these realities up and the context is a potential crash of global food and fresh water supplies, exacerbated by energy shortages. As authors such as Jared Diamond have explained, eras of resource depletion/drought often trigger unending war/conflict between competing groups and nations.

In essence there are four interlocking crises: environmental, energy, financial and geopolitical. Excellent sources abound on these topics: The Future of Life, Beyond Oil: The View from Hubbert's Peak, and The Long Emergency: Surviving the End of Oil, Climate Change, and Other Converging Catastrophes of the Twenty-First Century come to mind of the many useful texts in print.

Context Six: The End of Debt-Based "Prosperity"

The "prosperity" of the past two decades was based not on savings, investment and productivity, as the mainstream financial media and think-tank punditry maintain, but by extremes of speculative credit, leverage, debt and risk-taking, all enabled by a financial system based on obfuscation, deception, embezzlement, fraud, abuse of credit and grossly inflated asset valuations, a.k.a. bubbles.

This debt binge was fed by a marketing-based consumerist culture in which shopping and acquisition became recreation, therapy, self-fulfillment and status all in one profit-driven package.

Compounding the collapse of this debt-based bogus "prosperity" are two long-term trends: the end of cheap, abundant fossil fuels which enabled inexpensive global supply chains and tourism, and the "end of work," a global contraction of paid labor.

Context Seven: Squeezing the Middle Class

The intersection of various long-term political and financial trends is effectively squeezing the middle class, which the State (government) depends on to pay most of the taxes. Caught between the over-reach of both the state and its elites (the Plutocracy) and the end of debt-based, cheap-oil "prosperity" which enabled it to maintain an illusion of wealth, the middle class is being squeezed to the breaking point.

I address this topic in a later chapter.

Context Eight: The Nature of Prosperity and Happiness

The U.S. Declaration of Independence recognizes the inalienable rights to "life, liberty and the pursuit of happiness." Oddly enough, happiness turns out to be a slippery concept, and much of what Americans spend their lives pursuing does not actually increase their happiness. Indeed, it is self-evident that the stress levels, medication usage and miseries of the "American lifestyle" even in times of prosperity are far higher than one would expect were happiness as abundant as cheap consumer goods.

And even prosperity itself turns out to be rather more slippery than rising GDP or other metrics would suggest. It seems that much of what passes for "essential accoutrements of prosperity" such as large suburban homes, multiple vehicles and closets crammed with clothing do not bring happiness to their owners. Rather, they are largely the mirage-like results of marketing propaganda conjured up to generate profits, not life satisfaction or happiness.

Indeed, were we to travel back in time to 1870s San Francisco, for example, we would find people feeling quite prosperous even though they lived in what we would now consider relatively primitive poverty: no electricity, no vehicles except public streetcars, (On August 2, 1873, the inventor of the San Francisco cable car, Andrew Hallidie, was the system's first passenger), trains and horse-drawn wagons, primitive healthcare, costly consumer goods, etc.

Thus the entire notions of prosperity and happiness must be examined objectively before we can even say with any reliability what the words actually mean.

Context Nine: The Framework of Our Response

Our responses to these interwoven, reinforcing challenges of our era can be organized into three inter-related levels:

--family

--community/networks

--nation

Each level requires different skills, resources, inputs and solutions. I will cover these topics in the second section.


Key concepts in this chapter:

politics of experience

simulacrum of thinking

cognitive traps

scalability traps

Let's begin by considering Context One: Human Nature in more depth. Entire libraries have been written on the subject of human nature, but for our practical purposes those which probe humanity's "default settings" such as Jared Diamond's The Third Chimpanzee: The Evolution and Future of the Human Animal and E.O. Wilson's Sociobiology: The New Synthesis are the most useful.

Although we can slice and dice complex human responses in hundreds of ways (for instance, Who am I? The 16 Basic Desires that Motivate Our Actions and Define Our Personalities), for the purposes of a stripped-down practical analysis we can group our "default responses" into four basic categories: inertia, fear/panic, casting our lot with a "Big Man"/leader or fatalism/giving up.

While we can collectively sacrifice short-term gain for long-term security, as Jared Diamond describes in his book Collapse: How Societies Choose to Fail or Succeed, it is equally likely that a society will continue down the path to complete collapse. One of the key conditions Diamond identifies is a society's understanding of its primary challenges and dilemmas. Those which did not grasp the limitations and restricted options failed. So our first step must be to adequately understand the limitations and options we face while avoiding the denial, apathy and complacency which will doom our economy to collapse.

Since we cannot sustain the emotionally charged state of fear/panic ("fight or flight") for long, decisions made in this instinctive mode tend to be rash, hasty, impulsive and poorly planned. Thus the key is to recognize this mode and consciously avoid making decisions with long-term consequences while in the grip of this "instant response" survival-mode.

Humans, like our relatives the chimpanzees, are social animals. Like chimps, we are "wired" to form groups and select/follow leaders who reach their high status by offering something back to the community: protection, "potlatch" type sharing of wealth, etc. We will examine this political/social response to crisis in a later section.

But humans also have the capacity to be alone, like our other primate relatives the orangutans. Thus withdrawing from the community has deep roots in human nature and history.

Being creatures of habit—and habits are a survival mechanism, for why change anything when "everything's working"?-- humans prefer the status quo until crisis forces us to change. This inertia/attachment to the status quo is complacency, which acts as a cognitive and emotional attractor or trap, as does fatalism/withdrawal.

Complacency and Fatalism

Complacency and fatalism are both seductive cognitive traps and emotional attractors which we have to avoid if we are to think clearly. Each is an attractor because each is highly appealing for several fundamental reasons.

1. Human nature veers between these basic social/anti-social emotions: complacency/status quo (inertia) and fatalism/resignation (withdrawal).

2. History reveals these attractors (complacency and fatalism) were active in previous great declines/collapses, such as the Roman Empire circa 400-576 C.E. (see below)

3. Humans prefer simplistic "answers" to challenges/problems, and a blind faith in the status quo or resignation both fit the bill.

Complacency is best understood as what's expressed in the phrase, "Don't worry, it wil l sort itself out on its own." In stable "normal" times, this complacency is usually rewarded; various corrective feedback loops within complex systems kick in and problems are met with countermeasures that act to restabilize the system.

But in very dynamic eras, destabilizing factors overwhelm the usual corrective feedback mechanisms, and things do not sort themselves out. Dramatic, even radical action must be taken. In these times, complacency is not a practical or helpful strategy: it is a soothing but dangerous cognitive trap which guarantees the believer will be unprepared for the challenges just ahead.

In the cognitive trap of fatalism, we recognize the risks/dangers of the situation but feel helpless to correct or solve the problems. In this trap, we remove ourselves from action and give up, dooming ourselves to being swept up by whatever passing winds arise.

The goal here is to avoid these traps, analyze the challenges we face clearly, and then plan out a simple but interconnected three-part strategy for not just survival but prosperity and security.

Complacency can take many forms. For instance, a person who has prepared themselves for a doomsday collapse of civilization, i.e. "The end of the world as we know it" (TEOTWAWKI) may well find themselves ill-prepared for an equally probable slow decline in social cohesion and living standards. That is, living conditions in highly developed nations may descend not to a Collapse of Civilization into Chaos but to Third World levels of stable impoverishment.

Stable impoverishment describes a system which produces little national surplus but which produces the necessities of life in enough abundance that the instabilities of famine are generally stayed. Radios and TVs are in sufficient supply to offer the populace modest entertainment, and the State is neither burdensome nor repressive, as taxation cannot exceed what little surplus remains after minimally feeding, clothing and transporting the populace.

The key feature of stable impoverishment is the lack of incentives to any class to disrupt the status quo. The Elites dare not risk insurrection and the citizenry below dares not risk famine or turmoil which might lead to famine. Another way of describing stable impoverishment is that the ruling Elites do not over-reach but remain respectful of maintaining a stable division of national income.

These divergent but equally undesirable options, TEOTWAWKI and stable impoverishment, highlight the need to ground our analyses and expectations in history-- not because it repeats, but because it rhymes. No one can know the future, so we must be cautious about putting all our eggs in one basket/scenario. Prudence suggests always maintaining a skeptical point of view: what if we're wrong? What's our Plan B/alternative strategy?

Fatalism is similarly devious. People who withdraw from society are certainly taking action, but they have surrendered the opportunity to influence the outcome positively: that is fatalism of the first order.

If you're reading this, then you have already advanced beyond the naïve complacency of "don't worry, everything will work itself out" which is mesmerizing large segments of our citizenry. You may well be a member of The Remnant—more on that later.

The Politics of Complacency and Fatalism

In Greek mythology, two sea monsters Scylla and Charybdis forced sailors into an unsavory choice of facing one or the other when navigating the Strait of Messina. In modern vernacular, we might say the sailors were "between a rock and a hard place."

Our "default mode" responses were selected for a hunting-gathering lifestyle; humanity has pursued agriculture for perhaps 5% of its long history as homo sapiens sapiens and dealt with advanced technology for perhaps 1% of its history.

The consequences of these unconstructive responses can be seen in the advanced civilizations (Mayans, Rome, etc.) that collapsed despite a wealth of experience and knowledge.

As a result, even as we work at devising rational, long-range solutions, we will be fending off the "monsters" of complacency and fatalism every inch of the way.

Analyzing challenges and then plotting out practical solutions is arduous, precarious work, as the answers are rarely clear and painful trial-and-error attempts are often the only way forward. Rather than engage in this difficult process, many find doing nothing (complacency) or withdrawing (fatalism) much less risky and demanding. This inaction feeds on itself, setting up a point-of-no-return that could have been avoided by bold action when the problems were first visible.

Humans cannot remain in the high-stress "fight or flight" status for long; we seek a resolution or equilibrium, both intellectual and social. Thus the most constructive approach is to assess the challenges in a clear-eyed fashion, hashing out the strengths and weaknesses of each major strategy. Then make a decision, and commit the time, resources and unity the strategy needs to succeed—or fail conclusively, perhaps, at which point make a reassessment based on what's been learned from the experience.

At every point in this process, two new temptations arise: to either leap erratically from strategy to strategy as a short-term desire ("fight or flight" mode) for instant results sabotages any long-term effort, or to tire of the process of negotiation and analysis and give up any sustained effort.

Many who do engage the challenges will do so out of raw self-interest and thus they will base their solutions on inflexible ideological (political and/or religious) worldviews that are too rigid to be practical/realistic. Rather than face the problems with an eye on actual solutions, these players seek to protect their own fiefdoms, privileges and benefits under the guise of emotionally appealing ideologies. Faced with the loss of their sacrosanct (to them) privileges and benefits, they view the battle for diminishing resources as a "fight to the death." In a real sense, their status and advantages are definitely at risk; but ironically, by focusing on their ideological opponents instead of the actual problems, they seal their own destruction by insuring the collapse of the entire system.

Both ends of the political spectrum are prone to this frantic defense of the failing status quo: the plutocracy/holders of wealth and those drawing benefits/welfare. This too mirrors the experience of the Roman Empire's decline, which saw massive expansion of wealth disparity (those at the top gained ever more wealth at the expense of the middle class) even as an ever-growing army of unproductive recipients at the bottom received the infamous "bread and circuses" of free bread and public entertainments.

As a consequence of this rabidly self-serving political battle over diminishing resources and surpluses, those championing flexible, practical solutions are crowded out by the shrill, desperate voices of those protecting their fiefdoms and privileges. The result is a profound disunity in the body politic in which compromise is abandoned and common ground vanishes. As external and internal threats increase and surpluses/resources shrink, the culture and economy are frozen into warring camps, each of which seeks to undermine the other rather than actually address the severe problems facing the entire body politic and economy.

All these forces—complacency, fatalism, fanatic self-interest, ideological rigidity at each end of the political spectrum and political disunity—pose enormous challenges to those seeking long-term solutions to critical problems.

If we seek historical examples of the immense power of complacency, we need look no further than the Western Roman Empire.

For an explication of just how destructive such deep complacency can be, I turn to the excellent account of the causes of the Roman Empire's collapse by Michael Grant, The Fall of the Roman Empire.

"Enmeshed in classical history, all he can do is lapse into vague sermonizing, telling the Romans, as many a moralist had told them throughout the centuries, that they must undergo an ethical regeneration and return to the simplicities and self-sacrifices of their ancestors.

There was no room at all, in these ways of thinking, for the novel, apocalyptic situation which had now arisen, a situation which needed solutions as radical as itself. His whole attitude is a complacent acceptance of things as they are, without a single new idea.

This acceptance was accompanied by greatly excessive optimism about the present and future. Even when the end was only sixty years away, and the Empire was already crumbling fast, Rutilius continued to address the spirit of Rome with the same supreme assurance.

This blind adherence to the ideas of the past ranks high among the principal causes of the downfall of Rome. If you were sufficiently lulled by these traditional fictions, there was no call to take any practical first-aid measures at all."

As Grant noted elsewhere in The Fall of the Roman Empire:

"Considerable sections of the population of the later Roman Empire decided to opt out altogether. In the first place, a large number of people, finding the social system intolerable, went underground and became its enemies. But a second movement consisted of numerous men and women who merely abandoned the company of their fellow human beings and divorced themselves from the community.

And so as the final political and military reckoning rapidly approached, this substantial number of men and women was no longer available to contribute either to the actual defense of the Empire or to the revenue needed to pay for the defenders."

Grant traces much of the intellectual justification for what might be termed "a fatal fatalism" to Christian thinkers like Augustine:

"And so Augustine preached, as other had before him, that 'we do not want to have dealings with the powers that be.' That is frank: a call to withhold service from the government. Equally frank is his reminder that the Empire is bound to collapse anyway.

Augustine shifted the center of gravity so that the state is now a good deal less that half of what matters: far from helping his own country to survive, his attitude contributed to its downfall. But his suggestion that, since it was up to Providence whether the Roman world should collapse or not, human endeavor could do nothing about it in any case, met with the strong disapproval of thinkers such as Pelagius.

Pelagius' reaction to the sacking of Rome in 410 by Alaric was by no means limited to fatalistic gloom and despair. Both before and after the capture of the city, he found himself deeply dissatisfied with the moral sluggishness of many prosperous people of Rome. He insisted on a strenuous individual effort to attain salvation: we sin by a voluntary imitation of Adam, and an equally voluntary decision can cast our sins behind us.

His doctrine of the will at least wanted people to try. Augustine's philosophy, on the other hand, led to fatalism.

Given the stupendous inertia of complacency, the fierce defense of the status quo from those contributing little but reaping plenty and the intellectual and emotional charms of fatalist withdrawal, those seeking practical solutions and strategies may well see the battle as essentially hopeless.

As tempting as that fatalism might be, there is hope offered by the Pareto principle: the influential few (The Remnant) can indeed lead the trivial many.

The desire to withdraw from a corrupted, declining society, or indeed, from the imperfect company of humans, stretches back to the dawn of civilization. In many cultures, a spiritual quest for Oneness with God/Enlightenment encourages withdrawal and rejection of worldly goods and goals.

We have seen in the example of Rome how eras of crisis encourage many to opt out of society. But opting out of society can mean either a withdrawal to what we might call splendid isolation or an opting in to an alternative social structure.

Thus the yogi, spiritual seeker, or Transcendentalist might well seek complete isolation in a wilderness, while others opting out of a failing state might join a religious commune or monastery. Such communities are largely self-sustaining, even as they retain ties to various parts of the greater society and economy.

Both of these methods of opting out have deep roots in American culture and history. The noble desire to seek Oneness with God and fulfillment via oneness with Nature was championed by Henry David Thoreau in Walden, while various faith-based communes and communities have found fertile ground in every century.

Splendid Isolation also ties directly into a key American Myth: the Rugged Individual. This is a tangled web of fantasy, reality and hidden dependence on a functioning economy beyond the wilderness. Thus even Thoreau walked back to town on numerous occasions, for food and social contact, and the Buddhist mendicant monks of Southeast Asia rely on the alms of productive people for their sustenance. In other words, Splendid Isolation still relies in most cases on "the outside world" to grow the grain, etc. which the "one alone" ultimately relies upon.

It is exceedingly difficult to grow, nourish and sustain all that life requires alone. That is the fundamental reason why most primates, including humans, form groups: a group is simply a far more productive, robust survival structure than a single individual.

Thus, rugged individuals who could survive on their own form communities to reap the advantages of such mutually beneficial networks.

A few years ago the U.S. Army ran an advertising slogan "An Army of One." But this was a misnomer, for the single most important combat asset is unit cohesion. Even the supreme Rugged Individual survives best in a circle of others willing to fight together for a common cause.

Another enduring myth of American culture is "living off the land." Many of my correspondents who hunt and fish report that when discussions of financial hardship arise, many of their acquaintances say they will simply bag some deer and go fishing to feed their families.

Sadly, what was possible in the remote, largely unpopulated America of the distant past is not possible for a nation of dwindling wilderness and 300 millions mouths to feed.

The more one has actually walked remote areas of the nation like the Rockies, High Sierra, great deserts and untilled plains, the more one comes to understand just how little food for humans exists in the wild. This is why hunter-gatherers require vast tracts of land: Nature is indeed bountiful, but rarely for humans.

It is easy to over-estimate the number of wildfowl, fish and large mammals available for human consumption in the "wild," and even easier to overestimate the calories available to be reaped from the wild before the land is stripped of game and other edibles.

The hunter who bags several dozen pheasant, for instance, ends up with a pitifully small bag of dried meat at the end of the process. As for the plentiful fish—let's not forget they were stocked by an advanced-technology, oil-fueled, well-funded state agency. Once the fish are no longer stocked, the illusory bounty disappears.

To the unknowing eye, the Hawaiian rain forest looks like it must be a veritable cornucopia of edibles suitable for human consumption. In fact, the truly native Hawaiian rain forest offers very little to hungry humans. If you come across a mango or banana tree, that was planted by other humans.

You would also find that the "wild" mango tree is remarkably stingy with its bounty. Growing high above the ground, most of the fruit is unreachable, even with ladders, and the fruit is small and mostly seed; the actual pulp is stringy and meager compared to the farm-coddled mangoes we find in markets.

Thus a small intensive garden may well contain more human-suitable food than a square kilometer or square mile of wilderness. Many bounteous wild crops like acorns require a backbreaking amount of work before they can be rendered suitable for human consumption— and they require copious amounts of fuel for cooking.

It is sobering to recall that tiny bands of primitively armed humans hunted the wooly mammoth to extinction in a matter of a few decades, and a relative handful of better-armed Americans shot millions of bison in a few short years, driving the herds which once blackened the plains to the precipice of extinction.

We should be very wary of all such complacency traps: there is simply no way to feed 300 million people by foraging a mostly calorie-barren landscape and fish-stripped sea. Such a stupendous population requires a large-scale, heavily mechanized intensive production of grain.

Conclusion #1: everyone who opts out of a given social circumstance opts into some other circumstance. There can be no "opting out" without a corresponding opting in to something else.

Conclusion #2: Opting into a myth is not a sustainable option; humans developed social networks /communities and agriculture precisely because the alternative options of Splendid Isolation and foraging were perilously less successful survival strategies.

Conclusion #3: The key difference between opting for isolation and opting into alternative communities/networks is the sustainability and productivity of the community. Very few who live in isolation are truly independent of a larger productive society. This simple truth is the engine behind agriculture and urban centers.

Thus the skeptic gazes at the latter-day isolationists who stockpile six months of advanced-economy, advanced technology consumables in a remote cabin and asks:

What happens in Month Seven when the stockpile is gone?

Or make it Month 13 or Month 25; the point is withdrawing without creating a productive sustainable source of food, energy and other critical necessities is not a survival strategy at all, it's simply pushing the day of reckoning forward a bit.

Creating an integrated, independent, sustainable productivity by oneself or as a couple is akin to raising a child in isolation: it looks fun until you really give it a try. A baby may well be adorable to a teen for an hour or so, but give the teen the baby for 48 hours straight and his/her reaction will be quite different.

Haul water in five-gallon buckets from a stream for a few weeks, cut wood by hand, carry a 5-gallon propane tank by bicycle down to the refilling station, sharpen a chisel by hand, fix a balky gas-powered refrigerator—the list of skills and energies required are far longer than a myth-based culture can even imagine.

While it is possible to envision a technology-rich "splendid isolation" fueled by solar panels, water pumps, satellite Internet links, geothermal-exchange heating, triple-pane windows, all protected by elaborate security technology, there are two difficulties with this scenario: few can afford to set it up, and those few who do have created a high-value, very vulnerable target in the middle of an existing population with whom they have no social or economic ties. One need look no farther than luxury vehicles being smashed and burned in the streets to foresee the possible responses such wealth disparity causes.

There is a model for barricading oneself and one's wealth behind high walls of security: all "planet of slums" cities in the Third World contain small heavily defended islands of wealth in a vast sea of poverty. If this lifestyle appeals to you, there are ample opportunities to try it out today in any Third World mega-city/mega-slum.

The skeptic wonders if the Isolationist expects others to have constructed a large-scale productive sustainable economy in their absence, and to welcome those who opted out of contributing to the arduous construction of this sustainable future with open arms.

Just because the grasshopper squirreled away a stash to last the winter does not mean the productive colony of ants will welcome his future freeloading come spring.

Thus the goal must be a truly sustainable productivity, not a temporary opting out dependent on a stockpile of unsustainably produced consumer goods.

In some societies, the religious mendicant can freeload off the productive society because the productive members believe feeding the mendicant provides them with religious merit. But the U.S. is not such a society; its historical religious principles are expressed in the line, "The Lord helps those who help themselves," and stockpiling high-tech supplies to last a few months is not actually helping oneself or others in any long-term, sustainable fashion.


Manifestations of Political Complacency/Fatalism

The great danger of complacency is that a misplaced trust in the Powers That Be and their supposedly robust economic and political structures of control and distribution will lull us into the placid fantasy that the State will somehow rescue us from whatever crises befall the nation.

Ultimately, the belief in the almost godlike powers of the State breed a dangerous complacency. The writings left behind by citizens of the late Roman Empire speak with the utmost faith of Rome's everlasting power and its eternal glory. Yet a few decades hence the once-mighty global empire collapsed in a heap--a sharp reminder that no State is all-powerful or immune to financial ruin.

This faith in the powers of the Savior State manifests in several ways.

1. The State can provide us all with the FEW essentials (food, energy, water) in emergencies and extended crises.

In actuality, all the FEW systems are fragile and have low levels of redundancy. Most cities (and most of the populace in developed nations live in urban centers) have a week or so of food on hand and are dependent on long rail, trucking and shipping lines of supply which are themselves largely dependent on liquid petroleum.

While some nations possess enough nuclear generation capacity to provide electricity for their citizenry should petroleum supplied be disrupted, electricity will not fuel the tractors, trucks, petrochemical industries, etc. which are integral to agriculture and the global oil system.

Though the mainstream media marginalizes the "survivalist movement," the media itself rarely offers any realistic assessment of the FEW system's great vulnerabilities and dependency on cheap, abundant fossil fuels.

2. The State will provide the entitlements it has promised to us in our retirement years.

Is there any more pernicious misrepresentation than the endless assurances spewed by the Federal government and the Plutocracy's mass media that the insolvent carcasses of Medicare and Social Security will continue to send out tens of millions of checks to the citizenry and its "healthcare providers" even as the entire government slides toward an inevitable insolvency?

The gap between projected tax revenues (and these estimates were made before the current Depression took hold) and projected entitlement spending in the next two decades is around $100 trillion--three times the entire value of the U.S. and seven times the nation's GDP.

It is simply not within the realm of possibility that the U.S. will be able to borrow $100 trillion on top of its already unsustainable "normal" deficit spending, but it is misleading to the point of pure deception to hint that if the U.S. prints $100 trillion the resulting dollar will have any purchasing power whatsoever.

If your Social Security check bears a number around $1,000 but has the purchasing power of $5 today, will that fulfill the government's entitlement promises?

3. The State will act to protect private property.

There are numerous ways the State can fail to protect private property, or in essence steal it from its citizenry.

The most visible way the State can fail to protect private property is to be unable to stop or discourage outright "street crime" theft via burglary, robbery, etc. The reason why this is a plausible scenario is financial; as police officers now cost well over $100,000 each per year in salaries, benefits and pension costs, cities and counties may simply be unable to pay peace officers at these pay scales as their tax revenues plummet and their unsustainably generous pension plans require ever-larger sums.

A second more pernicious way the State can fail to protect property is to increase taxes in order to pay what are essentially confiscatory public employee wages and pension benefits, and "gaming the system" looting by local government officials, contractors, and various other State parasites.

Though this may seem farfetched, we have not seen the end of the cycle in which the State (Federal, state, county, city and municipal agencies) gradually increase the tax burdens on the remaining productive elements of the economy in order to fund their own employees (the protected, upper-caste technocracy), the Plutocracy's perquisites (loopholes, exemptions, etc.) and the underclass whose compliance/passivity the State must purchase.

As Rome crumbled, the remaining middle class fled to the Plutocracy's estates to willingly become serfs, as the Imperial taxes had become so onerous that freedom was no long a viable option.

The third way the State can fail to protect private property is via its abject failure to constrain or punish "theft by other means" in which financial players such as investment banks loot public funds. The money lost to financial thievery, corruption, fraud, etc. must be paid by the remaining productive members of the economy and their children and grandchildren--presuming the State remains solvent that long, a highly unlikely possibility.

The fourth way the State can fail to protect private property is by outright confiscation of private property such as gold, or the confiscation of private real estate via imminent domain which is then turned over to other private hands (the Plutocracy) for their enjoyment and gain.

The fifth way the State can fail to protect private property is to actively encourage (or fail to limit) inflation of the nation's currency, the dollar. Inflation is in effect theft from all holders of the dollar, most of whom are U.S. citizens.

The State benefits from inflation, which is essentially a hidden tax on all wealth holders and earners, for inflation enables the State to pay off its stupendous past borrowings with depreciated currency and to continue the illusion of paying entitlements at full value.

While some observers claim inflation also benefits private citizens, as they too can pay off debt with depreciated dollars, the citizenry who hold dollars or financial assets such as savings accounts and bonds are also losers, as these assets are severely reduced in purchasing power by inflation.

Traditional hedges against inflation such as real estate and collectibles, i.e. tangible goods, may not provide a durable hedge as oversupply and other factors may cause even tangibles to lose value when measured in gold or oil.

Equally as crippling as a complacent faith in the State is a fatalistic assumption that the State cannot be saved and thus we should stand aside and let it fall. It may well fall of its own weight, regardless of our actions, but to assume we citizens are powerless to force the State to adapt to reality is just as foolhardy as trusting it to save us from wave after wave of global crises.

The king of France, Louis VIX is proported to have said, "L'etat, c'est moi": the state, it is me. In a real sense we the citizenry are the State, should we wrest control of it from the Plutocracy and other parasitic classes which feed off it.

If we fall into either complacency or fatalism, then the State and its dependent classes will act in their own self-interest rather than in the interests of the citizenry at large.


The Complacency of "This is the only way the system can work"

In addition to a baseless faith that yesterday's prosperity will magically reappear on its own, there is another kind of complacency: "This is the only way the system can work."

To help us grasp just how deep complacency runs in the U.S., I turn to knowledgeable correspondent K.D., who recently filed this report:

I visited a friend of mine who lives in Fountain Hills Arizona. Nice 5,000 sq ft house with a huge pool in back, and if you walk outside his house you can see the fountain in the middle of town shoot water about 500 ft. in the air. I think the rainfall in the area is abut 9 inches a year (qualifies it as a desert) with a summer temp of 105 or so.

I visited him a few years ago and there were many 5000+ sq ft houses under construction. At that time, he mentioned his house had doubled in value in just two years and people couldn't buy lots fast enough. This visit, as I went for a morning jog around the area, I couldn't help but notice that every other house or lot was for sale.

He had a Superbowl party and many of his neighbors came over. These were all highly educated affluent people, ages from 45-65ish (hard to tell the upper limit, plenty of nip/tuck work). I made it a point to ask a few of them about:
1. general state of the economy, 2. housing bubble,
3. energy/peak oil, and
4. water resources.

The unanimous responses (in order above): 1. just a blip, things will start looking up once the stimulus hits, 2. no way prices will drop much more, it is a great time to buy, 3. there is plenty of oil, the recent price spike was do to speculators ("saw the same thing in the 70's..."), and if it does start to get expensive, we can run off of solar, 4. we have plenty of water - no way we can run out.

I won't bother with an analysis of the above - good times ahead for Fountain Hills, no doubt.... ;-)

This complacency/denial on all levels is slowly being eroded by reality. The 500-foot useless fountains are about to be turned off because the water and money have run out. We will belatedly discover that the systems we believed could only work one way are collapsing. There is an alternative to working one way: they can stop working altogether.


Key concepts in this chapter:

cognitive and emotional attractors/traps

Splendid Isolation

stable impoverishment

In addition to the near-impossibility of long-term productive sustainability, Splendid Isolation has another drawback: an insurmountably intrinsic insecurity. (A version of this chapter was first published on www.oftwominds.com on June 27, 2008.)

I'm not trying to be difficult, but I can't help cutting against the grain on topics like surviving the coming bad times when my experience runs counter to the standard received wisdom.

A common thread within most discussions of surviving bad times--especially really bad times--runs more or less like this: stockpile a bunch of canned/dried food and other valuable accoutrements of civilized life (generators, tools, canned goods, firearms, etc.) in a remote area far from urban centers, and then wait out the bad times, all the while protecting your stash with an array of weaponry and technology (night vision binocs, etc.)

Now while I respect and admire the goal, I must respectfully disagree with just about every assumption behind this strategy. Once again, this isn't because I enjoy being ornery (please don't check on that with my wife) but because everything in this strategy runs counter to my own experience in rural, remote settings.

You see, when I was a young teen my family lived in the mountains. To the urban sophisticates who came up as tourists, we were "hicks" (or worse), and to us they were "flatlanders" (derisive snort).

Now the first thing you have to realize is that we know the flatlanders, but they don't know us. They come up to their cabin, and since we live here year round, we soon recognize their vehicles and know about how often they come up, what they look like, if they own a boat, how many in their family, and just about everything else which can be learned by simple observation.

The second thing you have to consider is that after school and chores (remember there are lots of kids who are too young to have a legal job, and many older teens with no jobs, which are scarce), boys and girls have a lot of time on their hands. We're not taking piano lessons and all that urban busywork. And while there are plenty of pudgy kids spending all afternoon or summer in front of the TV or videogame console, not every kid is like that.

So we're out riding around. On a scooter or motorcycle if we have one, (and if there's gasoline, of course), but if not then on bicycles, or we're hoofing it. Since we have time, and we're wandering all over this valley or mountain or plain, one way or another, then somebody will spot that trail of dust rising behind your pickup when you go to your remote hideaway. Or we'll run across the new road or driveway you cut, and wander up to see what's going on. Not when you're around, of course, but after you've gone back down to wherever you live. There's plenty of time; since you picked a remote spot, nobody's around.

Your hideaway isn't remote to us; this is our valley, mountain, desert, etc., all 20 miles of it, or what have you. We've hiked around all the peaks, because there's no reason not to and we have a lot of energy. Fences and gates are no big deal, (if you triple-padlock your gate, then we'll just climb over it) and any dirt road, no matter how rough, is just an open invitation to see what's up there. Remember, if you can drive to your hideaway, so can we. Even a small pickup truck can easily drive right through most gates (don't ask how, but I can assure you this is true). If nobody's around, we have all the time in the world to lift up or snip your barbed wire and sneak into your haven. Its remoteness makes it easy for us to poke around and explore without fear of being seen.

What flatlanders think of as remote, we think of as home. If you packed in everything on your back, and there was no road, then you'd have a very small hideaway--more a tent than a cabin. You'd think it was safely hidden, but we'd eventually find it anyway, because we wander all over this area, maybe hunting rabbits, or climbing rocks, or doing a little fishing if there are any creeks or lakes in the area. Or we'd spot the wisp of smoke rising from your fire one crisp morning, or hear your generator, and wonder who's up there. We don't need much of a reason to walk miles over rough country, or ride miles on our bikes.

When we were 13, my buddy J.E. and I tied sleeping bags and a few provisions on our bikes--mine was an old 3-speed, his a Schwinn 10-speed--and rode off into the next valley over bone-jarring dirt roads. We didn't have fancy bikes with shocks, and we certainly didn't have camp chairs, radios, big ice chests and all the other stuff people think is necessary to go camping; we had some matches, cans of beans and apple sauce and some smashed bread. (It didn't start out smashed, but the roads were rough. Note: if you ever suffer from constipation, I recommend beans and applesauce.)

We camped where others had camped before us, not in a campground but just off the road in a pretty little meadow with a ring of fire-blackened rocks and a flat spot among the pine needles. We didn't have a tent, or air mattress, or any of those luxuries; but we had the smashed bread and the beans, and we made a little fire and ate and then went to sleep under the stars glittering in the dark sky.

There were a few bears in the area, but we weren't afraid; we didn't need a gun to feel safe. We weren't dumb enough to sleep with our food; if some bear wandered by and wanted the smashed bread, he could take it without bothering us. The only animal that could bother us was the human kind, and since few people walk 10 or more miles over rough ground in the heat and dust, then we'd hear their truck or motorbike approaching long before they ever spotted us.

We explored old mines and anything else we spotted, and then we rode home, a long loop over rutted, dusty roads. In summer, we took countless hikes over the mountainous wilderness behind his family cabin.

All of which is to say that the locals will know where your hideaway is because they have lots of time to poke around. Any road, no matter how rough, might as well be lit with neon lights which read, "Come on up and check this out!" If a teen doesn't spot your road, then somebody will: a county or utility employee out doing his/her job, a hunter, somebody. As I said, the only slim chance you have of being undetected is if you hump every item in your stash on your pack through trailess, roadless wilderness. But if you ever start a fire, or make much noise, then you're sending a beacon somebody will eventually notice.

The Taoists developed their philosophy during an extended era of turmoil known as the Warring States period of Chinese history.

One of their main principles runs something like this: if you're tall and stout and strong, then you'll call attention to yourself. And because you're rigid--that is, what looks like strength at first glance--then when the wind rises, it snaps you right in half.

If you're thin and ordinary and flexible, like a willow reed, then you'll bend in the wind, and nobody will notice you. You'll survive while the "strong" will be broken, either by unwanted attention or by being brittle.

Another thing to ponder is that the human animal is a much better predator than it is an elusive prey. Goats and wild turkeys and other animals have very keen senses of smell and hearing, and it's tough to get close without them smelling you or hearing you. They're well camouflaged, and since human sight is selected to detect movement and color, if they stay quite still we have a hard time spotting them.

In comparison, the human is a clumsy prey. It can't smell or hear very well, and it's large and not well camouflaged. Plus it's usually distracted and unaware of its surroundings. It doesn't take much to kill a human, either; a single-shot rifle and a single round of .22 long is plenty enough.

If the chips are down, and push comes to shove, then what we're discussing is a sort of war, isn't it? And if we're talking about war, then we should think about the principles laid down in The Art Of War by Sun Tzu quite some time ago.

The flatlander protecting his valuable depot is on the defensive, and anyone seeking to take it away (by negotiation, threat or force) is on the offensive. The defense can select the site for proximity to water, clear fields of fire, or what have you, but one or two defenders have numerous disadvantages. Perhaps most importantly, they need to sleep. Secondly, just about anyone who's plinked cans with a rifle and who's done a little hunting can sneak up and put away an unwary human. Unless you remain in an underground bunker 24/7, at some point you'll be vulnerable. And that's really not much of a life--especially when your food supplies finally run out, which they eventually will. Or you run out of water, or your sewage system overflows, or some other situation requires you to emerge.

So let's line it all up. Isn't a flatlander who piles up a high-value stash in a remote area with no neighbors within earshot or line of sight kind of like a big, tall brittle tree? All those chains and locks and barbed-wire fencing and bolted doors just shout out that the flatlander has something valuable inside that cabin/bunker/RV, etc.

Now if he doesn't know any better, then the flatlander reckons his stash is safe. But what he's not realizing if that we know about his stash and his vehicle and whatever else can be observed. If some locals want that stash, then they'll wait for the flatlander to leave and then they'll tow the RV off or break into the cabin, or if it's small enough, disassemble it and haul it clean off. There's plenty of time, and nobody's around. That's pretty much the ideal setting for leisurely thieving: a high-value stash of goodies in a remote area accessible by road is just about perfect.

Let's say things have gotten bad, and the flatlander is burrowed into his cabin. Eventually some locals will come up to visit; in a truck if there's gas, on foot if there isn't. We won't be armed; we're not interested in taking the flatlander's life or goodies. We just want to know what kind of person he is. So maybe we'll ask to borrow his generator for a town dance, or tell him about the church food drive, or maybe ask if he's seen so-and-so around.

Now what's the flatlander going to do when several unarmed men approach? Gun them down? Once he's faced with unarmed guys, he can't very well conclude they're a threat and warn them off. But if he does, then we'll know he's just another selfish flatlander. He won't get any help later when he needs it; or it will be minimal and grudging. He just counted himself out.

Suppose some bad guys hear about the flatlander's hideaway and stash. All it takes to stalk any prey is patience and observation; and no matter how heavily armed the flatlander is, he'll become vulnerable at some point to a long-range shot. (Even body armor can't stop a headshot or a hit to the femoral artery in the thigh.) Maybe he stays indoors for 6 days, or even 60. But at some point the windmill breaks or the dog needs walking or what have you, and he emerges--and then he's vulnerable. The more visible and stringent the security, the more he's advertising the high value of his depot.

And of course guarding a high-value stash alone is problematic for the simple reason that humans need to sleep.

So creating a high-value horde in a remote setting is looking like just about the worst possible strategy in the sense that the flatlander has provided a huge incentive to theft/robbery and also provided a setting advantageous to the thief or hunter.

If someone were to ask this "hick" for a less risky survival strategy, I would suggest moving into town and start showing a little generosity rather than a lot of hoarding. If not in town, then on the edge of town, where you can be seen and heard.

I'd suggest attending church, if you've a mind to, even if your faith isn't as strong as others. Or join the Lions Club, Kiwanis or Rotary International, if you can get an invitation. I'd volunteer to help with the pancake breakfast fundraiser, and buy a couple tickets to other fundraisers in town. I'd mow the old lady's lawn next door for free, and pony up a dollar if the elderly gentleman in line ahead of me at the grocery store finds himself a dollar light on his purchase.

If I had a parcel outside town that was suitable for an orchard or other crop, I'd plant it, and spend plenty of time in the local hardware store and farm supply, asking questions and spreading a little money around the local merchants. I'd invite my neighbors into my little plain house so they could see I don't own diddly-squat except some second-hand furniture and a crappy old TV. And I'd leave my door open so anyone could see for themselves I've got very little worth taking.

I'd have my tools, of course; but they're scattered around and old and battered by use; they're not shiny and new and expensive-looking, and they're not stored all nice and clean in a box some thief could lift. They're hung on old nails, or in the closet, and in the shed; a thief would have to spend a lot of time searching the entire place, and with my neighbors looking out for me, the thief is short of the most important advantage he has, which is time.

If somebody's desperate enough or dumb enough to steal my old handsaw, I'll buy another old one at a local swap meet. (Since I own three anyway, it's unlikely anyone would steal all three because they're not kept together.)

My valuable things, like the water filter, are kept hidden amidst all the low-value junk I keep around to send the message that there's nothing worth looking at. The safest things to own are those which are visibly low-value, surrounded by lots of other mostly worthless stuff.

I'd claim a spot in the community garden, or hire a neighbor to till up my backyard, and I'd plant chard and beans and whatever else my neighbors suggested grew well locally. I'd give away most of what I grew, or barter it, or maybe sell some at the farmer's market. It wouldn't matter how little I had to sell, or how much I sold; what mattered was meeting other like-minded souls and swapping tips and edibles.

If I didn't have a practical skill, I'd devote myself to learning one. If anyone asked me, I'd suggest saw sharpening and beer-making. You're legally entitled to make quite a bit of beer for yourself, and a decent homebrew is always welcome by those who drink beer. It's tricky, and your first batches may blow up or go flat, but when you finally get a good batch you'll be very popular and well-appreciated if you're of the mind to share.

Saw-sharpening just takes patience and a simple jig; you don't need to learn a lot, like a craftsman, but you'll have a skill you can swap with craftsmen/women. As a carpenter, I need sharp saws, and while I can do it myself, I find it tedious and would rather rebuild your front porch handrail or a chicken coop in exchange for the saw-sharpening.

Pickles are always welcome in winter, or when rations get boring; the Germans and Japanese of old lived on black bread or brown rice and pickled vegetables, with an occasional piece of dried meat or fish. Learning how to pickle is a useful and easy-to-learn craft. There are many others. If you're a techie, then volunteer to keep the network up at the local school; do it for free, and do a good job. Show you care.

Because the best protection isn't owning 30 guns; it's having 30 people who care about you. Since those 30 have other people who care about them, you actually have 300 people who are looking out for each other, including you. The second best protection isn't a big stash of stuff others want to steal; it's sharing what you have and owning little of value. That's being flexible, and common, the very opposite of creating a big fat highly visible, high-value target and trying to defend it yourself in a remote setting.

I know this runs counter to just about everything that's being recommended by others, but if you're a "hick" like me, then you know it rings true. The flatlanders are scared because they're alone and isolated; we're not scared. We've endured bad times before, and we don't need much to get by. We're not saints, but we will reciprocate to those who extend their good spirit and generosity to the community in which they live and in which they produce something of value.

The best way to look out for Number One is to start looking out for Numbers Two through Twenty.

Leading by example can be a far more powerful force for positive change than is commonly understood. (A version of this chapter was originally published on www.oftwominds.com on June 25, 2008.)

Frequent oftwominds.com contributor U. Doran sent in a link to this fascinating essay, which was published in the depths (Year 7) of the Great Depression: Isaiah's Job by Albert Jay Nock (from The Atlantic Monthly, 1936)

In the year of Uzziah's death, the Lord commissioned the prophet (Isaiah) to go out and warn the people of the wrath to come. "Tell them what a worthless lot they are." He said, "Tell them what is wrong, and why and what is going to happen unless they have a change of heart and straighten up. Don't mince matters. Make it clear that they are positively down to their last chance. Give it to them good and strong and keep on giving it to them."

"I suppose perhaps I ought to tell you," He added, "that it won't do any good. The official class and their intelligentsia will turn up their noses at you and the masses will not even listen. They will all keep on in their own ways until they carry everything down to destruction, and you will probably be lucky if you get out with your life."

Isaiah had been very willing to take on the job — in fact, he had asked for it — but the prospect put a new face on the situation. It raised the obvious question: Why, if all that were so — if the enterprise were to be a failure from the start — was there any sense in starting it?

"Ah," the Lord said, "you do not get the point. There is a Remnant there that you know nothing about. They are obscure, unorganized, inarticulate, each one rubbing along as best he can. They need to be encouraged and braced up because when everything has gone completely to the dogs, they are the ones who will come back and build up a new society; and meanwhile, your preaching will reassure them and keep them hanging on. Your job is to take care of the Remnant, so be off now and set about it."

Let's follow up on this notion of "Remnant" by invoking the Pareto Principle.

If the parameters in the Pareto distribution are suitably chosen, then one would have not only 80% of effects coming from 20% of causes, but also 80% of that top 80% of effects coming from 20% of that top 20% of causes, and so on (80% of 80% is 64%; 20% of 20% is 4%, so this implies a "64-4 law").

This suggests that a mere 4% of the 300 million Americans could influence 192 million of their fellow citizens. Since children and the very elderly generally wield less influence than those adults of working and child-bearing age, let's subtract the 60 million Americans under 14 years of age and the 18 million over 75 years of age: Annual Estimates of the Population by Sex and Five-Year Age Groups for the United States: April 1, 2000 to July 1, 2007 (U.S. census Bureau)

That leaves about 220 million Americans between 14 and 75 years of age. 4% of that number is 8.8 million. So the critical number for the Remnant in the U.S. appears to be about 9 million people.

In other words, when 9 million people start leading (4%), then 140 million (64%) will follow. Once those 150 million are moving in the same direction, then they will collectively be an irresistible force for positive change.

As the essay so brilliantly describes, members of the Remnant are not on the pulpit or writing for the Mainstream Media; they are unpublicized, unnoticed, perhaps viewed as outsiders by those around them, perhaps not. But their influence is generated by action and example, not by preaching, pontificating or cajoling.

I believe most of you are in the Remnant simply by virtue of being part of this little (unpublicized, zero-marketing budget) online community of www.oftwominds.com readers, contributors and correspondents.

Many of you are doing real work in the real world. Don E. raises chickens in Maine, David V. has Yukon gold potatoes in the ground up north, and Noah Cicero is pursuing permaculture in Ohio. (Note on gender: many other readers doing similar work happen to be female, for instance, Freeacre, who we'll hear from in a moment.)

Here is Noah's essay, in case you missed it. The Power of Eight and Three (Reinventing our Native Cuisine) (Noah Cicero, June 23, 2008).

On the financial front, frequent contributor Harun I. has written about how to hedge yourself against various financial risks, and about becoming a more successful investor --nost recently in this essay The Principles of Trading Also Apply to Life (Harun I., June 19, 2008)

If you glance through the 2008 and 2007 Readers Journal archives, you will find dozens of amazing essays by readers who to the best of my knowledge do not occupy positions of influence in government or the media.

Given the government's abysmal non-response to the growing financial and energy crises (for instance, Oil Woes Fail to Stir Leadership in Congress WSJ), then I conclude the 9 million will have to lead government, not vice versa.

Note that the Remnant is not engaged in any one pursuit; smart people are just doing what they think is right and good, which includes being skeptical of the received "wisdom" of the media and government pronouncements/propaganda, trying to avoid the financial vortex which is pulling down the non-elites (and maybe a few elites, too), living lighter, cheaper, better lifestyles away from the stomping masses of the Consumption Is Our True God mainstream, working to improve the soil of a patch of earth, and a thousand other projects and interests.

If anything characterizes the Remnant, it is skepticism, a disdain for pomp and aggrandizement, and an awareness that doing with less is actually a happier, more fulfilling life than Always Chasing More in the Public Eye.

For one example of how this works--first at the local level, which then influences the region, then the state and eventually the nation--let's turn to Freeacre in Oregon:

"It's nice to read your essay on permaculture and community gardening. I forwarded it to our city manager. Last week I attended a town meeting where we were to pick some goals and prioritize them, etc. I wrote down that I'd like to see our community gear up for economic collapse by localizing our food supply and ride sharing, etc, to help people on their commutes to work. I suggested community gardens, a tool bank, etc. Surprisingly, a bunch of people agreed with me and put me on a committee to hire the next city planner! So, something must be changing in the popular consciousness...

We live in Central Oregon at 4,200 ft. altitude. Our garden is situated on 30 ft. of volcanic ash. We have almost no organic stuff in the "soil" except pine needles, which are acidic. No worms - they would starve to death. And, you can only count on 30 nights a year that don't freeze. To say the least, it is tough to grow stuff here. We have to heat our greenhouse and cover our garden with thermal blankets at night. And, water frequently because it is also a desert.

But, despite that, we grew almost all of the vegetables that we ate last fall and winter. We have great luck with snow peas, Chinese peas, snap peas, carrots, beets, lettuce, onions, garlic, kale, and Swiss Chard outside, and tomatoes, summer squash, pole beans, cucumbers, and green peppers in a little greenhouse.

What is also a great help is chickens. We love our chickens. They give us great eggs and are very fun and relaxing to observe and live with. I would never have believed that I could look forward to my edition of "Backyard Poultry" as much as I used to like to read "Newsweek." What a laugh.

When the trucks stop rolling, we will probably start to keep rabbits, too, for protein. I can't eat a lot of carbs. Bad for me. Maybe even guinea pigs to feed to the dog. Sounds horrible, doesn't it? But, we've got a half St. Bernard/half Tibetan Mastiff. They can't eat dandelions.

We need to re-think so much. Right now, I'm looking into where the hand pumps went that the state parks used to have, since they've been replaced with electric ones. There must be a pile of them somewhere. If (when) the electricity fails, it's going to be hell getting water from the well without a hand pump - in the winter."

Don E. recently checked in with this report from Maine:

"I have looked about me here in Maine and wondered what my tribe will be. I agree that they will emerge. We joined MOFGA, the oldest organization in the country for organic living, and in surveying what their network looks like Maine comes off as a very sane place. Redneck to a large part, but also a lot of industrious hippie-types raising goats and crops. a very interesting place. The watchword seems to be 'lisa'; low impact sustainable agriculture. It really is amazing how big the movement to grow local food without chemicals is in this state. My hope, slightly tongue in cheek, is that new hampster, Vermont and Maine will break off into a new nation with a regional gov't that looks more toward Canada than south."

We cannot hope to understand the forces which will shape the Great Transformation unless we examine what might be called ontological forces: structures of Nature which work not just in organisms but in human societies and history, and ontological states which can be characterized as the politics of experience. By ontological I mean these are forces that are not limited to certain eras or cultures; they act upon human societies in all era and locales.

How do we make sense out of the vast, interlocking complexity of the modern world? We started with an accounting of key contexts: human nature, the environment, waves and cycles of history, etc., and then proceeded to explore human nature within the context of complacency and fatalism. We concluded by exploring the Pareto Principle and the way a relatively small group can end up influencing the majority of much larger population.

Though not a strictly predictable law of nature like gravity, the Pareto Principle nonetheless reflects patterns which are not just cultural constructs of the human mind: it can be observed in Nature, not just human behavior.

The same can be said of feedback loops. All biological systems contain feedback loops which strengthen or counter other feedbacks. Thus one way to understand any system is to identify the various inputs and feedbacks present. Again, feedback systems are not simply cultural constructs; they are observable ontological forces.

These ontological forces are powerful analytic tools. A superficial explanation of the subprime crisis would be: human greed overwhelmed common sense. While this may well be true, it does not explain the mechanisms of the crisis or explain why the subprime crisis occurred in this time and place. It also offers no predictive value, as human greed has always been present and will always be present: what I call windfall exploitation is a beneficial trait in Nature.

Various ideological explanations are also superficial: it was all the Democrats/Republicans' fault, etc. The way to avoid ending up in worthless superficiality is to seek out the ontological forces and states at play in any context or situation.

Thus an analysis of the subprime crisis would have to tease out the various feedbacks in play: the Federal Reserve's easy-money/low interest rate policy, the changes made to the way rating agencies were paid and issued their ratings on securities, the windfall exploitation of derivatives based on mortgages by the investment banks, and so on.

This approach can be characterized as "systems analysis," but we have to be very careful to note that "systems analysis" is itself an ontological state with limitations imposed by the values and tools of the practitioners.

Thus the systems analyst will reject cycles of human history as invalid: the cycles are too open to interpretation, insufficiently rigorous, etc. Trapped within the confines of this one ontological state, we would then miss the profound insights offered by an understanding of patterns within human history.

The dangers of being trapped within an exceedingly limited ontological state are best illustrated by the field of economics, which seeks a global understanding via a small set of analytic tools and a worldview so limited that it can be characterized as a state of psychotic disassociation from the real world.

If we were to limit our reading to academic economics papers, either traditional or of the "freakonomics" variety, we would come to believe that Foreign Direct Investment and various other metrics were the right and proper context for understanding our world.

But entirely missing from the vast majority of professional economics is any hint that an economy is based on a real world of dirt, evaporating rivers, smog-choked air and people responding to viral pandemics, religion and long-term ontological forces which cannot be described or measured by the tools available to the professional economist.

The utter failure of economics as a predictive "science" is well-known; and given this failure, we might wonder what value metrics such as GDP, M2 and all the rest actually possess in terms of understanding the Great Transformation ahead.

The answer seems rather clear: precious little.

One reason is that an onotological state I term the politics of experience is always in play. By way of example, consider a typical academic economist or Wall Street financial analyst. Both are seeking to understand China by way of the yuan-dollar exchange rate, foreign direct investment, electricity consumption, official unemployment and various other quantitative measurements, as if those numbers are meaningful reflections of realities such as a dried-up river and an angry mob of disenfranchized peasants.

Within the confines of the academic politics of experience, all that really matters is that the paper is accepted by a prestigious journal and that it bolsters the economist's chances for the golden ring of tenure. Anything which upsets the academic status quo (presenting dry papers filled with equations, making nuanced "improvements" to accepted gospel, etc.) would introduce a troubling uncertainty into the career prospects of the practitioner.

By way of contrast, the public health practioner examining the diseased lungs of the disenfranchized peasantry has an entirely different politics of experience: an indifferent and potentially hostile government, personal danger, outrage at the human cost of all that "growth" so tidily represented in the economists' columns of numbers, despair at the impossibility of changing the forces of corruption and wealth extraction which dooms the peasantry to the margins, and so on.

The word "globalization" will mean entirely different things to these two people. Indeed, what is "obvious" to each person will be radically different. This is why I will spend considerable time exploring the ontological state of "what is obvious."

By coupling all our methods of understanding (cui bono--to whose benefit?, over-reach and depletion as cycles of history, simulacrum/propaganda as defenses against erosion of the status quo, etc.) with an understanding of the politics of experience, we can then assemble a fully integrated understanding of our world's interlocking crises.

Much more could be said about ontological forces and states, and I can only hope this brief chapter will be enough to render the concepts comprehensible and useful.

The human mind seeks patterns and trends as a key survival strategy: if we can anticipate a problem before it overwhelms us, or discern a pattern or cycle in the world around us, we can make a timely and very beneficial corrective adaptation.

Trends may be profitably understood as vectors: a predictable direction influenced by measurable forces. Once we identify a trend/vector, we quickly anticipate it will continue in the same direction.

Thus in the early 1960s, oil seemed so abundant and the promise of nuclear power so bright that the envisioned future included flying vehicles for every suburban home, plastic pod homes and a leisure founded on endless prosperity.

Now, a few scant decades later, the future vector to many has darkened to a collapse that will return advanced economies to the 18th century in the best-case scenario and to a violent AK-47-ridden Dark Age in worst-case scenarios.

Neither of these extremes seem likely, in my view, because neither one is grounded in an analysis of culture, history or feedback systems.

Feedback is built into Nature, including ourselves. A bacterial infection triggers an immune response; without such a feedback loop, we would never survive past a few hours of life. (Feedback Loops, Positive and Negative ; (oftwominds.com)

All of life, from bacteria to the largest organisms and systems, responds to its environment with feedback; there are no vectors or trends that do not meet with positive (self-reinforcing) and/or negative (built-in stabilizers) feedback. Thus the bacteria responds to anti-bacterial medications by developing resistance, companies respond to changing market conditions, etc.

Positive feedback reinforces itself; the classic example is nuclear fission, in which decaying uranium atoms trigger a cascade of radiation that becomes a nuclear explosion. Doomsday scenarios assume that such positive feedback loops will overwhelm any negative feedback loops that would act to slow or reverse the trend.

Thus the Doomsday scenario assumes all civilizations fall in a great heap; some have, some haven't. The ever-popular "technology-will-save-us" scenario downplays or denies the full measure of positive feedbacks and assumes negative (counter-trend) loops will correct or reverse any downward trajectory. We cannot arbitrarily assume either alternative: that would be joining complacency with fatalism.

The outcome depends on our understanding of the crises and our responses (feedback) to those challenges: as families, communities and as nation-states.

We can be fairly certain of one thing: the likelihood of everything remaining like it is today is near-zero. All trends are merely temporary vectors influenced by positive and negative feedback loops which can drop away, strengthen or interact in unforeseen ways.

Those who assume runaway feedback will trigger complete collapse may also be anticipating a phase shift—a sudden jump from one state to another. This concept has been popularized as a "tipping point" in the book The Tipping Point: How Little Things Can Make a Big Difference. In the stock market, such a shift takes the form of a reversal of trend; this is also visible in elections, when the electorate seeks to reverse polarities, so to speak, and place the other party in power.

But a system has to be near a tipping point or phase shift for little things to matter. This ties directly into our exploration of The Remnant and the Pareto Principle: seemingly small percentages of people leading by example can have an outsized influence on the "trivial many," slowly building a trend for change which can "phase shift" at certain points, changing the entire cultural milieu and mindset in a short period of time.

That is, phase shifts do not have to be collapses; they can also be relatively sudden "awakenings" or positive transformations wrought by the informal leadership of The Remnant or by a technological innovation which rapidly replaces a less efficient technology. The messy, lengthy revolution launched by the printing press is a good example of the latter; the Web/Internet is an example of a new technology which enables entirely new distributions of knowledge and levels of interaction.

Some ideas are easier to express and understand than others. This stems from language being an ontological force in itself; language carries with it vast powers and equally vast difficulties of interpretation and ambiguity.

For instance, if I were to say the solution to all the problems listed above is to buy gold and a ton of rice, we can all understand the idea of not trusting paper money and a fragile supply chain of grain.

But if I say that how we identify a "problem" defines the "solution" we will accept, that is more difficult to grasp. The reason is that most of the assumptions we make in framing a "problem" are subconscious or deeply embedded in our cultural/intellectual worldview.

R.D. Laing, author of Politics of Experience, penned this prescient lecture in 1972, The Obvious, explained the inherent difficulty of understanding "the obviousness" of any "problem":

To a considerable extent what follows is an essay in stating what I take to be obvious. It is obvious that the social world situation is endangering the future of all life on this planet. To state the obvious is to share with you what (in your view) my misconceptions might be. The obvious can be dangerous. The deluded man frequently finds his delusions so obvious that he can hardly credit the good faith of those who do not share them.

What is obvious to Lyndon Johnson is not at all obvious to Ho Chi Minh. What is obvious to me might not be obvious to anyone else. The obvious is literally that which stands in one's way, in front of or over against oneself. One has to begin by recognizing that it exists for oneself.

The study of social events presents an almost insurmountable difficulty, in that their visibility, as one might say, is very low. In social space one's direct immediate capacity to see what is happening does not extend any further than one's own senses extend. Beyond that one has to make inferences based on hearsay evidence, reports of one kind or another of what other human beings are able to see within their equally limited field of observation. As in space, so in time.

Even in the most detailed investigations of small fragments of micro-history, in studies of families, one finds it difficult to get past two or three generations. Beyond that, how things have come to be as they are disappears into mist.

The human mind makes sense of the chaotic jumble of sensory experiences and internal mental states by assembling explanatory narratives—what we also call "stories." To the believer, the "story" "explains" how things work. In pre-scientific cultures, many such stories were not simply wrong but injurious. Thus we have cultures in which it is believed that pregnant women shouldn't eat much. While we in advanced economies like to think of ourselves as above this sort of "superstition-passing-as-causal explanation," we also have cultures today in which living animals are considered "things" more or less equivalent to inanimate rocks and economies which believe "the market" is always efficient and rational.

What if those narratives also contain hefty doses of injurious superstition? To those who see living animals as commodities, then extirpating them for financial gain is "obvious" and indeed "natural." To those who believe in the ontological (i.e. inherent or a priori) efficacy and rationality of "the market," then the pricing of the last ten wild tuna on Earth via the auction block is entirely "obvious" and "natural." The notion that the eradication of a species might have some value not calculated by "the market" is sacrilege and suppressed with the same fanatic fervor as any interfaith challenge to religious authority.

Humans are social animals because banding together by consent and bloodlines provides significant survival benefits over "going it alone." In its essence, politics is the granting of power to leaders for some benefit to those consenting to be led. The leaders must persuade consent or compliance, either by touting a persuasive narrative or creating a coercive system of punishment/terror.

The ultimate summary of politics is power. In lower animals, this boils down to power over reproduction (i.e. being able to improve one's chances of passing along one's genes via choice or coercion) and food. In humans, reproduction remains key (hence every despot acquires a harem and every official a mistress) but power also includes the various fruits of civilization such as wealth and wide-ranging political powers expressed through institutions such as religion, the state, etc.

In financial terms, imposing one's will via coercion/terror is a costly affair. Maintaining a vast gulag of prisons, secret police, domestic armies, etc., drains off a tremendous share of the national wealth, and the coercive state/Empire has a nasty habit of destroying or driving away many if not most of its most productive citizenry.

Thus the "natural selection" process of the coercive state (be it monarchy, oligarchy, state or Empire) weeds out the rebellious, the skeptical and the most productive, leaving the cowed unproductive or the sullen, willfully unproductive and a huge class of dependent drones ruled by a class of overlords with few limits on what they can skim from what remains of their economy.

The better choice is to persuade the people you wish to skim from to freely offer their consent and their compliance. This is best accomplished by creating a series of narratives in which your power (and the power of your class) is "obvious," "natural" and "beneficial." Thus we have cultures of caste in which the "high-borns'" privileges and power have been accepted as the "natural order of things." All the Powers That Be need do is maintain this narrative via whatever mediums are available (the pulpit, the media, etc.) and suppress or marginalize any challenging narratives as irrational, unnatural, representing the forces of Evil, counter to our sacred way of life, etc.

As an example in the U.S., we might consider the entire narrative of debt/credit. The idea of credit has been sold as a "benefit" for the average citizen; with credit, one needn't save up for five years to buy an auto, one can drive a new car out of the lot today and enjoy it for the five years it takes to pay it off in installments (debt/credit).

All narratives with political and thus economic consequences can be best untangled by this simple question: cui bono, to whose benefit? While credit "obviously" has some visible benefits to the borrower, the line between a borrower and a debt-serf can be thin indeed.

If we examine the profits generated by auto sales, we find that the profits generated by the credit/debt used to purchase the vehicle far exceed the profits made by manufacturing the vehicle. The same is true of housing and virtually all other goods.

So who benefits from an economy based on credit? Everyone, we are told; but it seems some benefit more than others.

Is there any more ideal system than one in which the vast majority of citizens are so heavily indebted that they have little time or energy left to question the system that has essentially enslaved them? Their high indebtedness generates a constant stream of heavy profits while their overworked, anxiety-ridden lifestyle ensures that political challenges to the Powers That Be will be stillborn or easily shunted aside as the ravings of cranks and doomsayers.

For one of the most powerful narratives in America is that we must always be positive and upbeat. One of the easiest ways to dismiss a critic in any setting is to label him or her a "doomsayer." "Just get with the program": that is, put your nose to the grindstone, make your debt payments and shut up.

Another powerful narrative with immense political consequences is the casting of 24/7 "entertainment" as a positive benefit to the masses. To be offered a cornucopia of distraction at any hour—what could be better? What could be better, indeed, for keeping a populace too distracted to question the "obvious" narratives which shape their compliance to debt-serf servitude?

This is the Politics of Experience: the presentation of a narrative, a context and a "problem" framed such that the "solution" richly benefits a self-serving Elite.

For instance: as public transit agencies and school districts face insolvency, the "problem" as presented by the public employee unions is that the stingy taxpayers are not providing these essential public services with sufficient funds to operate. The "solution" is "we need more money, so raise taxes."

If this is the only "problem," then why are requests for overtime pay, directors' salaries, the average monthly pensions of retirees, the length of service required to retire, explanations for why 80% of firefighters retire on "disability," etc., met with stony silence or angry resistance? Why are analyses comparing the labor costs of operating the systems today and 30 years ago suppressed or dismissed? Because the labor costs have shot up far faster than ridership, number of students, or the underlying economy; the Elite, in this case, the "high-caste" of public employees, has enriched themselves at the expense of the no-real-wage-increase-in-30-years public.

Any and all attempts to question the "obvious solution is we need more money" are suppressed, marginalized, denigrated or attacked because revealing the actual causes of the insolvency--over-reach by public/State employees--would topple the narrative which supports the Elites' control and power.

In a similar way, "the market" has achieved a quasi-religious status as the perfect arbiter of efficiency and rationality. Thus the last ten wild tuna on the planet will be priced on the auction block based on their scarcity. The value of that species to humanity as a whole and the ecology of the seas is not factored by "the market's" flawless efficiency and rationality.

Or consider a small tree frog that will be extirpated by the logging of its habitat. The small frog has zero market value; as a commodity, it has no value since nobody wants to eat it or turn it into a marketable product.

But what if the skin of this frog produces a film with anti-bacteriological characteristics that might be highly valuable to humanity? "The market" has no mechanism to assess this potential or future value.

Rather than being an "efficient" or "rational" machine, the market in these cases is a blind, irrational machine that reduces all planetary inputs to a type of scarcity-value gravel. If you happen to profit from the trade in that gravel, it's may well appear rational and efficient. But if you recognize all that the market failed to value, not just rationally, but in any way at all, then you might see "the market" as not just irrational but so out of touch with reality as to be psychotic.

Try getting that perspective into the Mainstream Media, and you'll discover that you're the one considered psychotic and out of touch with reality. That's "the politics of experience:" narratives which support Elites' power and privileges as "obvious" and "natural" are sustained, as are "entertainments" which distract and dilute questions like cui bono; all else is marginalized, dismissed, refused or rejected as a form of sacrilege.

R.D. Laing was a psychiatrist by training, and his understanding of the politics of experience flowed from his analysis of troubled families with "psychotic" or "insane" members. He found that in some cases, the family's "leaders" (the adults) had subconsciously selected one member of the family to bear the blame for the family's troubles and conflicts. This child was then labeled "rebellious," "uncooperative," "a troublemaker," etc., and as the child's resistance grew then they were viewed as a psychiatric case.

Laing found (along with Gregory Bateson) that when humans are given a narrative which runs counter to their own experience this disconnect forms a double-bind--an internal state of "no way out." At this point the human can slip into passivity or other states which are categorized as psychiatric "problems" to be treated with drugs.

This is not to say that all madness is essentially political, only that the resistance to irrational narratives is easily cast by those intent on preserving their own power as some sort of psychiatric "illness." The dominant narrative which supports the power structure cannot be allowed to be recognized as the "problem;" thus the beauty of a system in which rebellion, resistance or cui bono questioning can be cast as an "obviously" psychiatric "problem" to be "treated."

Those unable to be "processed" medically can be dismissed as "fringe" people unworthy of comment. Those who experience a double-bind between the supposedly "obvious" narratives they're expected to accept and their own internal experiences are given prescription drugs to ease their anxiety and depression.

Again, this is not to say that some of us do not suffer from chemical imbalances in the brain; many of us do, and for those, these psychiatric drugs are a godsend. But we must also be careful about what "problems" end up being "treated" by "solutions" which happen to be drug-based.

Thus we have evidence that children diagnosed as hyperactive responded positively to a lifestyle stripped of sugar, junk food, TV and video games. Imagine the immense reduction in profits if drugs, sugary snacks, junk food, TV and video games were no longer "consumed" by American children. Cui bono indeed.

The narratives that operate beneath the surface compress all of experience into a limited number of hammers; so when a nail resists, guess what happens? It gets pounded down. When you hold the hammer, that "solution" is "obvious."


Key concepts in this chapter:

explanatory narratives (intellectual frameworks)

scarcity-value

Just as our "solutions" are shaped by how we frame "the problem," our understanding of our world is shaped by a "politics of experience" created by our cultural milieu, education, mass media and government.

As noted in the excerpt from R.D. Laing above, the key feature of "the obvious" is its elusiveness. Thus we don't consciously formulate the notion that what we buy and own defines our "true self;" that notion is like air, everywhere around us and thus not in our conscious awareness.

"The politics of experience" is by definition not selected or consciously chosen; it is precisely the invisible assumptions we live by which are so unconscious that we cannot even recognize them as anything but "obvious" without great effort.

As an example, consider the work of author Douglas Rushkoff. Rushkoff's reply to an interview question on the consequences of ubiquitous marketing reveals how media/marketing has created an unquestioned "politics of experience" in which one's identity and sense of self is constructed almost entirely by what one buys:

Children are being adultified because our economy is depending on them to make purchasing decisions. So they're essentially the victims of a marketing and capitalist machine gone awry. You know, we need to expand, expand, expand. There is no such thing as enough in our current economic model and kids are bearing the brunt of that. ... So they're isolated, they're alone, they're desperate. It's a sad and lonely feeling. ...

The net effect of all of this marketing, all of this disorienting marketing, all of the shock media, all of this programming designed to untether us from a sense of self, is a loss of autonomy. You know, we no longer are the active source of our own experience or our own choices. Instead, we succumb to the notion that life is a series of product purchases that have been laid out and whose qualities and parameters have been pre-established.

As Laing also described, the past "politics of experience" is largely inaccessible to us for the same reason we cannot discern how unobvious our own "obvious" truly is: the assumptions were so deep and elusive that contempory accounts never even mention them, and thus histories are blind as well except by extrapolation of what was considered worthy of comment.

An excellent analogy to this problem can be found in the common Mississippi river barge of the 19^th century. So common was this mode of river transport that no one bothered to fashion a drawing of one or count them. They literally vanished without a trace simply because they were too ubiquitous to elicit notice. Recently a few representatives have been exhumed from the mud; these forgotten artifacts are our only evidence of what was once unremarkable but vitally important.

Thus is it difficult for us to register how drastically our experience has changed over time. What seems "normal" and "obvious" to us—the constant bombardment of marketing, the financial stress of over-indebtedness, the insecurity of employment, the reliance on powerful psychotropic prescription medications to "get through life"-- are actually artifacts of an obviously destructive set of assumptions and values.

Individuals pursue their livelihoods in this peculiar state of unawareness in which they are unaware of what they are unaware of, and unaware of the consequences of the "obvious" incentives and assumptions that underpin their sense of identity and seemingly "conscious" choices.

Consider a mortgage broker or salesperson. In the real world, their compensation depends on persuading a "consumer" (a word loaded with subtle assumptions and incentives) to take on more debt to acquire a good or service.

This individual is not consciously seeking to overburden another individual with too much debt, but this is the net result of what's "normal" and "obvious" in the salesperson "doing their job" and the "consumer" setting out to achieve what he/she has internalized as "happiness" or "success:" a bigger house, a nicer car, a faster computer, a trendier outfit, a top-notch personal trainer, etc.

As we explore the elusive qualities of our common "obvious" experience, we must differentiate between the mostly unconscious actions of most of us and the carefully plotted conscious actions of those seeking to influence our experience for specific gain.

For instance, most elected officials do not set out to be evil or to acquire wealth and power at the expense of others; most are well-meaning people who are attracted to the power of office but also to the notion of doing some good or serving their community.

Since running for office requires vast sums of money, they find that listening to those willing to donate large sums to their campaign makes sense. Once these lobbyists and representatives of the Plutocracy have aired their concerns and interests in various specifics, it only makes sense for the elected official to pay attention to their concerns.

And since the long-term consequences of satisfying the donors--national insolvency--is safely in the future, then it "obviously" makes sense to tend to the business at hand, which is getting re-elected and juggling all the competing demands of various well-funded interest groups.

The average voter--and how many citizens actually cast a ballot? Some 40% on average?-- has little interest in most of the complexities of governance, and so the elected official need not trouble themselves with their views other than auto-responses to the usual "noise" of "fringe" issues: cruelty to pets, some foreign policy imbroglio, etc.

Thus "just doing my job" and pursuing "what's obvious" can lead to the reinforcing crises we now face. In the politics of our collective experience, we're all simply doing what is "obvious" as officials, employees, consumers and voters.

For example: the first project of "the Powers That Be" is to deny the existence of The Powers That Be via a sustained propaganda campaign touting the great opportunities, justice and equality of our society and economy. The goal is to shape our interpretation of our experience into a politically pliable complacency which leaves the powers and influence of the Plutocracy safely accepted as "natural" and thus unquestioned.

The "politics of experience" which operates at a very subconscious level includes all the myths, incentives and assumptions which form our worldview.

Here is another example: "the rugged individual" myth that is core to American society has many positive elements--for instance, the ideal of individual responsibility for one's life and actions--but it also works to mask political and financial overreach by the plutocracy/Powers That Be by cloaking large-scale movements of vast profits and power as the disconnected workings of unrelated individuals.

Recall how the "politics of experience" of the subprime mortgage meltdown was presented by the Mainstream Media as the fault of irresponsible/greedy subprime borrowers. Then, as the U.S. government funneled hundreds of billions of dollars in bailout funds to save the Plutocracy from losses, the full extent of the corruption, greed, recklessness and fraud within the investment banking/mortgage/finance complex was revealed.

The "politics" behind that interpretation was revealed as a clever masking of the true cause: a Plutocracy operating without regard for laws or regulations and unhindered by political oversight. Please read Fiasco: The Inside Story of a Wall Street Trader and Greed, Fraud & Ignorance: A Subprime Insider's Look at the Mortgage Collapse for fuller accounts of the chicanery, greed and blatant disregard for law and risk.

The Mainstream Media (MSM), a highly centralized, corporate-owned structure, is a key player in shaping the politics of experience, as described in Manufacturing Consent: The Political Economy of the Mass Media. I have covered this topic many times, most recently in Our Schizophrenic Media and Garbage In, Garbage Out.

One key concept/mechanism in the politics of experience that we need to understand is how simulacrum are consciously presented as the "real thing" to protect the Elites' power and privileges.

Consider how the word "capitalism," with its powerful invocations of free markets, capital freely risked, transparency, entrepreneurship, etc., is constantly deployed to mask crony capitalism, which fundamentally undermines all the key elements of true capitalism.

Thus the crony capitalism on display when stupendous government bailouts are sunk into a handful of Plutocracy strongholds is masked by explanations that "we're doing this to save capitalism."

Capitalism does not require the State to borrow a trillion dollars and throw it into the coffers of the Plutocracy. What is being presented as "capitalism" by the Plutocracy and its MSM minions is in fact only a simulacrum of capitalism, a sham representation decorated with just enough shreds of resemblance to the real thing to fool the unwary.

Another key job of the MSM is to distract the populace from the political realities with endless entertainments, just as the Roman Empire provided the citizens of Rome with free bread and fully 175 days a year of free public entertainment.

So our national "politics of experience" serves three explicit goals:

1. Provide a superficially plausible simulacrum of justice, opportunity, equality, capitalism, good governance, etc., so the unskeptical/credulous will comply with the wishes of The Powers That Be and blame themselves (or a carefully designated "other group") for whatever is awry in their communities.
2. Offer up a cornucopia of compelling distractions via mindless "entertainments" and a broadcast media presenting a nonstop diet of "crimes, cops and docs" and a simulacrum of meaning and authenticity via social networks. (Please see my book Weblogs & New Media: Marketing in Crisis for more on the superficiality of social networking. )

   Lastly, offer up a politically potent entertainment of divisive finger-pointing and rancor which works to create superficially appealing "us and them" ideologies.

3. Construct a simulacrum of authenticity bound and defined by consuming, buying and presenting an attractive avatar in the media, i.e. a simulacrum of authority, "coolness" or celebrity which creates a sham Infrastructure of Self in a politics of experience dominated by hollow social networks, consuming/shopping and celebrity worship.

Since the key goal of the marketing/mass-media complex is to instill a pervasive, ubiquitous sense of insecurity in each "consumer" (how else to render someone susceptible to buying some needless item or service than make them feel unworthy/uncool without it?), then it is predictable that the consumer responds by constructing an Infrastructure of Self of various brands and symbols of identity (tattoos, certain bands/brands of music, etc.) which is an absurd simulacrum of authentic identity.

An authentic identity can only be formed by actions and deeds based on coherent internal beliefs--what was once known as strength of character--and internal states (faith, rules of conduct, self-discipline, etc.) which are inaccessible to marketing.

The Web's potential for propagating knowledge, innovations and practical solutions via self-organizing networks is visible to all. (I mentioned self-organizing networks in Chapter One in describing how the Plutocracy was not a conspiracy or secret club as much as a group bound by the same self interests.) That the Web enables people to self-organize in ways which were simply not possible in a world limited to telephones, centralized print and broadcast media and physical travel is self-evident.

But such ephemeral self-organizing networks vary in utility and duration. Lacking the bonds created by meetings and organizations in the real world, most such collections have very limited lifespans and results.

Nonetheless the political leverage offered by networking technologies (the Web, SMS-mobile phone texting, wikis, blogs, etc.) is already so powerful that repressive central States quickly disrupt, jam or shut down these networks when their power is threatened by popular insurrection.

The profitability and reach of such networks has not been lost on the global media empires, which have quickly taken control of the commercial social networks. But their dreams of windfall exploitation/untold profits may be misplaced, as these commercial social networks are largely Potemkin Villages, simulacrum of authentic networks largely inhabited by zombie "members" who have long since dropped out of active membership for the simple reason that the networks create little meaningful content or community.

The "meaning" derived from these corporate social networks is achieved by online avatars which project a simulation of "self-worth" via popularity (how many "friends" do you have?), coolness (more "valuable" than character or accomplishment in a media organized to sell something 24/7), authority (how many university degrees do you have?) and sham "authenticity" (what do you own or project which is in scarcity or which has yet to be co-opted by marketers?)

In a peculiar distortion of friendship and shared interests, these corporate social nerworks are perceived by their members and owners alike as marketing vehicles: one ceaselessly promotes one's band or "brand" and uses one's page to organize marketing campaigns. The "value" of one's contacts is in the commercial "networking" they enable; those with large numbers of "friends" (the ultimate inauthentic simulacrum) can push more "product" and therefore they have more "value" than someone with actual authentic friends in the real world, who as a consequence has neither the time nor desire to construct a counterfeit "self" in a counterfeit "community" of counterfeit "friends."

These sham simulacrums of community and friendship appeal to the population most vulnerable to the pervasive insecurity implicit in all marketing: teens. But as anyone who is a teen or knows teens or who has teens in the household knows, the inauthenticity and artifice of these social networks soon reveals itself and the teens slip into zombie membership, visible on corporate records but no longer engaged in the attempt to satisfy authentic longings with artificial constructs. (Yes, teens do use these networks to communicate with their real-world friends, but this is an extension of texting and the phone, a reflection of their existing network rather than some new community.)

If we examine social networks' politics of experience, we might conclude they are akin to South Seas Cargo Cults which sprouted up after World War Two ended and the nearly supernatural technology and wealth brought by the Americans to remote islands stopped coming.

In a painfully impossible hope of communicating with the vanished Aliens, Cargo Cult members painted rocks to look like radios (simulacrum radios) and called for the ships to return. Social networks designed for profitable marketing are the equivalent of stone radios; true friendship and community cannot be "called forth" by simulacrums and avatars. The social and spiritual poverty of such counterfeit social structures starkly reveals the internal poverty of our collective experience.

I will address the positive possibilities of the Web in Section Two.

Propaganda as Conscious Manipulation of the Politics of Experience

Though "propaganda" does not fully cover all that I mean by the politics of experience (which includes assumptions which are largely subconscious and subliminal, i.e. "the obvious"), it is nonetheless extremely important to understand how education actually makes one more vulnerable to carefully crafted marketing/propaganda. A classic text on the subject is Propaganda: The Formation of Men's Attitudes by Jacques Ellul.

Book reviewer Alexei Proussakov summarized what we need to look out for in his Amazon review of Age of Propaganda: The Everyday Use and Abuse of Persuasion:

Peoples' data-processing capabilities are limited. In the information-dense world people are unable to critically review all the information they receive. In order to be adequate to the situation, they resort to so-called heuristics, simple cues or rules for solving the problem. Heuristics are based on peoples' previous experience in similar situations.

Although relying on heuristics is sometimes a useful way of dealing with the onslaught of the decision-rich environment, basing our decisions primarily on heuristics can present some problems. First, heuristic cues that we possess may be false. Furthermore, a rule may be appropriate in certain situations but be misapplied in others. Another serious problem is that heuristics can be easily faked and manipulated. Knowledge of heuristics enables propagandists to control peoples' course of action.

The authors did a research of propaganda techniques and set four stratagems of persuasion:

1. You create favorable climate for the message (called pre-persuasion). You subtly outline what picture has to be drawn in the end. Here you decide what way thoughts and perceptions of the audience will be shaped and channeled. Having established right basis for further discourse you secure the results you seek. At this stage you should identify some statements as axioms, i.e. "what everyone takes for granted" and "what everyone knows". You attribute labels (positive or negative) to objects of further discussion, put black-or-white colors in non-disputable way. You use generalities to depict the situation - they are usually so ambiguous that you may change their meanings in the future. You use rumors and gossips.
2. You create a "source credibility", i.e. establish a favorable image in the eyes of the audience. The message must come from "experts" or "unbiased" and, of course, personally attractive communicators. Try to switch on the self-persuasion mechanism of the audience.
3. You create a message that focuses the target's attention and thoughts on exactly what you want them to think about. Research has identified at least five conditions that are likely lead to heuristics. Heuristics are most likely to be used when people do not have time to think carefully about the issue, when they are so overloaded with information that it becomes impossible to process it fully, or when they believe that the issues at stake are not very important. Heuristics are also used when people have little other knowledge or information on which to base a decision and when a given heuristics comes quickly to mind as they are confronted with a problem.
4. You create an emotion of the target that will help you channel thoughts of audience in right direction. Fear appeals are most effective when they raise high levels of fear and suggest a doable and effective response (the authors also explain why sometimes fear does not work). Guilt: once we are filled with guilt, our thoughts and behavior are directed towards ridding ourselves of this feeling that's where propagandists take advantage of us. Feeling of obligation and indebtedness: large initial request and immediate concession by the requester invokes the norm of reciprocity-- we concede. Feeling of commitment based on our desire to be self-consistent.

For example, to "soften up" the target you make him involved in a much smaller aspect of the action. This serves to commit the individual to "the case". Once people are thus committed, the likelihood of their complying with the larger request increases. Another way is to show uniqueness of the offer (scarcity sells). Use the "minimum group paradigm": You are on my side (never mind that I created the terms); now act like it and do what we say.

Note how the concepts of "what's obvious," simulacrum and "framing the problem defines the solution" seamlessly fit into this cogent description of propaganda's mechanisms.


Simulacrum: From Con Game to Full Spectrum Defense of the Status Quo

Let's begin by repeating this definition of simulacrum: an insubstantial form or semblance of something. The reason why someone would construct and deploy a simulacrum is (shall we risk this word?) obvious:

A simulacrum is used to mask or distort a reality which, once revealed, would cause the target audience to act in ways which would not serve the interests of those deploying the simulacrum.

The spectrum of simulacra runs from simple sidewalk confidence games to highly elaborate global propaganda campaigns.

In a simple con game, the simulacrum of a "fair game of chance" (or "open market") is presented to the target audience to persuade them to put their money into what is the opposite of fair and open: a setup carefully rigged to transfer the target's wealth to the simulacrum purveyor. In other words, the simulacrum offers the illusion that the game/market might benefit the target, while the reality is the game has only one end-state: it only benefits the con-man/purveyors at the expense of the targets/"marks."

A con game is a willful deception/distortion of an authentic game of chance which masks the reality that the game serves only the interests of its owners. A simulacrum of a fair game of chance coupled with slick marketing/propaganda ("See that guy? He just won a hundred bucks!") is an effective strategy to establish the necessary confidence/trust of the target/mark. ("Con" comes from confidence, as the con game's main challenge is to win the confidence of a sceptical mark/target).

For a context larger than the sidewalk con game, consider the stock market and its elaborate simulacrum of "open markets," "sound ratings" and "expert investment advice." The "mark"/target audience--the tens of millions of citizens with money in retirement accounts and similar funds--have suffered stupendous losses in the past decade by trusting "the market," the ratings promising low risk and the "expert investment advisors" who counseled "stay fully invested for the long-term" and "buy on the dips."

Every one of these actions required the confidence and trust of the marks, and every one served the interests of Wall Street rather than the interests of the marks. Every one enabled Wall Street to maximize its profits and transaction fees using the marks' own money, and every one provided Wall Street with maximum opportunity to sell losing positions to the marks and transfer the marks' wealth to Wall Street.

Many of the exotic mortgages (during the simulacrum era, these were known as "exotic;" now that reality has broken through the illusions and distortions, they're known as "toxic") were also first-order cons: a simulacrum of a legitimate mortgage was presented, along with simulacrum of supporting documents, in order to fleece the unwary mortgage holder/ home buyer into a transfer of wealth from the mark (both the holder of the mortgage and its eventual buyer in the global mortgage-backed securities market) to the con owners.

(That a few of the marks managed to dump their piece of the con onto "greater fools" before the game folded only enhanced the simulacrum of self-interest required to persuade the marks to play.)

A persuasive simulacrum offers many advantages, hence the great number of examples. Consider seduction: the male offering a simulacrum of love and enduring affection (tender attention, flowers, etc.) gains sexual gratification should the female find his simulacrum persuasive and perhaps even passes on his genes should the female mark become pregnant.

The crooked construction contractor creates a plausible simulacrum of legitimacy--business cards, well-worn tools, perhaps even phony references provided by confederates--in order to persuade the homeowners to sign a contract and put money down for a job which will never be started.

A worthy simulacrum of productive work can enable an artfully lazy worker to gain the same benefits enjoyed by his/her truly productive colleagues.

The simulacrum of prestige offered by a counterfeit Rolex watch is solidly in the self-interest of the person buying it, hence its appeal to marks. The buyer of a counterfeit pharmaceutical, on the other hand, may be paying full price for a worthless simulacrum counterfeit medication; the replacement of a legitmate label and product with facsimiles offers huge rewards to the purveyors and nothing to the unwary buyer.

In each of these cases--the con, the seduction, the counterfeit--the potential gains far outweigh the nominal cost of creating and presenting the simulacrum. This hugely imbalanced cost-benefit ratio explains the ubiquity and prevalence of cons, counterfeits and seductions in all cultures and eras.

The key defenses against simulacra are knowledge and experience. Thus the 30-year old woman with painful personal experience of being seduced will be far more difficult to con/seduce than an inexperienced, insecure 20-year old woman. What Wall Street fears is not regulation (which can be watered down with subsequent lobbying) but a dearth of new credulous marks willing to believe that Wall Street works to their benefit in a fair and open market.

But simulacra offer a much broader spectrum of deception beyond seductions, counterfeits and con games; the great power of the concept lies in its unification of a tremendous range of distortions, deflections, deceptions, illusions, masks, obfuscations and inauthenticities presented as authentic.

Within our analysis of the politics of experience, the fundamental mechanism simulacra provide is what I term full spectrum defense of the Status Quo. Such simulacra can be found in all time scales and settings, from marriages to nations.

Thus we find simulacrum not just in willfully conceived confidence games but in good-faith efforts to sustain or "reform" failing institutions. A partner who is fundamentally indifferent to the marriage will consent to counseling--in the case of those who have already given up, a simulacrum of the procress of saving the marriage--not just to appear willing to save the status quo, but perhaps to sustain their own self-image as one who "tried."

Managers and politicians will go through the process of "reforming" failed, corrupted institutions, not with the intention to deceive so much as to "play the part" they feel is demanded of them, even if they know the reforms are superficial and will not dent core structural problems, much less resolve them.

Thus simulacrum are designed and supported for a number of reasons beyond outright deception; their key feature is that they protect the self-interest of the participant and deflect challenges to that self-interest. Simulacrum can be designed to deflect criticism ("see, we are trying"), distort an attempt to replace the status quo with something much less beneficial to those controlling the market ("beware, socialized medicine is evil"), or even further an ultimately self-destructive self-delusion ("serving this Master is furthering my own interests.")

Politicians and marketers, of course, depend entirely on simulacra of "value" and persuasion/propaganda to further their own interests, but the same can be said of the entire Status Quo. Thus we find media pandering to their target audiences via simulacrum "issues" to serve their own interests (selling advertisements and subscriptions) while prudently avoiding any penetrating critiques of their audience or advertisers.

The greatest simulacra are designed to foster the illusion that a system which benefits an Elite over the common good is actually serving the common good. This is the primary tool of persuasion of the State (all government at all levels) and entrenched Elites like the medical and legal establishments.

Stated another way: as the Elites' interests diverge from those of the society as a whole, then they construct elaborate simulacrums to win the society's compliance and complicity (that is, the self-aggrandizement of "I don't care, I got mine").

For example, though the actual design and contracts for the construction of a massive State project will have already been decided behind closed doors, a simulacrum of "public participation" will be presented to foster the illusion that the process was transparent and in the public interest. A series of superficial "town hall" meetings is generally enough to mask the reality--an inside job all the way--with a soothing simulacrum of "democracy in action."

The same can be said of corporate annual meetings, show trials, and other simulacrum of participation, fairness, and decisions supposedly made for the common good.

A key goal of all systemic simulacra is the disruption of common-sense assessment and decisionmaking: what is often called the OODA loop: (observation, orientation (what I would term identifying contexts), decision, action.) If every step can be confused, obscured, distracted, distorted and deflected via disinformation, propaganda, deceptive framing of the problem, etc., then the process of change itself will be crippled. This is a key goal of all State/Plutocracy simulacra: by crippling all adaptation and transformation, the Status Quo is defended.

The great irony, of course, is that every organism and system must adapt to changing circumstances if it is to survive, much less prosper; and so the rigid defense of the Status Quo against all challenges renders it brittle and increasingly unstable to unstoppable devolution/phase shift/collapse.

This irony is perhaps best reflected in the Elites' self-reinforcing mechanism of exempting themselves (both the private capital-Plutocracy and the State functionary/public union Elite) from the very market forces which impose adaptation, creative destruction and evolution. The irony is deepened by the Plutocracy and State's alleged worship of "the free market"--the very market each exempts itself from at every turn.

Thus our first step in parsing the politics of experience will always be to ask cui bono of all participants, and to dig through the simulacrum (both the illusions of authenticity and the disruptions of OODA loops) to the underlying realities.

The second step will always be to realize that complacency and complicity with the status quo will almost always be self-serving for participants, even those with little to gain from supporting the status quo. Why is this so? Losing whatever crumbs one does receive by challenging the owners of the cake will always be riskier than remaining passively compliant and complicit.

Put another way: maintaining the security of the known (status quo) is inherently less risky than embarking on a new path because the outcome is unknown; while change might bring improvements, it might also result in catastrophy: losing even a very limited security would be far worse than passively accepting the status quo. We might even posit that risk aversion is a naturally selected trait.

Risk-aversion certainly explains why people stay in jobs and marriages they loathe--the risks of change are perceived as more dangerous than the suffering of staying put. This mechanism works on individual and societal levels alike.

If this is so, then transformation/change becomes inevitable only when the supposed security of the status quo gives way--when, for instance, the State becomes insolvent and its "security" is revealed as illusory. At that point it will become obvious that change is coming one way or the other and so the "low-risk" option of passive complicity is no longer available.

Thus open insurrection only occurs when the crumbs have been swept away, and there is no reason left to support the status quo. This is why the State's greatest power is distributing crumbs widely enough that few will be served by challenging the State's growing share of national income and its steadfast protection of the Plutocracy and its own elites. The ideal situation for the State (and thus the Plutocracy) is every family in the nation receives a payment from the State and abundant free entertainment (bread and circuses).

The State will only fall/devolve when it can no longer fund this universal largesse or the largesse is paid in a currency which has lost all value.

Both circumstances were present in the devolution of the Roman Empire, and so let us examine the forces at work in the patterns, waves and cycles of human history.

Key concepts in this chapter:

Infrastructure of Self

self-organizing networks

full spectrum defense of the Status Quo

It seems self-evident that like Nature (sunspot cycles, the seasons, etc.) history would lend itself to cycles, but there are two basic critiques of historical cycles:

1. Cycles are essentially arbitrary, an order extracted from random data to support a priori claims (i.e. finding data to support pre-selected positions)
2. Without an explanation of the causal mechanisms which power the cycles, then cycles cannot be predictive

The first argument has the strength of skepticism but the weakness of forced obscurity. Anyone looking at displays of prices over time notices patterns; the question is whether they are regular enough to suggest underlying causes are at work.

For example, if we discern cycles of crop prices, we might look first at crop yields and population growth, that is, supply and demand. We might next profitably look for regular variations in weather (rain/drought, warm/cool, etc.) which might explain why crop yields rose or fell in what appear to be cycles.

Taking the investigation one step further, we might look at the sun's energy output and the orbital variations in the planet's rotation around the sun. And indeed, we would find an imperfect but discernable cycle of sunspot activity that correlates to weather and crop yields.

The more inputs/feedback loops there are in a system, then naturally the more complex the interactions between all the "moving parts" will be. Nonetheless, within the "noise" of weather data various long-term patterns do emerge.

So if we are positing cycles in human history which we claim predictably repeat, what are the causal mechanisms for these cycles?

1. Environmental/demographic over-reach. Like all other organisms, humans tend to fill every available niche to the maximum carrying capacity of that environment. This cause is explored in The Great Wave: Price Revolutions and the Rhythm of History . In essence, humans expand their population and resource extraction right up to the high-tide line. Then, when the tide recedes--as it inevitably does in droughts and other weather patterns, resource depletion, etc.—humans are suddenly faced with starvation/pandemics and endless conflicts over remaining diminishing resources.
2. State over-reach. States tend to expand whenever the opportunity presents itself as the spoils of conquest (not necessarily of territory but of markets) outweigh the costs. States also relentlessly expand their share of the national income via higher taxation.
3. Plutocracy over-reach. As the state expands, the Plutocracy leverages its growing wealth into greater power over state functions. With no natural limits on its power or share of the national income, the Plutocracy inevitably over-reaches, taking so much of the national income and wealth that the middle class, the backbone of the state's tax revenues and support, breaks down. Caught between the pincers of ever-more onerous taxes and the state-granted privileges of the Plutocracy, the middle class is driven into penury and insolvency.
4. The four-generation cycle of forgetfulness. As individuals, we tend to truly trust only what we have experienced directly or heard directly from parents and grandparents. As a result, the follies of excess and over-reach that caused declines or collapses in previous generations are forgotten in the passage of four generations, or roughly 80 years. Even cultures with written histories exhibit this pattern. Please read The Fourth Turning for more on this topic.
5. Marginal returns. Expansions run out steam for many reasons, but exhaustion of resources and increasingly marginal returns on investment are proximate causes.
6. Illusion of incremental change. As trends run out steam and reverse course, the state and Plutocracy respond with incremental changes (simulacrum of fundamental change) which they hope will reverse the decline without affecting their power, wealth and privilege. Alas, merely adjusting the parameters in a failing system is not enough to rescue it from collapse.)

Once the costs of Empire/expansion rise above the value of the spoils gained, the state is caught between the demands of its ever-growing army of bureaucrats and dependents for higher tax revenues and the demands of the Plutocracy for greater tax relief and more privilege.

As individual leaders within the state are inevitably beholden to sponsors in the Plutocracy, such appeals cannot be denied. Given the inevitable rise of state powers and taxation, the leaders are loath to cut either their powers or their power base--the bureaucracies and dependent citizenry that both feed on rising tax revenues.

As a result, the relatively powerless but productive middle class is squeezed for more taxes to spare the Plutocracy and those dependent on state largesse from any pain. This is the inevitable result of state and Plutocracy overreach.

In an effort to forestall the collapse of its middle class while still increasing revenues, the state inevitably turns to two mechanisms: borrowing vast sums from foreign lenders and debasing the currency to create the illusion of increasing revenues/money supply.

Just as inevitably, the state eventually defaults on its foreign debt, and the currency collapses in value and is replaced with a new "good money" currency. In the decline/collapse phase, the impoverished middle class, a powerless underclass and a recalcitrant Plutocracy do battle for the diminished resources and state powers.

In cases such as the French Revolution, the Plutocracy is overthrown, however briefly, and replaced with a "revolutionary" ascendant class of political plutocrats. In cases such as the American Revolution, the middle class joins with enlightened segments of the Plutocracy to achieve a more balanced state structure. The Plutocracy agrees to these limits not out of selfless noblesse oblige but out of a long-range understanding that political and financial stability serves its own interests.

Increasingly Marginal Returns Lead to Collapse

One of the structural impediments to fashioning a true prosperity from the ashes of the bogus prosperity now imploding is marginal returns and the illusion of incremental change, two key topics I have covered in Marginal Returns Trigger Implosion , The U.S. Economy: Increasingly Marginal Returns (2009), The Seductive Illusion of Incremental Change (2008) and Incremental Change and Collapse.

Author/thinker Jeremy Rifkin describes this mechanism extremely well in his fascinating book The Hydrogen Economy. He illustrates the concept on a global scale by using the Roman Empire as an example.

Rome's early conquests yielded huge returns on "investment": large tracts of fertile cropland, significant treasure, productive populaces, etc. But as time progressed, more and more of the Empires' wealth flowed to the citizenry of Rome, and conquests of distant lands such as Britain yielded less and less return; garrisoning these distant territories began costing more than they produced.

Eventually even holding onto the now-exhausted croplands and restive populations exceeded Rome's dwindling wealth, and the Empire collapsed. There are many ways of accounting for empire-collapse, be it Roman or Mayan, but certainly "marginal returns" describes one element.

Here is how Rifkin applies the concept to U.S. farming practices:

An apt summary of the principle can be found in the ancient Chinese saying, "the journey of a thousand li starts with a single step." We all know small changes can eventually make profound changes in a system or person's life. For instance, lose a pound a week and in a year one has lost 50 pounds. As a society, increasing the efficiency of buildings and homes, one at a time, can add up to stupendous savings of energy and money.

The illusion is in the happy story that incremental changes will fix a fundamentally broken system. If a person doesn't profoundly change their understanding of self, diet, nutrition, self-image, identity, marketing, exercise and discipline, then the likelihood of incremental changes in their lifestyle producing profound long-term results is unfortunately low. The same can be said for a wastrel, profligate economy that wastes energy on a vast scale or an economy addicted to cheap, abundant credit.

In systems analysis, incremental change is likened to adjusting the parameters of a system. But as Donella Meadows outlined in her seminal paper, Leverage Points: Places to Intervene in a System (Sustainability Institute), adjusting the parameters of a system has limited effects. What this means is that fiddling around with "reforms" like increasing the fee paid by Medicare recipients by $10 will never make Medicare financially sustainable.

As an example of how the forces discussed above work in the real world, consider:

Food Shortages, Rising Prices, Stagnant Wages: Welcome to the 13th Century (first published on www.oftwominds.com on June 23, 2008).

Human history is not just a chaotic cacophony; if we pay attention, we observe rhythms and structures. The reason is as obvious as it is profound. Like all species of life on earth, humanity has been structured/selected via complex adaptations to survive and reproduce within various ecological niches. That our social structures and our histories share certain characteristics over historical time is common sense.

History, like an individual, is unique even as it shares characteristics with previous eras. Without studying history, we are prone to both arrogance and insecurity. Unaware of the past, we proudly reckon we've gone beyond the reach of cyclical history; and then, when the cycle turns and we are adrift and fearful, then we feel inadequate to the task of righting the sinking ship.

History properly studied renders us humble about our ability to control nature and events, and confident that we too can survive bad times.

Which brings me once again to The Great Wave: Price Revolutions and the Rhythm of History by historian David Hackett Fischer (recommended by reader Cheryl A., who kindly sent me a copy of the book.)

In Fischer's well-documented view, there is a grand cycle of prices and wages that turn on the simple but profound law of supply and demand; all else is detail.

As a people prosper and multiply, the demand for goods like food and energy outstrips supply, causing eras of rising prices. Long periods of stable prices (supply increases along with demand) beget rising wages and widespread prosperity. Once population and financial demand outstrip supply of food and energy--a situation often triggered by a series of catastrophically poor harvests--then the stability decays into instability as shortages develop and prices spike.

These junctures of great poverty, insecurity and unrest set the stage for wars, revolutions and pandemics.

It is remarkable indeed that the very conditions so troubling us now were also present in the price rises of the 13th, 16th and 18th centuries. Unfortunately, those cycles did not have Disney endings: the turmoil of the 13th century brought war and a series of plagues which killed 40% of Europe's population; the 16th century's era of rising prices tilled fertile ground for war, and the 18th century's violent revolutions and resultant wars can be traced directly to the unrest caused by spiking prices.

(The very day that prices for bread reached their peak in Paris, an angry mob tore down the Bastille prison, launching the French Revolution.)

After a gloriously long run of stable prices in the 19th century--prices were essentially unchanged in Britain between 1820 and 1900--The 20th century was one of steadily increasing prices. Fischer takes great pains to demolish the ideologically appealing notion that all inflation is monetary; the supply of money (gold and silver) rose spectacularly in the 19th century but prices barely budged. In a similar fashion, eras of rising prices have seen stable money supplies. Yes, monetary expansion can play a part, but Fischer has done his homework, and population growth is a far stronger correlation than money supply.

Monetary inflation can lead to hyperinflation, of course, but there are always mitigating factors in those circumstances. The long wave is not one of hyperinflation but of supply and demand imbalances undoing the social order.

Americans are inherently suspicious of anything that seems to threaten constraint of the American Will or Dream; thus it is not surprising that cycles of history are largely unknown in the U.S. As Fischer explains:

This collective amnesia is partly the consequence of an attitude widely shared among decision-makers in America, that history is more or less irrelevant to the urgent problems before them.

Fischer notes that he describes not cycles but waves, which are more variable and less predictable. (Surfers know to count waves, as they tend to arrive in sets.)

Is the sudden rise in the price of oil unique? Not at all. Energy in 1300 was firewood, and as Fischer relates, the cost of energy skyrocketed then, too:

In England from 1261 to 1320, the price of firewood and charcoal rose faster and farther than any other commodity. Close behind the soaring cost of energy came price-rises for food-stuffs of various kinds--particluarly for grain, meat and dairy products.

Talk about being ripped from the headlines: this describes our current situation remarkably well.

In response to this great rise in prices of essentials, both commoners and governments debased the currency. In their day, this meant shaving the edges of coins, or debasing new coins with non-precious metals. The debasement was an attempt to increase money to counteract the rise in prices, but it failed (of course). Every few decades, a new undebased coinage was released, and then the cycle of debasement began anew.

Just as insidiously, wages fell:

But as inflation continued in the mid-13th century, money wages began to lag behind. By the late 13th and early 14th centuries real wages were dropping at a rapid rate.

Hmm--sound familiar? Now guess what happened next:

At the same time that wages fell, rents and interest rose sharply. Returns to landowners generally kept pace with inflation or exceeded it.

This growing gap between returns to labor and capital was typical of price-revolutions in modern history. So also was its social result: a rapid growth of inequality that appeared in the late stages of every long inflation.

And what happened to government expenditures? It's deja vu all over again--deficits:

Yet another set of cultural responses toinflation created disparities of a different kind: fiscal imbalances between public income and expenditures. Governments fell deep into debt during the middle and later years of the 13th century.

Oh, and crime and illegitimacy also rose. Fischer summarizes the end-game of the price-rise wave thusly:

In the late 13th century, the medieval price-revolution entered another stage, marked by growing instability. Prices rose and fell in wild swings of increasing amplitude. Inequality increased at a rapid rate. Public deficits surged ever higher. The economy of Western Europe became dangerously vulnerable to stresses it might have managed more easily in other eras.

And there you have our future, writ large in the 13th, 16th and 18th century price-revolution waves which preceded ours. It is hubris in the extreme to think we have somehow morphed into some new kind of humanity far different from those people who tore down the Bastille in a great frustrated rage at prices for energy and bread they could no longer afford.

It is foolish to blame "speculators" for the rise in food and energy, when the human population has doubled in 40 years and the consumption of energy and food has exploded as a result. Yes, technology in the form of the Green Revolution enabled vastly greater yields per acre; and yields in many places can still be increased with fertilizers, improved seeds and so on.

But all of this was the result of cheap, easy-to-pump, readily available oil. All the miracles resulted from cheap oil, and now that it's gone--yes, yes, there is more, but it's not cheap or easy to pump--then we have to replace it with some other energy source.

But petroleum and natural gas are wonderfully adaptable energy sources, handy for making fertilizer, plastics, and other chemicals as well as for fuel. Both are readily stored and possess very high energy densities. Yes, Lithium-ion batteries also have a high energy density, but it isn't a matter of drilling a hole and complex lithium-ion batteries gush out. It takes tremendous energy and technology to fashion lithium-ion batteries, and as a result they're expensive.

If the market responds to the oil price-revolution with sufficient verve, capital and innovation, perhaps a rich brew of petroleum replacements will appear in mass production. But there is a peculiar feedback loop at work; there has to be enough energy on hand to build this new infrastructure of solar-cell factories, algae-to-biofuel plants and all the rest. If we consume all the cheap oil in a vain attempt to maintain the status quo, then the replacement becomes ever more costly. And then we have a price-revolution on our hands which looks eerily like the ones which swept Europe in the 13th, 16th and 18th centuries.

So where does this leave us? In Dude, We Are So Doomed (oftwominds.com), I noted the intersection of four long-term cycles (waves), which suggest that the era from the present (2009) to 2021 will be troubled indeed, and may result in a war, revolution or equivalent re-ordering of U.S. society and perhaps the world.

It doesn't take much thought to anticipate the post-cheap-petroleum era might be fraught with risk and turmoil as the transition--messy and unpredictable in some ways, but predictably messy in any event--takes place. Based on the history so painstakingly assembled by Fischer, we can anticipate:

--Ever higher prices for what I call the FEW Essentials: food, energy and water.

--Ever larger government deficits which end in bankruptcy/repudiation of debts/new issue of currency.

--Rising property/violent crime and illegitimacy.

--Rising interest rates (by a lot, not a little).

--Rising income inequality in favor of capital over labor.

--Continued debasement of the currency.

--Rising volatility of prices.

--Rising political unrest and turmoil (see "Insurrection" and "Revolution").

Chapter Eleven: Squeezing the Middle Class

As noted above, the Roman Empire's decline can be traced to a variety of causes. But we can summarize them collectively as the middle class being squeezed to death by the over-reach of the state and its Plutocracy/Elite managers.

Stated another way: as the Elites' interests diverge from those of the society as a whole, the middle class is caught in an economic and political vice between the state and its "powers behind the throne" Plutocracy and the large (and politically dangerous) underclass dependent on the largesse of the state. As each class (the Plutocracy and the class of less productive citizenry) become ever more dependent on the state's power and revenues for their privileges and entitlements, they demand the state's share of national income expand at the expense of the middle class.

Since the Plutocracy and the underclass both need the state's power (to exclude the Elites from service or taxes) and revenues (to fund "rights to entitlements"), they will fight ferociously and ceaselessly for their share of the dwindling national income. The middle class, distracted by the pressures to remain productive in a declining economy, have neither the time, will, capital or organization to match the upper and lower classes' desperate squeezing.

As a result, the middle class loses the political battle and either opts out (what I call Voluntary Poverty (oftwominds.com) or simply collapses into penury/poverty, joining the underclass.

It is important to refute one of the state's primary emotional points of leverage in demanding an ever-larger proportion of national income: we need this to help the poor. A close examination of the roughly $3 trillion Federal budget and the $1.5 trillion budgets of local government reveals that programs which directly alleviate the direct consequences of poverty such as hunger and lack of shelter (food stamps, now called SNAP and Section 8 housing vouchers, for example) are essentially trivial percentages of all government outlays.

For instance, the entire food stamp program (SNAP) serves approximately 30 million people at a cost of just over $30 billion—a mere 1% of Federal outlays. Section 8 Housing Vouchers costs about $16 billion—less than one-half percent of Federal outlays. The entire Housing and Urban Development department which also serves the homeless is about 1% of Federal outlays.

Add in programs with successful track records like Head Start and at most perhaps 5% of all tax revenues and government borrowing actually directly aid the poverty-stricken. So where does the rest of it go? To behemoth programs like Medicare $700 billion and rising at double-digit rates year after year), of which private analysis suggest 50% is waste and fraud, and a huge percentage of the balance either harms or does not improve patient health.

It is, however, very profitable for pharmaceutical companies and other vendors. Consider that approximately 1% of the citizenry control 2/3 of the productive assets of the U.S., and the question cui bono--to whose benefit are $4.5 trillion in taxes levied? Is quickly answered: not the poor. Sadly, the poverty-stricken are the "moral justification" simulacrum marketed by various Elites to justify their own stupendous take of ever-rising state revenues and debt issues.

From this long-range cyclical perspective, the artificial nature of political ideology is starkly revealed. The Right focuses all its attention and ire on the insatiable appetite of the State for more power and revenue, while the Left focuses all its attention and ire on the insatiable appetite of the Plutocracy for increased privilege and wealth. Unknown to the ideological adherents, each is one side of a single coin.

While the Left focuses on the plight of an underclass distracted by the "bread" provided by the State and the "circuses" provided by the Mainstream Corporate Media, the Right focuses on the diminishment of rights and income which results from the State's ever-increasing taxes and regulatory powers.

Neither side sees that the insatiable appetite of the State and Plutocracy for larger shares of the national income are one in the same. As both are blind to the causal structures, each seeks to defend its chosen champion (the Left--the State, the Right--the Plutocracy) from the slings and arrows cast by the ideological "opponents."

A handful of Revolutionaries fantasize about the underclass grabbing power from both the State and the Plutocracy, but since the underclass is by definition not productive enough to tax, there is little to entice the middle class to join their revolution. For they foresee they will have to pay for the costs of the "revolution" just as they carried most of the weight of the old State/Plutocracy. This is the classic "meet the new boss, same as the old boss" situation in which a new Plutocracy simply replaces the old one.

Libertarians, in their haste to focus on the rights of the individual to unfettered political and economic liberties, fail to notice that the Plutocracy is delighted to encourage their focus. For a nation of subservient debt-serfs can exist quite peaceably in a low-tax State dominated and controlled by a Plutocracy.

Indeed, a semi-feudal State founded on debt-serfdom has the luxury of offering generous political and economic liberties to its indentured citizenry--as long as they don't join together to challenge the perquisites, privileges and wealth of the Plutocracy.

In this analysis, the Plutocracy is well-served by a politics of experience which neatly dices the political ideological spectrum into various non-threatening and mutually distracting slices of rancor and illusion.

Since the middle class is the foundation of the State (by paying the taxes and providing political support for regulations and infrastructure), then questions of democracy, markets and empire directly affect the squeezing of the middle class.

While this discussion may seem far afield from practical responses to the intersecting crises we face, it is actually of paramount importance. For if the American State/Empire over-reaches globally, and the Plutocracy over-reaches domestically, then the middle must either respond in its own defense or collapse beneath rising taxes.

The state and its Elites will defend the status quo very robustly and perseverently, overriding or simply ignoring middle class attempts to limit its power.

We should pause here to remind ourselves that the politics of experience, the "obvious" incentives and assumptions which we do not even notice, such is their "naturalness," masks the actual mechanics of this destruction of the middle class.

Thus the State will argue that regulation protects everyone (even if it doesn't, and is riddled with profitable loopholes that served Elites' interests behind a sham transparency), the "underprivileged" "need" various services and benefits (even if the supposedly "necessary" benefits like bilingual classes fail in their stated objective) and an ever-increasing public payroll is needed to "serve the public."

The question of who pays for all this is left uneasily unsaid; the Elites will pay a much smaller percentage of their income than the middle class, and as a result their share of the national income continues to rise as the middle class founders.

The Elites will quietly voice their needs in the hushed halls of power, confident that media transparency (recall that they own or control the mainstream media) will be a simulacrum of transparency, a sham to satisfy the easily distracted public.

Thus it is not at all clear that democracy and Empire, that is, geopolitical hegemony, are compatible. Nor is it clear that centralized State planning (socialism) and democracy are entirely compatible, either (please see The Road to Serfdom by F. A. Hayek).

Why? Socialism always contains the potential for "the tyranny of the many" which concerned many of our Founding Fathers. If 51% of the citizenry is receiving benefits or free services from the government, they can essentially dominate the oppressed productive class via the ballot box.

Put another way: the percentage of people who will gladly accept free money or services is virtually 100%, while the percentage of those willing to risk their time and capital for productive enterprise is considerably less than 100%. Thus the less-productive benefactors of government largesse (socialism) can extract ever-higher taxes from the remaining productive members of the society, until the productive members either collapse into penury as in the late Roman Empire, or they opt out of supporting the unsustainable burdens imposed on them by the tyranny of the State's more numerous benefactors.

Why should we care about what sounds like an academic debate?

The answer is that the compatibility of democracy, socialism and Empire are vital issues for all of us seeking liberty, security and prosperity for a variety of reasons.

1. Democracy offers the middle-class some modicum of power. If democracy is undermined, the middle class has essentially no power. The fall of Rome provides an excellent template.
2. Empire costs a great deal of money that must be raised by taxes, mostly on the middle class. Thus Imperial over-reach in the form of costly wars with little to no payoff (a classic example of marginal returns) ends up overburdening the middle class. This is precisely what occurred in the decline and fall of Rome.
3. Central planning/government control of assets and revenues favors the politically influential Plutocracy over the middle class, as government ends up serving the Plutocracy's interests under the cover of expanding benefits to the less productive.
4. Government (State) regulations intended to rein in global corporations end up strangling middle-class entrepreneurs as the Plutocracy arranges for loopholes and exclusions which the middle-class cannot exploit.
5. State over-reach insures that multiple agencies and regulatory bodies create conflicting, overlapping layers of authority and decision-making, crippling middle-class entrepreneurship with bureaucratic sclerosis.

One example of too many governmental stakeholders resulting in bureaucratic sclerosis is the astonishingly time-consuming and arduous process of adding a new railway station in California. Everyone agreed that "smart growth" and common-sense transportation planning required an additional railway stop to serve commuters living in a new medium-density community on an existing rail line. Despite the obvious need and the will of the people as expressed by a general plan voted into law, the process is now in Year Nine with no resolution in sight due to the staggering number of governmental and private "stakeholders" /agencies with some say over the rail lines and station.

It is amazing that anything at all gets accomplished in the U.S. when situations such as this are examined in detail. As always, the proper context is the high cost to the middle class when political approval by various overlapping governmental stakeholders and Elites is required. Democracy has in effect been undermined by an ever-expanding government of overlapping authorities and ever-higher fees and taxes and a Plutocracy that gains exclusions and loopholes via political influence.

The fantasy that markets can be effectively self-regulated is encouraged by the self-serving Plutocracy and its "free market" enthusiasts in the MSM, as unregulated markets enable the fullest expression of greed, fraud, legerdemain and chicanery. No better proof of this can be found than the insiders' exploitation of the mortgage/housing/credit bubble's excesses of lies and leverage. Please read Fiasco: The Inside Story of a Wall Street Trader and Greed, Fraud & Ignorance: A Subprime Insider's Look at the Mortgage Collapse for more on these topics.

Put another way: "free" markets require transparency of inputs, competitors, pricing, value, ingredients, etc. Without transparency, then customers/participants' decisions cannot be sound. Yet transparency offers no competitive advantage, while secrecy and obfuscation offer tremendous competitive advantages. For example, an arcane and duplicitous property appraisal is a simulacrum of transparency, manipulating data to support a bogus valuation in order to qualify for a mortgage. A transparently false appraisal would not support the fraudulent mortgage or the immense profit it generated for everyone involved.

The mortgage itself is written in such a fashion that its true costs are obscured-- the very opposite of transparency. Thus, the mortgage/leverage/derivative/ratings bubble of fraud and greed depended on obscurity and obfuscation, and indeed, market participants lost competitive advantage in terms of profit if they dared choose transparency.

This is why it is specious to claim an unregulated finance-based economy will regulate itself. Though the government is by nature attempting to expand at the expense of the citizenry, that doesn't mean there is no need for governmental regulation. It simply means the regulations must be strong yet simple: transparency in all matters, no exceptions.

The classic examination of how self-regulating markets turn everything and everyone into commodities ripe for exploitation is The Great Transformation by Karl Polanyi.

The big losers in the fantasy of self-regulating markets are the middle class; the Plutocracy buys itself exclusions. The costs of dysfunctional markets eventually end up on the backs of the middle class while the outsized profits end up in the pockets of the Elites. Profits are privatized and losses are socialized, i.e. borne by the middle class taxpayers. Like the Roman citizens granted free bread and endless public entertainments, the less productive citizens are pleased to support the status quo (simply by remaining passive) as the status quo has effectively bought them off with "bread and circuses."

Just as we must be careful of government because of its inherent self-interest and vulnerability to influence/control by the Plutocracy, we must be careful not to assume that markets are effective at setting prices in all settings just because they work in limited, short-term contexts. The reason for our caution: markets are incapable of pricing the full social, medical and environmental costs of a product's entire lifecycle. Thus coal is priced by its demand as fuel and the cost to extract it from the earth. But if coal is burned in great quantities, as in China, then the air quality becomes adverse to human health.

People breathing such particulate-polluted air are far more likely to die from respiratory diseases than those who don't breathe such toxin-laden air. So shouldn't the cost of treating millions of people and the loss of millions of man-years of productive labor be priced into the cost of mining and burning coal?

And suppose the cost of restoring strip-mined areas to some semblance of its pre-mined natural state was built into the cost of mining surface coal. What would the price per ton be then?

Markets will never price in the full lifecycle and social/environmental costs on their own; self-regulated markets are about reaping maximum short-term profits, not seeking out long-term costs which competitors might be able to shirk. The full lifecycle costs of any product are often ambiguous; how do we price in the cost of restoring a landscape when we don't yet know the cost of doing so?

In both socialist/Communist nations like China and "free market" capitalist nations like the U.S., the market effectively shunts all these "common area" costs of doing business onto private individuals who had no choice in the matter (of the air they breathe or the power source they purchase electricity from) or onto the government which must then shoulder the healthcare and environmental costs via taxes on productive citizens.

Following our precept that all markets require transparency above all else, we find that the Plutocracy engineers obscure tax credits and subsidies for its industries, masking the true cost behind these government tax breaks. Thus the citizenry will find the task of sorting out the real benefits of transparent solar subsidies and obscure nuclear power/gas-oil subsidies quite difficult. This is of course quite purposeful; transparency may create a well-oiled marketplace but obscurity and obfuscation generate much larger profits.

The analog to this is monopoly. If one enterprise (or a handful in collusion) gains near-total control of a market, then the profits to be gained are immensely greater than those earned in a highly competitive market. This is why Marx posited that the drive to monopoly is inherent to capitalism. And of course a monopoly on information also generates far more handsome profits than transparency. This is why we find both government and its hidden masters, the Plutocracy, are constantly seeking to bury the truth at every turn, and why each fights transparency so fiercely.

To expect the state not to seek expansion as its self-interest, to expect wealthy citizens not to seek to influence the state to align policy with their own interests, to expect capitalism not to trend to monopoly, to expect markets not to shun transparency in favor of obfuscation and secrecy--these are all akin to expecting gravity to cease pulling us to earth. These are what we might call ontological forces, forces which are built into the very nature of the state, capitalism, markets and thus into human nature itself.

This is why we have to be careful not to fall for the seductive artifice of ideology as we choose responses to the multiple challenges ahead. Neither the market nor the State is an answer; each is as much a part of the problem as it is a part of the solution.

In Collapse of Complex Systems: Incremental Change and Collapse (oftwominds.com) I address how political disunity ends up crushing the middle class's wealth and political influence (first published in www.oftwominds.com on February 25, 2009).

In The Fall of the Roman Empire, author Michael Grant identified political disunity as one the one key causes of the fall of the Western Roman Empire (Rome).

One engine of such disunity and squabbling, of course, is a deep-denial complacency: if a large percentage of the ruling class/citizenry sees nothing wrong, or counts on feeble "reforms" to resolve mounting global challenges, then they will hobble those seeking systemic, sweeping changes required to survive the challenges.

Another key reason for this crippling disunity is the resistance of the Plutocracy/underclass recipients to any change in the status quo. It may strike some as ironic that the two ends of the political spectrum are united in one goal: fiercely resisting any shifting of largesse/benefits. At the top, the "fortunate 400" in Roman society paid less and less tax as the crises mounted, while 300,000 fortunates at the bottom rung continued to draw free bread and 170 days of free public entertainment in Rome as the Empire collapsed inward on Rome.

We see plentiful evidence of both trends around us. The number of recent political appointees who felt paying taxes was for plebians is not just embarrassing, it's indicative of a broad cultural trend; and it seems many of the riots we read about in western Europe stem from proposed cuts in what are essentially "bread and circuses" welfare benefits which the Empire can no longer afford to shower on its less-productive (non-tax paying) residents.

As the plutocracy contributes less and less to the finances of a heavily burdened central government, wealth disparity rises. This trend has been firmly in place for years. For 'Fortunate 400,' a Tumbling Tax Rate (Wall Street Journal)

As in fast-declining Rome, the plutocracy is pleased to wield its wealth and influence to insure it pays 17% tax rate (much, much less when tax-free municipal bonds are counted as income) while the productive elements of the economy are saddled with 40%-50% tax burdens.

Also as in headed-to-oblivion Rome, the plutocracy no longer contributes its sons and daughters to military service; that is left to the poor.

Lastly, rigid ideological camps are creating disunity as the middle (and the middle class) are eroded. Thus we have a Congress which united under pressure to give $700 billion in borrowed money to the banks under a Republican administration, and now under a Democratic administration the Republicans in Congress have belatedly discovered a deep desire for fiscal prudence--a desire which they mysteriously lacked for the 8 years of the borrow-and-spend Bush administration.

Though it is impossible to summarize the wealth of information in Jared Diamond's monumental Collapse: How Societies Choose to Fail or Succeed, it seems that the inability to see the underlying fragility of the environmental base of the economy was a key factor in the collapse of the cultures Diamond examines.

In an eerily similar way, the Plutocracy in the U.S. is essentially blind to the extreme fragility of the global energy complex, global fresh water supply, global soil reserves and the global public health system. As many authors have detailed, a global economy without abundant cheap fossil fuels will be unable to feed and maintain 6.5 billion humans.

Though neither Grant nor Diamond mentions this specifically, I note that the Roman plutocracy/ central leadership obviously hoped that additional regulations and edicts would somehow turn the tide. I see the same over-reliance on legal mechanisms, edicts and policy tweaks in the U.S. today. A Congress of attorneys rather unsurprisingly is enamored of legalisms and policy tweaks, and a plutocracy and welfare class wary of any reduction in benefits and tax breaks is pleased to hope tweaks and tucks will somehow maintain a crumbling status quo.

But as Donella Meadows outlined in her seminal paper, Leverage Points: Places to Intervene in a System (Sustainability Institute), adjusting the parameters of a system has limited effects. Tweaking the gas mileage of the U.S. fleet by a mile or two, and 99.9% of all the other "reforms" proposed and fought over, will effect no fundamental change.

What we have in essence is an over-regulated, overly complex, cost-heavy structure which we attempt to "fix" by adding further layers of complexity and overhead costs. The idea that these incremental approaches can change the fundamental structural flaws is simply false; their net effect will be to hasten the collapse of the systems they seek to repair.

This is what I call The Seductive Illusion of Incremental Change (oftwominds.com).

As noted before, Tainter's The Collapse of Complex Societies suggests that at some point the citizenry of failing societies more or less choose to let their unsustainable systems topple rather than continue the draining attempt to support the burden.

Disunity, complacency, growing wealth disparity, rising military and taxation burdens, fragile environmental foundations--all these need only a sustained drought or energy shortage to tumble like dominoes.

Key concepts in this chapter:

Voluntary Poverty

On March 12, 2008, I posted When Belief in the System Fades, which likened the faith of those pouring their lives into sustaining the status quo to religious belief.

The entry drew a mixed reaction ranging from "you nailed it" to dismissal. Now that the global financial structure has succumbed to gravity, I wonder how many readers who dismissed it then would now modify their reaction. Certainly those receiving pink slips might ponder how suddenly faith in the system can be lost.

The entire Survival+ analysis centers on trying to understand the multilayered ways the middle class is being squeezed to exhaustion / insolvency. My good friend G.F.B. (also a small business owner, as you could have guessed) likened the tax and fee-for-services (or whatever we deem a service, like you operating a business in our jurisdiction) system to a parasite and host. The parasite is careful not to extract too much, lest the host die.

But sometimes parasites become so numerous and greedy that they end up killing the host and thus themselves. Perhaps the single key task of the Plutocracy/State (two sides of a single coin) is to convince the host (the middle class) to keep laboring despite the ever-increasing extraction of their earnings and wealth.

The task requires an actively supported mythology (you too can be Bill Gates!) and a subtle cultivation of interlocking beliefs in the fairness and rightness of the system. The overriding faith that hard work and individual greed will both be rewarded as long as the middle class believer "keeps his nose clean," i.e. plays along with the set rules, is carefully nourished.

If we withdraw from the 24/7 propaganda of the Mainstream Media, the absurdity of these constantly repeated themes becomes painfully clear. For example, "Socialism is bad and evil because it redistributes wealth." Well, now that's interesting, because Crony Capitalism does the same thing, gathering heavy taxes from the productive class and funneling it into the hands of a Plutocrat class who shoulder relatively modest tax burdens while reaping vast rewards via government contracts, bailouts, tax loopholes, special legislation, etc.

In other words, the key difference between Euro-style Socialism and Crony Capitalism as perfected in the U.S. is the middle class receives few benefits from their onerous tax burdens. In much of Europe, college and medical care are mostly paid by taxes; here in the U.S. productive citizens pay stupendous taxes and yet they also pay tens of thousands of dollars for a university education and huge, wealth-destroying co-payments for medical care--if they even have insurance.

This is truly Orwellian: the middle class is conned into supporting income redistribution which favors the super-rich and those paying no tax whatsoever (for instance, undocumented laborers). Nice gig if you can get it: reap the rewards, pay no taxes. Unfortunately, middle class wage-earners don't get that option.

Here's another howler: "The U.S. healthcare system is the finest in the world." Ooh, I have to be careful not to laugh too hard--I can't afford to hurt myself. Just today my dermatologist prescribed a "been around for 20 years" topical cream to burn off the sun-damaged spots on my hands and arms. I've used this cream for a decade: Efudex is the brand name, and it's not some "new miracle drug" which cost billions to develop as per the pharmaceutical industry propaganda.

Some years ago a small tube of the stuff cost an absurdly high $79. Then it jumped to an even more insane $120 for a few ounces of cream. Even though the patent has long expired, it jumped to $218 per tube a few years back. Guess the current price: $272 per small tube.

How can any system justify a four-fold jump in the cost of a cream which was developed decades ago, other than rampant, uncontrolled greed and avarice? (Needless to say my own self-paid bare-bones medical insurance has no drug, dental or eyewear coverage.)

The pharmacist, herself a recent immigrant judging from her accent (I leave her ethnicity out other than to note she was non-Caucasian) shook her head and noted that in this country, you either have to be poor or rich. She added that undocumented workers get Medicaid (i.e. they pay nothing in taxes or fees) while people who have worked for decades get nothing. (Unless they hang on long enough to qualify for Medicare, of course, at 65.)

Those fortunate enough to have excellent medical insurance would co-pay $5 or $15 for this $272 tube of cream, and never know how much it cost the insurer/employer. Far from being "the best system in the world," the exact opposite is true: without any doubt, the U.S. has the worst medical/sick-care system of all industrialized nations. If you think it's great, that's because your costs are being paid by someone else; try asking for the "real cost" of the meds and services you've received, or better yet, paying for them cash. Your faith in just how wonderful the system is will dissipate with truly amazing alacrity.

The middle class citizens now losing their jobs are receiving just this "lesson" in how fast faith in the "best in the world" system can vanish as they face paying COBRA fees of $1,000 or more per month for stripped/simulacrum healthcare insurance, or find themselves without any healthcare at all.


When Belief in the System Fades

At some point--perhaps a "tipping point" or just an erosion--the middle class bails out of the increasingly burdensome task of propping up the State and the Plutocracy. I call this phenomenon "When Belief in the System Fades."

There are elites in every human culture (and in the social apes as well). But unlike a troop of chimps ruled by an alpha male, today's elites cannot operate the vast complex structure of the U.S. economy, government and society themselves. They need hundreds of thousands of well-educated, hard-working people to believe in the system of meritocracy, justice, opportunity, etc., people who will choose to invest their entire productive lives in sustaining the structure which the elites influence/control.

The corollary to this structural need for highly motivated, dedicated people to work the gears is that if their belief in the machine fades, then the machine grinds to a halt.

In the Armed Forces, the key layer of staffing is in the middle: lieutenants, captains, chief petty officers, etc. If those non-coms and junior officers leave the service, the Force is essentially gutted, regardless of the generals and admirals and high-tech weaponry and the valor of the recruits.

There is some evidence that just such a migration is occurring.

In a large law firm, the essential layer is the hungry-to-be-partner attorneys who labor insane hours for years, enriching their bosses as they pursue the carrot of "partner."

In the retail world, it is the store managers and assistant managers who keep the store running smoothly.

In construction, it is the foremen/women and onsite supervisors who get the building built.

In every case, the person takes on the burdens in the belief that their career will be enhanced and they will make more money/gain more prestige. Yes, we all understand this. But they also must believe in the structural fairness, justice, opportunity, security, meritocracy, etc. of the machine they willingly serve—even if their belief is subconscious or rarely in their conscious thoughts.

This belief is far more vulnerable than the Powers That Be seem to understand. You see the alienation, the bitterness, the disbelief, in factory workers when the factory shuts down, and their livelihoods are gone—and all too often, so too are the pension and benefits they were promised.

You see it in the face of an academic who worked long hours for years "on the tenure track," carrying much of the department's teaching load, when she/he is ultimately denied tenure. Thank you for working for $40,000 a year for years alongside people doing the same work for twice the salary; good night and good luck.

When the most dedicated servants of the system awaken to the realization that they are not benefiting from their service as they'd once believed, that their near-religious faith in the System has been bruised by the grim knowledge that the few are benefitting from the lives and sacrifices of the many, then they simply quit, or move down the chain to an undemanding position.

You can still work in law without having to bill 80 hours a week. You can resign your commission at 20 years and go live on a farm and leave all the headaches behind. You can resign from the commissions and boards and "career-enhancing" stuff you've crammed in after your regular hours. You can refuse the offer of the position of supervisor, or manager, or head of sales, because you now see the extra pay and phony prestige isn't worth it.

In a way, a belief in the value, transparency, trust and reciprocity of the System is like a religious belief. The converts, the true believers, are the ones who work like crazy for the company, or the Force or the firm. And when the veil of illusion is tugged from their eyes, then the Believer does a reversal, and becomes a devout non-believer in the System. He or she drops out, moves to a lower position, or "retires" to some lower level of employment.

One trigger of such destruction of belief in the worth of the System is the loss of a job or house—an event I unfortunately anticipate will become very common. "But don't these people have to work to support their lifestyles?" Yes they do, until they realize they can live on half the money they thought they needed as an absolute minimum.

Not that most people choose this—they find out via bankruptcy or being laid off, or by watching their buddies and friends getting laid off (or killed/wounded) around them. Their belief in the goodness and reciprocity of the System—that if you work hard and keep your nose clean, we're gonna take good care of you—fades and then dies.

Immigrants are by self-selection believers, and the rise from poverty to relative wealth they see around them offers visible proof that sacrificing one's productive life for the System is rewarding.

But once you've reached the plateau of relative wealth, then the proposition becomes contingent on exactly what happens to you and your family. If your kids all get advanced degrees and they can't find a decent job in their chosen profession, then you start wondering. If you get laid off, despite your decades of selfless service, then you start wondering. If you get passed over in favor of some brown-noser, you start wondering.

And then you realize you don't have to work 60 hours a week, or live in a big house. An apartment works just fine, and 30 hours a week is enough. Let somebody else step up and take all the heat and the guff and the never-catch-up endlessness of the work.

At that point—a point I anticipate will come to pass in the next 5-10 years--then the Elites' machine grinds to a crawl. People don't have to throw their bodies on the gears of the machine—they just have to stop believing, stop taking that promotion, and stop wanting to trade their entire lives for a thin slice of more more more.

If that day comes, then the social contract will have to be rewritten, or an entirely new set of Elites will have to emerge with a new social contract which people are willing to believe and trust.

Another way of stating "when belief in the system fades" is this: when the Plutocracy over-reaches. As noted above, societies collapse not just from foreign invasion or drought or environmental implosion but when the productive citizenry realize it's easier to let the increasingly burdensome structure collapse of its own weight than continue to support it.

Once the productive class removes its political and economic will to preserve the institutions via taxes, the institutions will fall. In our current situation, we can say that once the middle class opts out of the system, the burdens of Empire and entitlements will bring the Federal government to insolvency.

The social contract between the government/State and the middle class in advanced post-industrial democracies is fundamentally this: we pay substantial taxes, and you the state will handle the infrastructure of our society via various costly bureaucracies which don't require our input or oversight: Department of Defense, the judiciary, highway maintenance, etc.

But as the state over-reaches—and by that I mean the both the state over-extending its powers and its functionaries claiming ever-higher shares of the national income-- then the social contract breaks down. The middle class is dealt ever-higher taxes and fees, yet it receives less and less benefit as the less productive class and the Elites (including the "upper caste" of public employees) leverage their patronage of the status quo at the expense of the middle class.

The middle class sees their income as measured by purchasing power declining, even as the roads fall into juddering disrepair, the public education they counted on to educate their children falls under the costly sway of ideological fads and special interest groups and every bureaucracy slips into grandiose self-serving spending as oversight vanishes.

The upper middle class which pays the majority of the taxes then finds itself in an unfamiliar and increasingly unsustainable bind. The unspoken social contract with the state not only guaranteed working roads and a responsive, efficient bureaucracy for the high taxes paid; the status quo was supposed to offer its citizenry free expression. The ideals of personal liberty translated into leisure to pursue individual interests and to indulge in personal expression via music, the arts, sports, etc.

Now the middle class finds itself in an ever-tightening vise. To maintain its lifestyle and pay the higher taxes demanded by the state, it finds that leisure and the opportunity for free individual expression have diminished. Instead of expression, the middle class experiences the stress of financial insecurity and overwork.

With growing resentment, it looks at the entitlements granted the less productive classes in exchange for their passive acceptance of the status quo, and the increasing share of national income and wealth garnered by the self-serving Plutocracy.

In nations where the citizenry are still struggling for basic survival, free expression is not a key value; traditional restrictive "glues" of the social order like arranged marriage and unquestioned gender inequality hold firm sway.

In terms of human nature, we might surmise that these traditional societies are perched so close to the edge of survival that innovation is simply too risky; the potential gains do not outweigh the potential disruptions to a fragile, precarious order.

In advanced post-industrial societies, on the other hand, innovation and transformation of the economy and institutions are seen as essential adaptations; failure to compete globally via innovation is recognized as a sure path to national poverty.

There is a certain irony in the political and economic decline of the middle class. The very success of the middle class in becoming productive enough to gain leisure and the opportunity for individual expression was won at the cost of relinquishing involvement and oversight of the State.

Freed of the restraint of oversight, the State was free to extend its powers, and its functionaries were free to feed on the rising taxes paid by the productive class. Now that the middle class finds itself squeezed on all sides, it has only three choices, none positive:

1. attempt to preserve the institutions of the status quo by working harder and paying more taxes, surrendering meaningful individual expression
2. opt out ("when belief in the system fades"), quit the high-paying, high-pressure, high-tax jobs and slip into the low-tax informal economy
3. challenge the self-serving Elite and state by demanding oversight and democratic limits on "bread and circuses," the state's powers and the wealth being siphoned off by the state's parasitic "high-caste" functionaries.

Unfortunately for the middle class, today's "democracy" has been reduced to a sad simulacrum. When 97% of the incumbents win re-election via gerrymandering and propaganda (the remaining 3% either resigning in disgrace or dying in office) then exactly what is this "democracy"?

Any middle class attempt to build a meaningful political voice will be fiercely resisted by the state and its employees and dependents. "Class warfare" will be invoked, not between the Plutocracy and the middle class, which would at least reflect reality. No, the State and the Plutocracy will task the propaganda machine of the Mainstream Corporate Media to place the conflict between the middle class and the less-productive class (those not productive enough to pay much taxes). Any claim to lessen the burden on an increasingly overwhelmed middle class will be shaped into an attack on the inalienable rights to various entitlements at the state's expense.

It is in the self-interests of the Plutocracy and State to gin up a phony "class war" to distract the middle class from their true opponents: the State and its masters in the Plutocracy.

We need only look at the millions of prescriptions for anti-anxiety and anti-depressant medications to measure the toll this ever-increasing burden is taking on the middle class.

For each productive individual, opting out is far easier than trying to engage in a long, exhausting political battle. After all, the Plutocracy has immense resources and a huge stake in the outcome, as do those protected by State fiefdoms and those receiving benefits without paying taxes.

Each of these constituencies recognizes the fight to maintain the status quo (i.e. to keep the middle class productive and paying the lion's share of the taxes) is a fight to the death. Thus the Plutocracy will pull out all stops to defend its influence, just as the public unions and beneficiaries of State largesse will throw their entire forces into maintaining the status quo.

Meanwhile, the middle class productive taxpayer has less at stake; just another junk fee to pay, just another 10% surtax, etc. Pressed by the demands of commute, career, debt, family, etc., the productive citizen has little or no time or energy for a protracted political battle. So the Elite, the state and its beneficiaries will always win.

But what neither the State, nor its public employees or its beneficiaries of government largesse understand is that by denying the middle class some respite and some stake in the political division of the tax revenues, they are insuring the middle class will eventually opt out and let the system collapse. It will simply not be worth the cost or the effort to maintain these top-heavy, high-cost institutions.

Another irony is that the Plutocracy and the State will attempt to define the battle as "preserving our institutions" and "our middle class entitlements."

Sadly, truthfulness plays little role in this structural political battle. We might ask: if the middle class was garnering such stupendous entitlements and benefits, then why are they so stressed, so unhappy, so burdened and so alienated, not just from their State but from themselves? Having been promised free expression and individual liberty, they find instead that they are essentially debt-serfs, working either to pay off debt owed to the Manor Houses of the Plutocracy or crushing taxes and junk fees owed to the State.

Some of this can be attributed to structural changes in the very nature of post-industrial work (see "End of Work"), but much can be laid on the divergence of the interests of the State and the Plutocracy from the interests of the middle class which supports them.

So deep is the alienation and confusion that the middle class citizen, anxiety-ridden, staggering beneath worrisome debt and an ever-rising workload, popping countless bottles of psychotropic prescription drugs to maintain a semblance of "normalcy," blames their own inadequacies for their deep unhappiness and inability to bear the burdens imposed by the broken social contract.

Indeed, opting out isn't just the best choice for many; it may be the only choice that enables sanity and a return to free individual expression. Once you're distracted by debt and overwork, you lose track of what's been lost.

Many commentators refer back to the Great Depression as a historical guide or template to our present situation. But our current predicaments are far deeper, as commentators such as James Howard Kunstler have shown. To mention a few of Kunstler's observations: