Death of an Institution

SUBHEAD: Despite desperate mergers and acquisitions, large centralized institutions are in danger of failure.

 By Ilargi on 8 January 2012 for the the Automatic Earth -  

Image above: Illustration of M&E as sharks eating sharks. From (

In a nice coincidence, while Nicole Foss (Stoneleigh) wrote about decentralization a few days ago in The Storm Surge of Decentralization, today Ashvin Pandurangi, independently from Nicole, also focuses on that theme, albeit from a completely different angle. Perhaps even from the 180 degree opposite angle: it's precisely because the 1% push so hard for centralization that it's crucial for the 99% to push back and decentralize.

And it's precisely because our economic models exist only by the grace of growth unchecked that we need to get out and take a step back, or that growth will surely eat us alive. It's exactly like Arthur Miller's Willy Loman says in 'Death of a Salesman';
"After all the highways, and the trains, and the appointments, and the years, you end up worth more dead than alive".
That's what societies founded on perpetual growth and its inevitable companion, centralization, end up doing to 99% of their citizens: they degrade and pervert their dignity, their lives, and their value. In that sense, decentralization marks the beginning of a return to our true human potential, since it restores the values and dignity that make our lives worth living. Unfortunately, today most of the 99% will not recognize this, and if they did it would scare them senseless, so they help push the growth paradigm forward even as it's gnawing at their bones. Life as a cog in a machine is the only life they've ever known.

What else could there be? When you're told a hundred times a day that you live in the land of the free, what's not to believe? It's high time we begin to understand to what extent the interests of the politicians and bankers and CEOs that we allow to make our decisions for us (read: against us), differ from our own. But since our education systems and media have denied the very existence of any such difference all of our lives, this understanding will be very hard to come by for 99% of the 99%.

By Ashvin Pandurangi on 8 Janaury 2012 for Automatic Earth - 

  The word of the last few centuries is centralize. That's what "institutions" do, whether they are technically financial, political, educational, "corrective", religious or medical; private or public. Those labels are largely irrelevant when you want to understand the fundamental nature of an institution. They are simply structured hierarchies of distributed power that strive to grow larger and more influential with each passing day. Perhaps they are trying to influence the outcome of an election, the direction of foreign policy, the prices of a market, the focus of scientific research or the psychology of society's youth, but, rest assured, they are trying very hard to influence something.

Some institutions are much more influential than others, and typically these are the most self-serving. These institutions are also inherently self-limiting structures; fractal constructs that are self-similar and limiting at every scale, right up to that of our global economy and civilization. They never freely compete with each other to reach some generally productive equilibrium, but rather coerce their respective sectors to become more and more dependent on their functions over time. By exercising more power and influence in a given field, they crowd out both their own opportunities for further expansion and the opportunity of other institutions to enter the sector and grow.

The world's "too big to fail" financial institutions have clearly demonstrated how a few giant players can grow so large to threaten the collapse of the entire global economy when they can no longer grow. The current crises of capitalism also demonstrate a rapidly progressing, yet age old trend which reveals the strategy of almost all of society's "industries" and their respective institutions - boundless aggregation.

One of the major pieces of propaganda in today's financial world is that increasing mergers and acquisitions ("M&A") activity is a sign of growth and health in the economy. It is, in reality, a sign of desperation and a harbinger of decreased resilience (a.k.a. "impending doom"), and that becomes quite clear when we consider the type of M&A activity that has been occurring over the last few years.

Relatively large companies are suddenly finding themselves in a position of pure desperation, where they must either combine with other companies through some legal process or die. ... for more see original article linked above.


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