Reject Neofeudalism for Feudalism

SUBHEAD: Neofeudalism is not a re-run of feudalism. It's a "new and improved", state-corporate version of indentured servitude.

By Charles Hugh Smith on 20 September 2017 for Of Two Minds -
(http://charleshughsmith.blogspot.com/2017/09/loving-our-debt-serfdom-our-neofeudal.html)


Image above: Detail of a tapestry depicting feudal era agricultural work in "The Twelve Months of the Year" by Master of the Geneva Boccacci circa 1470AD. . From (https://commons.wikimedia.org/wiki/File:Crescenzi_calendar.jpg).

"Democracy" (i.e. political influence) and ownership of productive assets are the exclusive domains of the New Aristocracy.

I have often used the words neoliberal, neocolonial and neofeudal to describe our socio-economic-political status quo. Here are my shorthand descriptions of each term:

1. Neoliberal: the commoditization / financialization of every asset, input (such as labor) and output of the economy; the privatization of the public commons, and the maximizing of private profits while costs and losses are socialized, i.e. transferred to the taxpayers.
   
2. Neocolonial: the exploitation of the domestic populace using the same debt-servitude model used to subjugate, control and extract profits from overseas populations.
   
3. Neofeudal: the indenturing of the workforce via debt and financial repression to a new Aristocracy; the disempowerment of the workforce into powerless debt-serfs.

Neofeudalism is a subtle control structure that is invisible to those who buy into the Mainstream Media portrayal of our society and economy. This portrayal includes an apparent contradiction: America is a meritocracy--the best and brightest rise to the top, if they have pluck and work hard-- and America is all about identity politics: whomever doesn't make it is a victim of bias.

Both narratives neatly ignore the neofeudal structure which disempowers the workforce in the public sphere and limits the opportunities to build capital outside the control of the state-corporate duopoly.

The book The Inheritance of Rome: Illuminating the Dark Ages 400-1000 shed some light on the transition to a feudal society and economy. While the author is a fine writer, the subject matter doesn't lend itself to light reading.

The transition from the Roman legacy of centralized governance (empire, monarchy, theocracy, etc.) to feudalism (governance by local lords / aristocracy) was complex and uneven, and the author takes pains to describe the process and many variations that arose in a highly fragmented post-Roman Europe.

(Note that the Eastern Roman Empire, a.k.a. Byzantine Empire, endured until 1453 AD. I've written often on both the western and eastern Roman empires:

The "Secret Sauce" of the Byzantine Empire: Stable Currency, Social Mobility
(September 1, 2016)

Don't Diss the Dark Ages
(October 26, 2016)

In the Footsteps of Rome: Is Renewal Possible?
(July 24, 2017) 

Neofeudalism is not a re-run of feudalism. It's a new and improved, state-corporate version of indentured servitude. The process of devolving from central political power to feudalism required the erosion of peasants' rights to own productive assets, which in an agrarian economy meant ownership of land.

Ownership of land was replaced with various obligations to the local feudal lord or monastery--free labor for time periods ranging from a few days to months; a share of one's grain harvest, and so on.
The other key dynamic of feudalism was the removal of the peasantry from the public sphere.

In the pre-feudal era (for example, the reign of Charlemagne), peasants could still attend public councils and make their voices heard, and there was a rough system of justice in which peasants could petition authorities for redress.

Of course peasants usually lost to the aristocracy and monasteries, but at least the avenue of redress was at least partially open. This presence in the public sphere was slammed shut in feudalism.

From the capitalist perspective, feudalism restricted serfs' access to cash markets where they could sell their labor or harvests.

The key feature of capitalism isn't just markets-- it's unrestricted ownership of productive assets--land, tools, workshops, and the social capital of skills, networks, trading associations, guilds, etc.

Our system is Neofeudal because the non-elites have no real voice in the public sphere, and ownership of productive capital is indirectly suppressed by the state-corporate duopoly.

Various studies have found that politicians ignore the bottom 99.5% who don't contribute to their campaigns or crony-capitalist wealth (five quick speeches for $200,000 each is $1 million. Rinse and repeat.)

The vast majority of incumbents are re-elected, as they leverage their power to vacuum up enormous sums of campaign contributions that then buy the compliance of a cowed public.

As for ownership of assets-- small business startups have been crushed by soaring costs, heavy regulations and the dominance of cartels and quasi-monopolies enforced by the state.

The so-called middle class owns little to no productive capital; what it "owns" is a house, which is ultimately a form of consumption.

I say "owns" for two reasons: one, most households have a mortgage, so their ownership is still contingent on making monthly payments to a lender, and two, the government collects property taxes on the home regardless of the owner's income or ability to pay.

Compare this to taxes levied on business income: if the business has no net income, it owes no taxes. Not so with property taxes--they are the modern equivalent of "rent" paid to the feudal lord.

Note that the aristocracy owns productive assets while the serfs own housing and debt. This is not a flaw in the system, it's a feature of the system.

Democracy (i.e. political influence) and ownership of productive assets are the exclusive domains of the New Aristocracy. This is Neofeudalism in a nutshell.

"Under a scientific dictator education will really work -- with the result that most men and women will grow up to love their servitude and will never dream of revolution." 

"The nature of psychological compulsion is such that those who act under constraint remain under the impression that they are acting on their own initiative. The victim of mind-manipulation does not know that he is a victim. To him, the walls of his prison are invisible, and he believes himself to be free. That he is not free is apparent only to other people. His servitude is strictly objective."
- Aldous Huxley

Video interview of Aldous Huxley source of quotes (read the entire thread)
.

Elites lost consent of the governed

SUBHEAD: The Great Divide in America is between the ruling Elite and the governed they have strip-mined.

By Charles Hugh Smith on 20 October 2016 for Of Two Minds -
(http://www.oftwominds.com/blogoct16/consent-of-governed10-16.html)


Image above: Illustration of an uprising of peasants revolting against overlords. From (https://steamcommunity.com/sharedfiles/filedetails/?id=501698481).

Brimming with hubris and self-importance, the ruling Elite and mainstream media cannot believe they have lost the consent of the governed.

Every ruling Elite needs the consent of the governed: even autocracies, dictatorships and corporatocracies ultimately rule with the consent, however grudging, of the governed.

The American ruling Elite has lost the consent of the governed. This reality is being masked by the mainstream media, mouthpiece of the ruling class, which is ceaselessly promoting two false narratives:

1. The "great divide" in American politics is between left and right, Democrat or Republican.
   
   
2. The ruling Elite has delivered "prosperity" not just to the privileged few but to the unprivileged many they govern.

Both of these assertions are false. The Great Divide in America is between the ruling Elite and the governed that the Elite has strip-mined.

The ruling Elite is privileged and protected, the governed are unprivileged and unprotected. That's the divide that counts and the divide that is finally becoming visible to the marginalized, unprivileged class of debt-serfs.

The "prosperity" of the 21st century has flowed solely to the ruling Elite and its army of technocrat toadies, factotums, flunkies, apparatchiks and apologists.

The Elite's army of technocrats and its media apologists have engineered and promoted an endless spew of ginned-up phony statistics (the super-low unemployment rate, etc.) to create the illusion of "growth" and "prosperity" that benefit everyone rather than just the top 5%.

The media is 100% committed to promoting these two false narratives because the jig is up once the bottom 95% wake up to the reality that the ruling Elite has been stripmining them for decades.

As I have tirelessly explained, the U.S. economy is not just neoliberal (the code word for maximizing private gain by any means available, including theft, fraud, embezzlement, political fixing, price-fixing, and so on)--it is neofeudal, meaning that it is structurally an updated version of Medieval feudalism in which a top layer of financial-political nobility owns the engines of wealth and governs the marginalized debt-serfs who toil to pay student loans, auto loans, credit cards, mortgages and taxes--all of which benefit the financiers and political grifters.

The media is in a self-referential frenzy to convince us the decision of the century is between unrivaled political grifter Hillary Clinton and financier-cowboy Donald Trump. Both belong to the privileged ruling Elite: both have access to cheap credit, insider information (information asymmetry) and political influence.

The cold truth is the ruling Elite has shredded the social contract by skimming the income/wealth of the unprivileged.

The fake-"progressive" pandering apologists of the ruling Elite--Robert Reich, Paul Krugman and the rest of the Keynesian Cargo Cultists--turn a blind eye to the suppression of dissent and the looting the bottom 95% because they have cushy, protected positions as tenured faculty (or equivalent).

They cheerlead for more state-funded bread and circuses for the marginalized rather than demand an end to exploitive privileges of the sort they themselves enjoy.

Consider just three of the unsustainably costly broken systems that enrich the privileged Elite by strip-mining the unprivileged: healthcare (a.k.a. sickcare because sickness is profitable, prevention is unprofitable), higher education and Imperial over-reach (the National Security State and its partner the privately owned Military-Industrial Complex).

While the unprivileged and unprotected watch their healthcare premiums and co-pays soar year after year, the CEOs of various sickcare cartels skim off tens of millions of dollars annually in pay and stock options.

The system works great if you get a $20 million paycheck. If you get a 30% increase in monthly premiums for fewer actual healthcare services--the system is broken.
.

The Disappearing Stock Market

SUBHEAD: In a giant leveraged buyout corporations will not be publicly owned but become fiefdoms with legal barriers to protect them.

By Daniel Drew on 4 June 2015 for Dark Bid   -
(http://www.dark-bid.com/stock-market-disappearing.html)


Image above: The biggest corporations (by revenue) in each state. Click to embiggen. From (http://www.huffingtonpost.com/2014/06/21/biggest-companies-map_n_5518107.html).

It's easy to find critics and doomsayers who predict that the next stock market crash is just around the corner. They could be right, but another possibility is that the stock market itself will disappear entirely.

Anyone who is familiar with mergers and acquisitions knows what happens when a company is being slowly acquired. The price climbs higher, slowly yet relentlessly. Liquidity evaporates as offers are lifted. If the price moves up too quickly, buy programs are canceled. The buyer waits until the froth dies down a little before resuming purchases. Eventually, the bids reappear, and the process continues.

Once the buyer acquires 5% of the company, a legal requirement is triggered: the SEC requires the buyer to file Schedule 13D, otherwise known as a "beneficial ownership report." Once this report is filed, everyone can see the buyer, and the stock price will usually jump.

This same process has been underway in the stock market over the last 6 years. The market is up well over 200%. Liquidity has evaporated in the S&P 500 futures market, and the central banks themselves are buying S&P 500 futures. Companies are spending nearly all of their profits on stock buybacks. Just recently, Wendy's announced they would buy back half of their stock.

All of this activity harms employees. William Lazonick discussed the negative effects in a Harvard Business Review article called "Profits Without Prosperity." According to Lazonick, the American economy has transformed from a system of value creation to one of value extraction. He explained,

From the end of World War II until the late 1970s, a retain-and-reinvest approach to resource allocation prevailed at major U.S. corporations. They retained earnings and reinvested them in increasing their capabilities, first and foremost in the employees who helped make firms more competitive. They provided workers with higher incomes and greater job security, thus contributing to equitable, stable economic growth - what I call "sustainable prosperity."

This pattern began to break down in the late 1970s, giving way to a downsize-and-distribute regime of reducing costs and then distributing the freed-up cash to financial interests, particularly shareholders. By favoring value extraction over value creation, this approach has contributed to employment instability and income inequality.

The private takeover of the stock market is also apparent in the IPO market, or lack thereof. Rett Wallace said in Forbes, U.S. technology companies have already raised more money this year in the private market than in the public market in all of 2014 (excluding Alibaba's nearly $22 billion IPO, which is by any definition an outlier). The 25 tech IPOs in 2014 (again excluding Alibaba) raised a total of $6.5 billion, less than the $7.8 billion already raised privately by US tech companies this year.

This is the end game of unfettered capitalism. The signs are all here. When you cast aside reasonable restraints, the unscrupulous among us will rise to the top and exploit everyone else. What we have left is a new American feudalism where CEOs move around like a pack of ruthless Somalian warlords.

Riding behind the banner of efficiency, they replace employees with robots, outsource their work to foreigners and tell their employees to train their own replacements, and collude with hedge fund managers to strip companies of their most valuable assets to temporarily boost the stock price.

As if all this weren't enough, now they are buying the entire stock market with money provided by the Federal Reserve's quantitative easing policies. This is essentially the largest leveraged buyout in history, and it's being paid for by every American. If the IPO market continues to dry up and companies maintain their buybacks, eventually, they will run out of stock to buy, and the market will disappear.

In a country without public markets, corporate fiefdoms will dominate the landscape. Instead of actual castles and moats, fiefdoms will have legal barriers to protect them, like low minimum wages, tax loopholes, and regulatory capture. Warren Buffett always said he likes businesses with "economic moats." Just imagine how much he would like the moats of the new American feudalism.

The company that best epitomizes the increasing privatization of capital is Uber. With absurd valuations in the private market as high as $50 billion, the company already has a substantial fiefdom. One day in the future, when the private takeover of all public markets is complete, you will see a propaganda poster on the subway that says, "We are all Uber drivers now!"

.

What choice do we have?

SUBHEAD: For the vast majority of us there is a high price to be paid for independence from Corporate America.

By Charles Hugh Smith on 15 December 2014 for Of Two Minds -
(http://charleshughsmith.blogspot.co.uk/2014/12/what-choice-do-we-have.html)


Image above: Detail of painting "The MadTea Party" by Mark Bryan, 2010. From (http://www.artofmarkbryan.com/wp-content/gallery/politics/mad-tea-party-detail-2.jpg).


It's jolly good fun to discuss alternatives to the doomed status quo, but what choice do most of us have to participating in the current system, even if we loathe it? The lack of choice is of course a key characteristic of the status quo-- if alternatives were plentiful, how many would opt out of Corporate America and the Financial Nobility's manor house of debt servitude?

The absence of alternatives results from several interacting dynamics.The first is false choice, the illusion of choice that enables the Powers That Be to claim we live in a democracy that is also a meritocracy where anyone can rise to the top if they follow the prescribed pathway: a four-year university degree, followed by a graduate degree, and so on.

The political slaughterhouse has two entrances: Democratic and Republican. Nothing about the system changes regardless of which door you enter. "Democracy" is a false choice in a nation in which the big banks order their politico flunkies, toadies and lackeys to do their bidding: Fed Vice Chairman Shocked At Wall Street Influence After Jamie Dimon "Whips" Congressional Votes.

Going to college is also a false choice, given that those who choose not to get a 4-year degree are (we're assured) doomed to lifelong financial insecurity. Meanwhile, having a 4-year degree does little to guarantee an escape from lifelong financial insecurity.

The second factor is the status quo grants all the advantages to global corporations and the central state.The mechanisms used to enforce these advantages are both numerous and well-masked. One is cheap, limitless access to capital--what I call free money for financiers. Imagine how many profitable assets you could buy if you too could borrow $1 billion at .25% interest from the Federal Reserve or another central bank.

Several of these mechanisms are described in these articles, recommended by correspondent Chad D. (transnational is another way of saying global):

Why Transnationals Thrive
The Problem with Transnationals and what to do about it

Once you can access unlimited nearly-free capital, it's a snap to buy political influence, at which point the state (government) enforces your monopoly/cartel on the populace as rule of law. And we all know what happens if you challenge the state: you are targeted for marginalization, impoverishment and trumped-up Kafkaesque charges.

Given all these advantages, Corporate America and the State can afford to pay those who pledge their fealty far more handsome sums than can typically be earned outside these fortified fiefdoms. Above the entry level, Corporate America and the State both pay far in excess of the median wage in salary and benefits, and in the security promised to government employees.

It's not that difficult to earn $60,000 or more in government service (remember to include all the bennies--healthcare, vacation, personal days off, sick leave, pensions, etc.) and Corporate America pays its managerial/technocratic class very well.

Try earning enough outside the State or Corporate America to equal the pay and benefits offered to those inside. Of course a slice of professionals (accountants, attorneys, surgeons, engineers, etc.) can make handsome incomes as independents, but this is becoming more difficult even for highly educated professionals.

Below this level, making an upper-middle class income requires owning a profitable business. an increasingly challenging task in an economy which over-regulates all enterprise. As I have noted here many times, the fixed costs of doing legitimate business in America are rising constantly: healthcare insurance costs have skyrocketed for employers, along with junk fees, regulatory compliance, penalties for non-compliance, property taxes, rent, and on and on.

The sacred creed of the American economy is that the proper set of values, innovation and work ethic can make anybody wealthy (and thus powerful). The hype surrounding the "living proof" of this creed (Steve Jobs, Larry Ellison, et al.) fails to describe the considerably bleaker truth that the income earned by those outside the Corporate America/State fiefdoms follows a long tail distribution.

The long tail distribution is a handful of people (A-list actors, sports stars, tech entrepreneurs, venture capitalists, top-tier attorneys, corporate raiders, etc.) earn the majority of the money, while a relative pittance is distributed to the vast majority of those outside the fiefdoms.

The bottom line for the vast majority of us is that there is an extremely high price to be paid for independence from fealty to the State or Corporate America. Comparing the financial benefits and security offered in exchange for one's working life and fealty to Corporate America and the State, and the low income and precariousness of independence, most people choose the safety and security of working within the fiefdoms.

But there is a cost to this sacrifice of one's working life and fealty. It's difficult to put a price tag on it, but for most of us it's a significant sum--often hundreds of thousands of dollars over a lifetime. For those who can't stomach the absurdity of spending their lives in service to these fiefdoms, it's not really a choice; it simply isn't an option.

While we understand the price is far too steep for most people, for us it's a bargain. We will never have the corner office, the fat pension, the gold-plated healthcare, the Mercedes, or any of the other trappings of working in the top rungs of the fiefdoms. We may never own a new vehicle, or a house. We may never get a college degree.

We understand the immense appeal of the financial rewards and the security, and we don't begrudge those who choose to spend their lives in the fiefdoms. They have kids to raise, and dreams of a house and pension and all the rest. Nobody willingly accepts insecurity and low income if there is any way to avoid those burdens.

But for some of us, the price of independence is worth it for the simple reason we have no choice. 
.

End of US Market Economy

SUBHEAD:Why land is still referred to as “real property,” as though others are somehow unreal.

By John Michael Greer on 5 November 2014 for the Archdruid Report -
(http://thearchdruidreport.blogspot.com/2014/11/dark-age-america-end-of-market-economy.html)


Image above: Peter Bruegel the Elder painting of "The Peasant Wedding, 1566-69. From (http://upload.wikimedia.org/wikipedia/commons/7/70/Pieter_Bruegel_the_Elder_-_Peasant_Wedding_-_Google_Art_Project_2.jpg).

One of the factors that makes it difficult to think through the economic consequences of the end of the industrial age is that we’ve all grown up in a world where every form of economic activity has been channeled through certain familiar forms for so long that very few people remember that things could be any other way.

Another of the factors that make the same effort of thinking difficult is that the conventional economic thought of our time has invested immense effort and oceans of verbiage into obscuring the fact that things could be any other way.

Those are formidable obstacles. We’re going to have to confront them, though, because one of the core features of the decline and fall of civilizations is that most of the habits of everyday life that are standard practice when civilizations are at zenith get chucked promptly into the recycle bin as decline picks up speed.

That’s true across the whole spectrum of cultural phenomena, and it’s especially true of economics, for a reason discussed in last week’s post: the economic institutions and habits of a civilization in full flower are too complex for the same civilization to support once it’s gone to seed.

The institutions and habits that contemporary industrial civilization uses to structure its economic life comprise that tangled realm of supposedly voluntary exchanges we call “the market.”

Back when the United States was still contending with the Soviet Union for global hegemony, that almost always got rephrased as “the free market;” the adjective still gets some use among ideologues, but by and large it’s dropped out of use elsewhere.

This is a good thing, at least from the perspective of honest speaking, because the “free” market is of course nothing of the kind. It’s unfree in at least two crucial senses: first, in that it’s compulsory; second, in that it’s expensive.

“The law in its majestic equality,” Anatole France once noted drolly, “forbids rich and poor alike to urinate in public, sleep under bridges, or beg for bread.” In much the same sense, no one is actually forced to participate in the market economy in the modern industrial world.

Those who want to abstain are perfectly free to go looking for some other way to keep themselves fed, clothed, housed, and supplied with the other necessities of life, and the fact that every option outside of the market has been hedged around with impenetrable legal prohibitions if it hasn’t simply been annihilated by legal fiat or brute force is just one of those minor details that make life so interesting.

Historically speaking, there are a vast number of ways to handle exchanges of goods and services between people. In modern industrial societies, on the other hand, outside of the occasional vestige of an older tradition here and there, there’s only one.

Exchanging some form of labor for money, on whatever terms an employer chooses to offer, and then exchanging money for goods and services, on whatever terms the seller chooses to offer, is the only game in town. There’s nothing free about either exchange, other than the aforesaid freedom to starve in the gutter.

The further up you go in the social hierarchy, to be sure, the less burdensome the conditions on the exchanges generally turn out to be—here as elsewhere, privilege has its advantages—but unless you happen to have inherited wealth or can find some other way to parasitize the market economy without having to sell your own labor, you’re going to participate if you like to eat.

Your participation in the market, furthermore, doesn’t come cheap. Every exchange you make, whether it’s selling your labor or buying goods and services with the proceeds, takes place within a system that has been subjected to the process of intermediation discussed in last week’s post.

Thus, in most cases, you can’t simply sell your labor directly to individuals who want to buy it or its products; instead, you are expected to sell your labor to an employer, who then sells it or its product to others, gives you part of the proceeds, and pockets the rest.

Plenty of other people are lined up for their share of the value of your labor: bankers, landlords, government officials, and the list goes on. When you go to exchange money for goods and services, the same principle applies; how much of the value of your labor you get to keep for your own purposes varies from case to case, but it’s always less than the whole sum, and sometimes a great deal less.

Karl Marx performed a valuable service to political economy by pointing out these facts and giving them the stress they deserve, in the teeth of savage opposition from the cheerleaders of the status quo who, then as now, dominated economic thought. His proposed solution to the pervasive problems of the (un)free market was another matter.

Like most of his generation of European intellectuals, Marx was dazzled by the swamp-gas luminescence of Hegelian philosophy, and followed Hegel’s verbose and vaporous trail into a morass of circular reasoning and false prophecy from which few of his remaining followers have yet managed to extract themselves.

It’s from Hegel that Marx got the enticing but mistaken notion that history consists of a sequence of stages that move in a predetermined direction toward some as-perfect-as-possible state: the same idea, please note, that Francis Fukuyama used to justify his risible vision of the first Bush administration as the glorious fulfillment of human history. (To borrow a bit of old-fashioned European political jargon, there are right-Hegelians and left-Hegelians; Fukuyama was an example of the former, Marx of the latter.)

I’ll leave such claims and the theories founded on them to the true believers, alongside such equally plausible claims as the Singularity, the Rapture, and the lemonade oceans of Charles Fourier; what history itself shows is something rather different.

What history shows, as already noted, is that the complex systems that emerge during the heyday of a civilization are inevitably scrapped on the way back down. Market economies are among those complex systems.

Not all civilizations have market economies—some develop other ways to handle the complicated process of allocating goods and services in a society with many different social classes and occupational specialties—but those that do set up market economies inevitably load them with as many intermediaries as the overall complexity of their economies can support.

It’s when decline sets in and maintaining the existing level of complexity becomes a problem that the trouble begins. Under some conditions, intermediation can benefit the productive economy, but in a complex economy, more and more of the intermediation over time amounts to finding ways to game the system, profiting off economic activity without actually providing any benefit to anyone else.

A complex society at or after its zenith thus typically ends up with a huge burden of unproductive economic activity supported by an increasingly fragile foundation of productive activity.

All the intermediaries, the parasitic as well as the productive, expect to be maintained in the style to which they’re accustomed, and since they typically have more wealth and influence than the producers and consumers who support them, they can usually stop moves to block their access to the feed trough. Economic contraction, however, makes it hard to support business as usual on the shrinking supply of real wealth.

The intermediaries thus end up competing with the actual producers and consumers of goods and services, and since the intermediaries typically have the support of governments and institutional forms, more often than not it’s the intermediaries who win that competition.

It’s not at all hard to see that process at work; all it takes is a stroll down the main street of the old red brick mill town where I live, or any of thousands of other towns and cities in today’s America.

Here in Cumberland, there are empty storefronts all through downtown, and empty buildings well suited to any other kind of economic activity you care to name there and elsewhere in town. There are plenty of people who want to work, wage and benefit expectations are modest, and there are plenty of goods and services that people would buy if they had the chance.

Yet the storefronts stay empty, the workers stay unemployed, the goods and services remain unavailable. Why?

The reason is intermediation. Start a business in this town, or anywhere else in America, and the intermediaries all come running to line up in front of you with their hands out. Local, state, and federal bureaucrats all want their cut; so do the bankers, the landlords, the construction firms, and so on down the long list of businesses that feed on other businesses, and can’t be dispensed with because this or that law or regulation requires them to be paid their share. The resulting burden is far too large for most businesses to meet.

Thus businesses don’t get started, and those that do start up generally go under in short order. It’s the same problem faced by every parasite that becomes too successful: it kills the host on which its own survival depends.

That’s the usual outcome when a heavily intermediated market economy slams face first into the hard realities of decline. Theoretically, it would be possible to respond to the resulting crisis by forcing disintermediation, and thus salvaging the market economy. Practically, that’s usually not an option, because the disintermediation requires dragging a great many influential economic and political sectors away from their accustomed feeding trough.

Far more often than not, declining societies with heavily intermediated market economies respond to the crisis just described by trying to force the buyers and sellers of goods and services to participate in the market even at the cost of their own economic survival, so that some semblance of business as usual can proceed.

That’s why the late Roman Empire, for example, passed laws requiring that each male Roman citizen take up the same profession as his father, whether he could survive that way or not. That’s also why, as noted last week, so many American jurisdictions are cracking down on people who try to buy and sell food, medical care, and the like outside the corporate economy.

In the Roman case, the attempt to keep the market economy fully intermediated ended up killing the market economy altogether, and in most of the post-Roman world—interestingly, this was as true across much of the Byzantine empire as it was in the barbarian west—the complex money-mediated market economy of the old Roman world went away, and centuries passed before anything of the kind reappeared.

What replaced it is what always replaces the complex economic systems of fallen civilizations: a system that systematically chucks the intermediaries out of economic activity and replaces them with personal commitments set up to block any attempt to game the system: that is to say, feudalism.

There’s enough confusion around that last word these days that a concrete example is probably needed here. I’ll borrow a minor character from a favorite book of my childhood, therefore, and introduce you to Higg son of Snell.

His name could just as well be Michio, Chung-Wan, Devadatta, Hafiz, Diocles, Bel-Nasir-Apal, or Mentu-hetep, because the feudalisms that evolve in the wake of societal collapse are remarkably similar around the world and throughout time, but we’ll stick with Higg for now.

On the off chance that the name hasn’t clued you in, Higg is a peasant—a free peasant, he’ll tell you with some pride, and not a mere serf; his father died a little while back of what people call “elf-stroke” in his time and we’ve shortened to “stroke” in ours, and he’s come in the best of his two woolen tunics to the court of the local baron to take part in the ceremony at the heart of the feudal system.

It’s a verbal contract performed in the presence of witnesses: in this case, the baron, the village priest, a couple of elderly knights who serve the baron as advisers, and a gaggle of village elders who remember every detail of the local customary law with the verbal exactness common to learned people among the illiterate. Higg places his hands between the baron’s and repeats the traditional pledge of loyalty, coached as needed by the priest; the baron replies in equally formal words, and the two of them are bound for life in the relationship of liegeman to liege lord.

What this means in practice is anything but vague.

As the baron’s man, Higg has the lifelong right to dwell in his father’s house and make use of the garden and pigpen; to farm a certain specified portion of the village farmland; to pasture one milch cow and its calf, one ox, and twelve sheep on the village commons; to gather, on fourteen specified saint’s days, as much wood as he can carry on his back in a single trip from the forest north of the village, but only limbwood and fallen wood; to catch two dozen adult rabbits from the warren on the near side of the stream, being strictly forbidden to catch any from the warren on the far side of the millpond.

And, as a reward for a service his great-grandfather once performed for the baron’s great-grandfather during a boar hunt, to take anything that washes up on the weir across the stream between the first sound of the matin bell and the last of the vespers bell on the day of St. Ethelfrith each year.

In exchange for these benefits, Higg is bound to an equally specific set of duties.

He will labor in the baron’s fields, as well as his own and his neighbors, at seedtime and harvest; his son will help tend the baron’s cattle and sheep along with the rest of the village herd; he will give a tenth of his crop at harvest each year for the support of the village church; he will provide the baron with unpaid labor in the fields or on the great stone keep rising next to the old manorial hall for three weeks each year.

If the baron goes to war, whether he’s staging a raid on the next barony over or answering the summons of that half-mythical being, the king, in the distant town of London, Higg will put on a leather jerkin and an old iron helmet, take a stout knife and the billhook he normally uses to harvest wood on those fourteen saint’s days, and follow the baron in the field for up to forty days.

None of these benefits and duties are negotiable; all Higg’s paternal ancestors have held their land on these terms since time out of mind; each of his neighbors holds some equivalent set of feudal rights from the baron for some similar set of duties.

Higg has heard of markets. One is held annually every St. Audrey’s day at the king’s town of Norbury, twenty-seven miles away, but he’s never been there and may well never travel that far from home in his life. He also knows about money, and has even seen a silver penny once, but he will live out his entire life without ever buying or selling something for money, or engaging in any economic transaction governed by the law of supply and demand.

Not until centuries later, when the feudal economy begins to break down and intermediaries once again begin to insert themselves between producer and consumer, will that change—and that’s precisely the point, because feudal economics is what emerges in a society that has learned about the dangers of intermediation the hard way and sets out to build an economy where that doesn’t happen.

There are good reasons, in other words, why medieval European economic theory focused on the concept of the just price, which is not set by supply and demand, and why medieval European economic practice included a galaxy of carefully designed measures meant to prevent supply and demand from influencing prices, wages, or anything else.

There are equally good reasons why lending money at interest was considered a sufficiently heinous sin in the Middle Ages that Dante, in The Inferno, put lenders at the bottom of the seventh circle of hell, below mass murderers, heretics, and fallen angels.

The only sinners who go further down than lenders were the practitioners of fraud, in the eighth circle, and traitors, in the ninth: here again, this was a straightforward literary reflection of everyday reality in a society that depended on the sanctity of verbal contracts and the mutual personal obligations that structure feudal relationships.

(It’s probably necessary at this point to note that yes, I’m quite aware that European feudalism had its downsides—that it was rigidly caste-bound, brutally violent, and generally unjust. So is the system under which you live, dear reader, and it’s worth noting that the average medieval peasant worked fewer hours and had more days off than you do.

Medieval societies also valued stability or, as today’s economists like to call it, stagnation, rather than economic growth and technological progress; whether that’s a good thing or not probably ought to be left to be decided in the far future, when the long-term consequences of our system can be judged against the long-term consequences of Higg’s.)

A fully developed feudal system takes several centuries to emerge. The first stirrings of one, however, begin to take shape as soon as people in a declining civilization start to realize that the economic system under which they live is stacked against them, and benefits, at their expense, whatever class of parasitic intermediaries their society happens to have spawned. That’s when people begin looking for ways to meet their own economic needs outside the existing system, and certain things reliably follow.

The replacement of temporary economic transactions with enduring personal relationships is one of these; so is the primacy of farmland and other productive property to the economic system—this is why land and the like are still referred to legally as “real property,” as though all other forms of property are somehow unreal; in a feudal economy, that’s more or less the case.

A third consequence of the shift of economic activity away from the institutions and forms of a failing civilization has already been mentioned: the abandonment of money as an abstract intermediary in economic activity.

That’s a crucial element of the process, and it has even more crucial implications, but those are sweeping enough that the end of money will require a post of its own. We’ll discuss that next week.

.

Go Nuclear or Go Native

SUBHEAD: Being indigenous isn't really so bad, considering the alternative. It's just means being in a community in a place in the world.

By Juan Wilson on 20 October 2014 for Island Breath -
(http://islandbreath.blogspot.com/2014/10/go-nuclear-or-go-native.html)


Image above: Ceremony of the lighting of the Indigenous Sacred Fire in Cuiaba November 8, 2013. Forty-eight Brazilian tribes presented their cultural rituals and competed in traditional sports such as archery, running with logs and canoeing during the XII Games of Indigenous People.
From (http://totallycoolpix.com/2013/11/the-xii-games-of-indigenous-people/).

GOING NUCLEAR
There are several movers and shakers in the world that I have had respect for who have come to realize the desperate situation that modern mankind faces. This group senses that Peak Energy and Climate Change (due to the burning of the afore mentioned energy) are conspiring to put Modern Civilization off the road and in the ditch.

As mentioned before on this blog the group includes:

• James Hansen -  NASA atmospheric physicist; climatologist; Climate Change activist.
• James Lovelock - proponent of the Gaia Hypotheses; author "The Vanishing Face of Gaia".
• Steven Hawking - cosmologist of Black Holes; author of "A Brief History of Time".
• Stewart Brand - founder of the Whole Earth Catalog and The Long Now Foundation.
• Bill Gates - software engineer, founder of Microsoft, philanthropist, author of "The Road Ahead".

These guys perceive, quite rightly, that there aren't many ways to stay on the road and keep the wheels turning. The universities, the industries, the technology hubs, medical research facilities, the information/entertainment networks all require a level of refinement and continuous clean energy that does not appear possible with our current means.

This group has concluded that there is no way forward but a crash course of building nuclear power plants to support the power grid and information systems and organizations that sustain Modern Civilization throughout the world. This would require the construction of several hundred nuclear power plants to replace virtually all the oil, coal and natural gas power generating stations in the world.

There is plenty of Main Stream Media techno-porn about "New" and "Improved" nuclear power technology:

Popular Science: Compact Fusion Reactor  10/17/14
As they look to the sun Lockheed is working to develop a source of infinite energy... Suuuure.

The Telegaph: Molten Salt Nuclear Reactors 9/24/14
A revolution in nuclear power could slash costs of energy below cost of coal... Suuuure.

Forbes Magazine: Small Modular Reactors  5/13/14
Safe as a nuclear sub. These units be installed anywhere to supply needed power... Suuuure.

The facts are that the infrastructure to support a nuclear powered future does not exist and the resources to create and sustain that infrastructure do not exist.

As one example: We simply will not be able to repair and maintain the US Interstate Highway System necessary to provide the support for building, operating, and decommissioning of those nuclear power plants we want to build.

Just need for concrete, steel, and paving that is required for the bridges, over/under passes, culverts and roadways is monumental. As it is, our highway systems are crumbling and we do not seem to have the ability to keep up with its decay. Just imagine the lack of highway repair if we get to the point that interstate trucking is an unprofitable undertaking due to the cost of diesel fuel.

Although they won't yet admit it, Japan has demonstrated that nuclear power is a dead-end. The continuing massive release of radioactive material into the Pacific Ocean and the contamination of a large section of the middle third of Honshu Island (including greater Tokyo) is a permanent testament to the folly of nuclear power.

Japan's economy has been destroyed. The fact is hat they cannot afford to keep the Toyota, Nissan, Hitachi, and Mistubishi industries running on oil and they do not dare restart their 50 nuclear plants. This will be much clearer when the thyroid cancers emerge and other debilitating consequences of the Fukushima nuclear plant failure can no longer be hidden.

GOING NATIVE

However, there is an alternative to nuclear already in hand. As early as late 2011 James Howard Kunsler precicted (http://www.kunstler.com/Mags_Forecast2012.php):

Turning to Japan....That sore beset kingdom is suffering all the blowback of modern times at once: the Godzilla syndrome up in Fukushima; a demographic collapse; an imminent bond crisis; the collapse of export market partners; and a long, agonizing death spiral of its banks. I stick by a prediction I tendered back in March, after the deadly tsunami: Japan will decisively opt for a return to pre-industrial civilization. Why not? The rest of the world will be dragged kicking and screaming to the same place. Let Japan get there first and enjoy the advantage of the early adapter - back to an economy of local, hand-made stuff, rigid social hierarchy, folkloric hijinks in whispering bamboo groves, silk robes, and frequent time outs for the tea ceremony.

I wholeheartedly agree with Kunstler on this point and see that there is really no alternative to climbing down off our high horse and dealing with reality.

It seems the cost of keeping Western Civilization running is too expensive for the planet Earth to handle. As a result we will soon be forced to close that franchise or face the consequences - which likely will include several ramifications that could be called Extinction Level Events (ELE). Those would include among other things:

• Worldwide economic collapse due loss of non-renewable resources - Peak Everything.
• Massive desertification and/or soil loss in food producing areas of the world; 
• Wars fought with WMDs for diminishing resources - especially water, food and fuel.
• Multiple breaches of nuclear containment facilities due to industrialization's failures;
• Extinguishing of world's coastal urban centers due to global warming ocean level rise;
• Loss of knowledge and technological skill resulting from failure of information systems.

What will be needed as a base to work from is being able to conduct our lives with the energy and renewable resources immediately around us. That means sun, water, animals, plants and soil where we live.

For some places and peoples that may mean being hunter/gatherers with no fixed settlements; for others that may mean small rural gardening communities. The point is that the hunters and gardeners will be the rule not the exception. We will be indigenous, finally again.

This does not mean we will have no education or culture. But the subject matter and art forms however will be your own responsibility.

There will be repositories of knowledge - likely in the country monastery or manor library. There may even be villages with a school and the occasional town with a university, but they will be the exception not the rule.

Being indigenous isn't really so bad, considering the alternative. It's just means being in a community in a place in the world... and not somewhere else. It also means embracing that arrangement.

Forget the airports, the strip malls, the office cubicle and the cul-de-sac. You won't have to go there anymore. In fact you won't be able to. But you will have to get together to make dinner then make some music.

Go Nuclear or Go Native. There won't be much in between.

.

Bright Were The Halls Then

SUBHEAD: History indicates we'll chanting poems about the ruins of our cities four or five centuries from now.

By John Michael Greer on 9 July 2014 for Archdruid Report -
(http://thearchdruidreport.blogspot.com/2014/07/bright-were-halls-then.html)


Image above: The US Capital building under construction in 1861. From (http://www.visitthecapitol.gov/sites/default/files/Education/lesson-plan/PrimarySources_Round3/13-059_12_Philip_Reid_PS_v3.pdf).


Arnold Toynbee, whose magisterial writings on history have been a recurring source of inspiration for this blog, has pointed out an intriguing difference between the way civilizations rise and the way they fall. On the way up, he noted, each civilization tends to diverge not merely from its neighbors but from all other civilizations throughout history.  

 Its political and religious institutions, its arts and architecture, and all the other details of its daily life take on distinctive forms, so that as it nears maturity, even the briefest glance at one of its creations is often enough to identify its source.

Once the peak is past and the long road down begins, though, that pattern of divergence shifts into reverse, slowly at first, and then with increasing speed.

A curious sort of homogenization takes place: distinctive features are lost, and common patterns emerge in their place.  That doesn’t happen all at once, and different cultural forms lose their distinctive outlines at different rates, but the further down the trajectory of decline and fall a civilization proceeds, the more it resembles every other civilization in decline.

By the time that trajectory bottoms out, the resemblance is all but total; compare one postcollapse society to another—the societies of post-Roman Europe, let’s say, with those of post-Mycenean Greece—and it can be hard to believe that dark age societies so similar could have emerged out of the wreckage of civilizations so different.

It’s interesting to speculate about why this reversion to the mean should be so regular a theme in the twilight and afermath of so many civilizations. Still, the recurring patterns of decline and fall have another implication—or, if you will, another application. I’ve noted here and elsewhere that modern industrial society, especially but not only here in North America, is showing all the usual symptoms of a civilization on its way toward history’s compost bin.

If we’ve started along the familiar track of decline and fall—and I think a very good case can be made for that hypothesis—it should be possible to map the standard features of the way down onto the details of our current situation, and come up with a fairly accurate sense of the shape of the future ahead of us.

All the caveats raised in last week’s Archdruid Report post deserve repetition here, of course. The part of history that can be guessed in advance is a matter of broad trends and overall patterns, not the sort of specific incidents that make up so much of history as it happens.

Exactly how the pressures bearing down on late industrial America will work out in the day-by-day realities of politics, economics, and society will be determined by the usual interplay of individual choices and pure dumb luck.

That said, the broad trends and overall patterns are worth tracking in their own right, and some things that look as though they ought to belong to the realm of the unpredictable—for example, the political and military dynamics of border regions, or the relations among the imperial society’s political class, its increasingly disenfranchised lower classes, and the peoples outside its borders—follow predictable patterns in case after case in history, and show every sign of doing the same thing this time around too.


What I’m suggesting, in fact, is that in a very real sense, it’s possible to map out the history of North America over the next five centuries or so in advance. That’s a sweeping claim, and I’m well aware that the immediate response of at least some of my readers will be to reject the possibility out of hand.

I’d like to encourage those who have this reaction to try to keep an open mind. In the posts to come, I plan on illustrating every significant point I make with historical examples from the twilight years of other civilizations, as well as evidence from the current example insofar as that’s available yet.

Thus it should be possible for my readers to follow the argument as it unfolds and see how it hangs together.

Now of course all this presupposes that the lessons of the past actually have some relevance to our future. I’m aware that that’s a controversial proposal these days, but to my mind the controversy says more about the popular idiocies of our time than it does about the facts on the ground.

I’ve discussed in previous posts how people in today’s America have taken to using thoughtstoppers such as "but it’s different this time!" to protect themselves from learning anything from history—a habit that no doubt does wonders for their peace of mind today, though it pretty much guarantees them a face-first collision with a brick wall of misery and failure not much further down time’s road.

Those who insist on clinging to that habit are not going to find the next year or so of posts here to their taste.

They won’t be the only ones. Among the resources I plan on using to trace out the history of the next five centuries is the current state of the art in the environmental sciences, and that includes the very substantial body of evidence and research on anthropogenic climate change.

I’m aware that some people consider that controversial, and of course some very rich corporate interests have invested a lot of money into convincing people that it’s controversial, but I’ve read extensively on all sides of the subject, and the arguments against taking anthropogenic climate change seriously strike me as specious. I don’t propose to debate the matter here, either—there are plenty of forums for that.

While I propose to leaven current model-based estimates on climate change and sea level rise with the evidence from paleoclimatology, those who insist that there’s nothing at all the matter with treating the atmosphere as an aerial sewer for greenhouse gases are not going to be happy with the posts ahead.

I also propose to discuss industrial civilization’s decline and fall without trying to sugarcoat the harsher dimensions of that process, and that’s going to ruffle yet another set of feathers. Regular readers will recall a post earlier this year discussing the desperate attempts to insist that it won’t be that bad, really it won’t, that were starting to show up in the flurry of criticism each of these weekly essays reliably fields.

That’s even more common now than it was then; nowadays, in fact, whenever one of my posts uses words such as "decline" or "dark age," I can count on being taken to task by critics who insist earnestly that such language is too negative, that of course we’re facing a shift to a different kind of society but I shouldn’t describe it in such disempowering terms, and so on through the whole vocabulary of the obligatory optimism that’s so fashionable among the privileged these days.

I’m pretty sure, as noted in the blog post just cited, that this marks the beginning of a shift by the peak oil community as a whole out of the second of Elisabeth Kubler-Ross’ famous five stages, the stage of anger, into the third stage of bargaining. That’s welcome, in that it brings us closer to the point at which people have finished dealing with their own psychological issues and can get to work coping with the predicament of our time, but it’s still as much an evasion of that predicament as denial and anger were.

The fall of a civilization is not a pleasant prospect—and that’s what we’re talking about, of course: the decline and fall of industrial civilization, the long passage through a dark age, and the first stirrings of the successor societies that will build on our ruins. That’s how the life cycle of a civilization ends, and it’s the way that ours is ending right now.

What that means in practice is that most of the familiar assumptions people in the industrial world like to make about the future will be stood on their heads in the decades and centuries ahead.

Most of the rhetoric being splashed about these days in support of this or that or the other Great Turning that will save us from the consequences of our own actions assumes, as a matter of course, that a majority of people in the United States—or, heaven help us, in the whole industrial world—can and will come together around some broadly accepted set of values and some agreed-upon plan of action to rescue industrial civilization from the rising spiral of crises that surrounds it.

My readers may have noticed that things seem to be moving in the opposite direction, and history suggests that they’re quite correct.

Among the standard phenomena of decline and fall, in fact, is the shattering of the collective consensus that gives a growing society the capacity to act together to accomplish much of anything at all.  The schism between the political class and the rest of the population—you can certainly call these "the 1%" and "the 99%" if you wish—is simply the most visible of the fissures that spread through every declining civilization, breaking it into a crazy quilt of dissident fragments pursuing competing ideals and agendas.

That process has a predictable endpoint, too:  as the increasingly grotesque misbehavior of the political class loses it whatever respect and loyalty it once received from the rest of society, and the masses abandon their trust in the political institutions of their society, charismatic leaders from outside the political class fill the vacuum, violence becomes the normal arbiter of power, and the rule of law becomes a polite fiction when it isn’t simply abandoned altogether.

The economic sphere of a society in decline undergoes a parallel fragmentation for different reasons. In ages of economic expansion, the labor of the working classes yields enough profit to cover the costs of a more or less complex superstructure, whether that superstructure consists of the pharaohs and priesthoods of ancient Egypt or the bureaucrats and investment bankers of late industrial America.

As expansion gives way to contraction, the production of goods and services no longer yields the profit ot once did, but the members of the political class, whose power and wealth depend on the superstructure, are predictably unwilling to lose their privileged status and have the power to keep themselves fed at everyone else’s expense.

The reliable result is a squeeze on productive economic activity that drives a declining civilization into one convulsive financial crisis after another, and ends by shredding its capacity to produce even the most necessary goods and services.

In response, people begin dropping out of the economic mainstream altogether, because scrabbling for subsistence on the economic fringes is less futile than trying to get by in a system increasingly rigged against them. Rising taxes, declining government services, and systematic privatization of public goods by the rich compete to alienate more and more people from the established order, and the debasement of the money system in an attempt to make up for faltering tax revenues drives more and more economic activity into forms of exchange that don’t involve money at all.

As the monetary system fails, in turn, economies of scale become impossible to exploit; the economy fragments and simplifies until bare economic subsistence on local resources, occasionally supplemented by plunder, becomes the sole surviving form of economic activity.

Taken together, these patterns of political fragmentation and economic unraveling send the political class of a failing civilization on a feet-first journey through the exit doors of history.  The only skills its members have, by and large, are those needed to manipulate the complex political and economic levers of their society, and their power depends entirely on the active loyalty of their subordinates, all the way down the chain of command, and the passive obedience of the rest of society.

The collapse of political institutions strips the political class of any claim to legitimacy, the breakdown of the economic system limits its ability to buy the loyalty of those that it can no longer inspire, the breakdown of the levers of control strips its members of the only actual power they’ve got, and that’s when they find themselves having to compete for followers with the charismatic leaders rising just then from the lower echelons of society.

The endgame, far more often than not, comes when the political class tries to hire the rising leaders of the disenfranchised as a source of muscle to control the rest of the populace, and finds out the hard way that it’s the people who carry the weapons, not the ones who think they’re giving the orders, who actually exercise power.

The implosion of the political class has implications that go well beyond a simple change in personnel at the upper levels of society. The political and social fragmentation mentioned earlier applies just as forcefully to the less tangible dimensions of human life—its ideas and ideals, its beliefs and values and cultural practices.

As a civilization tips over into decline, its educational and cultural institutions, its arts, literature, sciences, philosophies and religions all become identified with its political class; this isn’t an accident, as the political class generally goes out of its way to exploit all these things for the sake of its own faltering authority and influence.

To those outside the political class, in turn, the high culture of the civilization becomes alien and hateful, and when the political class goes down, the cultural resources that it harnessed to its service go down with it.

Sometimes, some of those resources get salvaged by subcultures for their own purposes, as Christian monks and nuns salvaged portions of classical Greek and Roman philosophy and science for the greater glory of God.

That’s not guaranteed, though, and even when it does happen, the salvage crew picks and chooses for its own reasons—the survival of classical Greek astronomy in the early medieval West, for example, happened simply because the Church needed to know how to calculate the date of Easter.

Where no such motive exists, losses can be total: of the immense corpus of Roman music, the only thing that survives is a fragment of one tune that takes about 25 seconds to play, and there are historical examples in which even the simple trick of literacy got lost during the implosion of a civilization, and had to be imported centuries later from somewhere else.


All these transformations impact the human ecology of a falling civilization—that is, the basic relationships with the natural world on which every human society depends for day to day survival.

Most civilizations know perfectly well what has to be done to keep topsoil in place, irrigation water flowing, harvests coming in, and all the other details of human interaction with the environment on a stable footing. The problem is always how to meet the required costs as economic growth ends, contraction sets in, and the ability of central governments to enforce their edicts begins to unravel. 

The habit of feeding the superstructure at the expense of everything else impacts the environment just as forcefully as it does the working classes:  just as wages drop to starvation levels and keep falling, funding for necessary investments in infrastructure, fallow periods needed for crop rotation, and the other inputs that keep an agricultural system going in a sustainable manner all get cut.

As a result, topsoil washes away, agricultural hinterlands degrade into deserts or swamps, vital infrastructure collapses from malign neglect, and the ability of the land to support human life starts on the cascading descent that characterizes the end stage of decline—and so, in turn, does population, because human numbers in the last analysis are a dependent variable, not an independent one.

Populations don’t grow or shrink because people just up and decide one day to have more or fewer babies; they’re constrained by ecological limits.

In an expanding civilization, as its wealth and resource base increases, the population expands as well, since people can afford to have more children, and since more of the children born each year have access to the nutrition and basic health care that let them survive to breeding age themselves.  When growth gives way to decline, population typically keeps rising for another generation or so due to sheer demographic momentum, and then begins to fall.

The consequences can be traced in the history of every collapsing civilization.  As the rural economy implodes due to agricultural failure on top of the more general economic decline, a growing fraction of the population concentrates in urban slum districts, and as public health measures collapse, these turn into incubators for infectious disease.

Epidemics are thus a common feature in the history of declining civilizations, and of course war and famine are also significant factors, but an even larger toll is taken by the constant upward pressure exerted on death rates by poverty, malnutrition, crowding, and stress.

As deaths outnumber births, population goes into a decline that can easily continue for centuries. It’s far from uncommon for the population of an area in the wake of a civilization to equal less than 10% of the figure it reached at the precollapse peak.

Factor these patterns together, follow them out over the usual one to three centuries of spiralling decline, and you have the standard picture of a dark age society: a mostly deserted countryside of small and scattered villages where subsistence farmers, illiterate and impoverished, struggle to coax fertility back into the depleted topsoil.

Their goverments consist of the personal rule of local warlords, who take a share of each year’s harvest in exchange for protection from raiders and rough justice administered in the shade of any convenient tree.

Their literature consists of poems, lovingly memorized and chanted to the sound of a simple stringed instrument, recalling the great deeds of the charismatic leaders of a vanished age, and these same poems also contain everything they know about their history.

Their health care consists of herbs, a little rough surgery, and incantations cannily used to exploit the placebo effect. Their science—well, I’ll let you imagine that for yourself.

And the legacy of the past? Here’s some of what an anonymous poet in one dark age had to say about the previous civilization:

Bright were the halls then, many the bath-houses,
High the gables, loud the joyful clamor,
Many the meadhalls full of delights
Until mighty Fate overthrew it all.
Wide was the slaughter, the plague-time came,
Death took away all those brave men.
Broken their ramparts, fallen their halls,>
The city decayed; those who built it
Fell to the earth. Thus these courts crumble,
And roof-tiles fall from this arch of stone.

Fans of Anglo-Saxon poetry will recognize that as a passage from "The Ruin." If the processes of history follow their normal pattern, they will be chanting poems like this about the ruins of our cities four or five centuries from now.

How we’ll get there, and what is likely to happen en route, will be the subject of most of the posts here for the next year or so.

.

River of Human Folly

SUBHEAD: Without even noticing we are entering an era of Apocalypse and Full Spectrum Neo-Feudalism

By Ray Jason on 13 May 2014 for the Sea Gypsy Philosopher -
(http://theseagypsyphilosopher.blogspot.com/2014/05/the-river-of-human-folly.html)


Image above: The Aventura on the Rio Chagres in Panama. From original article.

It was a self-imposed exile. My initial diagnosis was “world weariness,” but after a few days of solitude on the Rio Chagres, it became clear to me that my true ailment was “human weariness.” How could my species be so foolish, so destructive, so self-absorbed, and so unaware of the consequences of its actions? It saddened me and it astonished me. So I had come here to escape from humanity in order to contemplate it more clearly.

Twice a day I would row as far up the river as the strength of the contrary current would permit me. Then I would lazily drift back down to AVENTURA in my inflatable dinghy.

As I floated downstream, I savored a tapestry of exquisite beauty – the threads included shimmering water and bird song and fish play and monkey trees in the jungle. By the fifth day, clarity was emerging as the river breezes and the exotic night sounds healed me.

The paradoxical magic of Solitude blessed me once again. For days on end there was not a single human in view, but this absence intensified my focus on the human project - until it seemed as sharp as the vision of the osprey that circled overhead.

Here is what I saw. Civilization seems to be hurtling down two disastrous paths that are contrary to each other and yet connected to each other.

The first course is a societal ruination that is so catastrophic that I refer to it as apocalyptic collapse - or to create a term – APOCOLLAPSE.

The second course is a steady but accelerating reshaping of the western democracies into tyrannical police-surveillance states. I call this FULL SPECTRUM NEO-FEUDALISM.

APOCOLLAPSE
There are three meta-systems that individually or in combination could de-stabilize the planet so profoundly that the world that we take for granted could vanish with paralyzing swiftness. I call them the Big Bad “E”s and they stand for Energy, Economics and Ecology.

ENERGY
Our modern techno-industrial society is so dependent on enormous inputs of fossil fuel products that as Peak Oil intensifies prices will skyrocket and supply chains will break-down. And so huge swaths of daily living that we take for granted will be compromised or eliminated.

The fragility of supermarkets that only stock three days worth of food will be revealed when the trucks can’t deliver the groceries because diesel fuel is unavailable or unaffordable. The industrial farming system which uses oil and natural gas in tractors, combines, fertilizer, insecticides, and pesticides will wobble to a halt. The electrical grid will go down as the fuel dribbles away, thus leaving millions of people either sweltering or shivering in the dark.

As for the recent rash (a most appropriate noun) of feel good energy stories - they are a callous and malicious charade underwritten by the energy giants to keep the illusion going … until it just stops going. A good comparison is the believability of the tobacco industry which deceived and lied and distorted until even their most expensive public relations campaigns could no longer disguise the truth.

ECONOMICS
 I would characterize our modern economic system as a perverse mating of absurdity and evil. At least the villainous Robber Barons of the 19th century actually “made things.” They may have been ruthless and greedy, but they produced steel and railroads and light bulbs. But our current financial titans have only one real talent. They are masters of deceit – of smoke and mirrors and collusion and corruption. Try heating your home with credit default swaps or try filling your car’s gas tank with collateralized debt obligations.

These financial demigods acquire their obscene fortunes not by producing anything of worth to society, but by a dark web of manipulation. They own the politicians of both parties. The government agencies that should police them are packed with “regulators” that used to work for the very banks that they are supposed to monitor.

They are the owners of and the beneficiaries of the Federal Reserve. This omnipotent agency, which many mistakenly assume works for The People via the government, is actually a creation of the biggest and most powerful banks. I think of the Fed as the pool boy for the Too Big to Jail banks.

This financial criminality has led to a global economic panorama that is appalling and suicidal. Most of the banks of the first world are insolvent. Their true assets vs. obligations portfolios have been hidden by money pumping from the central banks and the IMF which, ironically also has no real money. The fiat currency system, which is the foundation for all of this insanity, is now being called into question more and more frequently.

 This scrutiny is well deserved since there has not been a single fiat currency in the history of the world that survived. The supremacy of the U.S. dollar as the global reserve currency and as the petro-dollar is also being challenged. China and Russia would love to terminate this advantage, which has given the U.S. a “get out of debtor’s jail” free pass for decades.

In summary, the economic big picture is horrendous. The gap between the rich and the poor has become so gigantic that the disgruntled underclass is starting to become angry. The enormous debts of many nations are now so ludicrous that these countries have to borrow money just to pay the interest on previously borrowed money. And there is an enormous pool of financial dark matter circling the planet like an invisible Death Star. This is the multi-trillion dollar derivatives swindle.

One day, in the form of an enormous black dragon swan, it will darken the sky above the executive “team-building” picnic of a major corporation and divest them of their “all is well” delusions.

ECOLOGY
 There are two diametrically opposed trends on the environmental landscape. On the one hand the vast majority of climate scientists are continually adjusting their previous predictions because their “worst case scenarios” were not worst case enough. Not only are they altering the severity of the various calamities, but also the speed at which they are occurring.

The methane vents in Siberia are expanding faster than predicted. There are severe droughts in most of the world’s primary bread baskets. The Arctic ice shelf might completely disappear in the next few summers. The wettest forest in the world – the Amazon - is regularly catching fire. I could list a dozen other examples, but the trend is that things are deteriorating more significantly and at a faster pace than expected.

On the opposite hand, the “climate change denial” camp is growing. The fact that the obscenely rich oligarchs have funded thousands of lobbyists in Washington to sway the opinions of Congress is the main factor in this increase. And the fact that these politicians are handed bullet points based on “scientific” studies that these same industrialists bankrolled, is repulsive. What sort of sick sentient being would bequeath his grandchildren a smoldering planet just so that he can move further up the Forbes Richest People list?

So, in conclusion, the APOCOLLAPSE seems inevitable. There is no reason to believe that some sort of Tesla energy miracle will suddenly appear out of nowhere. The economic insanity that threatens our way of life is utterly monumental due to the interwoven nature of global finance and commerce in the 21st century. And we are approaching so many ecological tipping points that it will become impossible for 7 billion people to continue to survive at our current standard of living.

FULL SPECTRUM NEO-FEUDALSIM
Any honest analysis of 21st century American democracy must conclude that it is a sham. Certainly there is still the façade, but it is as phony as a Hollywood movie set. The trappings of a republic are still there, but the actual “power of the people” has vaporized. It has been supplanted by the power of the RICH PEOPLE. If the wealthy campaign contributors want a war in Iraq, it does not matter that 80% of the population is against it.

No matter which political party is in power, the results are still basically the same. And that’s because mega-wealthy individuals and enormous corporations donate to both campaigns, so that regardless of the outcome, the victor must grant them access and influence. Even the two party system itself, is symptomatic of the corruption at the core of our pseudo-republic. Any third party candidate who poses a genuine threat to the status quo is attacked and marginalized. Instead of citizen legislators, it has become a world of millionaire career politicians. And the phrases “term limits” and “genuine campaign finance reform” are not permitted in polite company.

It is bad enough that the U.S. political scene has become an exclusionary zone where only the prominent have access, but what is worse is the direction that this Plutocracy is headed. It feels like the country of my youth has disappeared and been replaced by an imposter. Here are some examples:

• The Middle Class, which should be the bulwark of democracy, is being knowingly destroyed.
  
  
• Instead of being outraged by the use of torture, my government now commits it.
  
• The power of the press has been neutered. They have forsaken their role as societal watch-dogs, and have instead become political lapdogs.
  
• Instead of supporting “self-determination” the U.S. is despised around the world for its imperial policies in support of its gigantic corporations.
  
• The Posse-Comitatus Act, which forbids the use of the military in domestic police duty, is being overtly and covertly undermined.
  
• The NDAA act gives the President the power to indefinitely detain (imprison) almost anyone that is perceived as a threat to the State.
  
• The nation is being rapidly turned into an Orwellian nightmare whereby the government can spy on all of your communications.

Instead of being honored and encouraged, whistleblowers are being vilified and imprisoned.

Local police forces all across the country are being militarized as though the powers that rule are preparing for revolution. Cops have morphed from crime stoppers into enforcers.

All of these bullet points are symptomatic of a government that seeks more and more control of its citizens. The inescapable trend is towards a society in which a tiny group is extremely rich and powerful and the vast majority is an underclass of modern serfs that run the machines that spew out the profits. It has all of the markings of a science fiction nightmare that is turning into reality.

Now that I have outlined these two powerful forces - APOCOLLAPSE and FULL SPECTRUM NEO-FEUDALISM - allow me to discuss the dynamic between the two. The big issue is whether the tyrants, who seek massive domination of humanity through their thugs and surveillance, will succeed with their control freak fantasies before civilization either suddenly implodes or gradually falls over. If the Big Bad “E”s do initiate a societal meltdown, then large governments will suddenly be neutered. The seemingly almighty rulers will swiftly be transformed from harem masters into eunuchs, as everything becomes smaller and more local.

If on the other hand the demagogues do manage to impose their Orwellian nightmare on large parts of the world, I believe that the APOCOLLAPSE will still occur. And that is because even a Soylent Green world needs energy and a livable biosphere and an economic system that is not laughably dysfunctional.

Therefore, to me, the major question is whether the world will unravel before the Malignant Overlords have managed to fully erect their wet dream control grid. It would certainly be preferable if a few generations of serfs did not have to live under police state oppression as the lights flicker out and the erupting methane vents make breathing a hellish ordeal.


As for how an individual or a family can respond to these tragic scenarios, these are my beliefs. I know that I can’t stop any of the Big Bad “E”s from continuing down the seemingly irreversible paths that lead to APOCOLLAPSE. Nor do I think that any citizen or group of people can derail the hideous locomotive of FULL SPECTRUM NEO-FEUDALISM. I suspect that both non-confrontational methods and revolution in the streets are both doomed to failure.

But I do believe that a wise person and his loved ones can prepare themselves so that they have at least a chance of escaping and surviving. And for those who succeed, they will face a difficult but wondrous challenge. Their mission will be to sculpt a new human living arrangement that combines the best elements of civilization with the best aspects of pre-civilized tribal cultures.

For over ten thousand generations we human animals GOT IT RIGHT! We lived in a manner that was sustainable, communal, joyous, egalitarian and compassionate. And we showed awe and reverence for the non-human world that cocooned us. We have lost our way only in the last few thousand years when Agriculture ended tribal society and ushered in Civilization. Unfortunately, the shining benefits of this new societal structure blinded us to the devastating side effects. We did not realize that hierarchy and division of labor would lead to rulers and priests and armies and wars and rich and poor and destruction and despair.


Personally, I no longer choose to “rage against the machine.” It seems like a hopeless task and a misuse of my time, energy and intellect. Instead, I believe that there is greater wisdom in attempting to conceptualize what might arise “on the other side of Collapse.” That strikes me as a worthwhile and incredibly vital pursuit. My essay on that topic is already pretty well sketched out. I am tentatively calling it “On the Far Side of Oblivion.”

But its completion will require more time on the river – in sacred harmony with the whispering water - and the creatures that it nurtures.  

.

Death of Ownership

SUBHEAD: Six dynamics in the destruction of widespread ownership and the creation of a neofeudal society.

By Charles Hugh Smith on 6 February 2013 for Of Two Minds -
(http://www.oftwominds.com/blogfeb13/death-of-ownership2-13.html)


Image above: A man and his castle. World record highest sand (37') castle by Ed Jarrett. From (http://www.dailymail.co.uk/news/article-2002328/Man-beats-record-building-worlds-tallest-sandcastle.html).

The foundation of the neofeudal economy is this: the right of ownership still exists in name, but the actual ownership of political and financial power is concentrated in the hands of a few.

The core of American liberty is widespread private ownership of property. The Founding Fathers were quite clear on the necessity of protecting private ownership from encroachment by a covertly created monarchical Empire or a financial Aristocracy.

Private ownership protected liberty and the distribution of wealth by enabling widespread ownership of "the means of production" (land, tools, intellectual property, enterprises) and home ownership.

Thus the correlation between prosperity, widespread ownership of small businesses and homes and a relatively modest disparity of private wealth. When ownership of property becomes concentrated into a rentier class (i.e. a financial Aristocracy) that is protected by a Monocrat Central State, income disparity shoots up and prosperity is concentrated in the hands of the political and financial Elites.

In other words, the Founding Fathers understood that financial servitude precluded political liberty. Liberty in a neofeudal economy was ultimately liberty in name only.

Why Inequality Matters: The Housing Crisis, The Justice System & Capitalism.

While outright slavery was outlawed, the chains of serfdom were (and are) entirely legal. If you doubt this, please try erasing your student loans in bankruptcy court.

There are a number of complex dynamics in play in the Death of the Ownership Society. I will try to cover them as simply and directly as possible.

Dynamic #1
If a homeowner's real-world equity is effectively zero, then what do they actually own? They own a mortgage, i.e. a promise to pay a debt. As long as they are current on payments, this acts more as a claim on future ownership, i.e. full ownership when the mortgage is paid off, or a long-term lease.

If their equity is 10% of the mortgage, there is no way to extract this equity short of selling the home, and the transactions fees will consume most of the 10%.

What the lender owns is A) a claim on the underlying property and B) the homeowner's income stream, much of which flows to the lender via mortgage payments.

Is this arrangement "widespread ownership" or is it cloaked neofeudalism? In credit bubbles, homeowners appear to benefit as their ownership claim is leveraged by the lender's capital into astounding profits. But alas, credit bubbles never last, and when they pop then the extra debt taken on to play the speculative leverage game remains to be paid.

Dynamic #2
If the mortgage is sliced and diced into tranches and securitized, i.e. bundled into pools of mortgages sold to investors, what happens to the notion of ownership?

Longtime correspondent Jim S. provides the answer: securitization creates a new class of "non-property" that is fraudulent and thus criminal. Jim explains:

The original crime at the front of the securitization process is creating "non-property." The loss of the legal paper trail of title transfers, note transfers, country property transfer registrations in the rapid performance of mortgage securitizations is further sidestepped by focusing attention on the foreclosure procedural irregularities at the end of the process. The creation of "non-property" at the front of the process necessarily creates the additional requirement of additional fraud at the end of the process: foreclosures.

By extending the forgiveness of what should be prosecuted as fraud (what has been deemed mere malfeasance deserving of a picayune civil fine), the Status Quo hid the original crimes of rapid securitization that destroyed the legal status of property. The biggest crime in American History is about to end the process of "sweeping" the original crime under the rug. The crime is the destruction of the legal standing of property, fully at public expense, and its ultimate accumulation in the Executive Branch for "redistributive" disposition, again at the full expense of the public. Dodd/Frank only has extended the efficiency of the complicated process of theft, and further solidified the nature of its very permanence.

The focus on the disappearance of mortgage titles is at the foreclosure end, and not at the front end of the securitization process where the titles disappeared on a system wide basis. Robo-signing is a fraudulent result of the original crime, not recognized or treated as a crime, but as a civil offense worthy of a paltry fine.

The robo-signing settlement will further solidify mortgage securities formation in the future, with civil penalties for malfeasance reduced to a minimized cost of continuing the process.

Though the the Consumer Financial Protection Bureau (CFPB) has been sold as a consumer protection agency, it is fundamentally a rogue agency operated within the Federal Reserve.

The CFPB is mentioned as having undefined scope and extensiveness of powers, immune from real Presidential or Congressional oversight, having essentially full, autonomous power within the Federal Reserve to do what it wants, when it wants, in the full comfort and safety of the Federal Reserve itself. The CFPB can buy, borrow on and take security positions in failing and failed banks. What a deal.

This harks back to a pre-crisis specialty: get rid of supposedly outdated regulation, but create no new limits or powers to keep things from blowing up.

Thank you, Jim, for the clear explanation.

It is clear that Securitization Is Illegal.

Dynamic #3
Economist John Maynard Keynes' concept of a "comprehensive socialisation of investment" has been reduced by the Neo-Keynesian cargo cult to a cartoonish campaign of the Central State to borrow trillions of dollars to prop up its most corrupt and inefficient crony-capitalist cartels and the rentier-class--the financial Aristocracy. Here is Keynes:

I conceive, therefore, that a somewhat comprehensive socialisation of investment will prove the means of securing an approximation to full employment. But beyond this no obvious case is made out for a system of State-Socialism which would embrace most of the economic life of the community.

In this context, we can understand the original purpose of the Federal Housing Administration (FHA) and the other housing-mortgage agencies of Fannie Mae and Freddie Mac as a "somewhat comprehensive socialisation of investment" in housing: a Federal agency underwrote and guaranteed mortgages to individual households to enable widespread ownership of homes. It was not conceived as a "system of State-Socialism," that is, a means for the State to acquire ownership of the nation's housing stock.

Not coincidentally, the rental housing market was dominated by individual investors (Mom and Pop proprietors) in the era before mortgage securitization and the concentration of power in "too big to fail" investment and commercial banks.

Institutional ownership of rental housing was concentrated in the 50+ unit housing sector, less than 1% of the nation's 15 million rental properties. In the 5- to 49-unit sector, individual owners still owned three-fourths of all properties.

The ownership of rental properties was widely dispersed among individual investors.

Dynamic #4
Now we find the Federal mortgage agencies are colluding with private capital to transfer ownership of the Federally guaranteed/owned portion of the nation's housing stock to concentrations of private capital, i.e. the financial Aristocracy.

The details of this wholesale transfer of what amounts to public property to the financial Aristocracy are chilling: in effect, private capital puts a few bucks down and Fannie Mae loans them the rest at zero interest. It also gives them roughly 30% of the rental income for managing the properties, and after the dust of robo-signing has settled, the properties will be transferred to the financial Aristocracy.

What happened to the agency's mission to broaden home ownership? It has been subverted to serve the interests of concentrated private capital.

Michael Olenick: How Fannie Enriches Private Equity Investors at Taxpayer and Homeowner Expense (Naked Capitalism, highly recommended)

Fannie Mae Begins Marketing Foreclosed Homes as Rentals

Structured Sales Transactions (i.e. the bundling and transfer of Fannie Mae owned properties to private capital)

Thanks to the collusion of the Federal Reserve and the Federal mortgage agencies, private capital is gorging on vast blocks of homes:

Blackstone to buy $1 billion worth of Tampa Bay homes for rentals

It’s About Time - JP Morgan To Enter The Housing Slumlord Trade

Dynamic #5
There are effectively two sets of laws in the U.S.: one for the Central State/financial Aristocracy and one for the serfs. From Why Inequality Matters: The Housing Crisis, The Justice System & Capitalism:

One of the central characteristics of highly unequal societies is that two sets of laws develop: One set for the rich and powerful and one set for everyone else. The more unequal societies become, the more easily they accept the unacceptable, and with each unrebuked violation, the powerful actors at the top of the society gain an ever greater sense of entitlement and an ever greater sense that the laws that govern everyone else don’t apply to them. As a result, their behavior becomes increasingly egregious.

Yale’s Robert Dahl, one of the preeminent political scientists of our era, wrote in 2006 in On Political Equality (Yale University Press) of the risks of rising economic inequality, which is inevitably accompanied by political power which also concentrates at the top of the society:

“The unequal accumulation of political resources points to an ominous possibility: political inequalities may be ratcheted up, so to speak, to a level from which they cannot be ratcheted down. The cumulative advantages in power, influence, and authority of the more privileged strata may become so great that .. a majority of ordinary citizens…are simply unable…to overcome the forces of inequality arrayed against them.”

In other words, neofeudal serfdom.

The new road to serfdom runs not through Marxist ownership by the State but the transfer of the nation's assets and wealth by the State to concentrated private capital.

Dynamic #6
The next iteration of this transfer is now clear: blocks of rental homes will be bundled and securitized by Wall Street and sold to investors worldwide. Haven't we seen this before? Only now it's all OK because the creation of "non-property" rentier income streams is now legal, and the Federal government and the Federal Reserve have begun to transfer publicly owned or guaranteed properties to their pals in private capital on a wholesale basis.

From It’s About Time - JP Morgan To Enter The Housing Slumlord Trade:

“It’s hard to find a private-equity firm on the planet that doesn’t have a strategy in this space,” Gary Beasley, chief executive officer at Waypoint Homes, said last week at the American Securitization Forum’s annual conference in Las Vegas. The Oakland, California-based company has bought homes in California, Arizona, Illinois and Georgia.

The foundation of the neofeudal economy is this: the right of ownership still exists in name, but the actual ownership of political and financial power is concentrated in the hands of a few. "Ownership" of a heavily mortgaged home is a simulacrum of ownership when the "owner's" income is diverted to a rentier financial Aristocracy.


.