The entire “first world” financial system is manipulated. This is no secret – the manipulators not only admit it, but are proud of it. And yes, I am referring to central banks: manipulation is what they do. I really don’t have any inside information on this, except that I’ve heard a lot of confidential stories from Comex traders. (Don’t trust Comex for a second.)
So, manipulation is a given. What I’m referring to is the fact that the manipulators are succeeding beyond anyone’s wildest dreams. Joe Average knows in his gut that everything is smoke and mirrors, but he is unwilling to look. He prays that the manipulators can keep the game going until he is dead, when he can no longer be held accountable.
The success of the manipulators has reached such levels that their victims are unwilling to complain. In fact, their victims defend them! It’s a type of Stockholm Syndrome, spread over continents.
I got an email two days ago, from a friend who happens to be one of the world’s great investment analysts. He was at wit’s end over the markets. Not because of price moves – his charts predicted those – but because people no longer cared about reality.
Here’s what I wrote back to my friend:
They are winning. There is no question about it. They are printing like mad with minimal inflation, stealing from millions at once with no riots, stoking raging bull markets based on no reason whatsoever, creating paper silver and gold without limit and without consequences, while keeping all the foreigners in line and obedient.
This is the ultimate, screaming triumph of the political and banking elite – their highest high in the history of civilization. And yet, no matter how badly they abuse the world, they enjoy complete obedience.
To quote a scientist from the early 1980s, upon seeing a photo of braided rings around Saturn: “It’s stark, raving mad, but it’s there.”
We are living through a moment of madness that future historians will write about: Black is white, down is up, rehypothecation is prudence, naked shorting is benevolent, abuse is love, theft is mercy. And all the while, humanity just sits and accepts their abuse. Following is courage, thinking is threat, and no one dares a sideways glance at the insanity, for fear that it will break.
All cling to a system that grinds them up and all walk together into the sea as they are told, singing hymns to governments and central banks as they go.
It’s sick; it’s evil; it’s disgusting; but for now it is also true.
And the rest of the world is allowing it. You’d think that the Russians or the Chinese, at least, would make some self-interested moves, but they don’t.
Either something breaks, or humanity tires of this insanity, or it continues until all the world is North Korea, worshiping photos of a vile little man, never lifting their eyes and thanking the vile little man for the deaths of themselves and their children.
And if something does ever break, they’ll need a war – a big, nasty war – the kind that really scares people – not tanks rolling through a desert.
That’s the world as it stands today. Perhaps everything will change tomorrow, but for now, the manipulators are at peak success.
“The madness of crowds” is here. If, somewhere, there is a successor to Charles Mackay (who wrote the classic book of that title), he must be a very busy boy.
Bitcoin – poorly understood and frequently talked about ignorantly – is a wonderful new financial tool… and a very timely one. But because of its virtues, it is about to be attacked.
But before I explain how, why, and my recommended responses, let me get everyone up to speed on what this stuff really is:
Bitcoin is digital cash. You do not get an account, you get a wallet. Holding Bitcoin on a computer is the same as holding government money in your wallet.
Bitcoin is distributed. There is no central office and no central computer… anywhere.
Bitcoin can’t be printed up, like national currencies. It has to be ‘mined’, and this requires special computers, lots of calculations, electricity and a bit of luck. It’s neither free nor easy.
Bitcoin is limited. Only 21 million of these things can ever exist, and they can only be mined on a very specific schedule. (About 11 million exist now.)
Bitcoin can’t be changed. Bitcoin is a specific computer program and cannot be changed by any single party. It is a specific set of rules cast into a computer program, and since that program is open source, it can be checked by anyone to assure that there are no secret back doors.
Bitcoin is pseudonymous. Every transaction is recorded, but real names are not. While it is not properly anonymous, it can be used anonymously if you do simple things like never using the same address twice. (There are even ‘laundries’.)
Bitcoins are oblivious to borders, laws or rules. This is simply computer code – nothing else matters.
Why The Fiat Masters Must Attack Bitcoin
I say that Bitcoin will be attacked for the simple reason that it is the anti-fiat currency… and a lot of very powerful people have their entire kingdoms built upon fiat currency and its central banking game.
It is actually very similar to gold and silver in its overall effect: If Bitcoin, or gold, or silver – or any combination thereof – ever became dominant, no one could play games with the world’s money and skim from millions of people at once… or run welfare states in defiance of economic reality.
The bankers do not want to lose their positions, and if they let this alternative currency take over, they will. So, they will have to attack. In fact, I am sure as I can be that they are doing it already.
I should add that there are socialist types who love this development because it could destroy the greedy bankers, but I don’t expect them to deter the attacks to any significant extent.
It is important to understand that the system is not invulnerable. It’s certainly not easy to attack (like a Cyprus bank account), but attacks both small and large are possible.
I’m not going to describe large attacks, as I don’t want to give anyone ideas. You can either believe me that they are possible, or not. These big attacks, however, would not be easy, and would have side-effects. So, I don’t expect to see them first. First, Bitcoin’s enemies have to win the PR war.
There was a great line in the movie Gladiator that applies right now:
You have a great name. Before they destroy you, they will have to destroy your name.
I’m not sure it’s fair to say that Bitcoin has a great name among the general populace, but it certainly does among the best and brightest of the younger generations. And this great name is spreading rapidly in places like Cyprus, and among people who fear a Cyprus-style mass theft coming to their area.
Gold and silver are the traditional ways of avoiding predation, but trying to cross a national border with precious metals these days is to invite theft and punishment. (This was not much of a problem before the 20th century.) Bitcoin, on the other hand, can be moved world-wide, instantly, from the comfort of your chair.
So, the first attacks will be combined with a PR war. The point will be to scare people away. “You’ll get ripped-off!” will be their emphatic meme.
So, the first attacks will be those that we are already seeing: Malicious hackers breaking into whatever clustered systems they can and stealing. (Or running Distributed Denial of Service [DDoS] attacks.) They are attacking exchangers, wallet hosting services, and so on – anything largish that can be hit. They are already publicizing these attacks, but I expect more and better.
The coming attacks will be publicized rapidly – with stories and releases prepared ahead of time – and will paint the worst possible picture. Afterwards it will be seen that the first loss estimates were wildly high, but that won’t matter to the people who see the headlines on the evening news. Joe and Jane Obedient will believe the worst.
This is all manipulation, obviously, since people are being ripped-off in government money, on gigantic scales: millions of thefts at once. Heck, every productive person in the West has about half their earnings taken from them every year in the form of taxes, not to mention the 5-10% they lose every year in the form of inflation. To compare these things to a few stolen wallets is a sick joke. But, such is the state of the West at this sad moment: The large abusers are sanctified and the innovators are demonized.
What to Do About It
Here’s my list:
Be prepared. Don’t let it shake you. Don’t compromise your beliefs.
Tell others to prepare. Tell people to expect attacks and a PR war. Tell them to upgrade their security and to be personally ready. Bitcoin will be called all sorts of things: A Ponzi, a fraud, a tool for terrorists, a threat to civilization, and so on. It’s not fun to have those accusations hurled in your face, so expect it and get ready for it.
Prepare for the worst. At some point we may need an alternative to the government-owned Internet. Setting up our own systems will not be hard or expensive, but it will require action on our parts. Learn about mesh networks (PDF) and packet radio. Those who can code should think about writing new high-latency protocols, or reviving old ones like FidoNet.
Do not rely on Internet exchangers. We should all be grateful to Bitcoin Exchange Mt. Gox and the others, but they are vulnerable and will soon enough be compromised or shut. The future lies with over the counter (OTC) exchangers.
Keep having fun! Bitcoin has been a gas – don’t let go of that. Adapt, improvise, overcome! Yes, there will be more bad days from here on, but don’t let them steal your joy for any length of time. Hold to the good, reject the fear. Do what resonates within you; do what makes you feel good and creative and productive.
Yes, I know that there are some churches and individual Christians who don’t approve of war, but a huge wing of Christianity in the US has put itself in service to a warfare state. Listening to them, you’d think that Christianity and war were natural bedfellows. If you’ve spent time in Red State America, you know what I mean.
Red State Protestants have given themselves over to “the virtues of defense,” seemingly without limit. They endlessly laud cops, firemen, and especially soldiers: anyone authorized by the state to use force. State force has become unquestionably righteous – especially if it is overseas. To these people, the US military can do no wrong.
This involves killing strangers, you understand… by Christians… people whose Holy Book say that they should love the outsider, turn the other cheek, and that every government belongs to the Devil.
Red State Religion as a Mix of Christianity and War Philosophy
Red State Christianity has become a State Religion, a Warfare Religion. So, since “judgment begins at the house of God,” let’s be harsh:
These churches are sucking up to the state for tax breaks, to follow a popular course, and to get lots and lots of members. It’s the new successful pattern, and they are following it without hesitation… to the point where they invent reasons to justify the killing of children. (“Collateral damage,” that is, not “killing.”)
A huge number of Red State churches have become whores to the US military culture, paying endless obeisance to uniformed state agents. According to them, all agents of the state are noble, are to be respected, and are most definitely to be obeyed without question. (Tell that to Sam Adams or Tom Jefferson!) All opinions to the contrary are discarded, condemned or ridiculed, without serious consideration.
This War Christianity is definitely at odds with the New Testament, which treats both war and state as barbaric relics.
I am not, by the way, opposed to stopping actual killers. What I am opposed to is telling someone to kill another person that he knows nothing about, guided by a superstition that “we’re automatically the good guys.”
And yes, I know that no one, in the midst of fire and confusion, has enough skill to avoid accidentally shooting an innocent. My complaint is with worshiping a government that places 18 year old boys in that position. These kids are being told to kill strangers, without any real evidence that the people they kill deserve it.
Is “because a politician said so” really sufficient?
These boys are coming home in pieces, or with pieces missing – and committing suicide in droves – for what? To magically turn Afghanistan into a western state? Does anyone seriously think that will happen?
And as someone who cares about history and theology, I am especially opposed to Jesus’ name being abused – yet again – by credentialed shepherds who are devoted – first and foremost – to gathering the largest flock possible, while not giving a damn that distant brown people die.
At this point in American history we are being treated to a continuing and twisted spectacle: Defenders of indiscriminate death pretending that they care about “love.”
They lie. So says me and so says John the Apostle.
Let me be clear about this: Christianity is an anti-state religion. It always was. So was the Judaism that came before it. All arguments to the contrary are fallacious, at least if we are to take the Bible as a serious reference.
But it will change…
Sooner or later, some American Christians will remember that theirs is an anti-state religion. It will doubtless begin with meetings in living rooms, barns and job sites, and will include a lot of good and talented young people. But they will make themselves despised outsiders, opposed by the current generation of Christian leaders, who have dedicated themselves to the state and haven’t any inclination to admit their errors.
In other words, the new, honest Christians will become the next link in a long and proud chain of heretics. They will be brave and committed people who are right, while all the institutions are wrong.
Are we really to believe that there is virtue in sending machines to rain indiscriminate death upon foreign people… at funerals? (Look it up!)
Must we really defend repetitive torture as being righteous?
Now, to be honest, the Red State Christians don’t say these things. Actually, they avoid facing them altogether. And thatis the problem. Many of them have become, as Jesus’ friend Simon Peter said, “willingly ignorant.”
The US war machine is killing and torturing, and American preachers are straining their every muscle to thank them for it, in the name of Christ.
I’ve read Jesus’ words too many times to be suckered by this game, and I don’t think Jesus is pleased with it either.
Let’s hope that some young Christians can pull their act together and do better than the generation that preceded them. War and Christianity don’t belong together. They never have and they never will.
Before I shock you with disturbing “Death by Government” facts, let me ask you a question: How important is reality to you? That’s a strange question, I know, but think about it for a second. If reality makes you uncomfortable, what should you do?
Should you ignore it? Should you face it anyway? Should you find reasons to get rid of it? Should you attack the person who showed it to you?
You will find nothing in this article about amendments, laws and judges. What you will find here is a fact that has been passed-over by the entire gun control argument.
Here it is; it’s really simple, so think about it for a few seconds:
The anti-gun arguments presume that the state is morally superior to individuals.
Even though they seldom say it explicitly, the gun control proponents believe that average people are too violent and erratic to hold guns. They want the government – the state – to take our guns away because only the state is responsible enough to handle serious weapons.
There is, however, a gigantic problem with this: States are far more dangerous than individuals.
20x more dangerous…
That’s a demonstrable fact, by the way, not merely an opinion. I ran the numbers, and it isn’t even close.
According to the UN’s statistics, total number homicides in which guns were involved in 2010 (or the most recent year reported) were 93,414.
I am as sure as I can be that those numbers are juiced – I have too much experience with the UN (another set of stories, for another day) to think that they left their agendas outside as they crunched these numbers – and I am going to ignore the inclusion of thousands of deaths in Mexico and other places that should be attributed to the US War on Drugs. I’ll accept the numbers as they are.
So, let’s say that guns are legitimately and primarily involved in all of these 93,414 cases. Maybe you think that’s a pretty bad argument for the moral superiority of individuals. But if so, take a deep breath and gather your moral courage. You ready?
The death rate for states is more than 20 times as high.
This figure has been well-documented, by the way. If you want to check it, start with political scientist R.J. Rummel’s Book, Death By Government. (The actual figure may be higher than 200 million.)
So, 93,414 x 100 = 9,341,400 people killed with guns over a century. That’s a bad number, but it’s less than 1/20th of the 200 million who were killed by governments.
Not possible, you say? Sorry, your beliefs are clashing with reality, and your devotion to reality is at risk.
Also, the 200 million deaths attributable to governments were over the course of the entire 20th century, when the average population was far less than what it is now. Population-adjusted, states are probably at least 30 times more deadly than individuals.
If you think I’m misstating this, run the numbers yourself! The fact is…
Death by government is far more likely than dying during a criminal attack
You know this from your personal experience too:
How many fistfights have you seen among the 200 people who live closest to you in the past couple of years? Maybe one? Maybe none?
Among the 200 or so states in this world, there have been at least 30 fights over the same time.
The numbers say that states fight much, much more frequently than do individuals. And they certainly kill far more people when they do fight.
By any objective standard, states have to be considered far more aggressive and violent than individuals. So, who is it that should be really holding the weapons?
The usual argument to the contrary, by the way, goes like this:
GuvBoy: Okay, maybe lots of people were killed by governments, but there were different leaders then!
Freethinkin’Boy: And the morals of politicians have improved? Have their operations substantially changed? They still have the same capital city, right? And they still have a small group of men gathering up all the taxes and ordering everyone else around, right?
GuvBoy: Yeah, but now we have modern, enlightened democracies!
Freethinkin’Boy: I see… please tell me this: Precisely how and when did they become enlightened?
Such arguments, of course, actually have to do with people being irrationally devoted to governments and too afraid to consider otherwise.
The fact is, most people don’t want to hear that the powers in charge are violent – no matter how well documented death by government really is. If reality were ever to matter, it would be the flawed individuals who got the guns, not the mega-flawed states.
All of our lives have occurred in an era of peak somnambulism (aka sleepwalking), and those of us who enjoy being awake have suffered mightily because of it. Using your mind has come with a price in our time, which is pretty sick, really. You can thank growing government tyranny for that.
Humanity, however, does not sleep forever. Eventually humans get tired with the permanent suspension of thought. I know that none of us have ever seen that in our lifetimes, but I study history, and trust me, it has happened in the past.
Can you imagine people traveling a hundred miles on foot, over muddy roads and fields, with bad shoes, and sleeping outdoors, just to listen to a teacher who the authorities had recently defrocked for immorality and cast out of the city? And this teacher wasn’t a religious guru or the leader of a revolution: he was teaching things like history, philosophy and logic.
Well, hundreds of people, even thousands, did this in the early 12th century. (The teacher’s name was Peter Abelard, and he wasn’t the only one.) Europeans had been cut off from learning by their ruling systems for hundreds of years, and yet at this moment they remembered that they were human and woke up.
I’m promising that this will happen again anytime soon, mind you, but it does happen on occasion.
History Shows the Way
From the 12th century through the 19th century, Europeans and Americans generally used their brains, and life in the West improved massively; far beyond anything ever seen in the historical record. But then, it changed. Knowledge didn’t go away, but humanity forgot that it mattered and decided that sleepwalking was easier and better.
It’s not often that you get personalities as diverse as F.A. Hayek, Virginia Woolf, Ayn Rand, and the Bohemian artists of London to all agree, but there was one subject on which they did concur: All of them said that there was a distinct change in the nature of humanity in 1911 or thereabouts. Virginia Woolf, for example, was very precise, placing it in December of 1910 and writing that “human character changed.” Ayn Rand, who was very young at the time, placed it “before World War One” and said “the West lost its nerve.”
Whatever it was that happened, it is very clear that since that time, the men of the West have tried very hard to sleep and have fought to remain in their slumbers. Yes, they were scientifically trained to be that way in government conditioning centers (aka schools). And yes, they spent decades of their lives in factories where thinking was taken as a threat. And yes, it’s true that they were subjected to millions of advertisements that grasped at their minds and wills. But even all of that doesn’t account for a hundred years of slumbers.
There’s a Reason it’s Called the Idiot Box…
The big factor in all of this was the great god of the age: Television. After all, to most people, television is simply what we do. Try telling people that you don’t watch TV some time and see what happens – they’ll treat you like a space alien. And if you persist, they’re likely to see you as a threat.
TV is simply what modern humanity does. Americans watch better than 150 hours of TV per month these days – on average. And when they’re not watching flashing images on their awesome new flatscreen (bigger than their neighbor’s!), they’re plugged in to some kind of iPod, iPad, or some other trendy new iGadget. Anything to avoid thinking.
And the more bizarre the world gets – like presidents and courts agreeing that droning citizens to death without a trial is not a Constitutional problem – the more they avoid thinking. The more the need to think sits in front of their faces, the more they crawl into TV, music, tabloids, booze, and anything else that will allow them to avoid it. Their ignorance must be preserved, or else they’ll have to face the thing they’ve been running from all their lives: responsibility.
But, as I say, this will not last forever. Whenever it is that the hypnosis breaks, those who have been using it as a slave drug will have a problem.
And that may be why they’re in such a hurry to build a fast, cheap tyranny. Once humanity turns again, the elite life-skimmers will need the ability to remove troublemakers quickly and easily, and to lead with it on the nightly news… presuming that anyone still watches the insulting drivel. There are signs of humanity waking up, after all.
Who would have dared to predict thousands of young people following an old doctor like Ron Paul around the country, eagerly waiting to hear about the Federal Reserve scam? I’m not at all sure that will be enough, but it did involve numbers of young people opening their eyes, and it was a real surprise.
Government Tyranny in Action
So, if this continues, the power-mongers will need cheap control, which is why they’ve been procuring drones and computers. Drones and 24/7 monitoring make for excellent, cheap tyranny: A world-wide surveillance web to see what you are thinking about, a world-wide manipulation system to nudge you in the ‘right’ directions, and drones to intimidate you… and, if necessary, to take you out. (Once your worst texts and emails have been worked into an appropriate story, of course.)
I have thus far made quite a few arguments why the Westphalian order of states is in trouble. Presuming that I am correct, and that the current state model fails, the great question is what comes next?
The Two Classes
Impolitic though it may be, any sensible analysis of states in transition has to divide the inhabitants into two groups: the Rulers and the Ruled. We can seek tamer terms if we like (such as officials and citizens), but those terms invariably muddle the issue. There are two groups that matter: those that make orders and those who take orders. These two face massively different challenges and incentives; separating them clearly is the only way to arrange a reasonable discourse.
I will begin with the rulers:
Imagine being a big boss of a big country: You and your predecessors have promised free everything to your voters, but you have now failed to deliver. They are angry, but there’s nothing you can do; there are no more buyers for your bonds and inflation has made your currency almost worthless. You are out of options. At the same time, you can’t just walk away – being the boss is something you need. So, what do you do?
Your first job will be to keep the people with you, rather than against you. You must give them someone else to blame and to make them feel horrible about the prospect of your system vanishing.
Finding outsiders to blame is always easy. (Jews and immigrants being the perennial favorites.) Making people feel like they need you, however, isn’t so easy, especially when your promises have just come up painfully short. You need some majestic promise for them to believe in: something that makes them special, provides a credible promise of more than they deserve, and/or makes them part of some magical uber-entity. In other words, you need an appealing new myth.
The problem, of course, is that large new myths are not created in a day, and certainly not by people who can’t deliver much. So, you have to use whatever respected myths remain, make them more grandiose, and run with them. (This is precisely what happened at the end of the Roman Empire, as I will explain in Free-Man’s Perspective.)
Right now, the only big myths are of the globalist strain, such as climate change, save the rainforest (or whales, or trees, or children, or…), the value of politically correct speech and so on. Judeo-Christianity remains, of course, but it is a horrible mythology from a ruler’s point of view, is more or less incompatible with the globalist myths, and has been driven from respectable circles in most of the west anyway.
So, the mythologies chosen by the rulers will have to be based upon environmentalism, anti-capitalism, and associated guilt-centric ideas. For lack of a better term, the new mythology will probably have to be globalist, with the many nation states and their scattered strategies being blamed for the crisis. The solution to the crisis, of course, will almost certainly be unified management by proper elites.
But if globalist, elite rule is to be the next model, a modification of the social contract will be necessary. This will be the great moment of opportunity for intellectuals. Devising a legitimacy myth for the new order will be a ticket to fame and fortune.
As strange as it sounds, there is another group associated with the rulers that must be included in this discussion, and they are the dependent class. People who survive on government checks are not what we usually think of as rulers, but they are necessarily joined to them. Together with the elites, they form a high-low ruling coalition.
The vast majority of the dependent will support the rulers (or at least the replacement rulers), almost regardless of what the rulers do. Even if their checks stop, promises of future checks will keep them faithful. The other choice is to utterly reform their lives, and very few will be of any mind to do so. They may complain or even riot at the moment when their checks stop, but being faced with either radical change or supporting the rulers and hoping for restoration, they will choose the latter. And, most unfortunately, this is a very large group.
The Other Side
Now – and this will not be hard for most of my readers – imagine that you have behaved well and worked hard; that, after being challenged by numerous obstacles, you have carved out a comfortable, stable life. Then imagine that it has been turned upside down. Everything is a mess, and you want things to get back to normal so you can work and enjoy life. What do you do?
This is where the formation of the future gets interesting. The Rulers may come up with a few surprises, but their strategies are more or less predictable. The productive ruled, however, are a wild card. Ultimately, they control everything, but they don’t know it.
Rulers do not make, they only take. The productive make. If they ever decided, en masse, to stop giving in to the rulers, the rulers would be soundly defeated, and in short order. No matter how many armed tax collectors they employed, it wouldn’t be enough for an unwilling populace, not to mention that paying the armed collectors gets very difficult when there is no more money coming in. And if the mechanic refuses to fix state vehicles, if the HVAC man refuses to fix their air conditioning, and so on, the end comes much faster.
The above is precisely what happened at the end of the Roman Empire: Harsher and harsher tax laws brought in less and less silver. People ran away to Germania, Britannia and Gaul to escape. The ruling structure failed.
But, as mentioned above, the productive middle does not believe that they have the right to make their own political decisions; they feel free to choose between Party A and Party B, but not to demand a new structure.
If, somehow, the productive class does decide they are worthy of such choices, it will be a small matter for them to begin organizing with their neighbors, cobbling together ground-up systems of law and markets, and arriving, over time, at a structure that suits them. They would almost certainly end up rediscovering John Locke, the common law, and sound money. But will they?
The Cognitive War
Though most of us have seldom realized it, we have been living through a continual war for our minds and our wills. We feel confused a great deal and suspect that it is our own problem; a problem that we hide, rather than risking shame. This equates, roughly, to a surrender in the cognitive war.
Anyone who seeks to make us do things without thinking, wages war against our wills. Whole industries are built on this, as we all know: “Look at the pretty, happy people; buy the beer,” “don’t vote for that horrible, scary candidate,” “look here at the sexy girl,” and so on. We all swim in a soup of it.
This battle will determine what comes out of Westphalia’s crisis. If the Lockean productive class is too confused and intimidated to assert their wills, the globalists will be able to regroup as they wish. If, somehow, the producers regain their nerve, they can more or less do as they wish. They will have an initial difficulty in overcoming the globalists’ death throes, but in endurance they will reclaim their world.
A Second American Revolution
The last time a broad group of producers asserted their will and stuck to it was the American Revolution. Contrary to any conventional wisdom of the time, they defeated the mightiest empire on the planet and changed the world. The American Revolution, as I have explained elsewhere, is misunderstood and used badly for propaganda purposes, but it was a unique and potent event. Producers have, at other times, pushed rulers to reform, but very seldom have they gathered the courage to say, “get lost, we’re doing it our way.” In order to achieve this goal the early Americans required separation, Christianity and the philosophy of John Locke. There are wonderful Lockean thinkers and teachers in the West today, but they are usually drowned out by the 24/7 clamor of 500 entertainment channels, music in nearly all public places and the recent Blackberry, texting and iPod fetishes.
Withdrawal from the Circus
The one real hope for the Lockeans is withdrawal from the great Western circus of mainstream TV, movies and music.
In a previous article, I wrote that free news may begin vanishing, and that if it does, people will begin to choose more carefully. The thing I didn’t mention, however, was that this is occurring already. And the people who have been wandering away from the circus are mainly the producers. The first among the Lockeans are headed slowly away from the big noise. These people will begin to reclaim the right to their own opinions, even regarding how they choose to be ruled (or not).
If this grows, there will be many people who don’t believe that they need to be coordinated and ordered by central elites and that Adam Smith was right: If you leave people alone, most of them will provide things needed by others, as if guided by an invisible, benevolent hand.
In order to avoid this, the globalists will have to preserve media above all. Whether this includes subsidies for cable TV, free Internet services, or whatever, it will be strongly in their interests to provide them. If the circus ends, the young will start to ask impertinent questions.
Lockean organization is effective, but it isn’t loud and flashy. Globalist organization is parasitic, but it comes with engaging stories and entertainments. If the circus reigns, the producers stand to be overwhelmed… yet again.
The Exercise of Will
I leave you with two quotes to consider, and I hope that you do so:
The will of men is not shattered, but softened, bent, and guided. Men are seldom forced by it to act, but they are constantly restrained from acting. Such a power does not destroy, but it prevents existence. It does not tyrannize, but it compresses, enervates, extinguishes, and stupefies a people, until each nation is reduced to be nothing better than a flock of timid and industrious animals, of which the government is the shepherd. — Alexis de Tocqueville
Mankind is made great or little by its own will.
— Friedrich Schiller
I have thus far made two primary arguments that the Westphalian order of states is in serious trouble. I’ll now continue with a large number of small arguments. The order of presentation is somewhat arbitrary, so the first point may not be more important than the last:
Currency traders prevent currency control: Back in the days when exchange rates were fixed, governments could change them to prevent certain fiscal issues. Now, with currencies being trading world-wide, and in massive amounts, that tool no longer exists. A powerful weapon has been removed from the state’s arsenal.
The fiat currency game is being understood and exposed: Knowledge is spreading and light is being shined. People who want to know, can know. And worse, fiat currency may have reached its limit. Several articles would be required to explain this properly, but the welfare-fiat system of the past 40 years is failing, and that is very, very significant. Precious metals, digital currencies and other forms of honest money continue to emerge and spread, even though they are viciously attacked by the US government. How this situation will develop is unknown, but is is a significant problem for the nation-state. The day they can no longer deliver on their promises, their spell will break.
Regulation: Governments and their sub-organizations survive and thrive, not by creation, but by restriction. To get what they want, their one tool is to restrict things. But, the more they use that tool, the more they constrain commerce, their one source of money. This is “strangling the goose that lays the golden eggs” and has myriad effects, most of them small.
Complexity: Again, much space would be required to explain fully, but complex structures breed more complexity, which feeds back upon itself and strangles itself. Over the past century, and especially over the past 40 years, states have reached a tremendous level of complexity; a level that restricts even simple actions. For example: When everything must be approved by a legal team, not much gets done, and that which is done, is done very slowly.
The War On…: Be it drugs, terror, or whatever, this phrase points out cracks in the Westphalian structure. Faced with successful criminal strategies, the state reacts in its natural way – by making ‘war.’
Mass polarization: This is already happening because of multiplied choices via the Internet, but it may get stronger if ‘free’ news begins to disappear and people must buy their own. If so, people will begin to surround themselves with others of their own opinion. In the worst case, many will become deeply polarized, conceivably leading to civil wars. However, the progression of this may be in a different direction. We’ll cover that next time.
Wikileaks: The new fly in the ointment of legitimacy. The broader Wikileaks strategy is exposing the sins of the state, and it is hard to portray yourself as morally superior when someone keeps exposing your nasty secrets. These guys are committed, motivated and obsessive. They will be very hard to stop.
Inertia: Huge organizations lack the ability to turn quickly. They are very often incapable of reaction, even in self-preservation. And it is not just the ability to act that is in question, it is also the ability to see. As is said: to the hammer, everything is a nail. Likewise, state agents have come to see themselves in very specific ways, and they have been consistently rewarded for doing so. Their mental filters will not change easily.
Infiltration: Criminals and interest groups are paying off politicians world-wide to get what they want. This is a massive business, much of it ‘legal,’ and it is working beautifully for those involved. If some person or group is necessary to get you elected to office, it’s not hard to justify favors for them. This is happening continuously in every government. To be fair, I should add that some of the people involved have no evil intentions. Many wealthy people and firms buy politicians, not really to grab other people’s money, but simply to protect themselves.
Frustration: The average citizen has no real way to change anything. Votes don’t matter for many reasons, but firstly because there are party organizations between themselves and their representatives. The Senator cares about (and obeys) the party more than opinion polls. They know that the party will develop strategies in time for the next election, and will provide them with effective advertising. Many people still hold out hope that their party will eventually grow a spine and do the right thing, but that bias may not hold. If it does not (as we may be seeing already), they will begin to identify with non-state or anti-state organizations and ideologies.
Nukes: The nuclear bomb created an unbeatable weapon. When fighting an opponent armed with such a weapon, you cannot face him directly; so, you adapt and attack his organizational method instead. The state is designed for face-on attacks, not for systems subversion.
Now, having (I hope) established that the Westphalian order of states is in some trouble, I will proceed to another reason for my pessimism.
The Obedience Game
All states of all periods share a common foundation: a group of subjects who accept rulership. Without this, no state can endure. That applies to democratic regimes, socialist regimes, republics, monarchies, theocracies and any other ruling arrangement. If the people are unwilling, the state will fail soon enough.
Though they seldom mention it in public, the operators of states know this. That is why they want to control information flows, and why, in a crisis, they will shut them down. Contrary voices undercut legitimacy, and the states cannot survive without it.Think of it this way: If a state had no more legitimacy than the local Rotary Club, attempts to collect taxes would be widely rebuffed; people might not buy government bonds, obey orders, or even choose to repair government equipment. That state would collapse.
A pristine image of legitimacy is essential to the state, even more so than power. The proof of this was the Church in the middle ages: They had no power to speak of, yet they ruled for a millennium. They were able to do this for one reason: They maintained a monopoly on legitimacy. (I write on this at length, by the way, in Production Versus Plunder.)
The Lost Heyday of Info-Control
The peak of information control came in the mid-20th Century, when perhaps 98% of all American news came out of one or two zip codes in Manhattan. (About the same was true for London and other capital cities.) Furthermore, the people who produced mass-market news were a fairly homogenous bunch. Some of them did excellent work, but there were not many dissenting voices. Party A always fought Party B, but thoughtful questioning of the larger operation was not heard. (Crazy people questioning the larger operation were welcomed, since that helped legitimacy.)
Even cable television didn’t add many dissenting voices, but something else did:
The Accidental Internet
A strange thing that happens when politicians get scared: They grudgingly call in the smart guys and let them loose. Most of us learn about this in elementary school: The smartest kid in the class is more or less abused until the class gets into real trouble; then they run straight to him and promise to do whatever he says. That’s how the Internet was born.
The event that scared the politicians was Sputnik. Russians surging ahead of the US into space meant that they had to pull out all the stops. The resulting Advanced Research Projects Agency (ARPA) was where the Internet began.
The Internet is not really a control technology. Designed by the smart kids rather than political types, it is purposely decentralized. That makes it hard to control.
Almost no one saw the Internet coming. Its explosion in about 1993 surprised almost everyone. And, before long, a lone news geek exposed Bill Clinton as a willful liar and “guys in jammies” brought down the mighty Dan Rather. The game had been changed.
Governments are presently retaking control of the Internet and using it for mass surveillance, but they are treading carefully, and it may be some years before they (along with their mega-corp friends) can clamp down on it altogether. In the meanwhile, ideas that question or oppose state legitimacy are spreading. There is no more gatekeeper.
There is also a serious decline of gatekeeping in the publishing business. Rather than requiring the approval of a major publisher (with friends in broadcast media and government, needing publicity help and attending the same cocktail parties), the rogue author can publish himself: either at zero cost as a blogger, or at zero initial investment as a print-on-demand publisher.
Newspapers also are in a state of flux. They began the Internet era by giving away their stories and have suffered continuing losses. Now, they seem to be moving to a pay model. This may save some of them, but it also breaks up what we may call the info-matrix. Once people are cut-off from ‘free’ news, they will begin to choose. And since they are paying this time, they will choose more carefully. This will favor newsletters and other providers of superior content. And, again, the state-friendly gatekeeper is removed from the equation.
Although it is not widely known, foreign nations are spreading money around Washington and New York to influence media coverage, and some of them are spending shocking amounts. (I strongly suspect that the same is happening in other countries.) So, the state that wants to influence the media in its own country now has competitors, and some percentage of the time, a media outlet will lean toward the foreigner who is paying better.
To retain proper control and influence, a state needs more than some of the intellectuals to comply with them; it needs substantially all of them. The state’s version of events must be the only sane version to be seen; any competing views must be seen as crazy and dangerous. Once truth outside of the authorized stream becomes possible, people will begin to wander, and the state’s brittle legitimacy can be broken.
The current world order of nation states is in trouble. In fact, it may be doomed. In this series of articles, I will explain this arrangement (briefly) and then how it is being broken, for reasons both good and bad.
The agreement that created sovereign states as we know them was called the Peace of Westphalia. This agreement was made between churches and rulers as the Divine Right of Kings was failing, Protestantism was ripping Europe apart, technology was revolutionizing the economic order and new continents were being settled. In other words, the old order had broken apart and a new arrangement was not an option: either the rulers cooperated and adapted or their game fell apart entirely. I’ll spare you the details and simply explain that the agreement was signed in 1648, after the first modern diplomatic congress. The main tenets of the Peace of Westphalia were:
Each prince would have the right to determine the religion of his own state, with the options being Catholicism, Lutheranism or Calvinism. (Of course they gave it a pompous Latin name: cuius regio, eius religio, which simply means “whose region, same religion.”)
Christians were guaranteed the right to practice their religion in public during allotted hours and in private at will, whether or not it was the same religion as the ruler.
The signers agreed to recognize each other’s sovereignty over territories, their agents abroad (to grant them diplomatic immunity), and not to interfere with each other’s shipping.
This agreement is the foundation of the modern state and is held to (fervently) by almost every ‘authority’ on the subject – from Henry Kissinger (by whom I was first acquainted with it) down to your local Poly-Sci instructor.
What, Exactly, Is Sovereignty?
Sovereignty is one of those words that is seldom understood clearly. Nonetheless, the definition is simple. Sovereignty is this: A right to rule that is held to be legitimate. For example:
A king of the ancient world was sovereignty personified.
The Greeks (followed by the Romans) broke sovereignty into thousands of pieces and made each citizen a partial holder of sovereignty.
As Rome devolved, sovereignty went back to the king, but only as authorized by the Roman church. This is what we often call the divine right of kings.
But, as the Right of Kings collapsed, a new order of rulership was required; we are calling that the Westphalian order, and all of us in the West have been living under it since the 17th Century.
Cometh Hobbes, Cometh Rousseau
There was one thing missing from this arrangement, however: With rulership no longer sanctified by God and his Church, what made a ruler ‘legitimate’? Simply seizing power wasn’t enough. People had to see the ruler as legitimate: if not, many would cease to obey.
This gap was rapidly filled by people who began to be called intellectuals. Two of them in particular (Thomas Hobbes and Jean-Jacques Rousseau) rose to prominence by filling this gap with what is called the social contract.
Both Hobbes and Rousseau, in different ways, provided secular legitimacy to replace the Divine Right of Kings. Both did this by imagining a contract between the rulers and the ruled. This social contract idea legitimized Westphalia’s new form of rulership. As a result, Hobbes and Rousseau are revered to this day.
But, as I say, that form is fracturing, and I shall now begin to explain how:
Al Qaeda’s Hedge
As mentioned, the system of Sovereign States is held with religious fervor by the operators of nation states: They respect borders, and do not cross them without publicly declaring and defending their reasons for doing so.
Criminal groups have begun taking advantage of this strategy. By hiding in a state that can’t or won’t hurt them, they are insulated from the other states of the world. Al Qaeda, for example, hid for a long time in Sudan, then they hid in Afghanistan, and they seem now to be hiding in Pakistan. National borders protect them.
This is probably best defined as a hollow state strategy. A hollow state is one that exists in all outward ways, but that is ‘hollowed-out’ and used by criminal organizations for cover.
Criminal organizations need safe havens, and hollow states provide them. These organizations make massive amounts of money from data theft operations, product piracy, traffic in illegal drugs or in other ways. They can afford to create and support corrupt states, and do so.
Aggrieved nations might want to stop criminals that are stealing their data and pirating their goods, but they are not going to bomb another sovereign nation that has committed no aggression.
Essentially, criminal groups rent a hollow state’s infrastructure and hide behind their sovereignty.
One way to obtain this is to destabilize a small state, so that it is easy to deal with. Renting France might not be possible, but renting a war-torn African nation can be affordable. The ideal hollow state is one with a clear international standing, but with massive internal problems.
Sovereign states, if they take over another state, become responsible for it, and must be seen to maintain their social contract. No such requirements face the criminal organization that creates or finds a hollow state and moves in. So long as a titular government remains in place, nothing else is required.
Devotion to the Westphalian ideal of sovereignty and the social contract gives the confirmed criminals of the world a hedge to hide behind. This strategy was held in check under a bi-polar US/Soviet world, but it has since become viable.
The criminals are adapting and are using sovereignty as cover… very effectively. The states cannot adapt. They are caught in a trap of their own making. It looks like this:
They have held up their ruling ethos (sovereign states, the social contract) as the inevitable end of civilized existence.
The overwhelming majority of subjects has come to see the current order as the best possible way to order life. (In this, the Westphalian states succeeded magnificently.)
If the states leave their model and their sanctified image, legitimacy is likely to break. And if it does, everything could fall apart.
So, the states are prevented from adapting to the threat. They are trapped. This leaves Al Qaeda, et al, with a hedge to hide behind. God only knows what kind of damage will come of this.
Thrift is far more important than is commonly understood, and I will be explaining why in a future dispatch, but first we need to dispel the guilt many of us feel about the topic. There is actually a very good reason why it’s so hard to save money nowadays.
I think most of my readers will recognize the feeling I’m referring to: You read great books on success, such as The Richest Man in Babylon, you understand that saving at least 10% of your paycheck is necessary for success and you go out to do it… but obstacles keep getting in your way.
And then you feel bad. You feel that you have failed. You really don’t want to think about thrift any more.
I’m here to tell you that you were far too hard on yourself. It wasn’t your fault. (Okay, if you were out knocking back brews at a bar four times every week, that was your fault, but I don’t think many readers fall into that category.)
Thrift has been systematically strangled over the past century; it is now just barely possible. You’ve been blaming yourself for the sins of others. And remember, most of those success books were written before thrift was dead.
The Simple Reason it’s so Hard to Save Money in Today’s World…
When analyzing the economics of civilizations, the big question is this: Where does the surplus go?
In Greece, for example, surplus was generated by the labor of slaves, and went to the citizen (property owner), who tended to be a very good judge of where and how to use it best. In Western civilization, surplus was generally left in the hands of the person who earned it, who also tended to be a good judge of how best to use it.
Through the past hundred years of a declining Western civilization, the movement of surplus was radically transformed… it was skimmed away, in thicker and thicker layers, to growing governments in capital cities.
The result of this is the current situation: Essentially all surplus is skimmed away from the producer. This is accomplished with direct taxes, such as income taxes, as well as with the hidden tax of inflation, real estate taxes, sales taxes, and dozens of others. (On your phone bill, electric bill, gasoline, liquor, etc.)
In other words, it’s so hard to save money because the government takes so much of it away.
We are so used to this situation that we fail to remember that it was not always so. And that is why we feel guilty about not being able to save money. And we shouldn’t – a large army of state employees work every day to remove our surplus from our hands. Aside from acting especially stupidly, it really isn’t our fault.
How it was in 1890
If you’re like most of us, you had great-grandparents worked hard, saved their money, and improved their situation in life. It was normal to do so in the later 19th Century, even until the first World War. Great-grandfather got ahead; you work just as hard, but you don’t make much progress. And there is good reason for this: When Great-gramps worked hard, he kept the money.
In Grandpa’s day there was no income tax and no sales tax. (The government survived anyway.) There was no social security tax either, and – believe it or not – the streets were never full of starving old people. Families were able to take care of their own.
We have forgotten that it was once possible for an average person to accumulate money. Mechanics, carpenters, shop owners and people like them filled their bank accounts with gold and silver. It was common for people like bakers and carriage builders to make serious business loans and to retire comfortably, living off of their investments.
Making a Fortune
In those days before mass-taxation and fiat currency, young men would go out to make their fortune. (“Fortune” didn’t mean multiple-billions, it meant enough capital for the rest of your life.) Young men would go to where money was being made, work hard, cooperate with similar young men, learn everything they could from the older men, save, invest, learn how to succeed, then return home as a prosperous adult.
Not every young man went out to build a fortune, and some certainly failed, but these activities were not punished at the time – which made them much easier than they are today. Gathering a fortune was common enough that it was built into the mating strategy of the time. Many women would agree to marriage only after the young man had “made something of himself.” This mating strategy was legislated out of existence, which is too bad, because it was generally a far healthier strategy than what developed in its wake.
Here is a graph depicting the difference between you and your great-grandfather:
The top line shows how many years of living expenses your great-grandfather would have accumulated as a hard-working young man. The bottom line shows what you can save.
After working for five years, Great-gramps had seven years of living expenses in the bank. Doing the same things, you’d have less than two.
In the modern world, everyone’s fortune is taxed away as it is being formed, and what is saved is eroded by the creation of currency. Very few of us ever get beyond ‘escape velocity’ to accumulate money. In other words, we work all our lives, just to stay more or less even.
With surplus removed from individuals, all investment capital is forced through institutions. Money is not saved, it is obtained from banks. Finance has been centralized and removed from the hands of individuals.
In the 19th Century, productive people made loans; in the 20th Century, their children shuffled into banks and begged for loans.
Grandpa wasn’t really better than you.
The Worst Part
And the worst part of this was mass demoralization: People began to feel morally weak, which generally happened in the name of compassion.
Here’s how the trick worked:
Your money is taken from you before it can accumulate, leaving you with barely enough to live a reasonable life.
You have nothing left to help those who suffer unjustly; not because you don’t work, but because your surplus is continuously skimmed away.
Politicians imply that you are a bad person for not wanting to help the poor.
Not only do the cultural elite make it almost impossible for you to give, but they insult you for it. Then, of course, they spend the money they skimmed from you on armies of government employees, who deliver a small fraction of your money to the poor.
Your great-grandparents were proud to help their friends and neighbors. They felt good about themselves, they felt compassion for others, and they were proud to make the world a better place. Being robbed of this heritage was far worse than the loss of surplus.
So, the question of why money is so hard to save has been answered. Now if only the steps from here were so simple.