November 21, 2010

Relocalization vs. Neoliberalism

Filed under: American Revolution, Freedom, Land Reform, Neo-feudalism, Relocalization — Tags: — Russ @ 6:17 am


Another day, another Naked Capitalism exposee, this time an analysis of how the servicers screw the MBS investors because the fee structure favors mass foreclosures, even though no one but the servicers benefits from this.
I participated in the comment thread (including a quick rundown on the residential developer racket), and a fellow commenter asked me:

attempter, what do you want instead? I think your argument is that there is no benign form of capitalism? That all forms of it, because of profit seeking, regardless of the nominal legal structure, in fact end up promoting criminal activity, theft, dishonesty, fraud.

I don’t agree, I think modern markets with sensible regulation, if we can figure out how to stop regulation being captured by the regulatees, is probably the least bad way of organizing economic life.

But what would your way be?

Since I thought my answer was a decent epitome of my thoughts on that question, I decided to reproduce it here:
Maybe it would be, who knows. But we do know that you’ve had innumerable shots at doing that and they all failed. I’d say that by now regulated oligopoly capitalism has been empirically proven to fail, if the measure of failure is that it devolves into kleptocracy.
I’ve said many times what I want, and what the end of the fossil fuel age will force anyway: Economic and political decentralization. Beyond that I want true federal democracy, since representative pseudo-democracy is also a proven failure, again by the measure of degradation into kleptocracy.
Direct democracy and true federalism means all real power, political and economic, stays at its natural level, among the productive people themselves.
This is the only way which any longer has any moral, rational, or practical validity.
Now, within that framework there’s still lots of room for experimentation with various economic forms. “Market” is not necessarily synonymous with “rentier capitalist”.
But I think one thing that’s proven NOT to work is propertarianism over natural resources, the land, or the means of production. These are all clearly either the produce of the earth itself, and/or a cooperative endeavor. Anything other than cooperative management and usufruct over these has no moral or rational validity.
And, not just in addition to, but precisely because it doesn’t work morally or rationally, it also doesn’t work on a practical level. That’s why it always degrades to oligopoly stagnation, bottlenecks, anti-innovation, inefficiency, strangulating rent extractions, kleptocracy. That’s what I call the Rule of Rackets – no one competes or innovates for one day longer than he has to. The second he can switch to rentier racketeering, he does. That’s why all the promises of the capitalist textbooks about how in a mature sector the profit rate would fall to a minimum have been proven false.
Because capitalism doesn’t work.
So the existing dispensation is not only immoral and irrational, but doesn’t even work, if the goal is to spread prosperity among all the productive people.
In case people have forgotten, that was the point of civilization in the first place.
But neoliberalism is an anticivilization ideology, strategy, and set of tactics. It is post-civilizational barbarism. It wants to restore the worst of feudal enslavement and misery where even the consolations of medieval religion no longer exist. (But I do expect new cults to arise.)
That’s what I want to prevent. That’s why I’m trying to oppose to it the idea of relocalization as the vehicle of redemption for economic prosperity, democracy, freedom, and human dignity.
It’s the only way forward for civilization itself.


  1. Capitalism as currently constructed (perhaps “financialism” is a better term for it) requires ever-increasing scale, and scale is the enemy of innovation. Once sufficient scale has been reached, it does not stagnate but deteriorates because margins cannot be grown through increasing the top line but only by cutting cost (aka human lives).

    The real purpose of “free trade” is to allow domestic businesses to expand their scale beyond their borders. But once they do, they’re no longer truly domestic.

    Once enough capital has escaped the borders of a sovereign nation, the government becomes beholden to the capital, and the nation effectively loses its sovereignty.

    This form of capitalism has been in place since at least the late 19th century. And you’re right, it doesn’t work. The problem is that everybody has become convinced that capitalism equals freedom, but it sure doesn’t look like it.

    Comment by Tao Jonesing — November 21, 2010 @ 3:12 pm

    • Once enough capital has escaped the borders of a sovereign nation, the government becomes beholden to the capital, and the nation effectively loses its sovereignty.

      I like that way of putting it. It sounds similar to my idea that through corporatism capital secedes from the country. It doesn’t have to be a physical secession (though in the case of colonialism and now neo-colonialism it often is), but can be a legalistic one, a removal of physical capital from the sovereign people through the device of “property” and a corrupt government which has abdicated sovereignty by letting the propertarian ideology run to antisocial, psychopathic extremes.

      Meanwhile globalized neo-colonialism is a global version of the separation of town and country problem analyzed by Liebig and Marx.


      But within our own countries, it’s also a way to plunder in place.

      Comment by Russ — November 21, 2010 @ 4:04 pm

      • It’s the same idea, we’re just describing it differently. Your description focues on the result, while mine focuses on the process that produces it.

        Comment by Tao Jonesing — November 22, 2010 @ 1:09 am

      • That’s a good combination.

        Comment by Russ — November 22, 2010 @ 3:04 am

  2. You are quite right, capitalism doesn’t work. Economic growth, an integral component of the capitalist world order, is coming to an end; the contraction that can, must, and will occur is not compatible with this order. A replacement is long overdue. Without this replacement, environmental destruction, resource depletion, overpopulation and global impoverishment will proceed to a very messy conclusion.

    I agree that civilization needs to be defended – the question is, what will be left of our civilization when capitalism is excised?

    The opponents of the capitalist world order have a problem. For over one hundred years, they have grouped around a banner labelled ‘socialism’. However, the word ‘socialism’ carries a lot of additional baggage, partly because we have collectively allowed capitalism to define what it means: in other words, the ruling order has co-opted the linguistic apparatus that would allow any meaningful debate to occur. In the USA, in particular, the word ‘socialist’ is the kiss of death for any politician it can be stuck to. Getting rid of this baggage, and getting rid of the capitalist world order in its heartland, would appear to require – amongst other things – a new vocubulary.

    But ‘relocalization’? I agree that relocalization will be one of the features of the new world order, but it has the ring of going backwards about it, and I can’t see anyone manning the barricades to demand it.

    Comment by Gerald Smith — November 22, 2010 @ 8:22 am

    • Hi Gerald,

      The notion that no one can use even the word “socialist” is more often asserted than demonstrated. But polls since 2008 have shown a significant tolerance for the word (and skepticism toward capitalism).

      I grant that’s not the same thing as e.g. the rhetorical brawl of a campaign, and how people would react to the word “socialist” in that context. (People always claim not to like negative campaigning as well, but they do keep rewarding it.)

      If I were more prone to calling myself by an “-ist” term, I’d just call myself an anarchist, and sometimes I do.

      The fact is that anarchism and relocalization are not only not retro the way you think, they’re the most futuristic possibilities available, and perhaps the only alternative to the truly reactionary feudalism the elites are trying to restore.

      Anarchism and relocalization are part of the swarm of ideas involving decentralization, including the most hyper-modernistic ideas of P2P, open source everything, creative commons, autonomous 3-D printing, the “rhizome” metaphor (itself a rhizomatic meme), just to name a few things which are considered cutting edge, but go hand in hand with what may look to a modern consumer or believer in representative pseudo-democracy as the highest political form like a retro step, but is really the only forward step possible, and the one which is truly modern, progressive, and desirable.

      The fact is that everything which is of the Oil Age isn’t “modern” or even classifiable in terms of the normal economic logic of history at all. The Oil Age was an ahistorical blip, a one-time drawdown of a heritage principal. With Peak Oil and the return of energy consumption to normal historical levels, we shall restore normal economic trends.

      So the term relocalization is only literally correct, but is not in fact any sort of novelty. It means the resumption of the norm. (That’s also why I sometimes wince when I use the term “organic” agriculture, since it’s just a fancy term for normal agriculture. Fossil fueled industrial ag is the exotic ahistorical aberration. Only system propaganda has accomplished terminological revaluations like these which turn reality upside down.)

      Nevertheless, I agree that getting people to the barricades is tough to do, and as it is “relocalization” by itself doesn’t look likely to stir the soul. (We also need a more potent name.)

      But like I said, it’s part of a whole suite of vanguard ideas, some of them with the sheen of hi-tech modernity, others like anti-corporatism ready to don the mantle of historical freedom-fighting prestige.

      It’s just a matter of philosophical, narrative, rhetorical, strategic, and tactical experimentation, to find the formula which clicks, which works, which engenders the movement.

      So that’s the adventure I’m attempting here.

      Comment by Russ — November 22, 2010 @ 8:50 am

  3. Russ, I’m a great admirer of the work both you and Damon Vrabel are doing. My great concern with the critique of politco-legal structures such as state-sponsored violence and corporate profiteering is how to deal with the problem of tribal/group resource wars?

    As a relocalized decentralized affiliation, how do we handle the vacuum left by the (hypothetical) demilitarization of the USA? Do we return to the model of a federal state existing only for the sake of national defense and international treaties? How are we to keep the defense industry from hijacking the state in a WMD-tech world?

    As a peaceful person, I don’t have an issue with violence in my life. It’s when I try to think about the geopolitical game, that I have trouble figuring out how to create a workable strategy in the midst of aggressive neighboring tribes.

    Comment by sandorgb — November 22, 2010 @ 1:01 pm

    • Thanks, sandorgb. I don’t know how things are going to play out, especially over the long run. I think there’s a decent chance that as the top-heavy system becomes unable to continue to zombify itself, it’s likely to disintegrate rather than be able to retrench to a signifcantly lower level of size and power.

      So I think over the mid-run, however long that may be, any rump central government and corporate structures are likely to be ineffectual, if they still exist at all.

      As for whether in the long run ancient-style empires and such will exist again, I have no idea. it’s my hope that we could take along some political wisdom from the modern experience and resist allowing power to centralize once again once non-fossil agriculture and production has fully resumed, in whatever form it will be able to exist post-oil. But I don’t know.

      As for local and regional cooperatives facing the threat of violence from neighboring regions, I don’t know how that will play out either, but in my mind I picture a healthy co-op having a citizen militia (universal for able-bodied adults) along the lines of the colonial minutemen.

      Otherwise such a community would be vulnerable, especially as its productive cooperation made it prosperous.

      Comment by Russ — November 22, 2010 @ 3:36 pm

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