December 23, 2010

The Limits to Racketeering


According to Joseph Tainter’s theory of imperial collapse, as societies become more complex, they must expend an ever greater portion of the energy they have available simply on maintaining their complexity. Although social and technological advances may achieve profitable returns for awhile, once a certain level of complexity is reached, diminishing returns set in. Eventually, at the late imperial stage, the complexity of the power structure, the military infrastructure, the bureaucracies, all the rents involved in maintaining an ever more bloated parasite class, their luxuries, the police state required to extract these rents and keep the productive people down, and the growing losses due to the response of the oppressed producers, everything from poor quality work to strikes to emigration or secession to rebellion, reaches a point where the system can only cannibalize itself and eventually collapse.
Julian Assange’s theory of the secrecy tax he’s trying to impose through Wikileaks is one example of these diminishing returns on imperial complexity. All the indications are that Wikileaks has been successful in this.
One dynamic of the system which makes citizen action so difficult is its distributed responsibility for repressing the people. But perhaps the same dynamic also generates an inner weakness.
The way things are today, anyone who wants to reform anything, anywhere (or in the case of politicians, pretend to try to reform) finds himself blocked by some vested interest which pops up to resist. There’s always a particular criminal who, in defending his own piece of the action, also takes the lead in defending the corporatist system as a whole, in that particular fight. The resources of change are always more thinly and broadly distributed than the force of the status quo, which concentrates immediately in the form of that special interest. That’s the way kleptocracy works. That’s also part of the reason regulation of rackets can never work.
However, there’s also a reverse vector here. The system is dedicated to the growth of every wealth and power cell. So the federal government never has any intention of rigorously regulating anybody. If it ever tried, it would face the same concentration of resistance. But it’s also constantly importuned by the aggression of those same concentrations, usually many or all of them at once. Each interest is not only a conservative defender of the status quo, but a reactionary aggressor.
So we have the vector of reform blocked and shattering itself on the immovable object of the entrenched racket. And in the same way we have the vector of that same racket’s insatiable greed and aggression as an irresistible force pushing the inertial government and power structure as a whole. As physics equations, these are identical effects, although in one case the racket is stationary, in the other it is in motion. In both cases its inertia is immutable.
The vector of racket greed, what Marx called the siren song luring the racketeer, cooing “Go on!…Go on!”, is always in the direction of greater expansion, greater complexity, monopolizing more of the finite system resources for itself. The system as a whole cannot achieve sufficient concentration at any point to resist this aggressive concentration.
It follows from this that there’s no way the system can rationalize itself or retrench in its own self-interest. Trying to do this, it would run into the same special interest resistance at each point. It too would find itself more dispersed than the concentration which resists. Nor can it even keep up its sham pretenses to democracy, two conflicting parties, the rule of law, since there’s no way for it to distribute responsibility for anyone in particular sustaining a loss. Nor is there anyone who would be rewarded for imposing this loss on anyone within the fraternity. Each racket or individual racketeer says, “Why should I take the hit for the common (elite) good? Let someone else take it.”
The recent doubling down on the ethanol mandates is a good example. The ethanol racket is absurd even by this kleptocracy’s standards. Many other rackets opposed this blend wall extension. All rational observers think the mandate should be repealed completely. It will only exhaust the people even further (exhaust their economic capacity and perhaps their political patience; everything runs that risk) and render the infrastructure even more prone to breakdown. But the system is helpless. At each point, like this one, there’s one aggressor against a dissipated front. It’s the same as when the people try to fight them.
This is a welter of parasites battening on the same host. They’re in a zero sum game, not only against the people, but among themselves. Each has an interest in just exploiting the host, not killing it. But together they are killing it and therefore themselves. It’s clear none is capable of organizing or regulating the others. The federal government isn’t capable of doing it. If one big bank tried to do it, it would be subverted by the others. Each racket, from highest to lowest, is going to maximize its bloodsucking until there’s no blood left.
It’s the truest and most extreme example of the tragedy of the commons. (The “tragedy of the commons” is a Big Lie in general, but in cases like this one it’s true.) Biologically, it can’t stay this way. It’s impossible to exploit any resource this way forever or to maintain such cannibalistic complexity. Such a bottleneck cannot endure. That’s why no such tyranny has lasted long, and in the acceleration of modern times, where tyrannies take only years to go through the same life cycle which once took centuries, we can reasonably aspire to soon see the collapse of this one.
The Tower of Babel grows ever higher, ever more top-heavy, ever more unstable, ever more tottering.


  1. The insurance racket is an excellent example of this. The figure I’d spend on health insurance alone in the US could be my entire budget here in Europe. People have lost perspective in the welter of manufactured needs.

    Not that Europe is, overall, any better in terms of complexity. I ran into a woman who has a farm B&B (called “agriturismo” here, a special status enterprise which is supposed to boost rural tourism). She had a few chickens, she said, but had got rid of them because of the cost and paperwork of registering each one with the ASL (local health authorities) and the required veterinary checkups!! So, no chickens on the farm. Oh, well!

    Could you post about the Tragedy of the Commons, though, and why you think it is a “Big Lie”?

    Comment by Lidia — December 23, 2010 @ 5:42 am

    • Yes, health insurance (i.e., a purely artificial, inefficient, unproductive, pointless cost imposed upon society by corrupt politicians and now judges on behalf of those who bribed them) is a good example. This mandate is an espcially egregious example of trying to squeeze yet more blood and political toleration out of the turnip.

      (I’m planning to write more about the mandate next week.)

      Maybe I’ll devote a post to the tragedy of the commons, but I’ll give a quick summary here.

      Hardin’s assertion:

      1. Had no evidence to back it up (which is why it was a dogmatic assertion and not even a theory), and was in fact quickly debunked by overwhelming historical evidence. Throughout history and going back thousands of years into prehistory, societies have managed commons to good effect.

      2. The very term, managed commons, reveals how tendentious Hardin’s thought experiment was. He simply assumed an unmanaged free-for-all, which is not what is generally meant by the commons.

      Hardin himself later admitted that he was wrong, and should have called it the “tragedy of the unmanaged commons”. But of course that wouldn’t have been as catchy and provocative, and by the time he issued that disclaimer the damage had already been done.

      It’s hard to believe he didn’t know exactly what he was doing at the time.

      The whole concept is a straw man if it’s used to rebut commons advocates, since we of course want managed commons. And the thought experiment was like rolling loaded dice, since it assumed a predatory capitalist economy. It then plopped this unmanaged commons right in the middle of this extremely hostile environment. Under those conditions, who would expect anything but what Hardin predicted?

      But commons activists call for the transformation of the economy and society to a managed commons basis. Under that favorable condition, where people came upon a new commons, their impulse wouldn’t be to trash it, but to manage it for the common good, which would be more productive and therefore more bounteous for everyone.

      Comment by Russ — December 23, 2010 @ 6:34 am

      • Russ,
        When I read “Tragedy of the Commons” I assumed that the commons Hardin meant was unmanaged: it didn’t occur to me that it could be read any other way. His observations – quite obviously, I thought – didn’t apply to pre-industrial societies, who clearly “managed commons to good effect”. If they hadn’t done so, neither the society nor the commons could have survived to the dawn of the industrial era.

        I think that a useful, modern interpretation of Hardin should broaden the notion of the commons to include “resources that are shared by all but owned by no-one”, i.e a commons is more than simply “property in common”. One example of this kind of commons is the earth’s atmosphere. Here, the advantages of adding CO2 apply to individuals, but the costs are experienced by everyone. It is quite clear that the atmosphere is unmanaged, and that rising CO2 levels are what Hardin would call an “unintended consequence” of industrialization. Furthermore, the atmosphere is a good example of a commons because it serves to rebut those critics who use Hardin to argue for the privatization of natural resources. Charging people to breathe is an obvious absurdity.

        Comment by Gerald — December 23, 2010 @ 10:33 am

      • They actually do charge people to breathe, in a sense, because the worst stationary emitters – factories, CAFOs, etc. – are located in places where nobody lives but those who are economically forced to. That’s an example of an affront to environmental justice.

        You’re right about GHGs, which is why I was always skeptical of cap-and-trade in principle. (Even before I saw how laden with corporate welfare in general, and welfare for the worst polluters in particular, all proposed bills are; and even before I knew about how the banks looked at it as a way to blow a carbon bubble.)

        In principle it represents the privatization of the atmosphere, and the conferral of a property right to pollute.

        I know the supporters claim that e.g. Kyoto explicitly says “this doesn’t bestow a property right”, but who cares about such boilerplate? We know how these globalization treaties work.

        No, if civilization were ever to get serious about GHG mitigation, a carbon tax or better yet command-and-control would be a much better route philosophically and as practical policy. (Not that I expect to ever see such seriousness. If they ever do anything it’ll be a scam C&T which won’t mitigate anything in practice but will only be a bank bonanza and corporate boondoggle.)

        Comment by Russ — December 23, 2010 @ 1:05 pm

      • IIRC, it was the enclosure movement — today, we’d call it “privatization” — that destroyed the commons, which before that had existed in balance for many centuries, as have other commons.

        Comment by lambert strether — December 28, 2010 @ 9:47 am

      • Hi Lambert. Yup, all of capitalism was originally financed by that original robbery. Yet they claim it’s been meritocratic.

        (And capitalism has kept requiring a repeat of this primitive accumulation process, because it keeps running out of profiteering potential as its sectors mature.


        Now the goal is to enclose the entire produce of the fossil fuel surplus, now that all the cheap oil and gas and coal have been extracted. Next stop on the elites’ itinerary for us, refeudalization.)

        Comment by Russ — December 28, 2010 @ 11:05 am

      • Russ, to comment upon the excellent “Accumulation” post you cite above, I would repeat my earlier emphasis that capitalism’s overproduction is an inescapable mathematical certainty, purely mechanical in essence once set into motion.

        As for corporate inefficiency, to which you refer primarily in the second two paragraphs, I would say that that’s a bit of a red herring in all this; perfect corporate efficiency with no “friction” would have the same underlying programmed imperative of exponentially-increasing over-extraction. A smaller, localized, capitalism will have the same basic traits as does globalizing capitalism; a new paradigm entirely must be adopted.

        What you see as defects pertinent to “large-scale” or “mass” capitalism are not really bugs; they are its core feature: extractive waste. In a truly efficient (subsistence) system, everyone produces just what is needed (within a limited margin for safety’s sake), with neither profit nor waste: Excess extraction (profit) just *cannot* be in the picture of a steady-state economy… Profit itself is the growing tax on the system, an artificially-imposed inefficiency with real physical & thermodynamical, to say nothing of social, ramifications. That’s how I see things.

        Comment by Lidia — December 28, 2010 @ 1:45 pm

      • Yes, I agree completely. By inefficient I meant even from the point of view of the capitalist; the activity is not profitable for him even given conventional exploitation parameters. So he has to move on to modes of exploitation which aren’t “capitalist” according to the textbooks.

        But by now I emphasize (if I perhaps wasn’t yet in the habit, last February) that this capitalist/feudalist hybrid is the real capitalism, while the textbook version (and the kind apologists always cite when they say, “but this isn’t a free market”) is a utopia or a fraud. It’s been in the full deployment stage long enough, that whatever it’s consistently been in practice, that’s what it really is.

        I also agree that capitalism is malign regardless of its size. Today I’d be more precise in using the word “market” for economically smaller-scale possibilities. A market doesn’t have to be capitalist. Historically most were not. (Perhaps I also try not to unnecessarily tie my hands with the terms I use. So since the real enemy right now is large-scale structures, for now I try not to argue much about the possibilities for relocalization, where I encounter people who agree with that broad program. But I no longer use the word “capitalist”, which does need to be rejected completely.)

        Comment by Russ — December 28, 2010 @ 3:38 pm

      • Those curious for a general and well-thought-out theory of managed commons should peruse Henry George’s ideas regarding public ownership of land, water, natural resources, and how this forms the basis for the best taxation system possible.

        Comment by Hal Horvath — December 28, 2010 @ 3:56 pm

      • Thanks Hal. George is another who has lots to say to us today.

        Comment by Russ — December 28, 2010 @ 5:35 pm

  2. Russ,
    I was a little troubled by your throw-away line “the tragedy of the commons is a Big Lie in general”. I can see why Garrett Hardin’s lifeboat ethics present such a problem for the left, which still appears to believe that “private profit, public losses” can be replaced by “public profit, public gain” when the capitalist world order self-destructs. I don’t know if this was ever a possibility, but in my opinion it certainly isn’t now. When the system collapses (and I agree that it will) there will still be a polluted environment, degraded habitats, species extinction, fossil fuel exhaustion and large-scale impoverishment to cope with. There will still be billions more humans than the planet can indefinitely sustain, and the metaphor of “a lifeboat earth” will be more valid than ever. The real challenge to the left is to devise an ideology that can meet this challenge without recourse to the four horsemen of the apocolypse. To use Hardin’s terminology: “Collapse, and then what?”.

    Comment by Gerald — December 23, 2010 @ 6:31 am

    • Hi Gerald,

      See above for my comment on Hardin.

      The real challenge to the left is to devise an ideology that can meet this challenge without recourse to the four horsemen of the apocolypse.

      I suppose Food Sovereignty is the core of my ideology. It means the people’s necessary food supply, and their right to work autonomously to grow their own food, including having sufficient land to do so, are basic human rights, part of the core function of civilization itself. No economic or political order which assaults or subverts this can ever be legitimate. Food must never be commodified. Therefore it follows that the basis of the land distribution must be useful possession for food production. (I have dozens of other arguments against land propertarianism, but that one’s #1 for me.)

      A legitimate political movement must have this as a core plank.

      So there’s my politics and morality, my ideology.

      As you say, there are critical practical issues here as well. The evidence is that food sovereignty on a post-fossil fuel basis is the only practical solution.

      Sustainable smallholder agriculture is the substitute for industrial ag which will be not only of a higher moral and political order, but has been proven to be more productive.


      So for everyone to become organic (i.e., historically normal) farmers, growers, gardeners, is the answer to our physical, economic, social, and political bottlenecks. America needs millions of small farmers. That’s the core of the movement I want to build.

      Neoliberal corporatism will do all it can to hinder this necessary and righteous transition, and to whatever extent it succeeds, it will murder many people, especially by famine and disease. That’s of course not the fault of the transformative attempt, but of the criminals who want us all to be either slaves or dead. If a murderer shoots someone in the head, that doesn’t prove that whatever the victim was working on couldn’t work. But that murderers’ logic is standard system and MSM logic.

      So there’s humanity’s best shot, according to the evidence and morality as I see them.

      BTW, not to nitpick, but I’m not of the “left”. It’s clear that the old left-right spectrum, if it ever had real validity, no longer does.

      The spectrum that is real today:

      Democracy vs. elitism.

      Citizen vs. corporation.

      Citizen vs. “consumer”.

      Humanity vs. Homo economicus.

      That last monstrosity is the one Hardin fraudulently asserted to be the natural man, for the sake of his neoclassicist thought experiment.

      Comment by Russ — December 23, 2010 @ 6:56 am

      • In a nutshell, free access to land offers the only solution. Our system substitutes the illusion of private profit, but profit derives only from innovation (temporary), efficiency (temporary), monopoly, usury or conspiracy. Coopting the power of government for private ends is the ultimate form of conspiracy. None of this is new. The process has been playing out at least since the American Revolution.

        Comment by jake chase — December 28, 2010 @ 9:30 am

      • Yup, since the American Revolution was diverted and misdirected starting in 1787-88.

        Comment by Russ — December 28, 2010 @ 11:07 am

  3. This really lays out the nature of the influence problem, why it forestalls reform, and why it may be impossible to fix short of collapse.

    In fact, while it may be assumed that my own project (the Commons-dedicated Account Network) arose because I’m convinced such a network can repair this imbalance… such is not the case.

    Frankly I’m not optimistic about avoiding collapse… and without the reform which your piece so skillfully lays out as unlikely… the survival of ‘nations’ as generally conceived may also be going the way of the Dodo.

    And should such a network fail in a mission to reform existing structures… its design allows it to fulfill a more fundamental purpose…

    It forms a pathway to local self-organization for trans or post collapse governance.

    Its use of existing currencies is unavoidable but need not be the only currencies … (in other words it can facilitate the development of local or specialized currencies)…

    The utility of such a distributed, Commons-owned and governed network… which maintains its OWN CLOUD AND BANKING (ultimately including credit creation)… then becomes a vital, global LANDSCAPE for human development…

    However the critical first step is to find a way to catalyze the network WHILE THE EXISTING STRUCTURE STILL EXISTS!

    I believe I have that formula.

    Whether I can catalyze such a network is certainly a good question. Its not a concept appealing to some concentrated interests with different agendas.

    (Private interests are desperately afraid of any “Commons-owned” enterprise getting involved in banking… and especially the online transaction (a critical element for their future maintenance of political/economic dominance).

    From the belly of the beast…

    Gov 2.0 and New Economies – Designing the Social Contract

    Comment by Tom Crowl — December 23, 2010 @ 7:28 am

    • Hi Tom. I wish you luck with that project. It sounds like the kind of thing we need.

      Comment by Russ — December 23, 2010 @ 1:21 pm

  4. I find it interesting that you use ethanol as an example since the ethanol industry was started, and is still partly owned, by farmer/producers intent on finding another use for their excess crops and thereby wean themselves from government hand outs. In our area this has meant that many small to medium farmers have had a greater income, and thus are likely to remain independent and on the farm.
    The problem comes when ethanol must compete with big oil and thus have to use mandates and incentives to be able to compete.
    We are blessed in this country to have abundant farm land and the cheapest food in the world. Americans spend less of their income on food than any other country. Farm folks, who would like to live with the same amenities as their city cousins, have found a way to produce something that Americans seem to want more than food, that is cheap transportation fuel.
    Because of the vast distances and thin population in the U.S. as compared to Europe we have become dependent on personal transportation. Today that means oil. Oil that must be imported unless we come up with a better source of transportation fuel. Until we find that fuel ethanol will help us bridge the gap future fuel sources and bring more income to the middle of America at the expense of oil companies.

    Comment by Michael — December 23, 2010 @ 10:36 am

    • Hi Michael,

      Oil that must be imported unless we come up with a better source of transportation fuel.

      It’s this unsustainable transportation system itself which must be replaced, since there is no substitute for cheap oil.

      The same goes for industrial agriculture itself, which won’t be able to feed the people for much longer, and is indeed already failing to do so.

      Thus the dozens of food insurrections around the world in recent years, the growing use of food stamps in America, and the rising price of food.

      Ethanol solves no problems, but only drags out the torment of propping up the personal car, while creating new problems in the form of higher food prices, rising hunger, worse environmental degradation, and continued dependence on government handouts and mandates. The ethanol “industry” has never earned a cent and never will. It’s a USSR-style command economy, just like most other large-scale features of the US economy today.

      The solution we need is for millions more people to grow food, to use as food, and as the basis for our local and regional economies.

      Comment by Russ — December 23, 2010 @ 1:15 pm

    • Your attempt to portray ethanol farmers/producers as virtuous independent family farmers is frankly deceitful. Much like every other federal subsidy the vast majority of the money goes to elite industrialists. Stiglitz quoted here says the lower 80% of farmers receive 13% of the subsidies, less than $7,000 each, while the largest 1% of farms receive $1,000,000 apiece. The subsidy in effect drives small farms out of business.

      This year ethanol subsidies will cause 37% of the entire US corn crop to be diverted to expensive, unnecessary, pollutive ethanol production. This is an obscene waste of natural resources diverted to the richest among us at the expense of the average citizen. The ethanol subsidy is a failure on rational, moral and economic grounds.

      Comment by reslez — December 23, 2010 @ 8:49 pm

      • Also, no farmer would ever need subsidies if we undertook Land Reform and broke the tyranny of bank credit.

        It’s a manifestation of that same Tower of Babel that we first erect the bank tyranny and then need to pile farmer subsidies on top of it.

        But if productive farmers were directly on the land, with the community they serve supporting their efforts through something like the Farmers’ Alliance subtreasury plan, we’d have a far simpler, more virtuous, sustainable economic loop, purged of all finance parasites.

        Then there would also be no need for subsidies of any sort, and other parasites like the ethanol racket would also have nowhere to go.

        Comment by Russ — December 24, 2010 @ 3:45 am

  5. I liked the clear cut principles you laid out here Russ, it shows your priorities clearly, and although rather gloomy, it is hard to refute the system collapsing arguments.

    I also agree that Ethanol issues are counter productive when you look at the big picture, and part of the scam of big subsidies of big AG as reslez points out, and Russ has said many times.

    Comment by kcbill13 — December 23, 2010 @ 11:04 pm

    • Thanks, kcbill. I actually don’t find the argument of the post gloomy, since if true then it helps establish why this tyranny can’t last long.

      I guess you mean that if the only hope is the partial collapse of the system, that’s pretty gloomy. Yes, I wish it didn’t have to be that way.

      But I think permanent totalitarian neo-feudalism would be infinitely worse. So that’s why I find it relatively optimistic.

      Comment by Russ — December 24, 2010 @ 3:38 am

  6. […] The Limits to Racketeering Attempter’s take on the endgame, from a much wider perspective than banking. […]

    Pingback by Links 12/28/10 « naked capitalism — December 28, 2010 @ 7:54 am

  7. Very interesting, informative article. But I think you’re overdoing the collapse bit, I don’t see why things shouldn’t keep going on like this for many, say 50, 100 years. You’re also forgetting that a lot can be done at the state level.

    Comment by Ed Beaugard — December 28, 2010 @ 8:26 am

    • Thanks, Ed. I don’t forget the possibility of constructive work at levels below the federal government, it just wasn’t a subject of this post.

      I still do think that trying to gain decisive power through existing government structures could work at especially the local/regional level.

      But I think the federal government is a lost cause, and the only way left to deal with it is withdrawal of support and where necessary passive or active resistance.

      Comment by Russ — December 28, 2010 @ 10:51 am

  8. This is the first time I have visited your blog although I have been interested in your comments on Naked Capitalism.

    I, too, am interested in Tainter’s theory even though I have only read portions of his book. I also recommend this book, if you have not already read it: “A Failure of Nerve: Leadership in the Age of the Quick Fix” by Edwin Friedman.

    Apropos your comment about “permanent totalitarian neo-feudalism”, the great monk Thomas Merton once discussed alienation in a retreat he gave to contemplative nuns. In describing how the American people are essentially slaves rather than free, he said: “Our society is set up in such a way that people are happy with this. In a police or totalitarian state, you want to get out. Our society gives enough rewards so that you’re willing to settle for this, provided you get your car, TV, house, food and drink, and enough other comforts…. One of the central issues in the prophetic life is that a person rocks the boat, not by telling slaves to be free, but by telling people who think they’re free that they’re slaves.”

    Comment by Bruce Post — December 28, 2010 @ 8:44 am

    • Thanks for the recommendations, Bruce.

      I don’t know when Merton said that, but today we have to add how the people are now losing all those things anyway, little by little.

      In the end it’s the same eternal truth: Those who are willing to renounce freedom for the sake of security or, in this case, consumerism, will end up with none of it.

      Comment by Russ — December 28, 2010 @ 10:53 am

  9. There is a reason that aggressive viruses and parasites become extinct, but many people believe that corporations and tyrannical governments are immortal.

    Comment by Advocatus Diaboli — December 28, 2010 @ 9:35 am

    • It’s unfortunate that most are so short-sighted. But who knows what tipping points in the mass consciousness lie ahead…

      Comment by Russ — December 28, 2010 @ 11:32 am

  10. […] The Limits to Racketeering […]

    Pingback by Foreign Banks Bailout Bombshell – United Nations of Film — December 28, 2010 @ 11:41 am

  11. I am cross posting this comment from nakedcapitalism, my apologies for the length. This may sound pedantic, but, this diminishing returns to complexity argument seems to depend upon a very narrow view of complexity that I feel lacks nuance. Lets be clear, there are many different types of complex systems, all we have to look at is regional ecologies for examples of this (tundra versus rainforest), they have varying returns to complexity. Certainly our current socio-economic system has its major failings and inefficiencies but that does not suggest that all complex societies are destined to ultimately fail or that this one will necessarily. Even with our current trajectory there are still some wildcards in favor of and counter to the collapse argument. There are quite a multitude of ways that our social system could be organized to reduce these inefficiencies, complexity does not necessarily imply diminishing returns.

    We have a long way to go in accurately determining these tipping points (social conflict and resource limitations) as well as the role of new technologies and adaptation in responding to them. Similarly the extent of rentier behavior, as discussed in this article, that is sustainable is likely to be determined by the surplus available to the complex system based upon material / resource / social limitations. The extent of that rentier behavior has varied in intensity historically in the USA and elsewhere, often in response to social pressure that results from maldistribution of resources.

    So we end up within this neo-malthusian versus cornucopian debate based on how we weigh resource limitations against the role of new technologies, adaptation, efficiencies, recycling, substitution, etc. Our ability to overcome resource limitations is a matter of committment at this point, we have generated an immense amount of surplus that is now directed to foreign wars, conspicuous consumption, etc that could be invested in resolving our resource limitations. Breaking the entrenched interests that have created this maldistribution of resources seems like a primary concern at this point.

    Many of us are quite aware of the reality of declining resources.
    Europeans presently live at a significantly lower resource intensity than Americans. Many within the eco-efficiency discourse are suggesting that we could comfortably live at one tenth or one hundredth of our current resource intensity with little development technologically. This would require significant behavioral changes of course, many of which we are unwilling to make presently, but could be sustained within both a complex society model and a more localized social order.

    From that perspective I am seriously concerned about the implications but certainly not convinced by the proponents of this collapse thesis. If we are willing to make the right choices many of these collapse scenarios are completely avoidable. Depending upon the scenario, the complex system or the smaller social system can exhibit different types of robustness against external shocks and resource limitations. The latter for example may not be as robust in solving issues that do require economies of scale and scope (scientific innovation, responding to plagues, environmental disasters, potential extinction events). Not that the current system isn’t perpetuating some of these problems (global warming, war, disease, etc).

    In reference to localized smallholder agriculture. Notwithstanding the 900 pound gorilla in the room that is effective and hopefully nonviolent redistribution, agriculture is often reliant upon insurance systems to hedge against unexpected weather events which can collapse productivity in entire regions. Right now we have a clear distribution problem in modern agriculture but I see the same issue in place in smallholder localized systems. There is quite a bit of historical evidence for these regional productivity collapses due to a variety of environmental factors. With a smallholder system, how do you suggest that we respond to regional productivity collapses?


    Comment by Stelios Theoharidis — December 28, 2010 @ 6:12 pm

    • Sure, smallholder and cooperative agriculture will be vulnerable to natural factors just as it always was. This will be rendered worse by the criminal effects of manmade climate change, residual poisons in the soil, plus whatever lingering effects remain from GMOs even when those are no longer being deployed.

      But any natural or delayed-criminal effects (which we already suffer anyway) will be less than the effects of the direct scarcity and tyranny assaults we now have.

      The eradication of corporate agriculture and establishment of democratic agriculture, while not a utopia, will still be a tremendous improvement over our current vulnerability.

      We’ve learned so much about sustainable agriculture in the modern era that if we applied all we learned, our post-capitalist agriculture would be far more resilient and less vulnerable to the shifting elements than pre-capitalist agriculture was.

      And if this agriculture is organized federally, that would add a new level of resiliency, as communities which suffered some natural disaster could be assisted by the rest of the federation.

      For example, the federation could be the basis of distributed grain storage and seed banking.

      So there’s some basic thoughts on how food sovereignty could bring about an agriculture which is not just economically and politically vastly superior to the globalized corporate system, but would be far more sustainable and resilient than any agriculture hitherto.

      Comment by Russ — December 29, 2010 @ 4:15 am

  12. The Second Law of Thermodynamics, as it works in information theory and the general trend to randomness. No mystery.

    Comment by Michael Hughes — December 28, 2010 @ 7:09 pm

  13. hmmm….

    I suppose that if some in the leadership of China sought to undermine the US, the more effect (and subtle and likely successful) method would be to extent endless credit (purchase of US debt, etc.), so as to strengthen the rackets, which otherwise would hit a wall at times.

    Comment by Hal Horvath — December 28, 2010 @ 8:53 pm

    • That’s sure what they’ve been doing, propping up the debt economy, which is the only thing that’s sustained US consumerism at all.

      Comment by Russ — December 29, 2010 @ 3:00 am

  14. What a bunch of whingers!

    We now have more souls than ever before! Most of them with riches that only kings could afford a century ago!

    The system is resetting, so what?

    There is lots of money, remember? The problem was too much saving!!!!

    The theft will accelerate at the banks and then we resume normal service, OK?

    So you missed the signals? Sell your wife!

    We are all part of the system, now. Get with the program!

    Comment by Pat Donnelly — December 29, 2010 @ 6:18 am

    • That’s the spirit. But my souls keep fighting among themselves. I think one would’ve been plenty.

      Comment by Russ — December 29, 2010 @ 6:30 am

  15. […] The Limits to Racketeering […]

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  16. […] I just described are both part of this haphazardness and will contribute to it. See also my post, The Limits to Racketeering.   So we see how there’s a big opportunity for anyone who wants to fight and defeat the […]

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  17. I disagree with the statement that CAFOs , factories, (now add hydrofracking to that list) etc. are placed in areas where only those economically forced to live there do so. From my (admittedly somewhat limited) experience and research, while people who live in those areas are generally not wealthy, some have lived there for generations and some are refugees from urban destruction. There are people who actually LIKE living in these areas.

    Of course, to be fair to you this post WAS written over a year ago 🙂

    Comment by DualPersonality — February 21, 2012 @ 12:38 am

    • Of course lots of people want to live on the land. But they’re under economic constraint in that they don’t have CAFO and non-CAFO options. Unlike a country club, they’re necessarily in a potential assault zone, on account of lacking socioeconomic power. That was in line with the point of the post. That they want to be there was a given. Do you think anyone’s a small farmer today, as hard as that is, because he doesn’t want to be?

      Comment by Russ — February 21, 2012 @ 4:49 am

  18. […] theory of “the cost of tightened secrecy to organizational I.Q.,” or as Volatility puts it more succinctly (more under Thing No. 9 below), his “secrecy tax.” The author […]

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  19. […] If there’s no local/regional Occupy, the time bank should try to help get one going.   2. I’ve written before about how the commons is an organic thing which depends upon its environment, and the basic […]

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