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Guest Post: Concentrated Wealth and the Purchase of Political Power: Democracy's Death Spiral
Submitted by Charles Hugh Smith from Of Two Minds
Concentrated Wealth and the Purchase of Political Power: Democracy's Death Spiral
Democracy's Death Spiral is a positive feedback loop between ever-greater concentrations of wealth and the ever-higher costs of retaining political power.
Positive feedback loops lead to "death spirals" in which destructive forces reinforce each other until the dynamic implodes. One example is an "arms race" in which ever more costly and complex weapons systems must be matched lest one nation in the race fall behind.
Since the number of weapons and their cost are essentially unlimited, then the race continues until one contestant is bankrupted.
Though many would claim it is a simplification, this dynamic was at the root of the Soviet Union's collapse: as the U.S. embarked on a massive expansion of its military and technological power, the Soviet Union exhausted its much smaller resources attempting to keep up.
Though statistics from the Soviet era are not entirely reliable, various scholars have estimated that fully 40% of the Soviet GDP was being expended on its military and military-industrial complex.
The U.S. was spending between 4% and 6% of its GDP on direct military expenditures, even during the height of the Reagan buildup. If you include the Security State (CIA, NSA, et al.), the Veterans Administration and other military-related programs (DARPA, etc.) then the cost was still far less than 10% of GDP.
The greater freedom to exchange information between government-funded research labs, private firms and government-funded universities enabled the U.S. to outdistance the Soviets technologically. Once again a positive feedback loop can be discerned in the way that increased spending on military-related R&D in the U.S. led to increasingly networked nodes of technological advancement which led to greater advances and more spending to develop those technologies.
The U.S. emerged victorious as the sole superpower, but a more closely matched rivalry might have ended with the collapse of both competitors: a Death Spiral of the sort Jared Diamond describes on Easter Island in his book Collapse: How Societies Choose to Fail or Succeed.
In the U.S., the ever-greater concentrations of wealth gathered by an ascendant Financial Power Elite has entered a positive feedback loop with the costs of gaining or retaining political power. The costs of winning an election have skyrocketed to the point that fundraising is the key function of any politico who is not independently extremely wealthy.
This quantum leap up in the costs of gaining or retaining power has forced politicos to curry the favors of those few Elite groups which can give them millions of dollars.
Just as in an arms race, the amounts of money which can be spent on campaigns is essentially unlimited. The explosion of media now requires multi-million dollar campaigns on multiple fronts: broadcast TV, cable TV, mailed flyers, radio spots, promotion campaigns to influence the mainstream media coverage, adverts on the Web and social media campaigns--the list grows longer every year.
Here is the positive feedback loop. Candidate A gains the backing of a Power Elite group (a political action committee or other front) and collects $5 million. As a result of a media blitz, he/she wins.
Between elections, he/she amasses a "war chest" of $5 million from the same donors, guaranteeing that the final cost of the next election will be $10 million.
Potential rivals understand that victory against this well-funded incumbent, no matter how incompetent, will require $15 million. The only sources of that amount of cash are other Financial Power Elites and State-funded fiefdoms like teachers unions, and so each candidate sells their soul to the few "special interests" with deep enough pockets to harvest and contribute millions of dollars.
Now repeat that election cycle a few times and see how quickly the cost rises. The truly pernicious aspect of this positive feedback is this: if wealth wasn't becoming ever more concentrated in the razor-thin slice at the top of the U.S. economy, then politicos couldn't gather huge sums of money from such small groups. They would have to seek a broader base to raise money, and that would dampen the influence of the top donors.
Instead, the cycle grows stronger with each election cycle: to raise the gargantuan sums needed to keep political power, politicos become ever more reliant on a tiny pool of super-wealthy Elites and State-funded fiefdoms.
(In Survival+, I describe the desperate plowing of millions of dollars by public unions and other State-dependent fiefdoms into election campaigns as full spectrum defense of the status quo. When two such fiefdoms are competing for dwindling State resources, I term that Internecine Conflict Between Protected Fiefdoms.)
In other words, the more elections cost, the greater the dependence of politicos on a wealthy Elite. And thus the influence of those Elites over the politicos grows as well. This is how the political machinery of deomocracy gets "captured" by a tiny Financial Power Elite.
But there is another aspect to this feedback loop: the key way to gather more of the national income and restrict competitors is to get the Central State (Federal government) to lower your taxes, raise barriers to competition, award you sweetheart State contracts, and so on: in other words, partner with the politicos who now depend on you for their power to expand your cartel's reach, revenues and profits.
This is the Death Spiral of Democracy. The way to increase the concentration of wealth is to partner with the State so the Central State functionaries and agencies funnel ever-larger shares of the national income to your cartel or quasi-monopoly while the State suppresses or marginalizes potential competitors.
The more wealth you concentrate, then the more political power you can purchase. Indeed, the involvement of the super-wealthy causes the costs of campaigns to rise to levels where politicos have no choice but to become dependent on Power Elites to fund their campaigns.
You see how the feedback works: greater concentrations of wealth creates greater concentrations of political power, and just as importantly, increases the dependence of the political class on the Financial Power Elites and fiefdoms for their very survival.
Alienating a Power Elite or State-funded fiefdom/monopoly is a death sentence, for all those millions will quickly flow to a political rival.
Now that the Supreme Court has ruled that corporations have the same rights as individual citizens and giving unlimited sums of money to politicos is protected as "free speech," then the Death Spiral of Democracy has no negative feedbacks to restrain its dynamic.
This is how a handful of banks and Wall Street firms over-rode the will of the citizens who expressed their desire to let the banks go bankrupt 600-to-1.
The winner and loser of this Death Spiral are clearly visible: democracy has imploded and concentrated wealth has won.
Lest you consider the bank bailout a now-stale example, consider these recent headlines:
Triple Down: Fannie, Freddie, and the Triumph of the Corporate State
Want to get away with murder? Become a bank.
SIGTARP Report: Treasury Hid AIG Losses
Treasury Shields Citigroup as Deletions Undercut Disclosure
Top U.S. Incomes Grew Five-Fold in 2009, to a $519 Million Average
Apologists who claim democracy is basically unchanged abound. The entire goal of a corporate media and State propaganda machine is to obfuscate what is really going on. Apologists ignore $500 million elections, an army of 40,000 lobbyists, and all the other evidence that concentrations of wealth are concentrating political power which they then use to further concentrate and protect their growing share of the national income.
A guest on a recent "Charlie Rose" show (I believe it was the October 25th show) summed up the reality of our "democracy" with an anecdote about President Obama's visit to Wall Street while the bogus "financial reform" bill was in play. The President essentially pleaded with the Wall Street Elite to "please stop lobbying us" about the (already gutted) "reform" bill.
There you have the end-state of Democracy's Death Spiral: "the most powerful elected official in the world" begging Wall Street to stop lobbying its Central State lackeys so visibly, lest the public catch on.
Democracy is already dead in America, but the wizened death-mask offers a useful facade for propaganda purposes. As I noted in The Stealth Coup D'Etat: U.S.A. 2008-2010 , The Power Elites are apolitical. They don't care about the color of your uniform; whether you wear a blue shirt or a red shirt is inconsequential.
So please enjoy the bread and circuses of the election which the Central State is holding for your entertainment in the Coliseum. No expense has been spared.
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Folks:
Would it be accurate to state that too much concentration of wealth, without a vibrant middle class, the form of government is irrelevant?
That those who have the money and the power will do whatever they can to protect it.
That this is a flaw in human nature, and not in the particular system of government?
Don Levit
Actually, I disagree. It's not the concentration of wealth only. In chinese history, the emperor has always been able to "butcher" or "clean out" the wealthiest dudes and that's that. There is a chinese saying which could be roughly translated to, "peasant dare not mess with the rich, the rich dare not mess with the government."
The Emperor/government which controls the army can alway confiscate the rich's wealth by labelling them with some arbitrary "crime" or "treason" of sorts (we never have Magna Carter). But's that a gross violation of "property rights", which is not in the spirit of the "rule of the law", isn't it?
Fascism is already here. Corporations, elites, banks, and especially the Federal Reserve are in near full control of the US government. They let us live as long at its by their rules. The prison-industrial complex is about to get a lot larger.
there is a cost and a payout to having a money system.
to whom does all that belong? that is the question.
Our judiciary is a disgrace. Until some of those hacks pass on, we are in for more misery. The problem is that until we get a change in the other two branches of gov't, its just more of the same.
It's a blow off top in government and banking. If you need a job, that's where you look: governments and banks.
"Concentration of wealth" can only be avoided by (1) not creating wealth or (2) taking shit from people at gunpoint. The problem here with our system isn't the wealth, it's the system.
Short answer: term limits. Longer answer that creates a much larger mess and takes a lot more work: term limits, and wiping the USC clean and starting over.
Term limits = no pensions. Sounds good to me.
There is a feedback loop, but this has it backward. The government has always been a function of the financial system. The Federal budgeting process is designed to over spend, because there is no budgeting process. Budgeting is to list priorities and spend to the limit that can be afforded. Instead we have a system where the leadership puts together as big a budget as they can possibly get away with, then add whatever it takes to coerce enough of the less powerful legislators to vote for it. Then the president's only option is to pass or veto it in whole. The result is inexorable debt growth. The private banking system then lends the money the government guarantees in the first place, back to it. Pattern seem familiar? Run up the debt, foreclose on the property? Ring any bells? The next step is having the government sell off public property to these private interests, for the same money the government guarantees. This hasn't been going on for two years, or ten years, or thirty years. This is the long game.
In nature, the circulatory system precedes the evolution of the nervous system. Money, an economic medium, is more fundamental than government. Those who control that medium own the economy. Eventually we will have to make banking and money a form of public utility and public commons. Monarchists thought monarchy was indispensable, but it became more trouble than it was worth and we had to make political power a public trust. Now we have to do the same with private banking.
I believe there's a 'counter-loop' that can be engendered and the tech is ready for it!
Enabling simple networked citizen lobbying... most essentially liberated by making an online political 'micro-transaction' easily feasible for the User... (without burdening it with transaction costs)
catalyzes a network of accounts that, in turn facilitates opportunities for enormously reducing the costs of campaigning while bringing candidate selection closer to the people directly.
The Commons-dedicated Account*
*A self-supporting , Commons-owned neutral network of accounts for both political and charitable monetary contribution... which for fundamental reasons of scale must allow a viable micro-transaction (think x-box points for action in the Commons). The resultant network catalyzes additional functionality for co-ordination of other 'social energy' utilization. (If desired, It's also the most neutral and ultimately politically viable method for the public finance of elections.)
Has just been GRANTED A PATENT by USPTO for its groundbreaking mechanism for political/charitable contribution!!!
LinkedIn http://www.linkedin.com/in/culturalengineer
Demo & FAQ http://www.Chagora.com
Blog http://CulturalEngineer.blogspot.com
P.S. It can make great return for founding investors but this is predicated on terms for predetermined buy-out by agreement with it's User-base/Owners at appropriate stage... (this is actually a model for how certain other 'businesses' that ultimately become established 'landscapes' may find as a worthwhile model I'm hoping. I think its a necessary adjustment to Capitalism.)
Hopefully USEFUL financial innovation will eventually find some support.At the risk of sounding like a hippy (whatever that is now), all this talk of power and wealth concentrated in the hands of elites and the sheep or peasants or whatever. You are free if you decide to be free. All you need is something to eat and somewhere safe to lay your head at night. Practice a spiritual path like yoga and eat simple foods, practice charity, compassion and humility and all this other stuff just becomes a noise in the background. A playground for deluded hungry ghosts.
Personally I play bass in bands for $200 a night and occasionally setup computer networks for people and look after them. Do their websites, that sort of thing. The rest of the time I walk the dog on the beach, do yoga, read. I'm setting up a little recording studio and next year I'll be heading out to aboriginal communities here is Aus to record music out there.
If you live in a western democracy there is still a lot of personal freedom to be had if you ignore the dogs barking in the background on TV.
What the heck is wrong with being a hippy? Far better than a bankster or a republic!
Tsukato,
Your earlier stated penchant for fascism belies your belief that you can be any credible arbitrator of what is moral.
Your stated disdain for presumed unmanly "hippy" characteristics is itself not manly, but macho.
Your stated belief that Hippies destroyed “morality” (sexual freedom?), coupled with your belief that women choosing hippies must be a scam, hardly indicates that you are in fact more desirable, or even equally so.
Actually I was kinda joking about the whole facism thing. I dont really dig it. However, regarding the hippies- Fuck those monkeys and perhaps... you too. Any woman who loves weak, backbiting men, must be a real piece of work. You've probably got a bigger chubby than the repulsive ass sniffer you're sleeping with. Good for you sister!
(sexual freedom?),
You mean people were in sexual bondage/prison until a buncha dirty hippies set us free!? You mean a buncha dirty hippies, and their equally dirty mates, gave us sexual freedom?! BWAHAHAHA!!! Jesus sister, you really believe this shit coming out of your head? Oh well, to each her own I guess. YUCK! You make me feel cold. :(
Guess there's no trying to be somewhat polite with you,
prudish homophobes typically have cold feelings.
You are gay!? I had no idea! As I said above, to each, his own. By ass sniffer, I meant mealy mouthed hippies, not queers. Forgive me for being so opaque. I dont hate homos, just hippies. But plz fill me in on something I've certainly never realised: by hating hippies, you are saying I hate gays.... HHHMMMMMM. So you are saying that hippies are queers!?!?! Wow! I must be the densest person on earth. I never realised that. Now I really feel cold, and more than a little stupid :) Thanks for waking me up!
But wait! Humor me for a minute. I used to know this dirty hippy when I lived in PB in SD. He was always hanging out on the boardwalk trying to hustle stupid chicks. What you are telling me is that those stupid chicks were actually effimanate guys?! No! It cant be! You must mean that he was a bi-sexual! AHHH! Now I see what you're talking about. Thanks again. Takes a while for this stuff to sink in with me. :)
Hey rwe2late,
I just had an excellent idea! If genetic researchers can find the homosexual gene, and parents can choose to abort said gay fetus, then does that mean we can rid ourselves of hippies in a generation?! Thats absolutely brilliant! I mean I'm sorry to all the queers that wont be born, but if it rids us of the hippies, its a small price I think.
Financial illiterate,
If it does not too much interfere with your achievement of spiritual bliss,
do pity those of us who cannot so readily as you ignore the increasing world-wide human misery and ecological destruction caused by our society's military, economic, and political activities.
Indeed, even in the "western democracies", many are finding it more and more difficult to turn up the headphone volume and ignore the "barking dogs".
Yeah, me too. I find the use of the term "DEMOCRACY" bloody annoying.
Death spiral of a nation would have sufficed. Or toilet flush of a Republic.
I'll bet there's a pretty easy way to get that "concentration of wealth" out of
the capstone and into the base. Also, I agree that interspersed CAPITALS
DO mean that you know what you're talking about, which is why you so
seldom see them.
Simple easy first fix:
Repeal the 17th Amendment. I will tell you, 1913 was a very bad year.
MBS&C
+17 . . .I mean minus. . .
That's the low-hanging fruit, the seventeenth. Since the whole voting thing is basically a scam these days, anyway, this simple act would force the lobbyists to the state capitals, and our state governments become again the nominating/confirming bodies, as well as the oversight panels for those pesky senators that they were to begin with.
It destroyed both the power of the voter and the state governments on the federal level. Our natural rights are where all power flows, and if we must give some of that infinite power away, the further it travels, the more dilute and weak against the individual it must become.
We don't have a democracy, so we can take the founders' leads in innovating with regards to this sort of thing (ala VA compromise for example) as well as a better separation of powers.
We should test a modern version of a constitutional convention with something like the seventeenth. If we do not challenge the uninspired fiddling around with the constitution, we have no defense against a captured supreme court.
We've got some sort of fresh census data, and since the supreme court thinks god also created corporations in the image of their lord and savior, satan hisself, we can re-inspire the democratic flavorings of the republic with modern means of expressing a republic we'd all might like to be a part of.
Simple stuff like putting voters in charge of how dollars stolen from them during the course of business ought to be liquidated at the federal level. The experiments in a secure and transparent voting network, where polls never really ever close, accompanied by 24/7 access to, for instance, what portion of my "contributions" are being budgeted to Defense or SS or whatnot.
The courage will have to be from the bottom up, where some brave suburb somewhere decides that their democracy consists of a high-bandwidth, more-secure-than-voting-machines mesh network, where the locals decide as much for themselves as they might like, and the sheriff is mostly interested in protecting his or her citizenry from the tyrannies so casually strutted out at the federal and state level.
Once democracy has become virtualized (There's an app for that!), then the sort of anonymity that works so nicely here, ends up enhancing debates. Once it becomes a real-time affair, we could go so far as to think about remote, anonymous representation, where Tyler could well serve on the school board, without anyone knowing his real name or location. Virtualized campaigning well on its way, and Ron Paul demonstrated that it is very possible to raise significant funds from individuals, and that can happen in the course of a few hours.
Democracy is what allows regular people to deliberately and willingly to participate in whatever sort of government might be operant. The democratic functions are as broken as any of the rest, but if we innovate in that direction, we can bring as many people as possible into sorting out the everything-we-wouldn't-want that this republic has become.
Up until 1913 election by the state house was how U.S. Senators were put into to office. The reason: A U.S. Senator 's term is 6 years and by the constitution cannot be removed but for impeachment. However if the Senator really turns out to be a real turkey the State house could remove him and a new Senator can be named. Further if the state pols refused they can be recalled, removed and others could replace them. Milestones
Our representative "democracy" was dead a LONG time ago. It just takes really bad times to make it so obvious. In an extremely wealthy banana republic, the prols don't notice the skimming. When bad times come and they're saddled with the gambling debt, they do.
Excellent analysis, BTW. Always great stuff from CHM.
trickle down? 30 yrs of history prove that this does not work.. but american public will fall for the ol` " tax cuts to stimulate growth and jobs" bs again this election cycle.. watch!
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