The Second Biggest Delusion In US Culture

Tyler Durden's picture

Submitted by James H. Kunstler of,

The debate over Thomas Piketty’s new book Capital in the Twenty-First Century is as dumb as every other issue-set in the public arena these days — a product of failed mental models, historical blindness, hubris, and wishful thinking. Piketty’s central idea is that wealth will continue to accumulate and concentrate among individual rich families at ever-greater rates and therefore that nation-states should take a number of steps to prevent that from happening or at least attempt to correct it.

The first mistake of Piketty fans such as New York Times op-ed ass Paul Krugman is the assumption that the dynamic labeled “capitalism” is an ism, a belief system that you can subscribe to or drop out of, depending on your political correctitude. That’s just not true. So-called capitalism is more like gravity, a set of laws that apply to and describe the behavior of surplus wealth, in particular wealth generated by industrial societies, which is to say unprecedented massive wealth. The human race never saw anything quite like it before. It became both a moral embarrassment and a political inconvenience. So among the intellectual grandiosities of modern times is the idea that this massive wealth can be politically managed to produce an ideal equitable society — with no side effects.

Hence, the bold but hapless 20th century experiment with statist communism, which pretended to abolish wealth but succeeded mainly in converting wealth into industrial waste and pollution, while directing the remainder to a lawless gangster government elite that ruled an expendable mass peasantry with maximum cruelty and injustice.

In the other industrial nations, loosely called “the west,” the pretense to abolish wealth altogether never completely took, but a great deal of wealth was “socialized” for the purpose of delivering public goods. That seemed to work fairly well in post-war Europe and a bit less-well in the USA after the anomalous Eisenhower decade when industrial labor enjoyed a power moment of wage arbitrage. Now that system is unraveling, and for the reason that Piketty & Company largely miss: industrial economies are winding down with the decline of cheap fossil fuels.

Piketty and his fans assume that the industrial orgy will continue one way or another, in other words that some mysterious “they” will “come up with innovative new technologies” to obviate the need for fossil fuels and that the volume of wealth generated will more or less continue to increase. This notion is childish, idiotic, and wrong. Energy and technology are not substitutable with each other. If you run out of the former, you can’t replace it with the latter (and by “run out” I mean get it at a return of energy investment that makes sense). The techno-narcissist Jeremy Rifkins and Ray Kurzweils among us propound magical something-for-nothing workarounds for our predicament, but they are just blowing smoke up the collective fundament of a credulous ruling plutocracy. In fact, we’re faced with an unprecedented contraction of wealth, and a shocking loss of ability to produce new wealth. That‘s the real “game-changer,” not the delusions about shale oil and the robotic “industrial renaissance” and all the related fantasies circulating among a leadership that checked its brains at the Microsoft window.

Of course, even in a general contraction wealth will still exist, and Piketty is certainly right that it will tend to remain concentrated (where it isn’t washed away in the deluge of broken promises to pay this and that obligation). But he is quite incorrect that the general conditions we enjoy at this moment in history will continue a whole lot longer — for instance the organization of giant nation-states and their ability to control populations. I suppose it’s counter-intuitive in this moment of the “Deep State” with all its Orwellian overtones of electronic surveillance and omnipotence, but I’d take the less popular view that the Deep State will choke to death on the diminishing returns of technology and that nation-states in general will first degenerate into impotence and then break up into smaller units. What’s more, I’d propose that the whole world is apt to be going medieval, so to speak, as we contend with our energy predicament and its effects on wealth generation, banking, and all the other operations of modern capital. That is, they’ll become a lot less modern.

As all this occurs, some families and individuals will hang onto wealth, and that wealth is apt to increase, though not at the scales and volumes afforded by industrial activities. Political theorizing a la Marx or Thomas Piketty is not liable to deprive them of it, but other forces will. The most plausible framework for understanding that is the circulation of elites. This refers to the tendency in history for one ruling elite to be overturned and replaced by another group, often by violence, and then become the new ruling elite. It always happens one way or another, and even the case of the Bolsheviks in Russia during the industrial 20th century can be seen this way.

In any case, just because human affairs follow certain patterns these days, don’t assume that all these patterns will persist. I doubt that the Warren Buffets and Jamie Dimons of the world will see their wealth confiscated via some new policy of the Internal Revenue Service — e.g. the proposed “tax on wealth.” Rather, its more likely that they’ll be strung up on lampposts or dragged over three miles of pavement behind their own limousines. After all, the second leading delusion in our culture these days, after the wish for a something-for-nothing magic energy rescue remedy, is the idea that we can politically organize our way out of the epochal predicament of civilization that we face. Piketty just feeds that secondary delusion.

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HedgeAccordingly's picture

well the iBankers are delusional but still rich...

unrulian's picture

a great prep is 1/4" Dyneema rope, whether it be a lynching, a limo tow job or lifting 5 tons

Anusocracy's picture

"industrial economies are winding down with the decline of cheap fossil fuels."

Aren't hours worked per unit of oil pretty constant over the last four decades?

Industrial economies are winding down because of unrestrained government growth. Too much taxation, too many laws, too many regulations, too much surveillance, too much lying, too much propaganda, too much printing, too damn much government, and ...

too little freedom.

NOTaREALmerican's picture

All the ISM's would work if there weren't so many sociopaths and assholes running around, even capitalism. 

Future Jim's picture

Even in the absence of sociopaths and psycopaths, communism doesn't work.

The free market is the absence of isms. 

Suppose I invent an innovative product or service because I think others will find it helpful enough to trade me enough of the fruits of their labor to make it worth my effort. Of course, I do not cheat them because my future sales depend on my reputation. Now consider that they have something to trade me because they are doing exacly the same thing. It is the free market, and it is entirely voluntary. It is self regulating, and it rewards those who are most helpful. It also created innovation, order, and benefit that did not exist before. The free market makes the pie bigger. iPhones did not exist in 2000 BC. It is a win-win. It is not a zero sum game.

NOTaREALmerican's picture

Re:  The free market is the absence of isms. 

But, not in the absence of sociopaths and assholes.   The "free-market" is a fantasy of human perfection.  Sure, it would be grand if the smart-n-savvy people didn't use their brains to manipulate the markets and the dumbasses, but - they do. 

You can't have "free markets", or Communism,   or socialism, or the Rightous Sword of Libertarian Justice, or honest government,  or (well) anything nice until people - or a society - figures out some way to identify and control the sociopaths and assholes.     

Future Jim's picture

You have it completely backwards. All attempts to get government to regulate the sociopaths is having the opposite effect.

The free market is most compatible with our genetic programming, and thus depends on people being imperfect.

In a free market, assholes would be real nice or they would end up getting shot. Governments protect assholes.

If there were any problem, such as smart people trying to manipulate others, then people will have an incentive to provide a profitable solution, but such solutions don't exist because governments protect such manipulators.

knukles's picture

"Don't feed the Marxists"
When anybody asks me about this guy's (Piketty's) tripe, I laugh and roll my eyes.
Then they (the Progressives) mention Paul Krugman..
And I have a Lewis Black moment, waving my arms, looking possessed pointing out that this is precisely the shit that got us here in the first place, FFS.
Then when my Progressive buds ask if I like Lewis Black, I say yes, they nod their appreciation and then I point out that he's a Libertarian....


This guy Piketty is not worth responding to...
I do not negotiate with Marxists

James_Cole's picture

So-called capitalism is more like gravity, a set of laws that apply to and describe the behavior of surplus wealth, in particular wealth generated by industrial societies, which is to say unprecedented massive wealth.


You know, capitalism is just like gravity, in that no one understands what it is and no theory has yet been devised to consistently describe its behaviour. Rather clever comparison mr. kunstler!

In a free market, assholes would be real nice or they would end up getting shot.

First law of the free market, assholes get shot. Second law of the free market..


nmewn's picture

First law of the free market, assholes get shot. Second law of the "free market"..

...the assholes partners-in-crime calls upon "the law".

See, its really not our (capitalists) fault that the cost of doing business under a tightly regulated regime is so high.

Fair dealing has a way of sorting these things out ;-)

Jack Burton's picture

You are on to something Jim. In a free market, assholes would be killed by the majority. In fact, back in our hunter gatherer and even early neolithic eras, it is most probable that assholes and greedy people were either driven out or killed. We need to consider that for almost all human existence, we were not in this modern world. Government did indeed provide the greedy and assholes protection from the majority, and we are now totally under their power. I offer you today's United States Govenment as proof positive of what I say.

samsara's picture

Hey Jack, Sometime watch The Life and Times of Judge Roy Bean. You see the entire procession in the span of one man's life. Paul Newman was great.

Acet's picture

In a Free Market the assholes with the fewer moral self restraints would get some guns and some buddies with just as few moral restraints and take overybody else's stuff by force.

What the purist Free Market types don't get is that a system with no State is called Anarchy and history shows again and again (most recently in Somalia) that Anarchy always turns into Warlordism - i.e. the assholes with the most guns have the power.

The truth is that just like Nature always ends up conquering a newly raise wasteland which is a volcanic island, so will a free-for-all chaotic human society naturaly see ever larger centers of power come to be as people get together for self-protection (or to raid other people's places in force). It is the natural state of things that people gather together for protection from the assholes (and the assholes gather together in response to maintain their strength) and that when people are together rules are need to figure out were one man's rights end and another men's rights start and to resolve any such conflicts (lest they blow up out of control and threathen the cohesion of the group), at which point you have the beginnings of law and order, i.e State.

The Free Market No State purists view of their utopia is about as deluded as the Communist utopia of equality for all: it simply doesn't work given that man is flawed and there will always be collisions where multiple people's idea of "what are my rights" clash against each other.


Pickleton's picture

I've noticed that what people like you do is liberally conflate a free market with 'no State' and or anarchy.  I believe purposely.  Of course, that's utter rubbish which makes your entire argument rubbish.

MeelionDollerBogus's picture

Not so fast. Could it be war-lording was imported, and structure removed in the face of dependancy, as the cause of "anarchy" not working? Or could it be that a culture of independance and morals and of everyone being equally armed resists warlords? If everyone in Somalia was as well-armed as the war-lords when they first rose they wouldn't have got far. I haven't researched the details of their rise to power so I just don't know.

As for 'order' or 'law' we as humans do tend to have built-in morals. They don't always agree on fine-details but generally they do agree. We want peace most of the time, mating, offspring & resources, and humans to tend to co-operate or compete in non-lethal ways to do this. Many other animals also compete in non-lethal ways or co-operate, or use both strategies within a species.

Perhaps the missing ingredient here is that society must first be weaned of dependancy if there is any.

Perhaps another ingredient is that so long as a populace is disarmed it can never turn to productive anarchy because it's like leaving a bank vault wide open (obviously olde timey banks that actually stored gold in vaults, not the modern-day nonsense). Defense is necessary. Defense requires resources like weapons & training and a moral personal constitution that permits you to injure or kill for the good of self, family & community without being an asshole, so as to resist the power of true asshole warlords when they try to take hold.

Anusocracy's picture

Your mistake is the belief that all people should partake in the benefits of civilization, even if they are counterproductive to it.

There are 7+ billion people on earth, there isn't a sane rational argument for including socio/psychopaths in anything.

Confine them somewhere where they can only harm each other and maybe they will go extinct.

Nick Jihad's picture

You know, there is a name for this category of idea that "everything would be just peachy, if we could get rid of the evildoers who ruin it for everyone." It's a childish way to think. The progressive left believes that their Utopia could be realized, if only the conservatives were in someway neutralized. For Staliniists, Kulaks were the problem. 

Anusocracy's picture

Isn't that the basis of the government lovers beliefs.

That getting rid of all competing ideas of government run societies is the ideal solution.

Almost no one believes utopia is attainable, so nice straw man argument.

MeelionDollerBogus's picture

Sociopaths are smarter than most people & able to produce totally fake personae on-demand which means you can't just identify them and isolate them. The only reason today it seems so easy is because they are so all-powerful they have no fear of you knowing who they are. Any who approach will be killed, captured or punished, who mean to do them harm, and you know it.

what's that smell's picture

let's say i invent a system where the bottom line is the greatest virtue.

walmart, pollution, debt slavery, plastic toys, black fridays, brain dead consumers.

capitalism? you bet your sweet ass!

can we move on beyond the rantings of british aristocrats centuries old?.....

capitalism is no more gravity than the smell coming outta my unsweet ass.

embarrasing are the defenders of this silly bygone ideology and their endless tinkerings with the definition of what is and what isn't capitalism...


Future Jim's picture

You have contradicted yourself. You criticize a system where government exercises absolute power over business, academia, individuals, and the media, but you call that system capitalism (a.k.a. freedom a.k.a free markets).

ebworthen's picture

The free market can work if there is rule-of-law.

Problem being; societies have been infested with lawyers interested in money versus justice, and judges interested in power versus the law, and governments more than willing to support and participate in the parasitism.

Enter MBA's and HR Departments, equivocating mandarins who have never worked the production line or done an hour of honest work, and their CEO overlords who get paid 300 times what the average worker does (and a monkey could do their job).

Future Jim's picture

Free markets don't even need rule of law. Competing transparent institutions would natually evolve to meet any real need regarding contracts, arbitration, reputation, regional security, self-defense, insurance, property, right of way, borders, ownership, etc. They would mostly be for-profit businesses who would quickly go out of business if their reputation slips because they can't print their own money.

CEO work really is 300 times more valuable in the perverse system of incentives created by government.

Nick Jihad's picture

A quibble perhaps, but you can see what happens when rule of law is absent. It works, but not as well. Investment tends to follow family ties, to the detriment of efficiency and profit. And capital tends to migrate to places where rule of law is present. For example, South America versus North America.

MeelionDollerBogus's picture

True but unlike a simple curve or line such a situation, plotting corruption & damage to society over time, would be very spikey just like a price-chart in a real market. Sometimes people would "figure it out" and stomp the fraud, then smarter frauds would get the better of the markets for a while, and it would keep co-evolving.

It's probably for the best, in the same way we don't anywhere near have any idea how to manufacture our own immune systems and yet they are with us and do a better job than most of our medicines. Our medicines are patch-ups for what exceptional situations can't be handled, like anti-biotics or transplanting organs (and then using immunosuppresive drugs). If we actually depended on that like we depend on food we'd be dead a long time ago, all of us. The immune system, a thing evolving that we barely understand at all in reality, does all the heavy lifting.

A market of markets, sufficiently evolved will do the same, but the risk is very high. Some will assuredly be killed by it because of weakness or bad circumstances. Some will survive & flourish who very clearly ought not to but that's sometimes how nature is.

Hobo Sapien's picture

+1 LOL

"The Pilgrims simply weren’t producing enough food, so their first solution was to institute beatings for those who did not work hard enough. This had little effect on productivity, and it increased discontent. "

Hobo Sapien's picture

Have to add a quote from Not-Tyler Brad Pitt:

"We're alllllll MONKEYS."

screw face's picture




Ignatius's picture

In a society that allows one to believe anything yet know nothing, resorting to the use of "they" is often necessary.  Kuntsler dogs this out probably because of his aversion to the possibilities of "conspiracies".  We know by observation and logic that the decisions are not being made on the surface by the politicians, yet with all the institutional secrecy in our National Security State what else are we to do?

NotApplicable's picture

Perhaps his aversion is to observation and logic?

He did recently admit to being a two-time Obummer voter.

Cuz somebody's gotta polish that turd!

cougar_w's picture

We can therefore assume then that you think everything will proceed forward exactly as it is now only more so.

buzzsaw99's picture

much as i would enjoy watching the maggots dangle at the end of a rope it probably won't end like that either. eventually people will be unwilling to do their bidding for a few (or many) measly clownbux. without servants they will wither and die naturally because let's face it, without that they are at the bottom of the survival of the fittest process.

NOTaREALmerican's picture

I think there'd be a glorious war in there someplace.


1) People unwilling to do bidding...

2) Glorious wars with lots of slow-motion eagles and flags vs other country's bullshit symbolism.

3) New sociopaths to rule us all !

Something like that...

buzzsaw99's picture

yeah, but after the wars and desolation the misery will eventually be spread across the entire population in a much more egalitarian manner. ;)

When you got nothing, you got nothing to lose. [/Bob Dylan]

sleigher's picture

And right when you have nothing to lose, you lose it.

swmnguy's picture

I started out with nothing and I've still got most of it left.

NOTaREALmerican's picture

Ahh....  I feel so much better now.   

Nobody can drain the hopium/anti-hopium like Kunstler!  

mumbo_jumbo's picture

this guys is a one trick pony and has been screeching peak oil for a decade now, i'm sure there was a guy just like him when whale oil started to become scarce

Schaublin's picture

Two trick pony actually. 


1. Industrial economies are winding down with the decline of cheap fossil fuels.

That is the first one and it is patently correct.

2. Visceral hatred of Europeans.


He rarely rants about peak oil and suburbia et al without slipping in a few snide remarks about "rednecks"


Commissar Kuntsler would like nothing better than to oversee the FEMA camps.

Mike in GA's picture

and he really doesn't like southerners or anyone who actually enjoys NASCAR racing.

disabledvet's picture

Is Alibaba the Iceberg?

That thing would have to go off perfectly...and I'm not talking fees here.

"The purpose of raising capital is to raise capital" not to create a market panic and the collapse of sayyyyyyyyy...Little Rock.

Of course this is Wall "MAKE WAY...

MedicalQuack's picture

This article just described what I call "The Grays" with people not being able to tell the difference between virtual and real world values.  The rich have become very smart at how to bring virtual values into the real world to make money.  It hurts the real world.  Why do you think they are edging out of commodities, decisions and gambles there hurt the real world. 

This is why it is not fair as all the virtual values run on servers, we are humans, we don't run on servers.

The sad case of the VA in Phoenix where 40 people died as they entire administration was so wrapped up in their virtual worlds of efficiencies, and we need those too, but they couldn't see the forest for the humans to make a left turn to help some get appointments with doctors.  This is where the virtual values are killing the real world and people can't separate them at times.

So here's some more virtual money makers..Verizon..going to follow you all over your home computer now to get some data to sell and is SAP acting as the broker as they wanted to do to make even more money off our data.

There's the frigging delusions with virtual and real world values and again the wealthy know how to use the virtual world to take from the real world. 

NOTaREALmerican's picture

Yeah,   it's tough for people to admit but sometimes the smart-n-savvy people are really just smarter-n-savvier that the average human, and have more loot as a result.   Running scams,  being able to comprehend the "virtual world" (as you said), bullshitting the dumbasses for fun-n-profit, being able to represent a guy able to throw a round object at 100mph with his left hand, ...  these are skills that some people are born with or their parents educated them about.

We call can't be the winners in a predatory society.  

shiftless's picture

"Yeah, it's tough for people to admit but sometimes the smart-n-savvy people are really just smarter-n-savvier that the average human, and have more loot as a result. "

You know what your problem is? You are clearly too stupid to see that these "smart and savvy" idiots whose nuts you are continually swinging from are NOT smart. Not even close. God laughs at their plans, just as he rolls his eyes at your ignorance. Those who embrace evil WILL always lose in the end. Look around you. You think a world of 7+ billion people was built by cheating and corruption? The force of creation is greater than the force of destruction. Your idols are the dumbasses who think they are smarter than God, and can successfully ignore God's rules for eternity with no consequences. You couldn't be more wrong if you tried. You and they are nothing more than zits on a mosquito's ass compared to the Truth of the Universe. Stop with this "smart and savvy" idiocy. Pull your head out of your ass.

shovelhead's picture

Anyone buying my data is a sucker.

I stopped buying things because they were packaged in red and had cowboys on em when I was 10.

We bought stuff that 'fell off a truck'. That happened a lot back East.

The ultimate value shopper.