Saturday, August 20, 2016

ULTRASOCIETY: The Neo-Liberal Locus of Trust

I'm not an evolutionary biologist, so maybe naively I ascribe to Richard Wrangham's notion from his book "Catching Fire," that man's relationship to flame is integral to our genome, that we could not have become who we are without it. We domesticated fire, inadvertently at first, but to our own purpose and set ourselves on a co-evolutionary path with technology while creating, through a conscious relationship to things, an exponentially broader cultural sphere than that of any other species.  Many other animals require deliberate knowledge transfers between generations for collective survival, mirror neurons in their brains, like those in ours, combine with "kin selection's" genetic impulses to form the facilitating substrate. But when hominids began to cook, they applied Morris' notion of energy capture, the import of power, to their own organism and captured the heat applied to food in the form of metabolically supercharged calories. In the process we evolved smaller guts and much larger brains and an ever expanding cultural/technological artifice constructed over and eventually changing nature itself.

With our hypertrophied brain came the explosion of culture resultant from energy capture: cooking is a technology, a cultural artifact with which we co-evolved, there's no gene for it and yet a hundred thousand years latter, here it is and we can't really do without it: this energy capture is the substrate that actually fed all our subsequent cultural efforts. Like Language, cooking is simultaneously a culture and technology that appears to have evolved as a sort of intellectual arms race for mating advantage: smarter, better sounding, better cooking, better looking and better making individuals had better reproductive prospects and proliferating technologies provided multiplying divergent avenues along which to compete in ever larger groups. All in a race of cultural evolution leaving traces in our genes only for intellectual capabilities like speed, invention and cleverness and for perceptual signals like beauty, voice, symmetry, skin, hair and eye color, but not for the manifest cultural behaviors themselves even as they have all been conserved over millennia. As we became smarter and our technologies more complex, culture co-evolved to support, integrate and conserve the results.

Our propensity to technology and the culture to support it is integral to our genetic break with our genomic relatives, and the defining technology was that of power. Power embodied both in the internal metabolic energy from cooking (external energy capture embodied), that from fire to forge to factory which makes our things, and in the language of power which commands demographically scaling, coordinated action. So power in the dual forms of material force and social coordination at scale, the two are related, is in our genome. Any understanding of human nature that leaves it out is missing the essential, and in "UltraSociety" Turchin is clear on this. Power has been at the center of culture from the start and has bequeathed us genetic artifacts beyond our large brain, particularly in the context of trust and warfare on which "UltraSociety" focuses, power has bequeathed us approximately one in one hundred people with genes that may express as psychopathy, an identification with a particular cultural form rather than our fellow humans, an identification with power.

From a genetic point of view, like rape, psychopathy has obvious selective advantages, but only as an outlier parasitic to a larger sociable community, either as a residual gene expression from less social primates or as a new mutation within our species. This gene thrives at the margins as a free rider on the evolving growth of collective goods, or public goods, the culturally selective advantage of sociability. The absence of empathy characteristic of the pathology gives individuals having it a huge power advantage: in situations short of force, they will be uniquely uninhibited in material dealings with others; once dominant, with access to institutional force, they will have an entirely different attitude to violence, that of Turchin's God King. These genes and their expression are still with us. Psychotic abuse of trust in the pursuit of power is the fissile isotope civilization can never free itself from as it forms an irreducible fraction of or genetic inheritance.

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The Cooperator's Dilemma, Chapter 3 of "UltraSociety", clouds its argument with a reliance on fictional narratives of contemporary business malfeasance. Business is a recent, and one hopes transient, manifestation of human socio-material relations. In its modern form, it's the result of a deliberate instrumentalization of people, a sociopathic process rooted in the caste structure of pre-modern  Great Britain: in the creation of a market based social system, enormous human dislocations were conceptualized and imposed despite monumental human misery to facilitate at the expense of the lower castes what would
become the Industrial Revolution. Conceiving what we now know as Liberalism, Jeremy Bentham, David Riccardo and Adam Smith theorized a new kind of ideology based on materialism, probabilities and power, in fact they fathered what Marx would call "historical materialism" and began merrily cracking eggs to make their omelettes a full century before Lenin and Trotsky, ironically the real reactionaries, a century later staged their revolt against this inhumanity. It will be my thesis in what follows that this ideological shift has now extinguished the Axial Age ideologies, or at least marginalized them enough to create a new, centralizing and exploitative vector in the cliodynamic oscillation of governing structures.

With the discussions of Jeffery Skilling at Enron, before and after the companies collapse in fraud, and reference to the entirely fictional Gordon Gecko from the movie "Wall Street," Turchin intended to describe how in-group competition degrades trust. This misses the larger fact that Skilling's core business had only recently been  de-criminalized: the financial practices on which Skilling built his company were in fact criminal activity until the "de-regulatory" policies of post Reagan U.S. Administrations put the Neo- in Neo-Liberalism by stripping pursuit of the public good from the role of Liberal government. With large scale fraud only recently decriminalized, what the fictional Gecko and the real Skilling were up to was simply pursuing formerly criminal frauds in a criminogenic business environment to their logical conclusion, Skilling turbocharging his with information technology. What is centrally wrong with using him as an illustration is that what he was finally convicted for was no different in kind from the core business plan of Wall Street in general.

Once frauds are made legal, no other business model can compete with them. This forces competitors to replicate the fraud in a Gresham's dynamic that destroys honest businesses. Skilling, like Conrad Black who was similarly convicted of a fraud that is standard operating procedure for many of his competitors, continues to insist on his innocence because of these facts: what Skilling is serving 14 years for is different only in degree from what all his Wall Street peers continue to do every day. In "Phishing for Phools", Princeton economists George Akerlof and Robert Shiller have described how any informational asymmetries the legal structure of a market allow will inevitably be exploited by the force of competition to guaranty systematic betrayals of trust creating entire fraudulent industries: the New Deal regulatory regime we have post Reagan de-regulated to oblivion rightly considered these systemic abuses of asymmetric information flows to be frauds. This was the pinnacle of economic Liberalism. Contemporary de-regulated Neo-Liberal finance has become systematically fraudulent. Trust has never been in evidence there, there has been none to betray except for that of external investors confused by the propaganda of business and economics schools and right wing think tanks, betrayals which the chapter does not treat.

Despite its near universality now in the West, there is nothing natural about organizing society around monetary exchange and money profits. Since its invention money has bedeviled society with its intuitively confounding nature by creating a cultural ecosystem, short of warfare, for psychopathic behavior. Cultural institutions built to support the technology that is money have been corrupted by the psychotic identification of key individuals within the system with power, the most socially important thing the empty signifier "money" can represent and a magnet for psychotic values. Our market societies are an artifact of the normalization of this pathology where socialization into psychotic values occurs through business and economics schools that deliberately avoid teaching the history of economics and in particular the history of the struggle to constrain the money, power psychosis. Even Smith and Riccardo, founding ideologues of Liberalism, understood  that rent extraction, the extraction of unearned income through the power relations of property law, were anti-social and deleterious to the functioning of Capitalism and markets as they conceived them.

Daniel Kahneman's "Thinking Fast and Slow" defines heuristic and computational thinking as distinct features and functions of the human brain, respectively fast and slow. Heuristic thinking is the result of evolutionary modules in our brain supporting intractably complex activities like athletic balance and language, these are fast heurisitic brain functions; deductive reasoning, mathematics and logic are slow computational functions, uniquely human and laborious activities. Money is an artifact of slow computational thinking that perverts fast heuristic linguistic thinking by appropriating terms from elsewhere making of them antonymic synonyms, like efficiency, credit and debt where meanings invert between fast and slow understandings. Our current market society has subjected more of human behavior including the necessities of human life to a sociopathic Procrustean structure of monetary economics than any previous social organization and with increasingly deadly effects at the margins, margins which have crept steadily towards the center of the Western system in recent decades.

The invention of market societies has tethered the Utilitarian ideology to money and, while resulting in a massive spike in the human population, has offered benefits scaled to this expansion only in the last fifty years, all of which are threatened by "externalities" of  their own production (climate change; antibiotic-resistant bacteria; wealth and income inequality; etc.). Karl Polanyi's "The Great Transformation" details both the imposition of and resistance to this degrading instrumentalism as a central principal of social organization, describing societies organic resistance to its anti-humanist, economic systematization. He identifies "three fictitious commodities" of Liberal market ideology, land, labor and money, and describes the moral degradation each is subjected to in order to complete their "commodification". This transformation has come at the cost of exponential growth in human suffering and ecological externalities, a price forecast even as the system was conceived, and debated at the time with its founders by Thomas Malthus. It's been several hundred years now and the piper is yet to be paid: a huge debt to nature is maturing.

Possibly, a more fruitful chapter could have been written about the human trust relationship that is the core technology that sits at the heart market society, money. Money, wherever it exists, is a social relationship that begins with trust. As Hyman Minsky famously said, "anyone can create money, the trick is getting it accepted." In the U.S. before the Civil War, pretty much everyone did and your money was just as good as your reputation, "an ordinary person’s wallet might contain a dozen different currencies, all worth different amounts in different places, since a bar’s money might trade at full value in the bar itself, but would be worth significantly less the second you stepped out the door – and less still as you moved further and further away." Money is a social construct of trust, it is its issuer's liability and its holders asset. Once you've established credit, a social accomplishment, your money becomes more generally accepted, but once this social credit exists, only your innate sense of fairness prevents taking advantage of the trust so expressed. Enter the psychopath: the commodification of trust is an obvious abuse of language, but it is absolutely central to the market ideal and underlies all notions of commodity money and is the central function of banking and turns money from a social relation into an empty signifier of price which Liberal ideology confused with value.

Once commodified, money becomes an empty signifier that can represent the cost of anything, but has itself no value. Hard money systems try to resolve this defect by, for instance, using gold as a commodity peg try to give money value, but even this kludge is stripped bare in social extremis where gold can no more provide food or shelter than paper money: people and the environment must ultimately provide these and can only do so in productive social relationships, relationships which money can lubricate just as Smith theorized, but can equally liquidate as we have recently watched in Greece where ECB policy, with no tool but money has  lain waste to the birthplace of democracy without so much as touching a sword. Commodified money, the debtor creditor relation stripped of the trust central to its humanity was used by the ECB first to force debt onto the Greek population through commercial loans made by European banks external to Greece to a Greek government universally known at the time to be corrupt, who's agents corruptly, personally benefited from these loans while using them to purchase the manufactured goods of the nations that housed the loaning banks. When the corrupt government collapsed and the human looters who had run it fled, the ECB, rather than recognizing the massive betrayal of trust this looting represented and writing down the debt, insisted the full burden be borne by the population of Greece who had been party neither to the loans nor the purchases made with them nor of any benefit whatsoever of these financial frauds.

In a good faith debt relationship, a creditor lends to a creditable counter-party and has no interest in harming that debtor: it is the character of good faith that, while the creditor intends to earn interest as a return on "investment", he has every incentive to see the investment succeed, and with it the debtor. Once the investment is "secured", however, there is a perverse incentive for the creditor to subvert the debtor, not enough to destroy the investment, but just enough to destroy the debtors equity in it and thereby take possession in default. This is just one of many, many ways the power of credit can be abused. Similarly, the rate of interest tends to be a fixed percentage while the real work of the invested money is engaged in a physical world of uncertainty: this places all temporal and circumstantial risk on the debtor. This asymmetrical reality is the central premise of Thomas Picketty's "Capital in the Twenty-First Century." The closer the terms of what we consider normal credit relationships are examined, the more we see the absence of good faith: good faith would consist of unsecured loans at rates that varied with underlying conditions, where, for instance, if the larger economy went into recession, and say the Fed lowered the funds interest rates, the rate on the loan would track down with them and even invert its terms to re-capitalize in response to external shocks where eventual returns would justify it. We see arrangements like this nowhere (even variable rate loans are always positive, never counter-cyclical): in Neo-Liberal society, money is systematically and normally used to abuse trust, our current market based society and its bankers are not and have never been operating in good faith.

This hasn't always been the case, in fact biblical jubilee laws and Paul's advice to Timothy, "for the love of money is the root of all evil," show that solidly at the Axial core of the Judeo-Christian tradition is an objection to the untrustworthyness of money and its perversion of value. Usury prohibitions exist to ensure good faith in the investments of wealth. Without fixed interest or security, creditors would be truly invested in the success of their debtors. The complexity of how money functions creates a breeding ground for psychopathic schemes of enrichment by commodifications of trust as outlined in the Greek tragedy above. Their success sociopathically corrupts adjacent institution that benefit from greed's wages making broad swaths of economic elites accessories to vast crimes. The Gresham's dynamic of the bad out competing the good consolidates sociopathy across the system. The worst of these pathologies are the legal normalization of the abuses of power inherent to modern credit relationships to which all contemporary market societies have succumbed and that have led to consumer recession/depression in parallel to massive and sustained asset bubbles. Money was invented as a tool to distribute the material benefits of society, but like all tools it is morally neutral and can just as easily be used for the opposite purpose. The predictable recurrence of the psychopathic personality type ensures that, where not strictly prohibited and scrupulously policed, money will be turned against society.

Money isn't necessarily a tool of evil, just a very powerful and complex counter intuitive mechanism that easily bends to reward abuses of trust. Occasionally we see hard won social norms enacted in custom and law to ensure the beneficial use of money. Wherever this happens though, the reversion to sociopathic deformation is never more than two generations away. The most recent such episode, at the culmination of the American Progressive Era, was the implementation of the New Deal, an integrated set of laws, practices and norms, forged in the Great Depression but galvanized in war, responsible for the creation of strong, healthy middle classes wherever implemented. This sixty year effort, from the 1880s to the 1940s expanded the power base at the center of Liberalism to include (by 1968) all the citizens of the Western system. This diffusion of power within the system caused it to distribute its benefits more broadly than ever before or since. From Europe under the Marshall Plan to Japan and Korea, even under MacArthur, wherever these policies were tried, they worked and formed the legitimizing apotheosis of Liberalism. But the first major crisis of this system, OPEC's cost push inflation supercharging a demand pull one at the collision of the Great Society and Viet Nam war, was adequate to expose this incredibly successful system to complete destruction within a generation.

With the abandonment of the distributive ethos of the New Deal, the "utilitarian", historical materialist market based system conceptualized in early Eighteenth Century England has metastasized into a universalizing, extractive capitalism, reverting to a path along which it had foundered in 1929. Neo-Liberalism, the Western system in its current form, has shorn the mass of citizens from its power base. Even as this system's money has become the locus of trust under Neo-Liberalism, with every institutional effort conceivable being made to preserve faith in the value its money, the dollar, it has begun to destroy the productive base in the real economy on which it depends. The regressive narrowing of Liberalism, the exclusion of the broad base of the population from benefits of the system which is the hallmark of Neo-Liberalism has brought a crisis of trust to the Western system expressed politically with the Corbyn, Sanders and Trump electoral insurgencies in the last year. Abroad, it is manifesting in the increasing alignment of historical mutual antoginists in the East, Russia, China, Iran and maybe Turkey and India, into allies against the Western Neo-Liberal system.

It has been the interaction of the innate human inclination to energy capture with the market based distributional systems of modern economics, our current money centered global social organization, that's led to the greatest challenge our species has yet to face, Anthropogenic Climate Change. Possibly the most deleterious quality of money is its tendency to occlude behind its luster its confusing empty value, blinding us to the very being of real wealth. The Neo-Liberal confusion of money's value with that of real wealth is the essential antonymical synonym between the fast and slow perceptions of it: to the extent that money has value, a slow concept, it is a tool for the social distribution of real wealth; to the extent that we accept value, as a substitute term for cost, denominated in money, a fast concept, real wealth becomes subject to whatever externalities, pollution, exhaustion or coercion, from which the money system can extract maximal money returns.

When we accept that the cost of something is its value, we blind ourselves to any possibility of externalities: when we insist that value is not subject to denomination we can maintain our awareness of costs hidden in the system or externalized from it into moral or ecological spheres of meaning. This is what the New Deal did to the extent that the last true Liberal president, Richard Nixon, created the EPA to formally account for ecological externalites. Neo-Liberalism has sabotaged this effort too, as it does with all public minded efforts. And, even as it devours exponentially more energy every year, the new information technology extends the coercions, exhaustions and pollutions into a world of surveillance of which earlier centralizing, exploitative governing forms could only dream. The information technology revolution, coinciding with as it did with the social roll backs of Neo-Liberalism, has privatized new universes of informational public goods at the same time they have created a private panopticon through which our unaccountable government now surviels us all. Between concentrated private money power and universal government surveillance, the base of Western society is actually being killed off with demonstrable mortality spikes in Southern Europe and the United States. Neo-Liberalism has eclipsed the Axial religions and re-instituted human sacrifice, but this time not on a high alter but in the gutter.


Trust is the central organizing principal of Turchin's theory of culture driven change through war. The scope for abuse of trust in market based social organizations begins with the commodification of land, subjecting the biological basis for continued life to the abstracted motive of profit extraction as distinct from the husbanding of real wealth. The commodification of labor subjects the non-creditor mass of humanity to similar degradation reducing all who must live from their labor to supplicants at the alter of money, who, when they fail are left to die on the streets or in prisons. These two re-conceptualizations of value are executed at the service of the values inherent in the commodification of the credit relationship itself, money. Excising the life from the prior two organisms, land and labor, and tying them to the Procrustean bed of "hard money," what remains of the credit  relationship once commodified, implicates them in market extractions of money profits unconcerned with the misery and death implicit in coercive human relations and environmental asset stripping. The "historical materialism" bequeathed us by the Utilitarians with their market ideology has and continues to debase every living thing it touches in history's most epic abuse of trust.

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