Plutocratic Insurgency

Preface: I’ve been developing the concept of what would be termed a plutocratic insurgency since 2011. The concept ties into earlier work done by John Robb (Onward to a Hollow State, 2008),Nils Gilman (Deviant Globalization, 2010), and others. This new concept will be highly controversial— it involves global elites and lacks the traditional trappings of an insurgency (i.e. an armed struggle). It is a counterpart to the criminal insurgency concept initially developed by John Sullivan. However, instead of being based on illicit economies and bottom up in nature, it is derived from sovereign free economies and top down in nature. The following elegantly crafted blog entry is one of the first public discussions about plutocratic insurgency. You will be reading more about this concept in this venue and others in the future.

Plutocratic Insurgency

WEDNESDAY, SEPTEMBER 05, 2012

Nils Gilman

I recently engaged in a private exchange with leading 4GW thinker Robert Bunker on the question of how to periodize what he calls "plutocratic insurgency." Here are a few notes I took in the course of that exchange. The point of departure for this sort of an inquiry is to ask what the JohnGaltification of society would actually look like in practice—what would it seriously mean for the wealthy to opt out of participation in the collective institutions that make up society?

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Oops, one more thing, I don't believe John Galt as envisioned by the author Rand is quite the equivalent to the Russian oligarch. John Galt brings value to society via the building up of something real and true, and is, therefore, in opposition to the plutocrats that use connections to hollow out a society without giving back anything of value, whether public or private sector.

Well, I'm not a fan of those doorstop novels and never will be, so this is from memory, and for discussion purposes only....

PS: Angelo Codevilla mines the same topic as this post, yes? Or am I doing that thing where I see what I want to see, and everywhere?

"The following elegantly crafted blog entry is one of the first public discussions about plutocratic insurgency."

How so? Is it the first, I mean? What about the Tea Party and the Occupy movements, respectively? Are they not--in the largest sense--a reaction to, a recognition of, a kind of plutocratic insurgency? Movements rooted in unease at the nature of the "top-of-society"?

I find Nils Gilman to be a geniunely interesting and deep thinker (I can't tell you how much I've learned since first running across his name on another blog), but, like all interesting thinkers, he can go off the deep end a bit. IMO.

I will read one post of his and nod my head in general agreement. Then, I'll read another and think, "I mean, really, that is very tribal!" The stuff about climate change: harsh language, meant to exclude. Catch more flies with honey than with vinegar....But I digress.

Note, I take no side, I'm talking only about the use of language and the description of current intellectually "tribal" movements. Of which we all subscribe, in one way or another.

I believe there has been a steady loss of "localism" in our early 21st century American discussions, the two tribal camps, sometimes R and L, sometimes something else, talking past each other.

Has the internet contributed in some sense to the intellectual underpinnings of such an insurgency, the central over the local? Reality to our two tribes is now a centralized discussion, "centralized" intellectuals talking about DC aims or blocking of said aims, very different from a localized understanding of problems, rooted in the particulars of place and personality? Centralized think tanks and DC scholars and big university intellectuals -- the Big Macs of Huffington Post and Fox News versus the local hamburger joint or coffee shop? Where people of different stripes might agree? Or deeply disagree - ever been to a local meeting about, say, fixing a pothole?

Okay, sorry, I tend to go off the deep end myself, don't I? Just ignore me when I get like this.

Our problems are often local (or, if not local, the solutions are), rooted in the particular and require attention to our own environment. And yet, how easy it is to lose oneself in the larger discussions: foreign policy, this or that law, a good global citizen dreaming of his or her own special NGO, saving the world. An alluring dream world: easy, comfortable and internet-y, the Facebook of democracy, and yet, dangerous too, perhaps?

Yeah, once again, sorry, but this is a fantastic discussion. I just hope all parties to the situation are examined carefully, because I believe it to be multifactorial and sequential.

PS: Dr. Bunker, I faithfully read all of your posts around here although I seldom comment. Very, very interesting work.

PPS: You've probably discussed all of this in the blog post, which I haven't read, but I will, because I do read the site from time-to-time and am familiar with it :)

Re: What about the Tea Party and the Occupy movements, respectively? Are they not--in the largest sense--a reaction to, a recognition of, a kind of plutocratic insurgency? Movements rooted in unease at the nature of the "top-of-society"?

Yes-- I agree-- this is key. They both are reacting to the same broader issue though coming from the right and left (for the most part). They are counter-movements/etc. When both ends of the political spectrum and then the middle begin to all react to the same issue/trending then we have to seriously ask if something is going on. This discussion is starting to "connect the dots" into a broader picture-- a level up in analysis I think. Also I'm questioning the conventional wisdom of what is an insurgency. Does it have to be defined by an armed struggle (a modernist view) or can we have an insurgency derived from the sustained employment of lawyers/lobbyists/favorable tax policies--foreign tax status/corruption? (very Unrestricted War-like). In someways this is possibly the "white collar" approach to insurgency rather than the more "blue collar" approach using guns/explosives(basic generalization). At SWJ I think we have had good discussions on "criminal insurgency". That appears to be only half of the picture. The Western state is also facing a top down problem too. If this is the case then the state is getting hit from both the bottom (illicit) and the top (sovereign free)levels via non-state entities. Current US governmental and household debt levels and the health of the US middle class (a squishy term I admit) suggest to me something is indeed going on.

http://www.theamericanconservative.com/articles/revolt-of-the-rich/

I think this article is making some of the same points.

Again: I take no sides in the debate, but I thought the argument supportive of the general thrust of the post.

I agree with Madhu, there is nothing new here. It is part of a larger movement that, while not intending to, is subverting the traditional idea of sovereignty. It can be seen in actions like the Libertarians demands to return to the gold standard (therefore not having to rely on the US Government's creditworthyness) to the demand for the UN to enforce set of universal rights. This is not just a "right wing" business mindset. The left have there place as well with ideas like the "Right to Protect". It is about "me" in the most selfish sense of the word. By selfish I mean "What I want". That is not necessarily just things for me; it is also things I want for other people.

It started centuries ago when we created the idea of rights separate from obligations. If you read "The Bourgeois Virtues: Ethics for an Age of Commerce" you will see the transition. Merchants were unethical monsters who added cost to good without adding value. They were a menace to society. All that seemed to change in the 1500-1700s as the idea of being a merchant became respectable and even enviable. This is part of a long process. It is really nothing new.

What is new is the ability to move capital rapidly from place to place due to a combination of information technology and globalism. There is a lot here that is very new.

thanks for the link to this article, and I'm glad it is in a conservative magazine which makes it less likely to get dismissed as a socialist view. You made a comment about adding value, and I think that is the key, business who had value (knowledge, products, services, etc.) are themselves valued and many if not most agree they earned their riches. Corporate raiders are another matter entirely, as are the large corporations that increasingly outsource their work in search of an ever greater profit margin with no regard to the impact of such moves on America. Patriotism is largely dead, the new patriotism for the far right is profit, for the far left it is socialism, and unfortunately neither offers solutions.

This may be the defining issue of our time, and ultimately much more important than our war on Islamic Extremists. When profit is the only motive and ethics play no role in constraints on behavior it is likely we will continue to see the erosion of control of the state and in democracies people are at risk of losing control of the government whose politicians are bought and paid for by the plutocrats.

Initially I thought this article was left leaning and another attack on capitalism, but this quote seems to ring true to me.

"Ultimately, however, I don't think this is really a liberal or conservative matter. It's a question of national and social coherence as such: do people living together in a contiguous territory feel themselves somehow to be "in the same boat," willing to share responsibilities and risks collectively? Those engaged in the plutocratic insurgency answer that question with a defiant "No!" The plutocratic insurgency from above thus mirrors the deviant globalization insurgency from below, and taken together they embody the contemporary crisis of the nation-state."

The growing divide betweens the haves and have nots, and the emergent system which limits the ability of the have nots to get ahead is a the beginning of a real social crisis. This isn't just due to unethical plutocrats, but also due to ineffective government which was well illustrated in the documentary "Waiting for Superman." This is focused on our failing education system and does an excellent job of pointing out factually that teacher unions which in their own way buy politicians are more interested in protecting their jobs than educating our children. All serious attempts at fixing the public school system are undermined by the teachers themselves, so unfortunately many kids are doomed to failure. The unions have already waged a successful insurgency by establishing effective control over the local politicians, and corporate raiders have also established an unbelievable level of control over the economy, and this level of control was given/sold to them by politicans sitting on both sides of the aisle. In both cases it comes down to ethics. We as a people need to decide who we really are and what type of society we ultimately want. It isn't a matter of left and right views, because these issues transcend that noise. There should be and I believe there are more common interests between the left and right than opposing interests, and both should want the people the control the government, not the unions or big business.

http://www.movieguide.org/reviews/movie/waiting-for-superman.html

This may be the defining issue of our time, and ultimately much more important than our war on Islamic Extremists. When profit is the only motive and ethics play no role in constraints on behavior it is likely we will continue to see the erosion of control of the state and in democracies people are at risk of losing control of the government whose politicians are bought and paid for by the plutocrats.

Wait...more important than our war on Islamic Extremists? The absence of that war led to 9/11 which created much of the latter portion of the $16 trillion deficit. The wealth of western nations and the perceived corruption of the wealthy and westernized citizenry in Islamic countries is part of what leads to Islamic extremism.

The resulting Jihadism and suicidal behavior is a contributing factor to fears of a nuclear Iran or others accessing nukes from places like Pakistan and North Korea. Foreignpolicy.com has a great article today about the dangers of nuclear war between Pakistan and India. Unlike other superpowers, possessing nuclear weapons has not deterred three past wars, nor halted continuing conflict in Kashmir and via LeT terrorist attacks.

http://www.foreignpolicy.com/articles/2012/09/05/race_to_the_end

That aside, forget not the arrogant manner that the liberal left and right coasts and unionized north-center skew our economy to lead to situations like outsourcing and overseas companies building plants in non-union states. Japanese and European manufacturers have few issues with labor in right to work states. The strange saga of threatening to close the South Carolina Boeing plant ranked right up there with the illogical rewriting of KC-X requirements. Overemphasizing lower cost at the expense of efficiency in refueling fighters over vast Pacific distances was illogical...and if serious about U.S. jobs, both could have been built in the U.S. with a dual buy as occurred with LCS.

It's interesting that one of the proponents of this concept is also an environmentalist. Hmmm, if we allowed drilling in Alaska, the Keystone pipeline from Canada, additional drilling on public lands, more refineries, and greater offshore activity, we would not be in a situation where the Straits of Hormuz are such a foreign policy and defense-cost driver. If liberal Californians weren't so concerned about tearing down long established dams and saving small fish, our central California farmers could overcome some of the drought hitting the central U.S. that drives up costs of both food and fuel.

Look at the most profitable corporations in the U.S. Note the recent job boom in North Dakota and imagine countless new middle class jobs we would create (that require no college degree) by allowing more drilling within the U.S. and offshore.

It was the coasts that insisted on housing speculation and excessively large houses which led to the housing bubble. It remains the coasts that have the highest property taxes due to unionized local and state employees with excessive pay and benefits such as retirement and health care. It is the educational elite, often gaining PhDs in subject areas that do nothing to enhance manufacturing, innovation, or other science-based jobs such as medicine, that lead to excessively high tuitions, student debt, and dead-end degrees from our colleges and universities.

On the other hand, I agree completely that taxes are far too low on our wealthiest. The cited 91% rate on upper incomes in the Eisenhower era is one example. As someone who ran a small business for over a decade, I can assure you that most small businesses would NOT be excessively penalized by higher tax rates on the wealthiest small business owners. We could increase the upper income amount that social security taxes are applied against. We could institute means testing for Medicare. Capital gains tax rates could be at one level for those up to a certain amount and a different rate could apply to higher amount for those like Gov Romney whose primary income source is equities.

Just as we eliminated the tax break on credit cards, reducing the amount you can deduct from housing interest would drive down the unhelpful trends in housing inflation that afflicted our coasts and led to much of the recession by leaving job-seekers unable to move. The America of the 1960s felt no need to live in a 3000 square foot house, partially subsidized by lower taxes. Neither should the middle class employee of today.

Republicans and Tea Party types must give up this insistence on adhering to Grover Norquist tax pledges. Democrats must forget the entitlement-buys-votes mentality that leads to unionized government employees extorting the rest of us through high property taxes. A pox on all their houses. Where is the party for independents!