The horizon is not so far as we can see, but as far as we can imagine

The “System” Did Not Appear Ex Nihilo

Last week I wrote an article lampooning the idea that people are only following incentives and therefore are not bad people.

Let’s spell this out clearly.

The system, whatever the system is, whether it is New Deal capitalism, Stalinist communism, English high feudalism, neoliberal capitalism, or French late medieval feudalism, is a creation of humans.

Our system is always a choice.

It doesn’t feel like a choice to you as an individual, because it is a collective choice which weights a very few individuals’ preferences much higher than yours. Not being Barack Obama (who had a choice to end neoliberalism) or FDR (who did choose to create a new type of capitalism) or Khrushchev (who created a different type of communism, recognizably different from Stalinism–and much more pleasant to live in), you have never had much of a choice.

So, being weak and only one person, to you the system feels like a force of nature or God, given, not a man-made construction.

But the system is always made and is always the result of choices. Sometimes, individuals at key junctures get to make a choice or a difference, and most people only make choices as part of large groups. But it is a choice.

Even within a system, different results are produced. English feudalism was far kinder than French feudalism, with far more free men and far fewer villeins or serfs. England produced common law and even non-free men and women had rights. Russian serfdom by the end of the Czars was known for its cruelty, but it wasn’t always thus, and so on and so forth.

More recently, and if not within your memory (though it is within my memory), then certainly within the memory of people you know, the previous form of capitalism running the US and most of the “free” world produced the following results:

  • steadily increasing incomes after real inflation was measured;
  • steadily decreasing share of income being made by the richest in society;
  • steadily increasing prices (but slower than wages).

It did all those things because it was designed to do those things. A choice was made in 1933, and made again pro-actively every four years after that to keep doing it. After a while, people became wishy washy about its continuation. You can trace it in stages: the post-war Congress weakening unions, Truman deciding to keep the war time state running, Kennedy deciding to lower top taxes, qualified immunity in the 60s, Nixon deciding to start the war on drugs, and so on.

But it didn’t really end until Reagan. Reagan was a choice, that’s why there were elections. He had been worked for, hard, by various rich people who could see that the current system was slowly siphoning away their power, and they found, with racism and the fear engendered by the oil shock crises, enough of a wedge to get a voting majority of Americans onside.

Then they systematically changed how the system operated so that it would produce:

  • stangnant income for the majority of the population (really decreasing if inflation were properly measured);
  • steadily increasing share of income and wealth controlled by the wealthiest in society;
  • steadily decreasing prices of production of goods. At first some of this was passed on, but most of it was kept as profit.

Neoliberal capitalism produced different results from New Deal capitalism because it was designed to do so. It had different incentives, to use econo-speak.

To say “people just follow the incentives” is driveling idiocy when dealing with large social matters, because in large social matters, the incentives are dependent variables; they are chosen by the leadership and the mass of the people (who, yes, do have power in large enough groups–Reagan was not possible if enough Democrats hadn’t defected, they were called the “Reagan Democrats”).

Nor are people ex-nihilo. We are shaped by the society we live in. Reagan’s revolution could not have happened while the Lost Generation still had large numbers because the Lost Generation remembered not just the Great Depression, but the roaring 20s. Knowing that the wealthy had caused the Great Depression, most Lost believed in keeping the rich poor. Those who came afterwards, not properly remembering the 20s, did not feel this in their gut, and they were willing to sell out.

Neoliberals said, “You can have a suburban home, away from the blacks, and we’ll spike the value of housing and stocks, so you’ll be rich, and you won’t even have to work for it.” Sub Voce: “Because you’ll get it for doing nothing, you won’t care about wages, which we’ll crush.”

More than this, a system selects for people who will do what it requires. You cannot join many gangs without murdering someone first. You cannot be in power in DC, or almost any state capital, if you are not onside with crushing wages and making the rich richer. You will not be allowed in power. You will not want power, because you will quickly find out that you can’t do what you want, you can only do evil.

The system doesn’t so much turn people evil as it selects for evil. The “incentives” don’t work on everyone, what matters is that, if they don’t work on you, you don’t get into power. Or, if you somehow fluke in (like Corbyn) you don’t stay in power. You won’t compromise enough.

People worked hard to create neoliberalism. Once they were in power, they worked hard to create a system which excludes those who don’t want to crush wages and make the rich richer. The rules of the system, the incentives, were created by men and women and are maintained by men and women.

They are not unchallenged, but so far every challenge has lost. Corbyn was a challenge. Sanders was a challenge. There have been other challenges. They all lost. This was true of every challenge to the New Deal Order from 1936 to 1976. All challenges lost. It looked unbeatable.

One day, the New Deal Order lost. One day Neo-Liberalism will lose. The questions are only, “When?” and “To what?”

Hitler, Mussolini, and Lenin defeated older orders too.

So, the people who run the US and the developed world are almost all very bad people. They were selected to be very bad, and they also worked very hard to ensure that only evil people could get power, because only evil people will do what their system requires and it is the system that makes them powerful and rich. (Reminder: Nancy Pelosi is worth $120 million.)

The systems selects for evil, the system was created, and is maintained, by people who worked and are working hard to make sure it selects only evil people to run it.

Just like Soylent Green, the system is people.

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Week-end Wrap – Political Economy – July 12, 2020


Feeling and Acting Powerful in Catastrophic Times


  1. Stirling S Newberry

    One of your best.

  2. Daniel Lynch

    Ian said ” Reagan is not possible if enough Democrats don’t defect.”

    Reagan was not possible if Jimmy Carter’s neoliberal economic policies had not caused a massive recession (with a little help from Bush the Elder’s October Surprise). Jimmy Carter was not possible without the backing of David Rockefeller’s Trilateral Commission. Nixon was not likely if not for LBJ’s Vietnam quagmire.

    How did America’s “left” party embrace imperialist wars and sell out to David Rockefeller? Because the American “left” has never had a consistent ideology, not even under the pragmatic FDR.

    But I find it difficult to point a finger at one politician when the right had been planning for what we now call neoliberalism since at least 1942, when American fascist Lammot Dupont told the National Association of Manufacturers “we will win the war by reducing taxes on corporations, high income brackets, and increases taxes on lower incomes, by removing unions from any power to tell industry how to produce, how to deal with their employees or anything else, by destroying any and all government agencies that stand in the way of free enterprise.” And there you have the neoliberal ideology in a nutshell. Give the right credit for having a consistent ideology. The right actually believes in their ideology, they have plans to implement it, and they stick to it. I don’t know what today’s left believes in and I don’t know what their plan is.

    But DuPont could not get his wish at that time because unions had political clout and the morbid fear of communism made many elites willing to support a minimal welfare state to head off a communist revolution. After the USSR fell, there was no longer a viable threat of communism and the elites took off their gloves.

  3. Ché Pasa

    The virus seems to be doing quite a number on Trumpism, elitism, neoliberalism, phony leftism, and much else besides. I keep saying that we’re not coming back from this the way we were, no more than we did after any number of shocks to the system over the course of the last century or more. Our rulers once responded to these repeated shocks by at least trying to get it right in the next iteration, but now they’ve pretty much given up.

    What will be will be, and they don’t much care what will be — as long as they’re safe and secure, which they fully intend to be. Come what may.

    Oh, they may lose a handful to the virus or other hazards, but most will do just fine. What happens to the rest of us will be delayed until it can’t be any more and then, whoosh! Into the inferno.

    I’ve been watching what’s been going on in our little corner of the wilderness, and it’s remarkable. I think all but one or two of the derelict houses, some of which had been unoccupied and falling to ruin for a decade or more, now are lived in. Some of the local homes shelter two or three families these days. Where have all the newcomers come from? Some from Texas, but most from Albuquerque. They’re getting out of the city and they feel they’ll be safe, relatively speaking, out here in the country.

    They figure there will be food. There are farms and ranches all around. Some of the farmers and ranchers are preppers, but most can see what’s happening in the outer world and figure it’s in their interests to be communitarians or at least appear to be.

    If we run out of water though, things will get dire fast. There are no streams or rivers here. We draw water from an aquifer that is recharged from rainfall on the mountains. It’s been overdrawn for some time, and if rain stops for even a few years, it’s gone. We’re going into the longest extended heat wave anyone can remember, and there’s been no monsoon rain at all. So people are watching and waiting. What comes next?

    There’s nothing much we can do about these realities. We can’t control national or international politics or economics, and the way some have tried has led to worse rather than better outcomes. Best to just hunker down, eh?

    We’re running out of some supplies. I’ve said that some things are perpetually “back ordered” or not being delivered out here. If you want it, you’ve got to go into town and hope to find it. Delivery from the big warehouses to individuals is spotty at best. Some market foods have skyrocketed in price. Same with many other things we once took for granted. People are getting poorer day by day.

    In connection with Ian’s point, I think we can agree that all this and more is a deliberate choice on the part of layers of rulers. They know what’s happening and they’re fine with most of it. They can’t or won’t control the virus, so they’ll let it do its magic, culling the herd, and hoping like anything it gets worse before it gets better and that it never touches them.

    We’ll see….

  4. Mark Pontin

    I have no arguments with any of this, Ian, except: ‘One day Neo-Liberalism will lose. The questions are only “when?” and “to what?”’

    Neoliberalism has already lost.

    Because it’s a system that’s (a) designed only for optimized looting by elites and has (b) so arranged its politics so that only politicians and bureaucrats reach power who’ll facilitate that looting and who are incapable of actual governance, it’s ineffective at dealing with both its own structural contradictions and exogenous challenges.

    The structural contradictions of neoliberalism are that at a certain point societies simply become irretrievably looted-out and immiserated. In 2020 large sectors of the U.S. are at this point.

    The exogenous challenges to neoliberalism are material realities like COVID19 and the rise of societies such as those in Asia that are still functional. In 2020, for instance, China, whatever its corruption and brutalities, has leaders who understand that a state needs an industrial strategy and actual governance that functions to benefit the masses of its people overall.

    Now it’s not clear what will come after neoliberalism in the U.S. It may be something worse.

    Nevertheless, neoliberalism has already lost. It just doesn’t know — it’s become too stupid to know it — as yet.

  5. Zachary Smith

    If we run out of water though, things will get dire fast.

    Time to get cracking with rainwater collection schemes. Not small ones, but quite oversized. This is an extremely old technology, but everything needs to be done right to ensure continued good health and to avoid wasting the money invested in the systems. Personally, I’d plan for some substantial purification of the water which would be withdrawn for bathing, cooking, and drinking.

    BTW, there are dozens of these guides available online. I’d suggest looking at all of them, and also at the old textbooks/articles on how they did this stuff back a hundred or more years ago.

  6. NR

    Great post.

  7. John Mark

    News Flash: Free Stuff Does Not Appear Ex Nihilo

    Economic collapse turns socialism into wishful thinking. You cannot parasitically feed off of a system if there is no government to enable it.

    The ones that will survive will be the independent self-sufficient people who can feed themselves.

    Sponges who prefer to spend their days moralizing and blaming other people will not survive.

  8. S Brennan

    Good one Ian, but, I quibble, 1933-1977…Carter not Reagan

    Articles well worth a read by those who were not there or, for folks who weren’t paying attention back then…and that would be the vast majority of early boomers 1945-55ers* and late boomerettes 1955-65.

    Should include those born during the war years 1940-45, indeed, those born when few were having babies and prior to a population boom have a distinct advantage over other generations…jobs…housing…business opportunities…being able to take advantage over those who’s needs you can profit by.

  9. Ché Pasa


    Have to have rain first, no? This monsoon season, we’ve seen no more than a pitiful trace of rain. Even less than in typical drought years. And those have been more and more frequent.

    But yes, those who can and have rain, absolutely should.

  10. Chiron

    “Corbyn was a challenge. Sanders was a challenge.”

    Maybe Corbyn was a challenge but Sanders clearly never wanted to be POTUS, you could see this back in 2016. Also the Jewish establishment worked hard to bury the old stereotype of the Jewish bolshevik that Sanders had ressurected, because jews today command our benevolent capitalism.

  11. Trinity

    Nailed it! I’ve liked all your posts, but I love this one.

    My only quibble is that to me a better marker for the start of the change you so clearly and succinctly describe, Ian, is the dismantling of the Bretton Woods agreement, beginning with the switch to fiat currency and away from the gold standard. As I understand it, that was Nixon. I was alive at the time, but being a Boomerette (which I am taking as a term of endearment) I was not really cognizant of politics or the political/economic implications of this. Nor did I care, unfortunately, because it is very safe to say I was probably more concerned about a cute boy at school.

    The basis for my argument is that many presidents, especially most recently, merely do as they are told. Any decisions they make, which the current occupant clearly illustrates, can be construed as political strategy, making it difficult to connect cause with effect. One could say they ran with the opportunities available to them (just saying). And as we now know, the only president not elected to a second term since that era is Bush Sr., so … hard to separate the political choices from electioneering. I guess I’m suggesting an easier to defend alternative.

    And a separate comment on Bernie … it is a huge disappointment that he didn’t challenge for the nomination, and seemed to give up too early. However, he managed to describe an alternative that we so desperately needed, and did it not once, but twice. And, he’s 80 years old. As far as I am concerned, he did a wonderful job providing an alternative to “TINA”, thereby putting the lie to that, and I would much rather have him around for years to come to consult than see him worn down by the duties of the office of the presidency.

  12. S Brennan

    Trinity, while I may disagree on some issues, “late boomerettes 1955-65″is not hate speech, it is my attempt to create a hook line that designates the reality…those born 1945-55* & those born 1955-65 have little in common. Boomerettes is my attempt to give voice to those who’s existence has been muffled under those 1940-55ers who still hold sway…except Obama…he had voice, as long ad he was willing to say/do whatever the 1940-55ers asked.

    *Should include those born during the war years 1940-45, indeed, those born when few were having babies and prior to a population boom have a distinct advantage over other generations…jobs…housing…business opportunities, being able to take advantage of the upcoming youth who’s needs you can profit by. Nobody screwed Boomerettes like the Boomers did.

  13. Gaianne

    Ian, this is really, really good.


  14. Cesar Del Pozo

    I always appreciate your analysis, I think it does a great job of articulating what ails American society and that of its vassal states.

    Do you think the despondency that is so abundant in the face of the increasing failures of western society reveal a blind spot or a lack of imagination in the despondent? Specifically one which ignores the progress that has occurred outside the \”West\”?

    For example, in the early stages of the pandemic a lot of Americans were trapped in the following contradiction: that COV-19 wasn\’t dangerous, but that the PRC was misreporting their fatalities to the downside. This notion is now marginally less popular, but it revealed two things about Americans. First, they don\’t have the cognitive framework for dealing with consequences; in this case death from COV-19 is something that happens to others, be they poor, be they brown, be they foreign. Second, even if they acknowledge something is wrong, like Candide, they live in the best of all possible worlds.

    These hurdles (and I am sure there are others), have set themselves as boundaries to thought and action. The sociopaths that run our society have set themselves to killing us; naturally the sociopaths that run other societies must do the same to their populations. But we can\’t change this, as our system is governed by immutable natural law (free markets!!) and not social constructs (free markets). This lack of agency creates the depression and nihilism that surrounds us. Americans are like those brandy gulping Wehrmacht officers trapped in bunkers in the Spring of 45.

    But as we wait for the Red Army to thunder over head, or in this case a Lenin to defeat the old order. Perhaps we are blind to the fact that the old order (we/us) has already been defeated. It\’s just that we are not destined to be part the new order. Just as we have relinquished our agency, history has relinquished us.

  15. Adams

    Brilliant. Overview of a comprehensive description of macro-political economy. Add in a theory on the nature of man and his relationship to the natural world, a little more history, and you might have (another) “Theory of Everything.” But don’t forget “the pre- and peri-natal domains.” That’s what tripped up Wilbur.

    You must be feeling better. Please plan to donate your brain to, uh, science? Made my day.

    Thanks. (i.e. check’s in the mail).

  16. I do not disagree with your piece but regarding “Reagan was a choice, that’s why there were elections.” Many of our choices are illusory. The powers that be vet the choices only allowing us to “choose” who they want. Consider as an example “Trump v. Biden.” Are the wealthy plutocrats in any danger from either of those two “choices?”

  17. different clue

    Many analyses of American progress or regress or whatever fail to see the existence of certain basic commanding politica-engineering realities.

    One can best explain those realities by way of a joke in the form of a riddle ( and a question) in several sentences.

    Question: Who killed Dr. Martin Luther King?
    Answer: Lee Harvey Oswald, acting alone. Hey! . . . He killed Kennedy, didn’t he?
    If that’s so funny, why aren’t I laughing?

    Those who ” get it”, understand how America got here and who put it here.

    Unless the Overclass and its UpperClass supporters can all be rounded up and physically exterminated, there will be no improvement to anything.

    And that is such a nasty thing to suggest that I would never ever suggest it. So there will be no improvement to anything.

  18. Bruce

    All of the “systems” you mention are connected to capitalism as such. Except for feudalism, they are attempts to bolster and prolong capitalism. Even state communism had to come to grips with existing in a capitalist world. Thus, the Soviet Union’s demise and China’s about-face. Nonetheless, the entire world is effected by dwindling labor and natural resources, whatever system there is. The fact is, profits are harder and harder to achieve because humans have become so productive. It does not matter what Trump, Putin, Pelosi or Xi want. (Or if Stalin, Roosevelt and Khrushchev came back to life.) Their choices are circumscribed as well. Some moronic leader may really want a New Holy Roman Empire, but his or her desire will not make us serfs.

    Capitalism, as any human community does, must confront the material necessities of life. The trouble is that capitalism, while truly exponentially expanding the material prosperity of humans, does so in an underhanded way. That is, it skims (or legally steals) value from workers in order to create profits. But this is unsustainable unless there are constantly more humans to exploit. But there are no more, so we can either kill people off (pandemics and poor health care help) or reduce work and share.

  19. Hugh

    The origins of our current oligarchic kleptocracy go back some 50 years to when the income share of the lower 80% peaked in the late 1960s and then to Carter’s pro-business, anti-labor policies and appointment of Paul Volcker to head the Fed. Since then, the principal competition between the two parties is about which can help the rich the most in their looting of the rest of us.

  20. Trinity

    S Brennan:

    No worries, I used the term because I liked it. I may have been a bit facetious, but we are in agreement on what you stated in your most recent post.

    It is a somewhat diminishing term (or diminutive may be the better word) and some people may not like it for that reason but I try to never allow labels to define me. We are good, so please don’t worry.

    Calling attention to the fact that differences exist within the demographic blob labeled “baby boomers” is a good thing.

    Such nuance is important by providing us a way to identify the things on which we can agree within the greater overall issues and problems. If we do not find ways to reconnect with each other, find, identify and name our common ground, the elites will continue to impose their agenda. To me, this is where the last stand will occur: either they divide us from each other forever, or we find a way to unite. I’m not talking about violence, I’m talking about ideas, solutions, non-violent ways to make them irrelevant. The best way to hurt a narcissist is to ignore it. I don’t think people realize how much power we have if we would just stop fighting each other and instead work together. Why else would they feel the need to keep making shit up that keeps us divided, and arguing trivia?

    I just saw another article calling for a single, global government. It is chilling because it is exactly our differences, our striving, our competing ideas, our sharing of ideas and sharing what works and what doesn’t work, our arguments combined with our agreements … this is where the answers are, and this is what scares them the most. They have only one single, unsustainable, utterly stupid idea.

    No, S Brennan, don’t ever stop identifying the nuance. It matters, now more than ever.

  21. Ché Pasa

    As Hugh often asks, “What kind of society do we want?” It’s the necessary question to answer, one way or another, if we are ever to see a different system and society in place.

    It’s a very difficult question for most of folks to answer, locked as so many are in the systems of the moment. Often, consideration is limited to partisan politics or negative responses to whatever is.

    In other words, not a change of systems and society, but pretty much only a change is who’s on top of the same system and society.

    That’s essentially what the current systems were designed for. The systems themselves are permanent, the overclass is almost so, and the rest of us get to choose who is apparently on top or the face of rule from time to time to soothe the savage beast. But in the end, nothing really changes, or what changes, changes in directions that may not be all that good for the many.

    Is that what we want?

    As others have said, it takes a long time to work out the many points of a revolution, and even then, what emerges isn’t necessarily what was wanted at all.

    Where do we go from here?

  22. different clue

    I think I remember reading that some of the WWII-generation veterans and others of that age started marrying and having children in the latest 1940s and various members of that same culture-and-experience-defined generation started or kept having children into the earliest 1960s.
    It was a long-rolling Baby Boom. So all those people born in that time got called Baby Boomer in honor of the Greatests who had them, not in honor of any defining culture-experience event-field which those babies themselves grew up to share.

    Some have recognized the fact that this cohort is big enough to be two politicultural generational groups by speaking of Older Boomers and Younger Boomers. Some have even graced the Younger Boomers with their very own generational name . . . Generation Jones.

    I myself have suggested that the two groups be know by the iconic TV shows of their respective eras. The older group should be called the Beaver Cleavers and the younger group should be called the Brady Bunchers.

  23. Thomas B Golladay

    Once we hit 100k cases a day in the US, the entire system will crash and their won’t be much of a US left.

  24. NL

    Oligarchy is really the worst kind of ruling system. Perhaps, the outcome will be a recognition of this. The West took the Greek word democracy with none of its political arrangement and used it to signify an oligarchy for PR purposes. This started about 500 years ago and went hand in hand with the spread of capitalism and colonialism, cause two world wars, one cold war and one Russian revolution. It feels like a force of nature…

    The West may need to embrace some sort of monarchial rule at some point, whether it will be the final richest oligarch declaring herself/himself the queen/king or a committee of determined philosopher-kings scatters the oligarchs and assumes the leadership. Or an external ruler…

    But I am way too early with this…

  25. someofparts

    Great video. Thanks for the link.

  26. S Brennan

    DC, never having heard “generation jones” I googled “names for the second half of the baby boom” I came up with one entry in 5 pages that matched “generation jones”. In the article, the writer says to never have heard the term before it was explained to him. Since I am a Boomerette I asked my fellows, not one in ten had heard the “generation jones” moniker. The name implies anonymous and…I think that describes it’s fate, a poor choice of words to be forgotten as quickly as possible.

    Why I like Boomerettes is, rather than come up with a wholly unique name for a previously described generation, Bommerettes provides context while differentiating their social-economic milieu from that of the Baby Boomers.

  27. t

    It\’d be great if you ever managed to climb out of the ayn rand/hanna arendt shithole trap Lenin was not only brilliant but also a good man. So was Stalin. Since you like going bottom line, the good that any of them has brought far, very far surpassed the consequences of any mistakes.
    It looks like bait for some of your liberal readers and it\’s sad because you\’re better than that.

  28. different clue

    @ John Mark,

    I wonder if things will get bad enough to where even the millionaires and billionaires will be forced to discover their own ability to be self-sufficient and provide their own food and etc.

    I wish someone would write a novel with the title : . . . Gaia Shrugged.

    Maybe some socialist novelist could write a novel with the title: . . . Spartacus Shrugged.

  29. John Random

    Just a comment about Bernie Sanders and Vermont. Some of the wealthiest Americans are defense contractors and they live in nice towns like Essex Junction. Why isn\’t this ever mentioned in wonkish sounding critiques of neoliberalism?

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