This is a guest post from Charles Hugh Smith. His newest book is Why Things Are Falling Apart and What We Can Do About It

Centralization and Sociopathology: The Consolidation of Control

I have long spoken of the dangers inherent to centralization of power and the extreme concentrations of wealth centralization inevitably creates.

The Master Narrative Nobody Dares Admit: Centralization Has Failed (June 21, 2012)

The Solution to Concentrated Power: Decentralize, Diffuse and Devolve Power (June 22, 2012)

To Fix Healthcare, Let 100 Solutions Bloom (February 26, 2013)

C.D., a longtime contributor to my blog, Of Two Minds, recently highlighted another danger of centralization: sociopaths/psychopaths excel in organizations that centralize power, and their ability to flatter, browbeat and manipulate others greases their climb to the top.

In effect, centralization is tailor-made for sociopaths gaining power. Sociopaths seek power over others, and centralization gives them the perfect avenue to control over millions or even entire nations.

Even worse (from the view of non-sociopaths), their perverse abilities are tailor-made for excelling in office and national politics via ruthless elimination of rivals and enemies and grandiose appeals to national greatness, ideological purity, etc.

As C.D. points out, the ultimate protection against sociopathology is to minimize the power held in any one agency, organization or institution:

After you watch these films on psychopaths, I think you’ll have an even greater understanding of why your premise of centralization is a key problem of our society. The first film points out that psychopaths generally thrive in the corporate/government top-down organization (I have seen it happen in my agency, unfortunately) and that when they come to power, their values (or lack thereof) tend to pervade the organization to varying degrees. In some cases, they end up creating secondary psychopaths which is kind of like a spiritual/moral disease that infects people.
If we are to believe the premise in the film that there are always psychopaths among us in small numbers, it follows then that we must limit the power of any one institution, whether it’s private or public, so that the damage created by psychopaths is limited.

It is very difficult for many people to fathom that there are people in our society that are that evil, for lack of a better term, and it is even harder for many people in society to accept that people in the higher strata of our society can exhibit these dangerous traits.

The same goes for criminal behavior. From my studies, it’s pretty clear that criminality is fairly constant throughout the different levels of our society and yet, it is the lower classes that are subjected to more scrutiny by law enforcement. The disparity between blue collar and white collar crime is pretty evident when one looks at arrests and sentencing. The total lack of effective enforcement against politically connected banks over the last few years is astounding to me and it sets a dangerous precedent. Corruption and psychopathy go hand in hand.

A less dark reason for avoiding over centralization is that we have to be aware of normal human fallibility. Nobody possesses enough information, experience, ability, lack of bias, etc. to always make the right decisions.

Defense Against the Psychopath (video, 37 minutes; the many photos of political, religious and secular leaders will likely offend many/most; if you look past these outrages, there is useful information here)

The Sociopath Next Door (video, 37 minutes)

As C.D. observes, once sociopaths rule an organization or nation, they create a zombie army of secondary sociopaths beneath them as those who resist are undermined, banished, fired or exterminated. If there is any lesson to be drawn from Iraq, it is how a single sociopath can completely undermine and destroy civil society by empowering secondary sociopaths and eliminating or marginalizing anyone who dares to cling to their humanity, conscience and independence.

“Going along to get along” breeds passive acceptance of sociopathology as “the new normal” and mimicry of the values and techniques of sociopathology as the ambitious and fearful (i.e. almost everyone) scramble to emulate the “successful” leadership.

Organizations can be perverted into institutionalizing sociopathology via sociopathological goals and rules of conduct. Make the metric of success in war a body count of dead “enemy combatants” and you’ll soon have dead civilians stacked like cordwood as proof of every units’ outstanding success.

Make lowering unemployment the acme of policy success and soon every agency will be gaming and manipulating data to reach that metric of success. Make higher grades the metric of academic success and soon every kid is getting a gold star and an A or B.

Centralization has another dark side: those ensconced in highly concentrated centers of power (for example, The White House) are in another world, and they find it increasingly easy to become isolated from the larger context and to slip into reliance on sycophants, toadies (i.e. budding secondary sociopaths) and “experts” (i.e. apparatchiks and factotums) who are equally influenced by the intense “high” of concentrated power/wealth.

Increasingly out of touch with those outside the circle of power, those within the circle slide into a belief in the superiority of their knowledge, skills and awareness—the very definition of sociopathology.

Even worse (if that is possible), the incestuous nature of the tight circle of power breeds a uniformity of opinion and ideology that creates a feedback loop that marginalizes dissenters and those with open minds. Dissenters are soon dismissed—“not a team player”—or trotted out for PR purposes, i.e. as evidence the administration maintains ties to the outside world.

Those few dissenters who resist the siren song of power soon face a choice: either quietly quit “to pursue other opportunities” (the easy way out) or quit in a blast of public refutation of the administration’s policies.

Public dissenters are quickly crucified by those in power, and knowing this fate awaits any dissenter places a powerful disincentive on “going public” about the sociopathology of the inner circle of power.

On rare occasions, an insider has the courage and talent to secure documentation that details the sociopathology of a policy, agency or administration (for example, Daniel Ellsberg and The Pentagon Papers).

Nothing infuriates a sociopath or a sociopathological organization more than the exposure of their sociopathology, and so those in power will stop at nothing to silence, discredit, criminalize or eliminate the heroic whistleblower.

In these ways, centralized power is itself is a sociopathologizing force. We cannot understand the present devolution of our civil society, economy and ethics unless we understand that concentrated power and wealth are intrinsically sociopathological by their very nature.

The solution: a culture of decentralization, transparency and open competition, what I call the DATA model (Decentralized, Adaptive, Transparent and Accountable) in my book Why Things Are Falling Apart and What We Can Do About It.

This is a guest post from Charles Hugh Smith. His newest book is Why Things Are Falling Apart and What We Can Do About It

 
This is a guest post by New Delhi-based social media consultant, Kartik Dayanand.

“We’re getting closer to a world where technology takes care of the hard work—discovery, organization, communication—so that you can get on with what makes you happiest… living and loving. It’s an exciting time to be at Google.”

These are the concluding lines of a recent announcement by the CEO of Google, Larry Page. It sounds great: technology will make our lives easier and we don’t have to work hard anymore. The machines, or rather ‘technology,’ they say will run our world. But…

I think we’e in the middle of an unfolding horror story!

It can’t simply be some bizarre coincidence, can it, that as we scale ever higher peaks of technological innovation, the USA is going through its worst recession in 97 years? The story is not too different in Europe and most of the rest of the world; there must be something seriously wrong somewhere. Stands to reason, right?

Plenty of words have been written on the topic of machines taking away jobs from humans, and the twin threat of outsourcing, but this time things are different, really different. They are so different that…

I have no hesitation in saying that the world is on the verge of screwing itself in a spectacular fashion!

Here is the proof…

The invisible robots

As a kid I used to imagine a future where robots would do things for us. That day has arrived but these robots don’t look like anything I imagined they would as a child. They don’t have arms or legs, they are computers and smartphones with the Internet acting as their brains. The talk about machines replacing humans is an age old story and we have managed pretty well so far, but this time things are different for two reasons: Distribution and Convergence!
 

 
Distribution

Since the Industrial Revolution, even before, machines have replaced human jobs but they never had this ability to multiply and spread across the global with almost zero additional costs through the Internet. Take the case of the mailman vs email or traditional books vs Kindle books. In the later case, it costs next to nothing to distribute something that used to take time and effort, printing, warehousing, shipping and retail outlets in the past. Time and effort that was spent by real people doing real jobs which are simply not necessary anymore.

From bank clerks to airline ticketing attendants, there are many classes of jobs that are going extinct. Read this article: A look at jobs replaced by technology. Where do all these people go now?

But isn’t capitalism, to a certain extent supposed to be “destructive”? Isn’t that where innovation comes from? In the battle between man and machine there is an old argument that goes instead of a candle we now have light bulbs and in place of a horse and carriage we have cars, so “disruption” is good. But now we are faced with a new problem: Convergence.

Convergence

Due to convergence of technologies, multiple tasks are now doable with but a single device. The smartphone and tablet are effectively destroying the calculator, camera, flashlight, alarm clock, wrist watch, notepad, audio player and multiple other industries. I am not merely talking about the things one can do via the Internet for the scale of disruption is unimaginable. Real people were making those products. They are now not needed anymore. And it’s not merely job loss, the products themselves won’t exist anymore.

And who manufactures these new converged products?

Most probably some company like Foxconn in China where Apple and many other companies build their products at dead cheap rates. Almost none of those manufacturing jobs are in the USA or anyplace in Europe. No wonder the Eurozone is in tatters right now, Greece is at 60% unemployment and Spain has 55% of its youth between the ages of 18 and 25 unemployed right now; forget manufacturing, they might never ever get a job that involves soft skills, all thanks to outsourcing.

Ousted by outsourcing

Outsourcing, while taking away jobs from many, has provided employment to millions in another part of the globe. This led to an increase in earning potential as well as spending capacity for millions who could now aspire to “things” and a lifestyle unimaginable earlier. New doors have opened where none existed earlier. However, there are dangerous pitfalls on this side too. There are already two main patterns one can notice emerging– Obsolescence and Cannibalism.

Obsolescence

All the pitfalls of disruptive technology apply here too. You can never say when a particular piece of technology or service will become obsolete. The skills that we learn today might not be needed tomorrow; this applies to software professionals who are dime a dozen out there specializing in skills that could be without economic value tomorrow.

Very few people specialize in “real” skills anymore, right from a commerce graduate to a science student to a mechanical, civil or chemical engineer; all want to become Software-IT Professionals.That’s where the easy moolah is. Those who continue in the pursuit of conventional professions often find themselves in a unique fix, not able to compete with their counterparts in the IT industry in terms of fat paychecks. But there is an even bigger issue in play here, cannibalism.

Cannibalism

In the modern world of outsourcing, cannibalism is a rampant practice. No one is eating anyone else alive but everyone is eating away at everyone else’s jobs.

Organizations are always looking at doing things the fastest and cheapest way. They achieve it by employing smarter technology, but where manpower is still essential they are always on the lookout for a cheaper option that can accomplish the same task in a shorter time-frame—the primary reason why outsourcing exists in the first place. Why bothering hiring and paying an experienced hand when a trainee will suffice?

For a country like India, that boasts of a massive youth population that is ready to be employed, the future can be quite unsettling. It is a win-win situation for the bosses, but the same can’t be said for the employees as job security simply does not exist anymore.

Even worse, in the modern age there are no trade unions to protect the workers, they are all dead or dying out, and each man is on his own. The best you can do is change your profile picture on Facebook as a sign of protest, like how some of my friends from the VFX industry did after Rhythm and Hues won the Oscar for best VFX this year against the backdrop of imminent bankruptcy.

Implications of the above two patterns:

So basically, technology and outsourcing are screwing the west and the rest are hell bent on screwing themselves . To put it simply…

The West is already screwed and the rest are hellbent on screwing themselves by cannibalising themselves to obsolescence

So what is the solution?

James Altucher, one of the most exciting writers I have come across online recently, wrote a post on TechCrunch titled “10 reasons why 2013 will be the year you quit your job.” In it Altucher advises his readers to turn into entrepreneurs to save themselves. He makes some terrific points to support his case, but I wonder if it’s realistic to expect that everyone can become an entrepreneur? Someone has to be at the bottom of the foodchain and even if someone dares to do something on his own, the big daddies will give them sleepless nights. Also in an open economy where everyone has equal opportunities, it is the big corporations that have the maximum leverage. Everyone else is just part of the crowd.

Take the case of movies. The top hits today make more money than ever while the bottom is a horror story with the vast majority of films not even finding any avenues of release or exhibition; it is a problem of plenty. It is the same with businesses and tech start ups. The big corps capture the bulk of the market and the smaller fish are in the game only to be hooked or to be eaten by the biggies. No wonder income inequalities are growing wider across the globe between the rich and the rest of us.

The Rich becoming richer and the poor becoming poorer has never been truer than it is today!

Forgetting for a moment, the poorer countries where wealth inequality is extraordinary and the bottom of the pyramid is unimaginably huge. Instead take the case of America, which in everyone’s opinion is an advanced and wealthy nation. Truth is, top 1% of America’s wealthy elite control 40% of their nation’s wealth. You should check the video below to see the scale of this phenomenon.
 

 
The middle class is almost non-existent now. We might as well rename it the “temporary class.”

We aspire to reach the top, but in reality most of us are just a part of the vast bottom that is feeding the top!

Technology is wonderful, it really does help us to live better lives. It is good that most things are becoming automated, wonderful that we don’t have to work as hard anymore, but here is the catch:

How do we survive in a world where our worth is only determined by our last paycheck?

And if all the jobs are handled by technology, who will give us those checks? We have yet to figure out a way to live in this world without money. Somewhere this cycle of the world’s productive labor and capital going to the 1% has to be broken.

That reminds me of the famous line by Charles Bukowski:

“How in the hell could a man enjoy being awakened at 6.30 a.m. by an alarm clock, leap out of bed, dress, force-feed, shit, piss, brush teeth and hair, and fight traffic to get to a place where essentially you made lots of money for somebody else and were asked to be grateful for the opportunity to do so”

How in the hell did we end up here? I wonder too. It is high time we all started to talk about this. A global conversation. Until then, we shall continue to be willing and invisible participants in the mission to screw ourselves and our world over (and to what end? We already know the answer). We have done a pretty great job of it until now. It is high time we figured out newer (and BETTER) ways of living and surviving in this world that are not dependent on us working ourselves to death so that the 1%‘s kids can sit on golden toilet seats and have a servant wipe their asses with 600 thread count Egyptian cotton napkins. In the future we’re heading for, your kid won’t have a pot to piss in.

I hope Google has some ideas for that too. Maybe you have one. Let me know.

This is a guest post by New Delhi-based social media consultant, Kartik Dayanand.

Previously on Dangerous Minds:
How much longer can capitalism last when robots will do all the work?
 

 

 
Have you seen the offensive meme that the Tea Party.net people put up on their Facebook page? Cute ain’t it?

It got liked by over 68,000 people. In case you’ve got a 2x4 wedged in your eye socket, let me spell it out to you, the “people who vote for a living” are African-Americans, who proportionately outvoted Caucasian Americans for the first time ever in 2012.

It would be (too) easy to whip up an editorial tirade about this, but why bother when the “party” is going to be over soon enough anyway?

The glaring twin ironies at play here seem to be missed entirely by the dum-dum tea baggers: First, that the folks who consider themselves Tea partiers correspond pretty faithfully to the same demographic who still read newspapers in printed form and who are receiving, or who soon enough will receive Social Security benefits and Medicare.

Why not try to elect Republican candidates who will cut your own benefits so that billionaires can amass greater and great hordes of cash? Psst, hey Tea party people, the Republican party wants to cut benefits for white seniors too! [And guess what: SO DO MOST OF THE FUCKING DEMOCRATS—INCLUDING OBAMA!]

I don’t think those ‘baggers have really thought any of this stuff through.

The other thing is, who will replenish the Tea party ranks when these dickheads die off? Will this message resonate much with all of those recent college grads with debt up to their eyeballs, and no job prospects that pay higher than ten bucks an hour?

Some of the comments are pretty classic. What do you think?

See also:
Moms Working At Walmart Earn Less Than They Need To Feed Their Kids

The Mediterranean island of Cyprus is the epicenter of an epic shitstorm…

This is a guest post from Charles Hugh Smith. His newest book is Why Things Are Falling Apart and What We Can Do About It

The deposit-confiscation “bailout” of Cyprus reveals much about the Eurozone’s fundamental neocolonial, neofeudal structure.

At long last, Europe’s flimsy facades of State sovereignty, democracy and free-market capitalism have collapsed, and we see the real machinery laid bare: the Eurozone’s political-financial Aristocracy will stripmine every nation’s citizenry to preserve their power and protect the banks and bondholders from absorbing losses.

The deposit-confiscation “bailout” of Cyprus confirms the Eurozone’s fundamental neocolonial, neofeudal structure and the region’s political surrender to financialization.

Let’s list what Cyprus reveals about the true state of financial-political power in Europe:

1. The Core-Periphery terminology masks the real structure: the E.U. operates on a neocolonial model. In the old Colonialism 1.0 model, the colonizing power conquered or co-opted the Power Elites of the periphery regions, and proceeded to exploit the new colonies’ resources and labor to enrich the Imperial core.

In Neocolonialism, the forces of financialization (debt and leverage controlled by State-enforced banking cartels) are used to indenture the local Elites and populace to the financial core: the peripheral “colonials” borrow money to buy the finished goods manufactured in the core economies, enriching the Imperial Elites with A) the profits made selling goods to the debtors B) interest on credit extended to the peripheral colonies to buy the core economies’ goods and “live large”, and C) the transactional skim of financializing peripheral assets such as real estate and State debt.

In essence, the core banks of the E.U. colonized the peripheral nations via the financializing euro, which enabled a massive expansion of debt and consumption in the periphery. The banks and exporters of the core exacted enormous profits from this expansion of debt and consumption.

Now that the financialization scheme of the euro has run its course, the periphery’s neocolonial standing is starkly revealed: the assets and income of the periphery are flowing to the core as interest on the private and sovereign debts that are owed to the core’s central bank and its crony money-center private banks.

This is not just the perfection of neocolonialism but of neofeudalism as well. The peripheral nations of the E.U. are effectively neocolonial debtors of the core (quasi-Imperial) banks, and the taxpayers of the core nations (now reduced to Germany and The Netherlands) are now feudal serfs whose labor is devoted to making good on any bank loans to the periphery that go bad.

Though we can term the E.U. a plutocracy or oligarchy, the neofeudal structure compels us to distinguish a class of those holding wealth and political power that is not limited to national border: This is an Aristocracy.

Serving the Aristocracy is a well-paid technocrat class of factotums, lackeys, toadies and enforcers. Below this well-compensated caste of technocrats is the larger class of debt-serfs, enslaved to interest payments on either their own debts or the debts of others, and bound by their class powerlessness to protecting banks and bondholders from losses.

Cyprus merely adds an expropriation twist to this well-oiled plunder: deposits will be expropriated directly to insure no Imperial (core) banks or bond holders lose money on their absurdly risky loans to periphery nations and serfs.

2. This is a supranational plunder. While commentators can wile away years debating how much Germany benefited from the euro, the real core is not national, it is supranational banks and the political machinery of the E.U. the banks have effectively captured.

The citizenry of Germany may approve or disapprove of the Cyprus expropriation, but it doesn’t matter either way: their own serfdom to banks and bondholders is simply being masked: the bailouts of periphery nations are transparently bailouts of core banks and bondholders.

The nation-states of the neocolonial periphery are simply convenient propaganda placeholders, useful misdirections aimed at the naive and sentimental, hollowed-out national structures propped up to mask the ugly neocolonial reality of servitude and plunder.

3. Democracy is a fiction when no matter who you vote for, the banks and bondholders win control of the national income stream and private wealth. Democracy in Europe is a travesty of a mockery of a sham, an absurd play which is acted out as a form of blood-sport circus to distract the masses from their powerlessness and debt-serfdom.

Democracy is a fiction when the policies protecting banks and bondholders from losses remain in place regardless of which political party, coalition or politico is nominally in power.

The German taxpayers’ private wealth is being expropriated via taxes to bail out core banks and bondholders; how is this any different from the blatant expropriation of private assets in Cyprus?

It is only a difference in technique; the result is the same: the forced transfer of wealth from those who earned it from their labor to banks and bondholders which in a truly capitalist economy would be immediately forced to absorb the losses of their leveraged, highly risky bets.

4. The ideological fiction of capitalism is dead in Europe. Capitalism is a fiction if capital that is placed at risk for a return cannot be lost.

5. Cyprus is a test to see how blatant the expropriation of private assets can become without triggering overthrow and revolution. If the furor dies down soon enough, then the same technique of expropriation will be imposed elsewhere. If the reaction is sustained and threatening to the Aristocracy, other less blatant expropriations will be tested in other neocolonies.

6. Divide and conquer is the propaganda order of the day. The Power Elites are attempting to set the serfs of the periphery against the serfs of the core, the goal being to keep both sets of serfs from realizing they are equally indentured to the core’s pathological political-financial Aristocracy.

This is a guest post from Charles Hugh Smith’s Of Two Minds blog. You should bookmark it and read him daily. Charles Hugh Smith’s newest book is Why Things Are Falling Apart and What We Can Do About It

Image via Polyp

 
This is a guest post by UK blogger and leftist activist Scriptonite Daily

A new ad campaign hit the streets of London two days ago, drawing attention to a surprisingly unrecognized state of affairs: the City of London is the tax haven in our own backyard.  While the British government is busy protecting banker’s bonuses, a global grass roots campaign has set up to take on the rules which create the institutionalized inequality which sees 0.1% of the world’s population owning 81% of the world’s wealth, while 8 million people will die this year because they are too poor stay alive. It’s time to help make The Rules.

The Way it Works Isn’t Working

The 2005 United Nations World Summit, before the bloated banking sector crashed the global economy, revealed the system was well broken before the crash;

Half the world lives on less than $2 a day
30,000 children die every single day due to poverty
2 billion people have no access to electricity
20% of people in the highest-income countries consume 86% of the world’s resources. The poorest 20% account for a minuscule 1.3%
 

 

A recent study showed that the neoliberal policies of the last thirty years have seen such a decline in social mobility that capitalism’s so called “meritocracy” delivers results no better than the medieval oligarchy. In fact, the top 1% of earners now pocket 10p in every £1 earned in Britain – an increase of 7% in the last fifteen years. The poorest half of the population taking home just 18p – dropping 1% during the same period.

The story in the US is similar. Robert Reich, former US Labour Secretary under Bill Clinton commented:

“Income inequality and wealth inequality even more so, are worse in the United States since the 1920s, and by some measures since the 1890s. Most of the economic gains in the past 25 years have gone to the top 15-20 percent of Americans, but more recently, in the past six to seven years, most of the economic gains have gone to the top one percent. . . . The average CEO is making about 380 times more than the average worker – a huge gap relative to what it used to be 40 years ago – it was about 30 times.”

Whilst wages, working conditions and social security for the majority of the world are being undermined, the conditions of the 1% continue to improve as the rules which govern the world are bent in their favour.  It is time we stopped living in a fantasy land of “trickle-down economics” and “anyone can make it if they try” fairy tales.

The Rules – A Campaign We Need to Get Behind

The campaign, which encompasses phone boxes (60 in all across the capital), a mobile billboard, viral video, postcards (and more) will run from the 11th to the 24th of March, is being brought to the UK by new anti-poverty initiative – The Rules  - on behalf of people from the majority world who have signed a petition by people online and via a new mobile innovation called Crowdring, which enables people to sign a petition via dialling a “missed call.” This is a similar mechanism to Indian anti-corruption campaign of 2011, which became the biggest petition-type campaign ever seen, allowing people to participate without internet access and at very low cost.

The Rules invites all comers, anywhere in the world, to join a global movement to rewrite the rules in the interests of the majority of the world, rather than the minority:

“Our world has never been more connected or more prosperous than it is today. Yet right now, one in every three of us alive today does not have access to the most basic needs for a decent life – food, education, medical care, a safe environment.

The good news is that for the first time, ordinary citizens like you and I have the power and ability to change the rules that are creating these injustices. Technology and the shift of global power mean that we can now demand our say in decisions that have traditionally been made by elites behind closed doors. But the truth is, these things will only change if we demand it.”

The campaign operates as a decentralised network with several campaign hubs around the world, including in Johannesburg, Mumbai, New York and Rio. The focus of these hubs is to identify issues, opportunities, technologies and regional strategies for each campaign.

The ‘engine room’ for their campaigns is the Working Group, which is made up of more than 70 people from around the world. Members come as individual volunteers, not as representatives of their respective organisations. They come from a broad range of organizations – from civil society, to grassroots advocacy groups, to policy think tanks, to technology providers.

The sole objective of the Working Group is to help create campaigns for viable, alternative rules that serve the interests of the world’s majority, with disproportionate benefit to the poor, vulnerable and marginalised among us.

There will be a day of action on 16 March, where representatives from the majority world, The Rules and UK activists from groups such as Occupy and UK Uncut will all come together to transform a space in the City of London into a “tropical tax haven.” Pete the Temp has been confirmed to MC.

So, spread the word and join the campaign.  It is time to stop complaining about the rules, and start rewriting them.

Take Action

Join The Rules campaign and be a part of the solution

This is a guest post from UK blogger and leftist social activist Scriptonite Daily. Follow Scriptonite Daily on Facebook and Twitter.
 

Bob Plotnik (aka Bleecker Bob).

After a year of speculation and rumors, it’s official: Bleecker Bob’s, New York City’s most loved and hated record store, is closing. It will be replaced by a Froyo outlet in May 2013. Soon, instead of rare punk 45s, you’ll have your choice of “sprinkles with that?” or a shot of protein powder with your 32 ounce container of probiotic bacteria. It seems progress means a total loss of identity in the once mighty Manhattan.

This is from Bleecker Bob’s Facebook page:

looks like the new tenant has signed the lease. we’ve heard they want to be open by June 1. it will take probably around 2 months to get work permits for the massive remodeling job they’ll need to do so we’re figuring we should be open until May 2013!!
—-get ready for another chain of self serve yogurt/coffee/hot chocolate cafes NYC!!”

Bleecker Bob’s opened in 1968 as Village Oldies Records. In the mid-70s, as Bleecker Bob’s (named after its owner, ex-lawyer Bob Plotnik), it became a Mecca for people seeking the latest punk rock 45s and albums. Plotnik’s surly attitude, a borderline parody of the most tightly-wound rude New Yorker, added a certain manic energy that melded perfectly with the edgy music playing on the sound system. Imagine Johnny Rotten as a fat, pissed-off Jew and you might get a feel for Plotnik’s schtick. I could never tell if Bob was genuinely nuts or just playing nuts. He did usually follow his highly caffeinated rants with a sheepish smile. Whatever the case, his gruffness turned off a good portion of his customers. I knew plenty of people who refused to shop at his store, but I wouldn’t allow his vibes to keep me away from the thousands of records pouring in every month, most of which were D.I.Y singles from all over the planet. If dealing with Bob was part of the price of doing business with the guy, I didn’t mind. I wanted the vinyl!

When punk and disco hit the scene, people who had stopped buying records started again with real passion. I know I did. Bob’s shop was packed in the late ‘70s—lines snaking out the door and Bob barking at people to keep it moving. If you browsed too long without buying, you were out of there. It was Bob’s good fortune that Yelp didn’t exist at the time.

For a lot of musicians, Bob’s place was not only a place to buy records, it was a place to sell your own. At the height of the punk era, Bob was always interested in new stuff from new bands and would pay cash for a stack of D.I.Y. 45s. Between buying and selling, the store was a meeting place for rockers from all over the world. It wasn’t unusual to run into Stiv Bators, Joey Ramone or Billy Idol thumbing through the racks.

One day while visiting Bob’s, I found around 50 copies of my latest single sitting on the counter. These were records that I paid to have pressed with my own money. The distributor had just sold them to Bob for cash. I never got an accounting for that sale. The distributor pocketed the money for himself. If you think major labels are the ultimate rip-offs, you haven’t had the experience of working with indies. I later mentioned it to Bob and he laughed. “It happens all the time,” he said. I didn’t find it funny.

In recent years, due to health issues, Plotnik passed the day-to-day activities of running the store to his management team. The place somehow managed to survive without its resident bully or the help of a music movement like punk to fuel record sales.

In the annals of great record stores, Bleecker Bob’s will always stand tall. Ironically, at a time when vinyl sales are on the rise, one of the pioneers of the indie record scene is closing. Another casualty of escalating rent. Thanks to an unfriendly environment for independent business in New York City, we won’t have Bleecker Bob to kick us around anymore.

Hazel Sheffield and Emily Judem’s For The Records is a bittersweet tribute to Bleecker Bob’s record store and the man who nurtured it for over four decades.
 

 
Last month on 60 Minutes, reporter Steve Kroft filed a fascinating story about how technological advances in automation and robotics have totally revolutionized American business and manufacturing, while we’ve seen the number of decent paying jobs shrink.

After he indicated how information workers like paralegals are about to become as SOL as airport counter personal and travel agents, two of the Kroft’s interviewees, MIT professors Erik Brynjolfsson and Andrew McAfee, told him we ain’t seen nuthin’ yet:

Andrew McAfee: Our economy is bigger than it was before the start of the Great Recession. Corporate profits are back. Business investment in hardware and software is back higher than it’s ever been. What’s not back is the jobs.

Steve Kroft: And you think technology and increased automation is a factor in that?

Erik Brynjolfsson: Absolutely.

I’ve never really considered 60 Minutes to be much of a cutting edge outlet to “break” stories, instead I feel like once a story has made it to the highest rated American news magazine, that it’s been minted, or confirmed, as a legitimate mainstream thing (or celebrity or whatever). That’s to say that by the time 60 Minutes gets around to reporting on some sort of long-term trend we’re usually already mired DEEP within this event. Sometimes, not just as a nation, but in this case, as with global warming or AIDS, as a planet.

What is so remarkable to ponder—and it’s touched on somewhat in this piece—is how cost-efficient advances in automation will probably have the most negative consequences in countries like China and India, not the first world countries where automated manufacturing plants will probably mostly end up being built. Shipping to the US from China, for instance, adds a not inconsiderable amount of cost to the price of a given commodity. To purchase one of the robots featured in the segment would be cheaper than three years of Chinese labor. There’s cold comfort in that for the “Made in America” crowd, of course, as it’s not like there’s going to be that many more jobs created in America if production is brought back to these shores.

There sure will be a hell of a lot fewer opportunities for employment in the Third World, though, this much seems assured.

It brings up the question of how the wealth of nations will be divvied up when only the holders (hoarders, if you prefer) of capital, employing armies of automatons and few human beings, will hold ALL the cards? Clearly not sustainable and besides that, WHO is going to buy their products anyway when no one will have a job or any money in the first place? In America, and around the world, too, we’re moving away from the notion of “Fordism” at a breakneck pace.

The long-term implications for the longevity of the capitalist system seem dire indeed when viewed through this lens (and let’s not forget, this sort of circling the toilet bowl endgame was predicted by a certain Mr. Karl Marx many, many years ago). The implications of all of this are enormous.

Labor unions will become obsolete in such a scenario, although in a sense, they’ll be replaced by much larger armies of the long-term unemployed!

The flipside of all this is a free-market sort of argument that holds as prices for automated “workers” would come down, there should be a corresponding explosion in small business innovation. Whereas, I do think that is possible with certain cases, how many people do you personally know who would make good entrepreneurs in this bold robotic future?

Unless there’s an Elon Musk born every second, we’re doomed!
 

 
With the news that a five-member panel of the FCC are considering creating a series of super powerful free WiFi network across America, it’s to be expected that the corporate lobbyists for the $178 billion wireless industry are already working overtime to scuttle these plans.

Conversely, according to The Washington Post, there has been an equally aggressive push coming from tech giants like Google and Microsoft for free WiFi networks “who say a free-for-all WiFi service would spark an explosion of innovations and devices that would benefit most Americans, especially the poor”:

The airwaves that FCC officials want to hand over to the public would be much more powerful than existing WiFi networks that have become common in households. They could penetrate thick concrete walls and travel over hills and around trees. If all goes as planned, free access to the Web would be available in just about every metropolitan area and in many rural areas.

The new WiFi networks would also have much farther reach, allowing for a driverless car to communicate with another vehicle a mile away or a patient’s heart monitor to connect to a hospital on the other side of town.

If approved by the FCC, the free networks would still take several years to set up. And, with no one actively managing them, con­nections could easily become jammed in major cities. But public WiFi could allow many consumers to make free calls from their mobile phones via the Internet. The frugal-minded could even use the service in their homes, allowing them to cut off expensive Internet bills.

In a country where Wal-Mart is the nation’s largest employer and doesn’t really even pay a living wage, this sort of monthly savings for what has become a necessity of modern life would seen quite attractive for the common man. The costs are surprisingly minimal, too.

But what of the poor, put-upon media barons who won’t be able to continue sticking the masses with a monthly cell phone bill? Should the management and stockholders of AT&T, T-Mobile, Verizon Wireless, Intel and Qualcomm be disallowed from skimming around a hundred bucks a month from the bank accounts of the average American?

Of course, the wireless telecom and cable providers are determined not to let this happen. In a January letter to FCC Chairman Julius Genachowski, the architect of this ambitious plan, and a powerful member of the Obama inner circle, several major companies argued that the government should concentrate on selling the public airwaves to private business, and raising money for the US Treasury that way, rather than going with the free WiFi for all, option.

They would feel that way, wouldn’t that??? LOL.

Naturally, the Republicans are lining up behind this ridiculously blinkered, backwards “free market” approach. Who can forget watching the Tea party dolts who were against net neutrality—because someone on Fox News told them it was something “socialist,” I guess—and braying like buffoons for the privilege of being able to give more power to the telecoms, even if it would mean seeing their own monthly bills rise... because, um, THEIR FREEDUMBS were apparently at stake.

This is a different kind of free market entirely that we’re talking about, one that could alter American lives in profound ways, spurring great innovation and perhaps even unprecedented high tech job creation. The saying goes that there’s no such thing as a free lunch, but free WiFi is already occurring in New York City and parts of Silicon Valley. In January, Google announced that it was providing free WiFi for NYC’s Chelsea neighborhood (where Google is headquartered in Manhattan). Soon that will extend to indoor fiber optic wiring as well. Google also rolled out high-speed fiber-optic Internet coverage recently in the Kansas City area, with download speeds up to 1 Gigabit per second. That’s pretty good. In fact it’s approximately 200 times faster than your home broadband connection. It’s not five times faster, it’s 200 times faster. (So much for innovation among the cable companies themselves, eh?)

Google’s blazing fast fiber optic service is beginning to draw hi-tech start-ups to Kansas City. Who would have thought that would happen a few years ago?

Furthermore, the major wireless carriers own far more spectrum than would even be necessary to provide public WiFi, and it would also improve their existing wireless networks for their own consumers. The only downside for this is for a relatively tiny group of stockholders. The benefits for Americans overall? Well, they seem limitless in terms of what can be imagined from 2013.

Designed by FCC Chairman Julius Genachowski, the plan would be a global first. When the U.S. government made a limited amount of unlicensed airwaves available in 1985, an unexpected explosion in innovation followed. Baby monitors, garage door openers and wireless stage microphones were created. Millions of homes now run their own wireless networks, connecting tablets, game consoles, kitchen appliances and security systems to the Internet.

“Freeing up unlicensed spectrum is a vibrantly free-market approach that offers low barriers to entry to innovators developing the technologies of the future and benefits consumers,” Genachow­ski said in a an e-mailed statement.

He’s 1000% right. Although not seeing the economic benefits flowing upwards at first may discombobulate their tiny brains, how idiotic would even Republicans have to be not to see the logic of this decidedly free market approach? If they balk, they need to be reminded of what the earlier—but far more technologically limited, pre-PC, iPad and smartphone, of course—Reagan-era changes in the management of the public airways wrought for the economy.

This is a real us vs.against them situation. The fattest cats versus EVERYBODY ELSE. It’ll be interesting to see how this shakes out. It’s an idea that’s time has come—IF NOT, WHY NOT—and I don’t think it’s going to go away until there’s free Wifi for all. The cat’s out of the bag and it ain’t going back in.

 
Our brainy friend Charles Hugh Smith posted this chilling essay about the “limits to growth” mankind faces in this century at his essential Of Two Minds blog. As he points out, the innovations of recent decades have more often than not served to destroy jobs, not create them. (I can’t source this because someone told me this conversationally, but apparently there is one factory, owned by Samsung, that manufactures nearly all of the world’s supply of a certain size HD flatscreen (not the entire TV, just the screen). The factory, I was told, employs fewer than twenty workers! Keep that in mind as you read the following).

The common feature of the transformative technologies of the 20th and 21st centuries is that they were one-offs that cannot be duplicated.

What if the engines of global growth that worked for 65 years (since 1945) have not just stalled but broken down? The primary “engines” have been productivity gains from industrialization, real estate development and expansion of consumption based on the continual expansion of debt and leverage—in short-hand, financialization.

The Status Quo around the globe has responded to the obvious endgame of financialization (the 2008 financial crisis) by doing more of what has failed: expanding credit and leverage, flooding the global economy with liquidity (money available for borrowing), credits and subsidies for real estate development and a near-religious belief in “the next industrial revolution” that will spark rapid growth in employment, profits and productivity.

“The usual suspects” for the next engine of growth include nanotechnology, biotechnology, unconventional energy and Digital Fabrication, i.e. 3-D printing and desktop foundries. But are any of these capable of not just replacing jobs and revenues in existing industries, but creating more jobs and expanding revenues and profits?

There is a growing literature on this very topic, as many start questioning the quasi-religious faith that there will “always” be another driver of growth, i.e. the expansion of wealth, profit, employment and assets.

The Status Quo dares not even entertain this question because the only way to service the fast-rising mountain of debt that is sustaining the Status Quo is to “grow our way out of debt,” i.e. expand the real economy faster than debt.

The past 250 years has been one long “proof” that we can indeed “grow our way out of debt” because the low-hanging fruit of industrialization and cheap, abundant energy enabled wealth to be created at a faster pace than debt.

Clueless Keynesians mock those questioning the possibility that the low-hanging fruit has been plucked by noting that doomsdayers were actively decrying the ballooning debt of the British Empire in the mid-1700s. We all know how that story ended: what looked like crushingly massive debt in 1780 was reduced to a trivial sum by the rapid expansion of industrialization.

But suppose the end of cheap, abundant energy (replaced by abundant, costly energy) and the Internet spells the end of centralized models of growth? What if all the innovation currently bubbling away only produces marginal returns?

Take biotechnology for example. Those with little actual knowledge of biotech are quick to latch onto the potential for genetic engineered medications, biofuels, etc. What they don’t ask is if these technologies can scale up while costs decline, i.e. the computer technology model where everything progressively gets cheaper and more powerful.

Biofuels may have promise, but it still takes “old fashioned” energy to collect the feedstock, and it is a non-trivial task to keep micro-organisms alive on the scale that would be needed to produce a useful amount of liquid fuels, i.e. a few million barrels every day. Some processes may not scale up, and others may not see any significant reduction in fuel costs once the full input costs are calculated.

Genetic engineering also may not scale up—it may be limited by key barriers of individual patient complexity and by intrinsic costs that do not drop enough to make a difference.

Consider the diseases that have almost been eradicated—polio, for example—and the lifestyle diseases such as diabesity. The wave of diseases that were eradicated were caused by bacteria or viruses: a vaccine or agent that disabled or killed the bacteria/virus wiped out the disease.

Diabesity, cancer and heart disease are not caused by a single virus or bacteria. The “one med/vaccine works for all” model has failed and will always fail because diabesity and other lifestyle diseases have multiple, non-linear causes that are beyond the reach of a single “solution.” These diseases may well be tied to epigenetic factors, for example, the interaction of “junk DNA” with environmental stresses that extend back into the individual genome.

What we face is the confusion of symptoms and effects with causes. Lowering cholesterol is not the “magic bullet” many hoped for, and neither was hormone therapy.

In the technology sector, it is clear that the Internet is destroying entire sectors of employment. The jobs that have been lost for good have not been replaced by jobs created by the Internet, nor is there any credible evidence to support this hope: automated software continues chewing up one industry after another, and the politically protected fiefdoms of healthcare (sickcare), education and government have yet to taste the whip of real innovation.

Rather than add jobs, we will lose tens of millions of jobs as faster-better-cheaper breaches the walls of these massive politically protected fiefdoms.

Healthcare spending is clearly in terminal marginal return: our collective health continues to decline in key metrics even as spending doubles, triples and quadruples. The same can be said of defense, education and many other industries.

Sectors such as agriculture have already seen employment decline by 98% even as production rose; there are still improvements in agriculture (robotic milking machine, for example) but the low-hanging fruit in agriculture as well as in medicine, education, etc. have all been picked.

The next wave of innovation will destroy protected profit centers and employment; even the Armed Forces are not immune, as the “ships of the future” will have relatively small crews and robotic drones will replace high-cost, high-employment weapons systems.

The semi-magical belief that technological innovation will create wealth in such quantities that all other problems become solvable may well be false. We may have entered an era of marginal returns, where innovations destroy jobs, wealth, assets and debt—the very foundations of “growth.”

I have begun to speculate about a future where energy might be abundant but few can afford to consume much: money and income may be scarcer than energy.

The one innovation that might energize an entirely new field of employment is digital fabrication, the decentralization and distribution of production. But this will also creatively destroy jobs dependent on the present supply chain.

National governments have over-promised entitlements to their citizens on a vast scale, and the current “solution” to the mismatch of promises to national surplus is to borrow monumental sums to fund the promises. If innovations actually shrinks employment, incomes and wealth, then the base for taxes and debt will quickly shrink to the point that the debt is unserviceable. The Status Quo will collapse financially, even if energy and labor are both abundant.

Consider END OF GROWTH - six headwinds: demography, education, inequality, globalization, energy/environment, and the overhang of consumer and government debt. (via Zero Hedge)

The point made in this lengthy essay is a powerful one: the common feature of the transformative technologies of the 20th and 21st centuries is that they could only happen once. They are one-offs that cannot be duplicated. Doing more of what has failed will only set up a grander failure as returns on all our debt-based “investments” become ever more marginal and the return on increasing complexity drops into negative territory. Once complexity yields negative returns, the systems that depend on complexity quickly destabilize and implode.

Read more
No More Industrial Revolutions?

The Collapse of Complex Business Models

This is a cross-post from Charles Hugh Smith’s Of Two Minds blog. You should bookmark it and read him daily. Charles Hugh Smith’s newest book is Why Things Are Falling Apart and What We Can Do About It

Count the clowns in this picture. Hint: They’re all wearing suits and ties.

During last night’s epic Rachel Maddow piece about the Republican party’s mind-boggling real-time implosion, she described the GOP as a dog being wagged by the tail of the conservative movement and pondered why some of the movement’s most powerful pols, like Jim Demint, are picking up their toys and leaving Congress:

“[A] huge internal fight including screaming matches in their own caucus… they’re just turning off the light and abandoning what they’re doing and nobody really knows why.”

Obama has all the leverage now. If he can’t manage to negotiate a modest tax increase for the wealthy without limiting future cost of living increases for poor and middle class Social Security recipients, he’ll have proven himself to be one of the worst—if not THE worst—presidential negotiators of all time. He’s already offered up more than he had to (WHY?) and also demonstrated that his promises made during the campaign were nothing but bullshit.

Frankly, I never thought Obama was offering lefties all that much to begin with—he just wasn’t named Mitt Romney—but these guys are pathetic, why bargain with them at all? Now’s the time to shove it up their asses, if for no other reason, just on principle.
 

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