Over the last few months I've been repeatedly talking to people about the ideas of an archeologist and historian called Joseph Tainter who studied why complex societies collapse. On many occasions, when they are discussing their work-life in the the public services (local government, health, civil service etc,) the ideas of Tainter seem to me to illuminate what they are saying: individuals are aware that their efforts, that are costly in terms of time and effort, as well as costly in their salaries, seem to yield very little in return. The time of these individuals is spent in endless rounds of meetings, in largely meaningless paperwork and form filling with little tangible outcome. All this creates a great deal of stress when officials and professionals feel that they are not able to achieve anything very much even though they are always busy.
In the stream of stories in the media the same things are reflected: try as they may, it seems that politicians and senior managers repeatedly find that the departments that they leading are 'not fit for purpose' – something which their junior staff have probably known for years.
To be sure the facade of the state is very imposing and all-embracing but the more it is re-organised the less and less effective it seems to become. This carries implications not just for the state's ability to deliver on routine matters but also throws into question its ability to respond to a frightening array of new challenges and threats facing British and global society – climate change, energy and resource depletion, fresh water shortages, an increasingly unstable debt structure, new diseases, resource wars intertwined with geo-political cultural and religious conflicts which threaten to spiral out of control. An inability to respond to rise to the frightening array of challenges raises questions of the resilience of society in the face of serious threats.
In 1988 Tainter wrote a book called 'The Collapse of Complex Societies' which is still in print, the fourteenth printing being in 2005, because it appears to have lost none of its relevance. The central thesis of the book is that societies collapse because, as they try to solve their problems by investing more and more in complex socio-political organisation, the additional benefits arising in this process are less and less, while the costs go up and up. This is described in the jargon of economics - the marginal productivity of investing in complexity declines and at some point becomes negative.
“Marginal productivity” here means additional benefit with each further step in the process. Increasing complexity beyond a certain point makes the conditions of life inferior – and the state is less and less able to respond to its problems and society's problems.
Those who are aware of the collapse of the Western Roman Empire probably immediately think of the barbarian invasions as its 'cause'. However, Tainter would describe these invasions as "stress surges". Apart from wars and invasions, other 'stress surges' would be things like disease pandemics (the plague), and climatic change producing crop failure.
Tainter is at pains to argue that 'stress surges' do not in and of themselves provide the reasons why complex societies collapse - one typically finds that in the decades or centuries before the collapse 'stress surges' of equal or even greater magnitude have occurred and the society has withstood them. What is important is to understand why the final stress surge, the one that brings down a society, does not produce the necessary robust coping response which the society had displayed in earlier crises.
A collapse – that's to say a catastrophic reduction in complexity in social organisation - occurs because the political and social structure is not only less and less effective, it becomes less resilient. It becomes fragile or 'brittle'.
“The resilience of a system is its ability to survive without loss of diversity and complexity despite shocks. The diversity and complexity are essential: resilience is an empty concept except when they are implicit in it. The surface of Mars, or a dead coral reef, are resilient in a trivial sense – resilient, since they do not change under assault. There is no loss of diversity and complexity, but that does not make them resilient, since there is no loss of diversity and complexity to lose” (David Fleming, “The Lean Economy” p113)
This idea of 'resilience' in complex systems has been the subject of much inter-disciplinary study by a group of thinkers who have evolved an interpretation of transformations in nature and human society which they call “Panarchy”. (“Panarchy: Understanding Transformations in Human and Natural Systems” Edited by Lance H. Gunderson and C.S.Holling. Island Press 2002).
The word “Panarchy” can be understood by breaking it into its two parts “Pan” and “archy”. The Pan word is meant to evoke the idea of Pan, the god of Nature, as well as the word part “pan” as in “panorama” - an overview vision. The word part “archy” is as in “anarchy" or "hierarchy".
The framework described in Panarchy is one where transformation in human and natural systems occurs through 'adaptive cycles'. An adaptive cycle evolves in three dimensions:
1.Productivity and potential: the amount of energy and resources embodied and embedded in the system and its ability to capture and use energy for its purposes.
2.Connectedness: the level of interconnectedness of its parts (e.g. a transport and communications network).
3.Resilience: the ability of the system to withstand or respond to shocks – at its most fundamental by reinventing itself.
Schematically we can apply this to human systems and societies by describing a cyclical process which goes through 4 to 5 phases:
1.It starts with a pioneering phase where groups manage to survive and maintain appropriate social organisations after a collapse.
2.A structure begins to take shape as connections between these pioneering groups take place and they begin to develop a new system.
3.The system moves into a consolidation phase and forges its chief structures which are ever more dominant – however the system now starts to evolve more and more complexity and 'round-about' ways of doing things. In the process the structure becomes rigid and loses its resilience.
4.Stress surges bring on collapse – the rigid complexity of the system cannot cope with a variety of challenges and problems and breaks down, its productivity and connectedness collapsing with it.
5.The disconnection and decline eventually leads into a new pioneering phase and the emergence of a new social system – though in our own age it might not.....
In his book, The Lean Economy, David Fleming places a particular stress in his description of this cycle on the 'intermediate economy'. This is the expression in the economy of the increasing complexity. The Intermediate economy encompasses all those processes that are not wanted for their own sake. Rather they are the increasingly complicated means to a final end – for example the transport sector is not wanted for its own sake – it is the goods that transport delivers that are wanted, not transport as such. The transport sector is the means to get the consumer goods to the end consumer.
The expanding intermediate economy emerges particularly in phase 3 of the cycle and becomes bigger and bigger – as do the administrative structures of the state. It is the dependence on these complex delivery and political processes that makes the system increasingly rigid and vulnerable. As Fleming puts it:
“For example: a modern economy which depends on continued growth and on a transport network (in turn dependent on oil), or on a centralised system of government, is liable to collapse if these functions break down. Such unconditional dependencies rule out the possibility of resilient responses to local particulars of time and place: even recovery becomes impossible. Instead, breakdown, once it starts, tends to cascade through the system.” (The Lean Economy p 114)
The dense interrelated complexity of the modern world means that chain reactions or cascade of problems can pass through the entire system with one problem (i.e. an abnormal state that falls too far outside the organisational routine) leading to another problem in a series of vicious spirals.
One has only to see what happens when the electricity supply grid breaks down for that to become clear. Of course, each organisation will have its own power generators as 'back-ups' for emergencies but, should these run out of fuel the mechanisms of our complex civilisation would grind to a halt. An overlapping network of intermediate economy and state functions would break
down - computer and telecommunications, lighting, monetary and accounting systems; traffic management and transport; production systems and food delivery arrangements; water and sewerage.....In the resulting public health crisis the health service would be hard pressed to manage - dependent as is it too, on a dense network of complicated arrangements and energy intensive hospitals.
Energy emerges as a unifying theme for concern for our own complex society. The earlier civilisations whose collapse Tainter has studied were essentially solar powered - with human and animal muscle power deriving its energy for work and life activities from the solar collection of crops on arable land and/or from animals who collected the solar gain through their grazing from pastoral land. Wind mills and water wheels provided a small supplement. In our own civilisation the energy input into the UK economy is about 50- to 70 times as great as what its labour force could generate if working full time with their muscle power. This energy supplement makes possible the vastly higher level of complexity. It makes possible the round-about arrangements involved in the intermediate economy. Yet it is clear that this energy supplement cannot be sustained. This is both because of the rising costs of recovering oil, gas and coal (and soon their absolute decline in availability) and also because of the climatic consequences of burning more and more carbon based fuels.
Technological optimists claim of cause that new technologies can provide the answer to these problems. However, most new technologies involve a further clever use for available energy in a further more complicated arrangement. For example, if we sequester carbon dioxide during the process of generating electricity and pump it into what is claimed to be safe storage underground, the earth is thereby saved from more greenhouse gas in the atmosphere. However, even if this succeeds in keeping the greenhouses gases out of the atmosphere this means that yet another new and complicated branch of technology has to be added to the power generation sector – involving finding suitable sites for underground storage, engineering and installing the equipment at power stations, constructing pipes to be used in pumping. This is not to mention the new branches of law and legislation and departments of central and local government needed to approve and regulate such sites (for the next few thousand years?)
As our example shows the “solutions” put forward by the techno optimists almost always assume growing complexity and growing (energy) costs.
Tainter looks in depth at three examples where collapse has occurred before: the Roman Empire (finally collapsed in the fifth century AD), the Mayan civilisation(collapsed in the ninth century AD) and a Chacoan native American civilisation around the St Juan Basin in what is today New Mexico which collapsed in the 12th century AD. He also discusses, more sketchily a host of other examples of complex societies that collapsed where the available evidence and information, from archeology and/or written records is more sketchy and less well researched.
Here are his comments about the Roman Empire which demonstrate the essential idea:"The burdens and costliness of the Empire not only increased over time, but the benefits it afforded its members declined. As crops were confiscated for taxation and peasant's children sold into slavery, lands were increasingly ravaged by barbarians who could not be halted with the Empire's resources. The advantages of Empire declined so precipitously that many peasants were apathetic about the dissolution of Roman rule, while some actively joined the invaders. In being unable to maintain an acceptable return on investment in complexity, the Roman empire lost both its legimacy and its survivability. The Germanic kingdoms that succeeded Roman rule in the West were more successful at resisting invasions, and did so at lower levels of size, complexity, permanent military apparatus, and costliness." (Tainter p 188).
The expanding state.
As described above the process of growing complexity and rising costs is not exclusively a story about the growth of the state – it includes the massive growth of the intermediate economy which may be largely in the private sector. However, the inflation of the state is a major and central part of this process which occurs in all developing social systems. Connected to this the story of the lead up to a collapse involves a major sub plot centred in the relationship between private sector and the public sector which I turn to next.
The idea of an expanding socio-political organisation which achieves less and less until it ends up strangling the society is not really new. It is the stuff on which right wing political movements and free market ideology feeds. Comments Tainter: “So widespread is the trend that, in democratic nations, entire political careers have been successfully based on rallying voters against it. " He cites C Northcote Parkinson as one author who "most effectively conjured the vision of bloated bureaucracies growing ever larger, devouring ever more of the produce of taxpayers, and producing ever less of real value." (p106). Clearly Thatcherism and Reaganism were based on all of this.
However, Tainter is not making a case for the private sector versus the public sector. As he says:"Parkinson indicted bureaucratic self serving to account for declining marginal returns on investment in hierarchical specialists. However, comforting to some, this is far too simplistic an explanation, Benson (1956) has compiled for private industry in several nations, data similar to those of Parkinson has uncovered for government. He was able to show that a pattern of hierarchical specialisation characterises the private sector as strongly as the Parkinson has for the public....The reason why complex organisations must allocated ever larger portions of of their personnel to and other resources to personnel and other resources to administration is because increased complexity requires greater quantities of information processing and greater integration of disparate parts." (p107)
This has not stopped the public sector being subjected to continuous scrutiny and criticism, being subjected to the claim that the private sector can do it better and has expertise that the public sector lacks. This agenda is one in which the public sector is being constantly eyed up for a take over by the private sector of the revenues and purchasing power which it has access to through taxation of various kinds. As such,the material that Tainter touches on, relates closely to ongoing debates about core political themes.
Differences between Public Sector and Private Sector
In these highly topical debates, initiated in the UK by Thatcher and now championed by Blair's New Labour, it is worth remembering that the public sector, being what it is, is necessarily more complex than the private sector. In theory at least, it is there to serve the widest public interest of all the citizens. Yet all citizens are very disparate stakeholders with disparate kinds of interests. They live in hugely different kinds of circumstances. Synthesizing a public interest between these disparate elements, and making priorities in the political process accordingly, is bound to be immensely complicated.
A further difference between public and private sector is this: because public sector organisations exist in an electoral democracy they are inevitably subject to greater level of scrutiny and criticism. When it comes to comparisons with the private sector the public sector therefore labours under a disadvantage.
Unlike the multi-stakeholder multi-goal features of much of the public sector, the private sector has one aim and one aim only - to make as much money as possible. Thus its one criteria of maximum monetary outcomes makes the integration of its disparate parts far less problematic - since the contribution of these different parts is judged with a single viewpoint made possible by a single criteria. Moreover, the private sector has more room for covering up what it is doing, under the cover of commercial secrecy.
Indeed, if the truth were seen more clearly by placing more spotlight on the private sector, most private enterprises would also be recognised as operating in a way that involves multiple stakeholders whose interests, needs and circumstances remain largely unseen. It is in the interest of companies to try to ensure that these interests are not taken into account and remain as far as possible unseen. In the jargon of economics, external environmental and social costs of private corporations are 'externalised'. They are imposed outside the company often in hidden ways in order that the monetary costs that the company has to pay out are reduced to a minimum. (e.g. pollution spills that are covered up, rather than being cleaned up – as cleaning them up would involve paying out more money).
Accelerating the Collapse – Predation by the Private Sector on the Public Sector
The simplistic idea has been taken over that the private sector ipso facto possesses the approach that can reform the public sector into more effective and less cumbersome managerial machines. This has led to a massive influx of private sector consultants let loose on public sector organisations - according to some estimates as much as £70 billion has been spent by the British government on consultants whose job it has been to reform the public sector. For reasons that Tainter identifies the difficulty of co-ordinating the public sector increases over time with declining incremental benefits and this makes it vulnerable to criticism - which in turn makes it vulnerable to a scavenging attack from the private sector. In reality the private sector does not have a real basis to claim that it can solve the increasing costs/declining marginal benefits problem which is an almost inevitable process - but it can parasite on what is happening and, in the process, make money for a 'contribution' that, if anything accelerates the decline in the public sector.
This is not written as a rhetorical claim - there is ample evidence for it, as David Craig's recent book "Plundering the Public Sector" demonstrates. Reading David Craig's book we can become clearer how it comes about that while the government is pouring more money, for example, into the National Health Service, there is nevertheless a crisis in funding services at the point where patient care actually takes place ('front line staff'). What Craig succeeded in doing in his book is to show why advice from private sector consultancies is so expensive and also why, time and again, it is, at best, of no value, and frequently, makes things worse.
This is inevitably so because the private sector exists to pursue a single goal (making money for itself) which is difficult to make consistent with what should be the broader public service goals of the state. Craig shows the ways that consultancies squeeze as much money as they can out of the public sector with all sorts of routine scams - charging full price on air fares to the public sector when they have already got rebated rates from airlines; charging for the re-location of staff and their families from other countries to live in style in the UK rather than taking local staff; charging the public sector for 40 hours a week for the work of partners - even when the staff concerned are not working at all, are on holiday or even in a brothel; charging overheads for administrative and support staff that are not employed in practice; calculating expenses on the assumption of a flat rate and then, when real expenses are less, using the difference to pay for the costs in other projects (if this is noticed one can always claim an administration error); simple overcharging; tax avoidance.
So what do the experts in greed and dishonesty actually deliver in the way of efficiency improvements to the public sector? Craig quotes a study by the Cranfield School of Management who, in 1998, asked 640 management consultants and 170 clients about the outcomes of management consultancy...."A healthy 71% of consultants thought that they brought value to their clients but only 36% of clients happened to agree" (p 113).
More recent research, by a respected Harvard Business School professor and world expert on the management consultant industry, concluded that management consultants admitted privately that about 20% of their work was really excellent, about 60% was tolerable and around 20% was 'junk'. (p 114).
Craig explains why it is pretty much inevitable that one should expect management consultancy to deliver disappointing results: consultants are put to work on lucrative 'billing slots' - this is where the public sector doesn't really have a problem but a consultant pretends there is one in order to look busy; a lack of relevant expertise in consultancy staff - consultancies work as teams largely made up of inexperienced consultants perhaps with no public sector experience who are only really helpful if properly led - which they often aren't; consultancies interested in selling their product (e.g. an IT system) rather than actually trying to discover the right solution to the issue or problem; the deployment of consultants where the real problem lies in the weakness of the senior public sector managers (and politicians) rather than in the organisation - so that bringing in a consultancy is a diversion from real problem.
The parasitical plundering of the co-ordination problems of an increasingly complex socio-political structure is above all illustrated in the huge expenditure on public sector IT systems - that then do not work. All earlier civilisations that collapsed operated with much more primitive information and communication systems - today, with the benefit of technologies that have arisen on the back of fossil fuels and of electricity we have computer telecommunications. But any superficial reassurance that information technology will protect us against a Tainter style 'complexity crisis' rapildly evaporates when one looks closely at the repeated record of disasters in IT provision in the public sector. Craig claims that 70% of big IT schemes fail - when I checked this with a friend who teaches computing at Nottingham Trent University he thought that the true figure was more like 80 to 90%.
In Craig's book the terrifying record of repeated public sector IT system disasters brought about by private sector IT consultancies is documented in detail - in the administration of the magistrates courts (the Libra system); in the Passport Agency; in the Criminal Records Bureau; in the Benefits Agency and soon, as Craig predicts, in the National Health Service computer network called "Connecting for Health".
In official reviews about these disasters (for example by the Public Accounts Committee of the House of Commons) the same mistakes appear to be made repeatedly. To be sure they are not always the fault of the IT companies – arrogant and ignorant senior managers in the public sector must also share some of the blame. These mistakes are: designing systems based on assumptions from high level public sector managers about how the system to be computerised works that are never checked with the actual users of those system, the eventual staff using them - assumptions that turn out to be wrong (which show how much the official managers understand their own organisations); high level officials not listening to suppliers who suggest changes - assuming, wrongly, that they know best; not managing IT system suppliers effectively; not doing pilot schemes; doing projects 'big bang style' - costly all embracing new IT systems designed to meet all eventualities that start from scratch - rather than evolving tried and tested IT arrangements that have already been created in house (which would not catch the headlines for the politicians nor make so much money for the suppliers); creating uniform all-embracing systems - rather than developing inter-operativeness in a number of already existing arrangements that have proved their workability (all embracing uniform arrangements typically give one supplier a monopoly - and then leads to a mega disaster when it doesn't work).
The fact that mistakes like these are noted and then noted again suggests that the problem does not appear to be amenable to reform. In fact, although Craig does draw up a programme for reform he concludes: "All the proposals that I have made in this chapter have been enjoyable speculation. But they are mere daydreaming - too much of our money has been squandered on worthless and incompetently managed political posturing for the government to be able to turn back or even slightly course correct." (p253)
Perhaps there will come an election at which the Tory party will claim that they can do such things better - but there is absolutely no reason to believe that they will. The revolving door between government and business whereby private sector bankers, accountants, consultants enter government service former government ministers and senior civil servants and officials take senior management positions in business is likely to spin even faster when the Tories get to power.
But that's not the only reason that the Tories (or the Lib Dems or whoever) can or will make the slightest difference to these processes. The point is that there is a system problem here - the private sector predation on the public services is occuring because our socio-political organisation is so vast and so complex that the politicians and senior civil servants have lost control over them - calling in management consultants is a way abdicating responsibility for the unmanageability of the empires under themselves.
"It is an unfortunate fact of life that organisations with highly effective, visionary leadership tend to make limited use of consultants, whereas organisations with management that are weak, divided among themselves or out of their depth use large amounts of consulting and often seem to be dependent on their consultants" (Craig p247)
When they don't know what to do politicians and senior civil servants bring in consultants and effectively hand the public sector over to the private sector - thus accelerating the break up and break down of the political economic state apparatus and handing it over for the plundering by corporations. This process is the particular form that Tainter's process of decomposition takes in todays conditions - in the development of 'policy' and the state.
Perhaps it is worth reflecting what would happen if a government came to power dedicated to getting to grip with these problems - the reforms themselves would be experienced as yet another set of sweeping changes - another set of policies to be read about and taken in, another set of office moves, another set of situations where people have to re-apply for their jobs or are re-assigned, another change of headed notepaper, another marathon round of meetings which have nothing to do with front line services – more distractions drawing the attention of management and everyone else away from the purposes of the organisation and the services and role towards the logistics of the change process itself.
In other words 'reform' would be into the next step in the accelerating merry go round of re-organisation, the next step in decomposition. Reform is a further turn of the same screw which destabilizes things. When politicians, officials and managers are confronted with a situation they must be seen to act. The guiding thought is that "Inaction is not an option". The more comprehensive and sweeping the reforms, so it appears that the more they need to be seen to be doing thing in the press and public media. However, on on the ground, the more they are de-stabilizing and further demoralising their organisations.
Increasing Complexity in the Private Sector – The Collapse of Regulation brings a tide of corruption
The collapse of societies is often understood as the result of their “decadence” - part of which is a decay in public morality. However, this is also largely a product of the increasing complexity and one of its principle costs. In this section I discuss the breakdown in ethics in the financial and military systems.
Once upon a time there was a thing called a “public sector ethic” - millions of people got their sataisfaction and self respect not primarily by earning masses of money but through job satisfaction in serving the wider community in an official post. In this role, in theory at least, some people in the public sector had a role of regulating and policing the private sector. However, as the private sector too becomes more complex the ability to regulate and police it effectively decline. As fraud becomes increasingly costly to detect, and then to successfully prosecute, the level of corruption is almost bound to increase, creating a corrosive effect at the most powerful levels of the state where the main players operate with the morals of sewer rats – but have excellent public relations machinery to cover up their misdemeanors.
Financial controls become lax – in recent times the trend has been to financial de-regulation as well as to an increase in predatory lending practices at every level of the economic system – where others are prevailed upon to take out loans and invest in financial instruments where it is not in their interest to do so. The increasing complexity of the system means that the information and sophistication gap between lenders and borrowers becomes highly exploitable so that, instead of financial risks being carried by the institutions with the greatest ability to bear the risks, others, who are out of their depth are enticed into taking on risks and ultimately making losses which they should never have been ventured into. This does not only happen between loan sharks and the poor on council house estates, it is happening too at the highest levels of the private sector. Even big name companies like Proctor and Gamble have come unstuck as they effectively gambled on the most complex financial market of all – derivatives - retrospectively admitting that they did not know what they were doing. This was when they were seduced into making business arrangements by bank traders whose own motivations were to make multi-million pay bonuses rather than focusing on customer care. The combination of less control and increasing predation means that the banking system is becoming less stable than it would otherwise be – it is becoming fragile. It is losing its resilience.
There are many reasons for this. For one thing there tends to be a revolving door relationship between central bank, financial regulators and the private sector financial institutions. They are all part of the same club and poachers frequently turn game keepers and vice versa. In a more general sense bankers are chums with lots of influential people, they are well connected and can be expected to get off lightly if they misbehave. A recent study of the financial markets describes what happened to two financial miscreants – in the USA Michael Milken and in the UK Ernest Saunders of Guinness.
“There were odd parallels between Milken and Saunders, both were flayed by the media and sentenced to lengthy prison terms. Both also left prison early, became gravely ill, and miraculously recovered. (Milken overcame cancer; Saunders was diagnosed with Alzheimer's, which he incredibly conquuered after he was released early from prison – apparently the proper diagnosis had been curable pseudo-dementia; or, as many British newspapers argued, prevarication.) There have been few prosecutions for financial fraud in either the United States or England since those two cases in 1990” ( Frank Partnoy, “Infectious Greed: How Deceit and Risk corrupted the Financial Markets” Profile Books 2004 p 231).
Perhaps another reason for the decline in regulation is called “moral hazard” - the central banks are supposed to bail out other banks when they are in trouble – but if they do the commercial and investment banking sector may start making increasingly risky investments – if they win they win, if they get into problems they get bailed out. As a result the financial system eventually evolves into a casino with more and more risky investments being made.
So one can see that not only have central banks and financial regulators in different countries effectively given up trying to regulate against fraud and predatory lending practices they may even be perpetrators of predatory practices in their international dealings. Influential banking regulators like Alan Greenspan, formerly of the US Federal Reserve are well known not to believe in financial regulation for doctrinaire reasons - in their argument because markets are supposed to be self regulating and once it is noticed that someone is taking big risks, or cheating, they will not be traded with any more. That this is doctrinaire self serving fantasy is shown by the large number of financial arrangements that have been designed to take deals “off balance sheet” - where they are out of sight. All this is happening against the background of an explosive increase in the number and type of new financial arrangements many of which are designed to find their way round financial regulations and to take financial arrangements “off the books” so that they are out of sight.
Financial fraud and/or irresponsibility can be incredibly complex and therefore difficult to understand. In the last 20 years or so computer telecommunications have globalised financial markets even more than previously and there has been a host of new types of financial arrangement invented – many of them are specifically aimed to allow financial and institutions to get around national financial regulations. For example – let's say that your countries financial regulations are such that you are not allowed to speculate with other people's money in other countries financial systems. The regulations say that all your assets must be denominated in your own currency. No problem, Credit Suisse First Boston may have just the financial derivative for you. It's called the Quanto - this is a financial security issued by a bank in which the interest payments are based on interest rates in another country but paid to you in your own currency. In fact it is extraordinarily complex to make accurate assessments of the risks of holding financial instruments like this.
Financier George Soros comments: “The explosive growth of derivative instruments holds other dangers. There are so many of them, and some are so esoteric, that the risks involved may not be properly understood even by the most sophisticated of investors. Some appear to be specifically designed to enable institutional investors to take gambles that they would not otherwise be permitted to take.” ('Soros on Soros', John Wiley, 1995, pp313-4 quoted in “Not by Money Alone” by Malcolm Slesser and Jane King p49. ) Other investors like Warren Buffet are saying that derivatives are financial weapons of mass destruction posing “mega catastrophic risks”- they are investment time bombs ticking http://news.bbc.co.uk/1/hi/business/2817995.stm
The biggest pickings for the plundering of the state through corporate welfare lie in armaments . A civilisation is in trouble when it begins to run out of its key resources and must find them abroad – in places that may not be that friendly. The US oil industry has been in decline since 1970 and oil and gas must be imported on an increasing scale. Likewise in Britain the North Sea oil and gas fields are now in decline with the consequence that Britain, like the rest of Western Europe, will have to rely increasingly on Russia and other countries that the British Foreign Office describes as “unstable” for its supplies. War and oil go hand in hand and it is not surprising then that the Vice President of the United State was formerly Chief Executive of Halliburton whose various subsidiaries win billions in no bid contracts in both the fields of oil logistics and military logistics in Iraq and elsewhere. (Halliburton, which with its various subsidiaries like Kellogg Brown and Root, is legendary for the number of times it has been accused of ripping off governments, was also given a contract to help out in the early stages of developing the new NHS Computer system).
A civilisation heading towards collapse is a civilisation involved in many conflicts. Armaments are highly profitable as there is always a market for them. 4,000 precision guided bombs with depleted uranium warheads that will pollute the soil of Lebanon with heavy metals and low level radiation for generations, will make a lot of money for their manufacturers, paid, incidentally, by the US taxpayer under military assistance programme to Israel.
Wars can also be used to distract and divert attention away from misdeeds at the top of society. Moreover, when it comes to ripping off the state there is little more profitable than operating in a sector which, by its very nature, is kept secret, supposely for reasons of 'national security'. In this regard, not many people will have noticed this, because such things do not get much media attention, but a recent presidential directive in the US means that national security reasons can be given to exempt businesses from their financial reporting requirements.
William McLucas, the Securities & Exchange commission's former enforcement chief, has suggested that the ability to conceal financial information in the name of national security could lead some companies "to play fast and loose with their numbers." McLucas, a partner at Wilmer Cutler Pickering Hale and Dorr in Washington added: "It could be that you have a bunch of books and records out there that no one knows about."
Just 4 years ago, in 2002, the chief names in US business, many of them friendly with the President, were accused of falsifying their accounts – Enron, WorldCom, Reliant, Qwest, Tyco, Adelphia, Global Crossing, El Paso, Motorola, ImClone, Martha Stewart and Merck were all accused of cooking their books in 2002 and after. What this presidential directive does is open the door for it all to become virtually undetectable in the future for companies who are "partnered" with whatever administration is in office in the USA.
According to former Assistant Housing Secretary Catherine Austin Fitts, the former managing director of Dillon Read:"The use of national security law to create exceptions to the SEC law requiring books, records and transparency means that the basic conditions of markets are now gone. The black budget can now be the official budget for both government and private banks and corporations.
"Organized crime is now officially legal and combined with the stock and capital markets -- all enforced by force and rigged profits. This is the economic infrastructure for fascism."
In this situation does it really make sense to engage in main stream politics to try to bring about change? This is to be sure, a description of the US, but is the UK so much better? Our description of plundering the NHS suggests not. The decision to go to war against Iraq, ignoring the opinion of most of the population, and based on lies and cover up suggests not. The muzzling of the BBC when a reporter questioned our war criminal Prime Minister suggests not. If we are governed by thieves, liars and gangsters does it really make sense to make helpful policy suggestions to them about how they might arrange things to forestall a collapse that they are busily accelerating by their own futile and violent power games?
I think to believe this is to be heavily into avoiding the reality of the situation that we are in. Perhaps the use of a metaphor helps. In the film the Poseidon adventure a ship turns upside down and those trapped inside it have to re-orient themselves fundamentally. There is no guarantee that they will survive – indeed it seems very unlikely – however, if they are to stand any chance then they must make their way to the bottom of the ship – which is now on the surface of the ocean.
What this metaphor means in current conditions is to start trying to draw together people in networks which are focused on the basics of life done with the least possible energy inputs and least possible complexity. That means community level organisation around food growing and food preparation, around arrangements for water; around energy saving and self building. All these are arrangements which are, as far as possible, local and involve minimal bought-in inputs. It involves individuals radically simplifying their lives and joining together with others who are doing so. It means seeking ways of living that as far as possible do without the arrangements and services of the intermediate economy.
At this time this matches very well the increasing tendency of significant sections of the population to simplify their lives in a process called “downshifting” - accepting a lower income in order to do less employed work and do those things which better correspond to ones values. For many people this includes community based environmental activity. In this regard there are those who say that one might as well withdraw from mainstream politics and concentrate on learning gardening and practical skills and helping others to do so. There is much to be said for this viewpoint.
“Epicurus (341-270 B.C.) suggested that the individual just needed tranquility and peace to be happy....Personal contentment could only be achieved by retreating from the nasty and often violent world of politics, which is why Epicureans are sometimes known as the 'garden philosophers' “ (An Introduction to Philosophy” Dave Robinson and Judy Groves, p 37) A similar viewpoint was expressed by Voltaire in his book, Candide, presumably under the influence of Epicurus. After a lifetime of misfortune, partly brought on by stupidity that arose out of their own greed, Candide and his group of friends, survive to cultivate a garden together and find peace and happiness.
Shortly after Voltaire wrote, however, the world was plunged into the French Revolution and the Napoleonic Wars. In our own time, one can say without much doubt that the people of Lebanon would love to spend time in their gardens. They are not being given that option.
It is not impossible to draw up ideas for policies that would in a relatively simple way prevent some of the unrushing catastrophes occuring. For example, Feasta, the think tank for sustainable economics has designed incredibly simple policy scheme to bring down the amount of greenhouse gas emissions in a way that is fair and just. (Before suppliers of coal, oil and gas can sell their products into any economy they could be required to buy permits for the greenhouse gas content of these fuels when burned. It is easy to calculate the GHG content of any kind of fuel and there are relatively few primary energy suppliers in the world to impose this scheme on. The total amount of the permitted greenhouse gases would be capped by setting an upper limit on the permits issued and this upper limit would be brought down by 3% per annum over time. The permits would be issued to the public on a per capita basis who would then sell them to the primary energy suppliers – this would ensure that as energy prices rose the poor would be protected against being driven out of the energy market and against fuel poverty).
The problem is not in designing schemes to solve the problems of the world – the problem is in getting them noticed in a policy discourse in which all the noise is made by vested interests who have the resources, the time, the information and the personal connections to grab the attention of policy makers – thus setting or skewing the agenda to the interests of the carbon energy lobby.
A major theme of this paper has been the way in which society becomes more and more complex over time. It is interesting then that a major feature of the carbon trading schemes to affect climate change that have been introduced, particularly in Europe, has been their Byzantine and bewildering complexity. This was not an accident. It was the result of a policy process at a European and national level in which a simple idea has been adjusted and bent to accommodate a multiplicity of powerful interests groups in order to buy off their opposition and buy in their support. The resulting policy has been so complicated that it took almost two years for some countries e.g. Poland - to get it going. Perhaps predictability it was the computer system that is supposed to hold it all together that has taken the Poles so long to get going. At national level another layer of complexity is laid on it. In the first phase of the scheme, for example, the German government created 58 different regulations for handing out carbon permits each effectively tailored to a different interest group.
The issue then becomes – does it repay the effort to try to intervene to 'influence policy' . I cannot give a definitive answer – but my heart tells me that it is a lost battle.
The world is so complex, there are so many potential problems that it is completely impossible to predict the course of events – except for the general direction of things. Just as when the Poseidon turns over there is no guarantee of a happy ending. All one can say, merely as a matter of guess and best judgement, is that it seems better to be putting ones efforts to trying to move in the other direction, trying to create the foundations and networks for rebuilding a local economy, around low energy, trying to prepare something that might help some survive when the collapse eventually comes.
© BRIAN DAVEY