All centralized systems, open and shadow alike, act as heavy taxes on
the society and economy. This is why they cannot compete with the forces of
networked decentralization.
The primary "news" narrative may be the failure of the euro,
but the master narrative is much, much bigger: centralization has failed. The
failure of Europe's "ultimate centralization project" is but a
symptom of a global failure of centralization.
Though many look at China's command-economy as proof that the model of
Elite-controlled centralization is a roaring success, let's check in on China's
stability and distribution of prosperity in 2021 before declaring
centralization an enduring success. The pressure cooker is already hissing and
the flame is being turned up every day.
What's the key driver of this master narrative? Technology,
specifically, the Internet. Gatekeepers and centralized authority are no match
for decentralized knowledge and decision-making. Once a people don't need to
rely on a centralized authority to tell them what to do, the centralized
authority becomes a costly impediment, a tax on the entire society and economy.
In a cost-benefit analysis, centralization once paid significant
dividends. Now it is a drag that only inhibits growth and progress. The
Eurozone is the ultimate attempt to impose an intrinsically inefficient and
unproductive centralized authority on disparate economies, and we are
witnessing its spectacular implosion.
Centralization acts as a positive feedback, i.e. a self-reinforcing loop
that leads to a runaway death spiral. Centralize the entire banking sector into
five corporations and guess what happens? They buy access to the highly
centralized power centers of the Federal government. Like the HIV virus,
centralized concentrations of capital like the five "too big to fail"
banks disrupt the regulatory "immune response" that was supposed to
control them.
This feedback between centralized capital and centralized government
cannot be controlled by more rules and regulations--the two partners in
domination will subvert or bypass any such feeble attempts with shadow systems
of governance and control of the very sort we now see dominating economies and
governments around the globe.
Centralization itself is the disease, and devolving power to
decentralized nodes based on the transparent power of the Web is the cure. The
authorities and Elites attempting to maintain their centralized fiefdoms of
power are desperately trying to control the technology of the Web, but
disruptive technology that offers stupendous improvements in efficiency and
productivity cannot be put back in the genie's bottle. The authorities can try,
but they will fail.
The analog to the printing press is but one example. The centralized
authorities of the Holy Roman Empire tried to limit the citizens' access to the
Bible and other books, and as their failure became evident they ramped up their
oppression to extremes: printing the Bible was a "crime" punishable
by death.
Despite their almost total dominance of society and the economy, the
centralized authorities failed to limit the technology of printing and
distributing books.
Centralized authorities face an impossible double-bind: if they limit
access to the Web, their economic growth is doomed, and thus eventually so is
their power as the impoverished and oppressed populace rises up to overthrow
their failed Elites. But if they enable widespread access to the Web, then the
populace eventually realizes the centralized authorities and Elites are
burdensome hindrances to liberty and prosperity.
The highly centralized Elites controlling China are engaged in a
desperate campaign to constrain the Web in China to what they deem supportive
of their regime. The "Great Firewall of China" reportedly has tens of
thousands of employees monitoring and censoring content. Hyper-nationalistic
rants are "enabled" to spread virally, while inquiries into official
over-reach and misconduct are quickly suppressed.
You can't fool Mother Nature for long, and the Chinese are trying to
tame forces akin to Nature.
We already saw this dynamic play out with the Soviet Union. In the
former U.S.S.R., networked computers were understood to be a serious threat to
political control by centralized authorities, so access was strictly limited.
Scientists and mathematicians in the U.S.S.R. were relegated to working with
paper and pencils because this was "politically acceptable."
Denied access to transformative technologies, the economy and society of
the U.S.S.R. withered and eventually expired.
China has played a very quick game of catch-up based on a unique set of
factors:
1. An abundance of low-hanging fruit to be picked, both domestically and
globally. If you watch documentaries filmed in China in the early 1980s,
villagers were harvesting bamboo by hand and the village "theater"
was one black-and-white television. By the time I first visited China in 2000,
there was already a glut of cheap TVs and massive overcapacity in TV
manufacturing.
2. An abundance of mobile global capital to fund the initial
industrialization.
3. The ease of stealing/copying existing technology. It's always easy to
steal/copy existing technologies: strip down the motorbike to its parts,
machine-tool a factory to make the parts and voila, you are soon producing
"Yamaka" motorbikes in quantity (and drinking "Starbuck"
coffee).
But once the low-hanging fruit has been picked, you have to develop new
technologies on your own to keep growing. The U.S.S.R. was able to keep up by stealing
technology for decades, but once the pace of innovation slipped from
centralized labs (where spies could be highly effective) to decentralized
networks of innovation, the game was over: stealing technology became
inefficient and/or impossible on the necessary scale and timeline to keep up.
The Web also feeds social innovations. Centralized authorities move with
glacial trepitude because any change, no matter how modest, steps on the
exquisitely sensitive toes of some vested interest, protected fiefdom or
favored Elite. So while the centralized Elites and their apparatchiks in
government are detailing more regulations of the buggy-whip industry, the
entire industry is bypassed by social and technological forces beyond the
control of the Elites and their flunkies and factotums.
The forces of centralized authority will not relinquish their power
easily. In Egypt and many other quasi-feudalistic nation-states, the Empire of
centralized Elite authority is striking back, often via the "shadow"
systems of governance and control they established behind the thin veneer of
legitimacy created by their organs of propaganda.
But all centralized systems, open and shadow alike, act as heavy taxes
on the society and economy. Their attempts to retain control will fail because
of the conundrum outlined above: if they succeed in stifling the Web and the
powers of decentralization, their economy will wither and their impoverished
people will eventually tire enough of poverty to rise up and crush their
oppressive Elites.
If they allow access to the Web and the innovation-driven power of
decentralized networks of knowledge, collaboration and information, then their
political and financial control will be eroded. Either way, disruptive
technologies will dismantle their power base and wealth.
Here in the U.S., our Central State and Financial Elites are also
desperately trying to maintain their control, even as their control strangles
the economy and social innovation. Being controlled by five "too big to
fail" banks and six media corporations is like being dominated by the
buggy-whip industry and the horse-manure-collection industry.
The way forward is to dismantle the five banks and six media companies
and allow 500 banks to compete in a transparent market but be unable to buy
other banks or other companies. If there are 500 banks that are forced to
compete in a transparent marketplace, it will be very difficult for those
corporations to purchase the political power the TBTF banks own.
The Federal Reserve is the ultimate centralized horse-manure-collection
industry. Like the Catholic Church trying to control Gutenberg's printing
press, the Fed is terrified of transparency, liberty, competition and the
technological forces of networked decentralization. Though those in power
cannot dare contemplate it, their highly centralized institution and the
chokehold of its authority are already doomed.
Centralized control leads to stagnation and poverty, which leads to the
overthrow of oppressive political Elites. If the centralized Elites attempt to
corral the Web to serve their own narrow self-interests, it will overflow their
narrow channels and erode their power. Either way, their attempts to control
disruptive technology will fail. Their only choice is which path to destruction
they wish to tread.
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