"Every civilization carries the seeds of its own destruction, and the same cycle shows in them all. The Republic is born, flourishes, decays into plutocracy, and is captured by the shoemaker whom the mercenaries and millionaires make into a king. The people invent their oppressors, and the oppressors serve the function for which they are invented." -Mark Twain

"The history of cultural complexity is the history of human problem solving. In many sectors of investment, such as resource production, technology, competition, political organization, and research, complexity is increased by a continual need to solve problems. As easier solutions are exhausted, problem solving moves inexorably to greater complexity, higher costs, and diminishing returns. . . . A society in this condition is extremely vulnerable to collapse." - Joseph Tainter

Beyond the necessities of life, there are two truly essential things without which American society falls apart, that it currently isn't producing enough of. One is sophisticated solutions to increasingly complex problems. That's the relatively easy part.

The other essential crazy glue to society is in complete contrast to the first, and it's difficult for people used to thinking in precise, technical, statistical terms to grasp. It is something very ancient, primordial, that can't be accurately expressed in a formula by a statistician, or exactly calculated with scientific precision by university research centers, and then mass produced by multinational corporations. That necessary social glue is a commonly believed mythology and shared ritual sacrifice.

A Myth doesn't fit into an ap on a handheld device, which is exactly the reason that it's increasingly beyond the grasp of the same modern civilization that's most at risk without it. Ritual Sacrifice simply doesn't work if it isn't seen to be shared.

A generally accepted mythology addresses common uncertainty. In America, we last shared it through Franklin Roosevelt's voice. Not many listen to radio, anymore, and there are few voices much worth listening to today. It is still echoed in old, grainy footage of Martin Luthur King addressing the Memphis garbage workers union and in some of the moments of JFK's Inaugural speech. But, there are nostalgic reminders pulled out by those seeking to drum up warm and fuzzy feelings, usually to sell an inferior political product.

Until quite recently, America had a functioning mythical foundation: American Exceptionalism and democracy, which had been around for a few generations. They served through a couple world wars as a sort of civic religion that helped to prop up the legitimacy of the essential institutions of government, law and economics. Alex de Toqueville described, accurately but in less than flattering terms, the real civic religion of America since the mid-1800s this way:

As one digs deeper into the national character of the Americans, one sees that they have sought the value of everything in this world only in the answer to this single question: how much money will it bring in?

However, the foundational faith in American Exceptionalism, and its vaunted democracy, always a myth, is largely burned out in 2020.

Because all major institutions operate as highly complex belief systems, they also function as secular mythologies, without which dominant elites cannot continue to dominate more numerous populations. To put a sharper point on it, if these institutions or their sustaining mythologies become dysfunctional, illegitimate, or are simply widely forgotten, the social order will collapse and dominant elites may be extinguished or replaced unless some powerful new immersive foundation myth can be developed.

The anthropological view of social collapse has many variations, but at the heart is the indispensible role that irrational mythologies have in maintaining social hierarchies and order. That goes back to Malinowski's anthropology (1926) , which had a "postulate of indispensibility" of myth as the universal super-glue that holds together all cultures. In this view, "all standardized cultural forms have positive functions." The alleged indispensability of law and economics is akin to the role of religion in primative society. It is through “worship” and “supernatural prescriptions” that the necessary minimum “control over human conduct” and “integration in terms of sentiments and beliefs” can be achieved. In challenging this view, Robert Merton (1947, 87-88) asserts that "the same function may be diversely fulfilled by alternative items". In either case, cultural anthropology, from which modern sociology emerged, holds that highly codified modern institutions of law and economics are essentially religions.

To take this a step further, in even the most modern, technological and complex society, order relies upon the essentially irrational, superstitious belief systems that justify the relative disadvantage, subjugation, and self-sacrifice of majorities on the altar of elite privilege. The more complex, technological and wealthy the society, the greater the inequalities, and as Tainter shows, the higher the marginal costs of maintaining inequality the higher the probability that society will collapse. As Tainter has demonstrated using the cases of the collapse of the Mayans and other complex civilizations, the costs of social complexity invariably increase over time so, too, do the costs of maintaining superstitions, social privileges, inequality, and social order. As will be shown below, corporate profits and property rights, must be protected by elaborate mythologies of law and economics. In 21st century America, the maintenance of those myths is becoming extremely expensive.

When the strength of the religion of efficient markets and immutable property rights underlying law and economics wanes, social bonds collapse amidst the increasingly complex and costly burden of competition for control over scarce resources. Because the strength of belief in mythologies is not precisely engineered or measurable, like wing strength of Boeing aircraft or the current Dow Jones Industrial Index (which aren't really all that reliable), the system can reach a point of surprise collapse without warning. One thing that is certain is that inflection point will accompany the most emotional trading day on the floor of the New York Stock Exchange, leading to a crash, setting off a global cascade of economic and political crises.

Nation states, too, are subject to collapse; like other stratified complex social structures, they require legitimacy for survival. Coercion is only a stopgap measure, as police states require enormous expenditures to maintain order. Therefore, they also rely upon traditional “worship” and “supernatural prescriptions” to provide the necessary minimum “control over human conduct” and “integration in terms of sentiments and beliefs." Early modern states often depended upon an official religion for unity, with monarchial elites appealing to supernatural authority, the "Divine Right of Kings", to supplement intra-group allegiance as the basis for order.

Over time, "sacred legitimization” ran into the conflict between emerging secular and traditional sacred values. The serial collapse of much of the old European order occurred under “output failure” (political and material) after delegitimization as new democratizing ideologies of constitutional republics and electoral democracy spread across much of the western world in the 18th and 19th centuries. After the the traditional social and economic order was swept away in the two World Wars, the Great Depression and multiple Social Revolutions of the 20th Century, varieties of social democracy became the new civic religion and primary organizing principle and sustaining mythology of the modern welfare state.

During the post-Second World War era to this day, however, rising commercial and financial elites rapidly moved to challenge and displace state-based institutions and electoral democracy as the primary organizing authority of society. The University of Chicago Schools of law and economics became the center of a subversively radical conservative doctrine. That enshrined marketplace mechanisms as a substitute for government regulation of business by federal agencies and the courts. Because, until recently, the state has retained legitimacy, and maintained a monopoly on the use of force in America, the state has maintained some authority. The Chicago School, despite its deep penetration into the business and legal establishment, has struggled to develop a thorough-going and popular canon of "sacred legitimization".

Chicago School doctrine found in classical economics of Ricardo and Smith relies upon a belief in a host of supernatural forces such as theories of "efficient markets", "perfect information", "trickle down", and the assumption that social costs are "external" to the calculation of social utility. Like the sacred utterances of a priesthood, these theories are written in a cryptic language understood only to the initiated. While this religion of the sacred Hidden Hand is held as a divine certainty on Wall Street, by many in tenured academe, and by Third Way politicians, neoliberalism has always lacked a broadbased, willing endorsement and understanding by most of the public in western countries which only grudgingly accepted it. That makes this mythology particularly vulnerable as a foundation for social organization. The faith is simply not sufficiently internalized as a strongly held belief system shared by the masses to last very long in the face of another financial crisis. The neoliberal order will struggle to retain much of their gains.

According to the founding neoliberal economists at the University of Chicago, the purpose of the law is to protect the efficient gains of the marketplace, which is property, and to maximize profit at all cost. In 1960, The Chicago School published a seminal paper written by a British formal socialist named Ronald Coase. The Coase theorum states it doesn't matter if wealth (profits) are misallocated and a variety of social harms are done to a great many people by the operation of business and misallocation of profits. Even mass damage to health and death that comes with air pollution from factories, he wrote at the height of the unrestricted industrial era, is permissable if the goods produced are more valuable than the damage done to others, which is an "externality" to the calculation of total social utility. Courts should simply compare the costs and award rights to the more valuable producer, he wrote. Growth in market value (aggregate profits) measured in business profits, shareholder value, and Gross national product are the only true indicators of the common good. Neither government regulators nor the courts should disturb that outcome. So sayeth the Chicago School professors, Coase, Friedman, Stigler and the Law and Economic judges led by Judge Posner.

That, in a nutshell, was the founding of a new civic religion that has in the succeeding six decades taken hold and now controls the guiding calculus of neoliberalism. But, it is not any more deeply believed than it is, in truth, understood by many.

Chicago School of Economics Professor Coase admitted, with a laugh, that what was being demonstrated by elaborate statistical formulas was "silly."

Prof. Ronald Coase - University of Chicago, namesake of the Coase Center for Law and Economics. Major postulate: the Coase Theorum: Government regulation is an inefficient way to achieve social utility. " If we assume that the harmful effect of the pollution is that it kills the fish, the question to be decided is: is the value of the fish lost greater or less than the value of the product which the contamination of the stream makes possible."

Chicago School economics and law is an enormously expensive and complex justification for privatizing benefits and socializing costs of business. It provides a religious doctrine and ritual mask to disguise how most wealth is really generated as transfers of public debt into private profit through direct subsidies to the banking system, as explained below.

Like everything else under neoliberalism, the Federal Debt is commodified. The distinction between private property and public debt is a myth. Apostasy, but true. The Debt is converted into various forms of tradeable securities, income which feed bank profit margins and inflate market bubbles. Along with foreign exchange trading, the value of daily trading in Federal Treasuries -- most of which is done in the Repo Market, run by the New York Federal Reserve -- is the single largest exchange, utterly dwarfing markets for corporate stocks and bonds by at least 10 to one. Yet, until recently, when it started going wonky, "failing", as it did in the months leading up to the 2008 Meltdown, you probably never heard of it. That is no accident. Trading in public debt, and the enormous profits made from it (public subsidies of private banks), is the holiest of holies, the best kept secret of capitalism.

To fund the QE2 bailout, the Federal Reserve borrowed trillions from China and other foreign lenders to refloat the Federal Reserve's emergency fund, that was nearly wiped out after the 2008 Wall Street meltdown. It then used the QE2 "special mechanism" to inject below zero real interest rate funding to the same large U.S. and foreign banks, most of it to the same 15 large Primary Dealers (PDs) that trade in Treasuries on the Repo Market.

QE2 was temporary. But, the Repo Market is a permanent fixture of American financial system where T-bills are swapped daily for junk bonds and other riskier assets as short-term loans - a giant money laundering and systemic financial risk-reduction machine.

The Fed has been subsidizing big private banks, domestic and foreign, this way for decades. By handing out below-zero real interest loans to the PDs through the Overnight Window, and allowing holders to profitably loan out Treasuries to other banks in reverse-repos, the Fed injects trillions of dollars each year into the flow of funds through the private banking system. This has the indirect effect of inflating balloon assets in other markets. The privatized dividends of state debt are thus harvested by oligarchs who control large banks and corporate boards. None of it goes to the general public, who do not trade on the Repo Market.

Some of this public stimulus is then distributed as stock buybacks to pump up corporate share prices, inflating investor returns and expectations for earnings. The share buyback, which was illegal until the Reagan Administration, forces U.S. public companies to reduce reinvestment in productive capacity that might lead to expanding domestic plants and offices with employment gains. The supplementary income from Repo trading may actually indirectly hurt the income of the lower classes.

Because elites benefit enormously from trading in public debt and assets, the nation-state itself is not yet dead. It is kept alive on a tether, a sacrificial cash cow that is bled daily by financial institutions trading in the Repo Market. Demand for public debt issues, particularly "zero risk" T-bills, is largely driven by their secondary value as short-term loan instruments. Growth in public debt increases the supply of these government bonds, which are additionally in demand for their use in balancing risk factors in investment portfolios. The hunger for the trading revenues from these government bonds thus drives up public debt. In other words, the big banks have a vested interest in increasing the federal debt, which is contrary to one of the core myths that government entitlements spending -- all those greedy faces to feed -- is the culprit for the $23 trillion federal debt and trillion dollar deficit.

In addition to the cash-cowing of the federal debt, legislatures and allied mass media, provide Oligarchs another valuable political function in mobilizing national populations to exert the necessary self-sacrifice to sustain the costs of permanent warfare economies and a huge Military Industrial-Intelligence Complex and its permanent wars that drives public debt, which leads to the creation of more Treasuries traded at discount as Repo for corporate debt, that further inflates the stock markets. A nice, neat Royal Circle. A pyramid scheme. A ritual of transferring mana upwards to the Gods, while human heads and blood trickle down the steps. Mounting private wealth creation from public debt continues in mythic proportions, and its eventual ritual burn until all is consumed, cleansed.

The Fed is again burning through its reserves to feed the Repo Man. The Failed Iowa Caucus and another failing Presidential election. A towering funeral pyre for democracy in the neoliberal era.