America 2020: Subversion from Above, Uncertainty, and Oligarchy
For Decades, Mainstream Social Sciences Have Warned that the Real Threat to Society is From the Very Top Where the Rest of Us Have Disappeared from View.
As multiple crises of western societies come to a head in 2020, even the Masters of the Universe are worried. They cannot forever maintain the hold of illusions required to sustain the current Crisis of crises and a spreading Forever War. Illusions, terror and confusion underlie crisis and conflict - engineered uncertainty must continue if the upward trajectory of wealth and inflation of markets is to continue. At a certain point there is a reckoning. The reckoning they sense, is down there, and it is a hard, real bottom where most of us live, and it is hurtling upwards. . . .
For more than a century, Americans have seen how wars, big and small, domestic and foreign, and the disruption and uncertainty that go with them, have historically inflated market bubbles, and how these same markets have occasionally burst, and then how everything changes.
Change happened in 1929. That change brought the New Deal that wasn't well appreciated at the time time by most elites, but brought a form of mild social democracy that proved stabilizing until it was found to be too constraining. It happened again after the Vietnam War, when by 1975, the Dow stood at a mere 850, the S&P 500 having lost a total 50% of its value the previous two years, but average purchasing power was at its post-War high. On one blue-collar union salary, seven or eight bucks an hour, Joe Sixpack -- way down there -- could buy a house, drive a two year old car to the factory where he worked and back to his suburban split-level ranch, and send two or three kids through college, while looking forward to his employer-paid pension. That was thought to be excessively generous and costly, so a way was found to break the deal.
1974 was another inflection point, when the world changed, again. The American Middle Class started its long stagnation, as corporate elites learned how to claw back more of the gains in productivity. This was the start of the grand upward accumulation of wealth and power that created the Global Oligarchy that now reigns in the 21st Century. The plutocrats did this by applying in a systematic way a singular guiding set of principles learned from academe:
Profit is found in deception, destruction and insecurity. Diversion of wealth upwards is essential to maximized returns. Uncertainty and exploitation of unequal access to information is necessary to maintenance of profits, economic growth and social order.
This formula was embodied in a systematic body of economic and social principles articulated by three of the most influential American academics of the 20th Century, who together, we describe below as "the Troika". By observance of these principles, Wall Street found a way to retain more of the value of goods produced, and more than anything, how to create value for itself and the one percent from financial products that normal workers don't buy and aren't even aware of. Post War American was split, with the old industrial part a national sacrifice area run according to the principles of creative destruction of capitalism.
Reaganomics proved to be a lousy way to run an industrial economy. It plunged half the country not connected to Wall Street and Silicon Valley into permanent stagnation after 1975. But all the flag waving and smoke of Cold War and Global War on Terrorism was effective cover for a massive transfer of wealth upwards and outwards that has occurred with ease and shockingly little resistance. They learned from professors of economics and sociology to strategically create uncertainty about the sources of change and value in the economy, and how to make a society function that is built upon internal contradictions.
Forever War masked the very real picking of millions of pockets -- skimming value off the top of wages of working people, and trillions in upward transfer payments can be plainly seen in the difference between the two lines of the graph, above -- and, the oligarchs got away with it for a good reason.
It happened easily because Americans are, by and large, far better socialized than they are educated. They have internalized a peculiarly American blend of Spartan military discipline, and the Athenian belief that they live freely in a democratic society.
If your job was sent to China, that is just an unintended consequence of Globalization, which is an invisible and uncontrollable force, we have been told. Nothing can be done about that. That's market forces at work - Government can't help you with that. If half your federal taxes go to Pentagon contractors to wage Oil Wars that never seem to stop, but the bridges are falling down and medicine and college isn't affordable, that too is just a latent function of national defense and to protect the homeland. Millions of bumper stickers proclaim the successful internalization of these lessons that "freedom isn't free."
The success of this system owes a great deal to modern social theory of "unintended consequences" and "latent functions" by Robert Merton at Columbia University, which is based on the insight into the "uncertainty principle" of the Chicago School economist, Frank Knight, and Harvard's Joseph Schumpeter's "creative destruction of capitalism". Under capitalism, as the Troika each describe it, profit is found in deception, destruction of existing institutions and mass insecurity.
Uncertainty and exploitation of unequal access to information is found necessary to maximize profits, economic advantage and social order. This formula was embodied in a series of principles articulated by the most influential American social scientists and economists of the 20th Century, and reinforced through the mass media and in the workplace.
What the three had in common was in their rejection of the classical tenet of their fields that society and firms organize themselves to seek stability and equilibrium. Merton, Knight, and Schumpeter saw, instead, is that the most powerful force underpinning capitalist society is uncertainty that drives change from above by dominant firms seeking monopolies over their markets. That critical insight is shared with Marx and the Conflict Theorists. But, it has been sanitized and given the Ivy League seal of approval. Thus, in the theory of the Troika, recessions, instability and periodic crises are not viewed as malfunctions in the operation of the system, but are instead seen as normal to the "business cycle," a manifestation of creative destruction. The notions that information is evenly shared and that all compete on a level playing field in modern capitalism is false, a useful fiction or in anthropological terms, a myth.
Robert K. Merton, Chairman of Department of Sociology, Columbia University.
• "Latent Structures" - Society operates according to "latent functions": the element of a behavior that is not explicitly stated, recognized, or intended, and is thereby hidden.
• "Unintended Consequences" - outcomes of a purposeful action that are not intended or foreseen or announced.
• The self-fulfilling prophecy - "in the beginning, a false definition of the situation evoking a new behavior, which makes the originally false conception come true."
• "Anomie" - ritualistic adaptive social behaviors of populations under stress that proceeds according to a predictable pattern: adaptation to frustration starting with ritualism, conformity, (criminal) innovation, and then political retreatism. May result under some foreseeable circumstances with rebellion.
Frank Knight, Chairman of the Economics Department, University of Chicago.
• "Knightian Uncertainty" - the search for economic profit drives the economy. Profits occur because changes are predicted imperfectly. For Knight, imperfect knowledge is a consequence of change: "Changes in conditions give rise to profit by upsetting anticipations and producing a divergence between costs and selling price, which would otherwise be equalized by competition" (1921, p. 198)
Joseph Schumpeter, Professor, Harvard University Department of Economics
- Creative Destruction of Capitalism, wrote: [Capitalism, Socialism and Democracy (1942)]
• "[... T]he capitalist process, in much the same way in which it destroyed the institutional framework of feudal society, also undermines its own."
• "In breaking down the pre-capitalist framework of society, capitalism thus broke not only barriers that impeded its progress but also flying buttresses that prevented its collapse. That process, impressive in its relentless necessity, was not merely a matter of removing institutional deadwood, but of removing partners of the capitalist stratum, symbiosis with whom was an essential element of the capitalist schema."
• Capitalism will eventually lead to corporatism owing to increasing monopolization. A political system in which the power becomes fully monopolized is fascist.
Robert Merton, the chair of the Sociology Department at Columbia University criticized the conventions of his field at the time, which spanned from the late 1930s until his death in 2003. He is considered the founding father of the field of modern Sociology and a key figure in the development of Criminology. In advancing his own alternative structural-functionalist approach, one of Merton's key insights was that some institutions are dysfunctional, and not all social functions are necessary or even beneficial to society. Merton further recognized that social functions aren't necessarily openly expressed - not all are functional in the sense of being commonly recognized as openly acknowledged and not all social consequences are intentional.
He is probably most famous for his formulation of the concept of self-fulfilling prophesy. Defined by Merton, "The self-fulfilling prophecy is, in the beginning, a false definition of the situation evoking a new behavior, which makes the originally false conception come true." It captures the standard operating procedure of most large institutions, which he described as a positive evil.
Following Merton, structuralism started to lead to some interesting research and useful insights into modern society and its governing institutions. The issue, however, remained, to whom are they most useful?
Furthermore, Merton stated, it is impossible to predict with certainty the results of any purposive social action in any particular case. Society also operates according to "latent functions": the element of a behavior that is not explicitly stated, recognized, or intended, and is thereby hidden. Here, Merton adopts and agrees with the economist Frank Knight's position that not all actors hold the same degree of knowledge or abilities to calculate risks. Merton wrote that individual and group action "will usually involve ignorance of certain aspects of the situation and will bring about unexpected results."
Merton's doctoral dissertation shows us where he's coming from, and anticipates where his work would go. First, it gives due homage to Knight's insight into the social role of uncertainty and Merton's resulting theory of unintended consequences: [Robert K. Merton The Unanticipated Consequences of Purposive Social Action , American Sociological Review, 1 (6), Dec. 1936]
The importance of ignorance as a factor is enhanced by the fact that the exigencies of practical life frequently compel us to act with some confidence even though it is manifest that the information on which we base our action is not complete. We usually act, as Knight has properly observed, not on the basis of scientific knowledge, but opinion and estimate. Thus, situations which demand (or what is for our purposes tantamount to the same thing, appear to the actor to demand) immediate action of some sort, will usually involve ignorance of certain aspects of the situation and will bring about unexpected results.
The true importance of unintended consequences due to uncertainty is not simply epistemological, or restricted to the nature of understanding. It is at the core of economic exchange and is ultimately political. As Merton, and Frank -- a founder of the Chicago School of Economics -- and many who read and followed them both, society's institutional control over publics is not based in consent freely given based in unchanging social arrangements. Social relations and expectations are actually based in unequal knowledge and expectations of advantage, and those who can best control perceptions, either by increasing perceived uncertainty held by others, or by reducing their own known risks, enhance their chances of maximizing their own advantage.
In a breakthrough of the artificial barriers that separated mid-20th Century social science from economics, Professor Merton agreed with Professor Frank that dominant elites, large corporations and incumbent parties, usually come out ahead in exchanges with rivals and publics because they are often in a position to better understand, withhold, and manipulate privileged information so as to create inaccurate perceptions, and this, they agreed, often has malign outcomes for society as a whole. Knight should not be confused with the more doctrinaire "Swiss Guard" free market enthusiasts, such as Milton Friedman, George Stigler, and James M. Buchanan who studied under him and later took over the Department of Economics at the University of Chicago. Frank has instead described himself as a "ex-liberal" who in 1932 took to a university podium and announced: “Those who want a change and wish to vote intelligently should vote Communist.” [Angus Berkin, "The Radical Conservatism of Frank H. Knight", Modern Intellectual History, 6, 3 (2009), pp. 513–538]
On that occasion he pronounced that capitalism and democracy each demonstrated irretrievable failures as modes of social organization, the combination of the two was uniquely problematic. “The dualistic social order of the 19th century liberalism,” he concluded, “made up of economic laissez-faire and political democracy, that is, of economics and politics alike based on competitive, mass-selling talk, is bankrupt, and it is only a question of a successor to bid in the effects of the defunct at nominal figure.
These insights, of course, challenge conventional notions about free markets as made up of equally informed players operating openly and honestly, and social structures, such as American government, as being essentially open and democratic in nature. Knight died in 1972, as the Chicago School of Economics became synonomous with Supply Side, Rational Expectations Theory, and other radically triumphalist brands of neoliberalism informed the politics of conservatism. In the hands of Wall Street, that boiled down to the "shareholder wealth maximization principle."
Milton Friedman (1970) articulated the principle by imploring managers as shareholders’ agents to “conduct the business in accordance with their desires, which will generally be to make as much money as possible while conforming to the basic rules of the society, both those embodied in law and those embodied in ethical custom.” But, what if the laws are made by those who studied under the Troika, knowing full-well that laws allow those with sufficient power to rarely if ever prosecuted, and breaking laws is just another calculated risk of doing business factored into prices passed onto the consumer? What if the ethical custom is known to actually be just a myth, to be upheld as ritual only to placate the ignorant savages? Those were the real lessons learned and applied by the elite to create American oligarchy, 2020.
Given that the Troika continued their posts at elite universities for decades, and Frank in particular, is remembered as one of the most important figures of neoliberal economics, clearly, they all knew that their work would operate through their institutions and students most largely to perpetuate the economic system they sometimes criticized. What each brought, undoubtedly, was a dose of informed realism to an order that until recently portrayed itself, publicly, as not only legal, ethical, but essential, enduring and irreplaceable. Now, the ritual has been abandoned, and oligarchs no longer bother to pretend to observe such taboos.
Merton said it best that bureaucracies, both public and private, deceive and defeat themselves most effectively as they strive to maintain secrecy about their own internal processes. Control over all of capitalist society's goods is bureaucratic, based in management of uncertainty and understanding of hidden functions, Merton explained. However, when the bureaucratic imperative takes over, and behaves in secrecy to undermine elected government, its legality comes into question, and the secret national security state exposes itself as illegitimate. Same can be said for when they become "too big to fail" and escape accountability. That is the definition of "market failure", a condition that Knight, in particular, warned would lead to the collapse of democratic society.
While he rarely paid open homage to them, in this unblinking view that powerful institutions are at least in part dysfunctional, here Merton was not hostile to the conclusions of the Conflict Theorists, such as C. Wright Mills, who described society as in continual struggle between and among elites and the rest of society. He also endorsed some key tenets of Marx, writing in 1957, for instance; "With increasing bureaucratization, it becomes plain to all who would see that man is to a very important degree controlled by his social relations to the instruments of production. This can no longer seem only a tenet of Marxism, but a stubborn fact to be acknowledged by all, quite apart from their ideological persuasion." Writing in the same book chapter, Merton criticizes bureaucracies, public and private, for the dysfunctions he sees in bureaucratic "ritualism":
Formalism, even ritualism, ensues with an unchallenged insistence upon punctilious adherence to formalized procedures. (12) This may be exaggerated to the point where primary concern with conformity to the rules interferes with the achievement of the purposes of the organization, in which case we have the familiar phenomenon of the technicism or red tape of the official. An extreme product of this process of displacement of goals is the bureaucratic virtuoso, who never forgets a single rule binding his action and hence is unable to assist many of his clients. [/QUOTE]
Like Merton and Knight, Schumpeter also acknowledges his debt to Marx, including agreement that large firms and in industrial concentration devolve into monopolies, the inherent instability of capitalism and its inevitable “crises”. Schumpeter, along with Merton, foresaw in capitalism the eventual self-destruction of capitalist institutions. Knight saw the system as rotten in 1932, but thought it could last longer than the others. One of Schumpeter's main contributions is his insight into "temporal lags", i.e., social forms that persist after they have lost their economic rationale, and he concludes that the inevitable tendency of capitalist system to depart from equilibrium and that instability mostly serves to reinforce the relative advantage of those with already dominant positions in society. Vestiginal free enterprise and some familiar social norms of democracy might persist, he wrote, but society would not be democratic in the sense that it was in the earlier era. The end result of crisis would be command economy and a state dominated by monopolies, which he identified with fascism. What many of their students concluded was, no doubt, if market capitalism is headed for fascism, go with the winning team.
Schumpeter warned in his famous work, Capitalism, Socialism, and Democracy that as Capitalism becomes increasingly monopolized, it undermines and removes its partners located in other institutions in the capitalist stratum. We saw openly turn on government when Reagan announced that government is the problem and the welfare state was over.
With regard to notions of individual freedom, Schumpeter saw this, as other expectations, to be irrational - largely a sham, shaped and limited to the greatest degree by the needs and agendas of dominant institutions. With the demise of competitive economy, he predicted, government would become less reflective of broad interests, and society more regimented and authoritarian. He wrote:
“However, whether favorable or unfavorable, value judgments about capitalist performance are of little interest. For mankind is not free to choose. This is not only because the mass of people are not in a position to compare alternatives rationally and always accept what they are being told. There is a much deeper reason for it. Things economic and social move by their own momentum and the ensuing situations compel individuals and groups to behave in certain ways whatever they may wish to do—not indeed by destroying their freedom of choice but by shaping the choosing mentalities and by narrowing the list of possibilities from which to choose.”
Friedman's rhetorical "Free to Choose", is of course, a reaction to the undesirable realism that underlay the description of late capitalism offered by Schumpeter and his contemporaries.
The Troika is seen to have anticipated aspects of the Critical Social Inquiry paradigm. Merton agrees with Knight about limits of knowledge and expressly articulates that information, particularly held by those outside institutions with access to sophisticated research tools is usually incomplete and conclusions "subjective." (1936) In that, he has influenced contemporary feminist, antiracist, anticolonial, poststructural, and postmodern perspectives who point to the inherently unequality and injustice of institutions and non-objective nature of knowledge.
In terms of Knightian Uncertainty, as it is taken by Chicago School disciples and Critical Theorists, alike, what appears to be an incalculable uncertainty to those being fleeced is to dominant players simply a calculated risk. In other words, in a market exchange system power is deception, and deception is power - and because all knowledge is inherently limited, as both Knight and Merton acknowledged - those who wield risk and uncertainty most skillfully will likely profit and dominate society.
Knight's seminal theory is summed up as follows: [Allan H. Metzer, Rational Expectations, Risk, Uncertainty, and Market Responses, Carnegie Mellon University, 1982]
Knight (1921) believed that the search for economic profit drives the economy. Profits occur because changes are predicted imperfectly. For Knight imperfect knowledge is a consequence of change: "Changes in conditions give rise to profit by upsetting anticipations and producing a divergence between costs and selling price, which would otherwise be equalized by competition" (1921, p. 198).
"Manifest functions" are intended, Merton observed, whereas latent functions are unintended. From this sprung his conception of "unintended consequences" a vulgarization of which defines how America has since attributed its many problems revealed after key decisions have been made. Of course, this has provided an easy out for policymakers, a ready-made excuse for outcomes where the manifest costs are later realized to outweigh the publicly stated intended benefits. Critical theorists point out that often "unintended consequences" are actually quite transparently intentional. Take the following example:
"The manifest function of racial slavery, for example, was to increase the economic productivity of the America South, but it had the latent function of providing a vast underclass that served to increase the social status of southern whites, both rich and poor."
Although everyone is today aware of the concept of intended consequences, sociological analysis is required to uncover less obvious unintended consequences; indeed, to some this is the very essence of sociology. In application, however, sociology has also served as a tool to anticipate outcomes by which elites can obtain indirect gains at the expense of latent consequences that are not immediately recognized by others, social costs which in hindsight were readily knowable to those with insider knowledge or with more advanced methods of analysis.
In retrospect, unintended consequences often become apparent long after the fact that they are noticed by those who suffer them -- long after those who control the chief structures of society -- institutions such as politics, religion, education, media, law, and the economy --have taken their profits, and the statutes of limitations have expired. Where intention to harm is difficult to prove, under the system of limited liability and civil torts, accountability after the fact for harms that are less than direct criminal violations is unlikely. Manipulation of latent functions so as to disadvantage others also occurs in the everyday structures of family, workplaces, classrooms, in the award of privileges that go along with profession, rank, race, gender, age groups. Those in a position to manipulate latent functions (definitions, vocabularies, operating systems) rather than through expressed functions -- formal laws or rules, which are subject to challenge, are actually more likely to succeed without even being noticed.
Later, these opposing views of conflict theory and functionalism were joined by a third branch, springing from communications and media studies, that also informs the post-modernist school. Symbolic Interactionism posits that social relations spring out of the psychology of individuals who collectively organize society according to what each perceives to be group norms received as symbolic messages through the shifting filter of communications. While each individual retains a core of self-volition in this view, the phenomenon of the world is defined by those who control the means, media and meaning of messages. Meaning is not fixed but contested.
A synthesis of these sociological approaches would be a Critical Theory that packs it back together like this: society, the economy, politics and media are the result of large scale organizations that embody both conflict and equilibrium-seeking behavior in an attempt to control contested perceptions. The intent of dominant elites -- oligarchs -- is to influence, limit and pre-determine choices, wants and demands in how populations live, what they consume, the wages they demand, how governments operate, and in the content and received meaning of what people see and hear. The sociologist Max Horkheimer described a theory as critical insofar as it seeks "to liberate human beings from the circumstances that enslave them." His Frankfurt School colleague, Theodor Adorno observed in 1938 that capitalism so dominates all aspects of everyday life that "every pleasure which emancipates itself from the exchange-value takes on subversive features".
Conflict over meaning is an enduring element that can be seen in the politics and economics of most large-scale organizations. The bounds of conflict, as well as outcomes, are managed by elites in order to stabilize social hierarchies by forestalling radical change through various means, including control over institutions, suppression of opposition, cooptation of dissident, information management and deception, and the creation of uncertainty and economic insecurity. What oligarchs seek is to avoid disruption from below, but one strategy they employ to maintain control is, paradoxically, managed disruption of society by its own major institutions, which sometimes entails "subversion from above."
One of the central pillars of American society, as viewed from this critical perspective, is what Joseph Schumpeter termed the "creative destruction" of American capitalism, and its nephew, disruptive innovation, so beloved in today's business school literature and in Silicon Valley lore. As one of the few serious, methodical critiques of this misunderstood concept concludes: [John Komlos, "Has Creative Destruction become more Destructive?" , The B.E. Journal of Economic Analysis & Policy. 2016; 20160179]
Actually, creative destruction is being taken to a new level: “devastating innovation” with no consideration of how much of it will improve the human condition and how much damage its spillover effects cause. The transition to a post-industrial economy has been far from advantageous to the well-being of a substantial share of the population.
In reality, creative destruction involves the planned neglect and mass displacement of populations, particularly minority urban populations and closure of abandoned domestic industries across entire regions. Termed "Urban Disinvestment", Daniel Patrick Moynihan commissioned the RAND Corporation in 1969 in "benign neglect" and "planned shrinkage" strategies to raze and then bulldoze minority areas of America's inner-cities under the rubric of "urban renewal"; this was accompanied during the following decades by the mass offshoring of domestic heavy industry and the expatriation of capital to tax havens abroad, putting millions out of work, a loss from which most never recovered. Real estate continues to be the site of planned destruction of subprime populations and systematic institutional fraud. In 2009, the Wall Street crash was precipitated by massive fraud by investors and bankers who covered their positions in bundled Mortgage Backed Securities by purchase of Credit Default Swaps, securities that paid off when risky underwriting defaulted on these overvalued assets. The Federal Reserve turned this into systemic risk, socializing the risks and privatizing the gains, when it extended trillions of dollars at below zero real interest to bail out large institutions using these same overvalued assets as collateral. At the same time that most large mortgage underwriters and banks were bailed out, homeowners were denied relief.
Immediately in our own time, there is emerging realization that creative destruction and subversion from above are being systematically applied to the now dominant online economy and politics. Not only is e-commerce disrupting and exterminating brick and mortar industries wholesale, bankrupting entire economic sectors, wiping out the retail sector jobs of millions in the process, on-line existence has also led paradoxically to the disempowerment and demobilization of vast communities of formerly politically active Americans who no longer participate in "real" retail politics.
While easy, immediate access to like-minded on-line communities was initially viewed as spurring political mobilization, the later consolidation and takeover of mass political platforms by political parties, and purges of those who express nonconformist views in recent years, has led to the "kettling" of dissenting voices onto small niche boards and sub-Reddits and Twitter feeds. This leads to further isolation and disempowerment of ideologically nonconformist segments of the American electorate. The net result of the narrowing of political discourse and the channeling of activism, of course, is polarization and a New McCarthyism. Add to social factors the overt efforts by Silicon Valley oligarchs and para-state organizations to control political content on the web, in the name of curtailing "fake news" and "Russian interference" and we see that the politics of the New Digital Economy have become demonstrably less free. less broadly participatory, more tightly controlled by oligarchs, and less democratic than the one it is replacing.
It has long been known that economic crisis and disruption present extraordinary opportunities for oligarch profit. Weakened competitors can be liquidated and their assets, including employee retirement accounts, can be bought out at a steep discount. Even the unintended political consequences of social crisis can also be managed so that the net effect is to accelerate the consolidation of wealth and power. During market crises, there is also the salutory effect (for those who don't have to rely on wages or social benefits) of damping public expectations for wages and social benefits. Governments and officials viewed as uncooperative are subverted or removed by covert actions and regime change operations carried out by their own intelligence services, and traumatized, heavily propagandized populations can be persuaded to support mass surveillance and repression. In the last resort, a buildup to foreign war will reconsolidate social cohesion.
This creative destructive entails the introduction into functional systems and communication networks of large amounts of cognitively disruptive white noise. Social confusion and uncertainty also has the paradoxical effect of consolidating market control to the biggest firms and in facilitating offshoring strategies, shaking out competitors as well as drowning out political dissent. Chaos and confusion that accompanies terrorism, plunging markets, and the noise of controlled oppositions and media are proven tools of subversion from above, as these factors work together to consolidate gains and accelerate change. Schumpeter, himself, suggested that the very processes that caused capitalism to emerge and maximized the growth of capital also inevitably make capitalism unsustainable. He points out, significantly, its destructive mechanisms also undermine and eventually remove all its institutional "partners":
In breaking down the pre-capitalist framework of society, capitalism thus broke not only barriers that impeded its progress but also flying buttresses that prevented its collapse. That process, impressive in its relentless necessity, was not merely a matter of removing institutional deadwood, but of removing partners of the capitalist stratum, symbiosis with whom was an essential element of the capitalist schema. [... T]he capitalist process in much the same way in which it destroyed the institutional framework of feudal society also undermines its own
Symbolic Interactionism and the Rise of the Digital Totalitarian
The central role of uncertainty and deception (perception management) in social conflict also invokes a third approach to sociological analysis, the Symbolic Interactionist perspective, which posits that power and social order is socially constructed in aggregate by each individual. In this view, social order depends upon maintenance and observance by all of assigned group norms. However, maximization of profit and centralization of wealth and power to a tiny elite requires the destruction of traditional communities and targeted interference in the internalization of norms. By controlling the content of dominant media, oligarchs effectively take over internal perceptions and attitudes as well as social structures. Oligarchs systematically corrupt and manipulate state institutions at all levels in societies they control. The comprehensive power of oligarchs over sources and dissemination of information, and their legal power to commodify and monopolize most forms of information as copyrighted or proprietary material, along with the lack of accountability and real competition in major media and information industries, make the nature of their power totalitarian. Digital age oligarchs exercise totalitarian control that is at the same time more effective while being far more profitable than the old fashioned bureaucratic variety of 20th Century totalitarian states. In the shared terms of Knight and Merton, they have managed to master uncertainty.
Nearly all social, economic and legal constraints on the power of consolidated media oligarchies have been removed. Competing media barons of the 19th and 20th Centuries have been supplanted by the more segmented oligarchs of the digital age. In an environment of almost total suspension of antitrust laws and other forms of regulation of digital marketing and media, near monopolies have again emerged. Amazon enjoys a near total market dominance of on-line retail and is fast gaining anti-competitive control over horizontal services and related technologies such as automated warehousing and delivery. Enormous social media companies such as Facebook and the dominant financial news service, Bloomberg, enjoy very little accountability or competition, factors that restrained such oligarchies in earlier decades, in the view of Pluralist theorists of that time. [Cf. (Edelstein, 1967; Gouldner, 1965; Lipset et al., 1956; Schumpeter, 1950).] As Dahrendorf (1959) shows, what makes a group oligarchic is their power to control the processes by which decisions are made and implemented, regardless of what allows them to wield that power.
From Conformity to Rebellion?
However, as disruption of industries spreads as a standard feature of economic management, it has a paradoxical effect. The strategic application of intentional disruption of institutions and industries to disadvantage competitors, break up traditional group identities, and drive down the wage expectations of labor creates cognitive difficulties in the construction and internalization of social norms., and under sufficient strain, social structures and controlling functions can breakdown. This has been observed going back to the 1800s by Emile Durkheim, who stated that the normal result of anomie is apathy and social alienation, which when internalized as breakdown of individual ties to the community, he termed "anomie".
As a mountain of research since demonstrates, insecurity over jobs and incomes disparities increasingly leads to psychological and socialization problems, which results in a large number of people who manifest depression and anxiety disorders, or among the population prone to them, triggers personality disorders, rage and associated violent behavior. Many politically conscious people have in recent years ended up suffering a range of symptoms of what is now termed "learned helplessness" -- which Merton identified as a process of maladaptation to frustration starting with ritualism, conformity, innovation (criminality), and then political retreatism. Recent studies show a smaller but substantial group (10-15%), adapt to sustained frustration with the perceived futility of operating within accepted political institutions, eventually move on to Merton's fifth stage, manifest some type of politically violent behavior as active rebellion. If mass discontent spreads widely, deeply, and long enough, it achieves a critical mass of violent disorder, which if not contained or channeled, can endanger the system from below.
In the final analysis, there are real dangers to elites of this strategy of social control by disruption. Setting off a potentially vicious cycle of breakdown of social norms and socialized violence is an extremely risky, and the elites realize that, so the creation of mass tension is usually maintained at moderate levels. When social management produce alarming levels of social violence, and openly attack their institutional partners (evokes Goya's, "Saturn eating its children") , this is also an indicator of severe social strain, that elites have overused techniques of subversion, are close to exhaustion of these options, and are vulnerable to disruption and overthrow from below.