SEEDS OF DESTRUCTION: The Endangered Mythology of American Exceptionalism

"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.

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Comments

We can do anything.
Except provide health care for all.
Except have democratic elections.
Except stop endless wars.
Except educate our kids.
Except hold corporations accountable.
Except hold law enforcement accountable.
Except....

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@Battle of Blair Mountain
Come the Summer Solstice. Something old, something new.

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Pluto's Republic's picture

...as I've ever read. It neatly split my emotions from my mind, and left them behind gravely wounded.

Featuring the full context of the Chicago School was greatly appreciated. I've found it enormously difficult to fully apprehend its importance in incubating both our best and our worst.

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@Pluto's Republic other founding figures of the Chicago School. If you liked this one, you might also enjoy https://caucus99percent.com/content/america-2020-subversion-above-uncert...

"Subversion from above" keeps running through my head like an old tune. I can't get rid of it.

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ggersh's picture

it always comes a crashin down....buckle them seatbelts ladies and gents

[video:https://www.youtube.com/watch?v=5tu32CCA_Ig]

Nice essay....

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I never knew that the term "Never Again" only pertained to
those born Jewish

"Antisemite used to be someone who didn't like Jews
now it's someone who Jews don't like"

Heard from Margaret Kimberley

@ggersh @ggersh hold it as a commonly received truth. Sometimes, myths are perceived by people to be more real than what their senses tell them. Orwell, as fine a cultural anthropologist as there ever was, identified the example of Black-White and the ability of true believers to hold two opposing facts in their heads at the same time, that War is Peace, and to pronounce that one plus one equals five. That describes Chicago School Economists and Judges perfectly.

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k9disc's picture

I really want to comment on this aspect of the essay, but I don’t think and write as well on my phone as my laptop...

The importance of Myth — capital M — IMO, can’t be overestimated. Baked into it are irrational and rational ideas AND feelings. The myth of the hidden hand is why we can’t smash it with logical discourse. We can’t get at the irrational nor can we reach the rational feelings— we can’t touch either of those feelings with logic.

Joe Rogan has some prescient discussion on this with a British satirist on his Thursday show. I recommend the entire show. It’s worth it.

His commentary had to do with the Woke crowd and how Wokeness is filling the void of religion for many people in the vacuum of religious myth and culture of the 21st century. It was some powerful and scary stuff. It has great bearing on scientism and atheism as well. It’s a little Jordan Peterson-esque without the hidden moral undertones.

That’s about all I got for now, as my thumbs are getting tired and my brain is done with the slow speed input...
Thanks again for this amazing essay.

@leveymg

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“Tactics without strategy is the noise before defeat.” ~ Sun Tzu

Pluto's Republic's picture

@k9disc

It's odd that such an important part of the human experience cannot be wrapped in language.

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k9disc's picture

Meant to hide it. Poetry gets close but then we go and ruin it with treatises that lock it down and codify it with explanation.

Anything important or naturally simple is difficult to express.

@Pluto's Republic

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“Tactics without strategy is the noise before defeat.” ~ Sun Tzu

snoopydawg's picture

Sure people go to work everyday because they need money to support themselves and their families, but people who are billionaires got that way because they rigged the economy to work for them. From rigging the tax codes to be able to offshore their money to getting subsidies and tax breaks that the mom and pop shops don't get.

F off you f'cking millionaires on MSDNC! No one wants to just take their money away from them. We want them to pay their fair share of taxes and have to follow the rules like us peons do. Gawd speaking of being out of touch with what the rest of us are going through in this time of high inequality. Just stfu up!

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Was Humpty Dumpty pushed?

snoopydawg's picture

If you have to rig the system to get ahead you didn't get there by working hard.

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Was Humpty Dumpty pushed?

janis b's picture

I can’t say with any confidence that I understand the subject matter sufficiently, but your response to ggersh helped put it in perspective.

A myth isn't exactly a lie, as it is believed by those who
@ggersh hold it as a commonly perceived truth. Sometimes, myths are perceived by people to be more real than what their senses tell them. Orwell, as fine a cultural anthropologist as there ever was, identified the example of Black-White and the ability of true believers to hold two opposing facts in their heads at the same time, that War is Peace, and to pronounce that one plus one equals five. That describes Chicago School Economists and Judges perfectly.

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k9disc's picture

It reads extremely well and is extremely important to hear — and I stress hear. I have been reading some of my training pieces, long form, deep work, for my Patreon blog pieces.

I have a subscription to a podcasting service and can create multiple channels. The spoken, or read, word pieces I have done have been relatively popular. Back in the day, 2004 or 05 I got permission from Tom Englehardt to read some of his pieces — he found them compelling as well.

This piece and most of the stuff here has tremendous power but the public lacks the attention to read long form pieces like this. Half way through this piece, I had the feeling that I really wanted to read this and publish it in audio format.

It made me think that I could easily create a spoken word podcast or audio blog for C99P, perhaps even serve to compile some audiobooks and eBooks for distribution and/or sale.

I would like to give it a shot. Would you allow me to read it and post it in a public but unlisted fashion as a test run?

You can check out http://discdogradio.com for a couple of samples if you like. They are mirrored in text at my site - https://pvybe.com/daily-flow/ - all the Tao pieces should have an audio header.

Anyway, thought I would throw that out there. I really would like to read this and see how it works in the spoken word.
Please do let me know.

Thanks for this thoughtfully insightful piece. I have some topical commentary to add, but am on my phone and unable to write as clearly as I would like at this time.
Peace~

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“Tactics without strategy is the noise before defeat.” ~ Sun Tzu

k9disc's picture

I think much of the work here is quite well written for the spoken word. It might be a good way to get the word out and change the game a bit.

@k9disc

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“Tactics without strategy is the noise before defeat.” ~ Sun Tzu

@k9disc @k9disc Glad this has found an appreciative audience here. Viva!

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The Hindsight Times's picture

While reading this I was reminded of Mircea Eliade, a Professor of the History of Religions at the University of Chicago 1956-86 (coincidence?), who wrote about mythology and religious symbolism. Right wing with a tendency for overgeneralizing.

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@The Hindsight Times Eliade in his wide travels during the 1930s spent some time in Germany, and among his acquaintances there was Carl Schmitt, the jurist, who was seen as the greatest German legal mind of his time. Schmitt became notorious for his role as the leading jurist of the Third Reich, and was held for a year in an American detention camp. Although he resisted de-nazification, after release he was allowed to live quietly, receiving distinguished visitors for the rest of his life. To Schmitt, law is nothing more than the manifestation of state political power. Law as power is supreme politics, he held, more essential than economics or religion to society. In other words, law is the will, the spirit, of national leadership. No other principles or barriers need apply to law, Schmitt held.

Schmitt's favorable recommendation of Leo Strauss, and Schmitt's approval of his work, had been instrumental in winning Strauss the scholarship funding that allowed him to leave Germany in the late 1930s. Leo Strauss went on to head the department of Political Science at the University of Chicago.

It's significant that the basis of the law is efficient protection of property, according to Stigler and Coase, the founders of the Law and Economics faculty at Chicago. When we put this together with Schmitt's conception of law, we see that Power ultimately rests in Property, which is Law in itself and its own supreme justification. Back to Prof. Eliade's History of Religion and how he viewed the relationship between myth-making and science, and his Chicago colleagues essentially as myth-makers nostalgic for originalism:

Eliade sees traces of religious thought even in secular academia. He thinks modern scientists are motivated by the religious desire to return to the sacred time of origins:

One could say that the anxious search for the origins of Life and Mind; the fascination in the 'mysteries of Nature'; the urge to penetrate and decipher the inner structure of Matter—all these longings and drives denote a sort of nostalgia for the primordial, for the original universal matrix. Matter, Substance, represents the absolute origin, the beginning of all things.[171]

Eliade believes the rise of materialism in the 19th century forced the religious nostalgia for "origins" to express itself in science. He mentions his own field of History of Religions as one of the fields that was obsessed with origins during the 19th century:

The new discipline of History of Religions developed rapidly in this cultural context. And, of course, it followed a like pattern: the positivistic approach to the facts and the search for origins, for the very beginning of religion.

All Western historiography was during that time obsessed with the quest of origins. [...] This search for the origins of human institutions and cultural creations prolongs and completes the naturalist's quest for the origin of species, the biologist's dream of grasping the origin of life, the geologist's and the astronomer's endeavor to understand the origin of the Earth and the Universe. From a psychological point of view, one can decipher here the same nostalgia for the 'primordial' and the 'original'.[172]

Eliade, who belonged to a Hungarian Iron Guard organization, was far too comfortable with Fascism and primeval beliefs. So were his Chicago School colleagues.

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Pluto's Republic's picture

To Schmitt, law is nothing more than the manifestation of state political power. Law as power is supreme politics, he held, more essential than economics or religion to society. In other words, law is the will, the spirit, of national leadership. No other principles or barriers need apply to law, Schmitt held.

::

It's significant that the basis of the law is efficient protection of property ... Power ultimately rests in Property, which is Law in itself and its own supreme justification.

@leveymg

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k9disc's picture

This primordial pursuits are VERY present today in academia and science. Except they don’t want to understand them, they want to explain them. Explaining is NOT understanding, and mathematical proof is simply explanation.

Coming out of the Enlightenment, materialist science did And does seek to answer the unanswerable, and shits all over the honest expression of ignorance required in the honest pursuit of understanding. The BIg Bang being a FACT is a great example of this entire situation, as is the unfounded ridicule of consciousness as an actor in nature and the nature of things.

Much alchemical pseudo-scientific bullshit is coming full circle now as we’ve cut and split things down so far below the atomic level. That pseudo-scientific bullshit is looking like the future.

Reminds me of a saying I’ve been using a lot over the last few years,”The Enlightenment put blinders on the Renaissance.”

I will have to look at this thread again after I get back to the hotel... still the phone thing.

Fascinating discussion.
@leveymg

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“Tactics without strategy is the noise before defeat.” ~ Sun Tzu