the mollusc saying "austerity won't work in America" doesn't make it so...,

archdruidreport |  Stories in the media, some recent, some recently reprinted, happen to have brought up a couple of first-rate examples of the way that resources get locked up in unproductive activities during the twilight years of a failing society. A California newspaper, for example, recently mentioned that Elon Musk’s large and much-ballyhooed fortune is almost entirely a product of government subsidies. Musk is a smart guy; he obviously realized a good long time ago that federal and state subsidies for technology was where the money was at, and he’s constructed an industrial empire funded by US taxpayers to the tune of many billions of dollars. None of his publicly traded firms has ever made a profit, and as long as the subsidies keep flowing, none of them ever has to; between an overflowing feed trough of government largesse and the longstanding eagerness of fools to be parted from their money by way of the stock market, he’s pretty much set for life.

This is business as usual in today’s America. An article from 2013 pointed out, along the same lines, that the profits made by the five largest US banks were almost exactly equal to the amount of taxpayer money those same five banks got from the government. Like Elon Musk, the banks in question have figured out where the money is, and have gone after it with their usual verve; the revolving door that allows men in suits to shuttle back and forth between those same banks and the financial end of the US government doesn’t exactly hinder that process. It’s lucrative, it’s legal, and the mere fact that it’s bankrupting the real economy of goods and services in order to further enrich an already glutted minority of kleptocrats is nothing anyone in the citadels of power worries about.

A useful light on a different side of the same process comes from an editorial (in PDF) which claims that something like half of all current scientific papers are unreliable junk. Is this the utterance of an archdruid, or some other wild-eyed critic of science? No, it comes from the editor of Lancet, one of the two or three most reputable medical journals on the planet. The managing editor of The New England Journal of Medicine, which has a comparable ranking to Lancet, expressed much the same opinion of the shoddy experimental design, dubious analysis, and blatant conflicts of interest that pervade contemporary scientific research.

Notice that what’s happening here affects the flow of information in the same way that misplaced government subsidies affect the flow of investment. The functioning of the scientific process, like that of the market, depends on the presupposition that everyone who takes part abides by certain rules. When those rules are flouted, individual actors profit, but they do so at the expense of the whole system: the results of scientific research are distorted so that (for example) pharmaceutical firms can profit from drugs that don’t actually have the benefits claimed for them, just as the behavior of the market is distorted so that (for example) banks that would otherwise struggle for survival, and would certainly not be able to pay their CEOs gargantuan bonuses, can continue on their merry way. 

 

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These days, despite a practically endless barrage of rhetoric to the contrary, the great majority of Americans are getting fewer and fewer benefits from the industrial system, and are being forced to pay more and more of its costs, so that a relatively small fraction of the population can monopolize an ever-increasing fraction of the national wealth and contribute less and less in exchange. What’s more, a growing number of Americans are aware of this fact. The traditional schism of a collapsing society into a dominant minority and an internal proletariat, to use Arnold Toynbee’s terms, is a massive and accelerating social reality in the United States today.

As that schism widens, and more and more Americans are forced into the Third World poverty that’s among the unmentionable realities of public life in today’s United States, several changes of great importance are taking place. The first, of course, is precisely that a great many Americans are perforce learning to live with less—not in the playacting style popular just now on the faux-green end of the privileged classes, but really, seriously living with much less, because that’s all there is. That’s a huge shift and a necessary one, since the absurd extravagance many Americans consider to be a normal lifestyle is among the most important things that will be landing in history’s compost heap in the not too distant future.

At the same time, the collective consensus that keeps the hopelessly dysfunctional institutions of today’s status quo glued in place is already coming apart, and can be expected to dissolve completely in the years ahead. What sort of consensus will replace it, after the inevitable interval of chaos and struggle, is anybody’s guess at this point—though it’s vanishingly unlikely to have anything to do with the current political fantasies of left and right.