The Roots of Rage

Perhaps the main problem with the case made by Pankaj Mishra in his Age of Anger is that it gives an outsized place to intellectuals and the ideas that inspire them, people and their works like Mishra and his books, and as consequence fail to bring to light the material forces that are such idea’s true source.

It’s one thing to be aware that today’s neo-liberalism, and the current populist revolt against them have roots stretching back to the Enlightenment and Rousseau’s revolt against it and to be made aware that there’s a contradiction at the heart of the Enlightenment project that has yet to be resolved. It’s quite another thing to puzzle out why even a likely doomed revolt against this project is taking place right now as opposed to a decade or even decades ago. To do that one needs to turn to insights from sociology and political economy, for if the crisis we are in is truly global- how is it so, and is it the same everywhere, or does it vary across regions?

The big trend that defines our age as much as any other is the growing littoralisation of human populations, and capital. In the developing world this means the creation of mega-cities. By 2050, 75  percent of humanity will be urbanized. India alone might have 6 cities with a population of over 10 million.     

What’s driving littoralisation in the developing world? I won’t deny that part of mass migration to the cities can be explained by people seeking more opportunities for themselves and especially for their children. It’s also the case that globalization has compelled regions to specialize in the face of cheap food and goods from elsewhere and thus reduced the opportunities for employment. Yet perhaps one of the biggest, and least discussed, reasons for littoralization in the developing world is that huge tracts of land are being bought by often outside capitalists to set up massive plantations, industrial farms and mines.

It’s a process the urban sociologist Saskia Sassen describes in great detail in her book: Expulsions: Brutality and Complexity in the Global Economy where she writes:

A recent report from the Oakland Institute suggest that during 2009 alone, foreign investors acquired nearly 60 million hectares of land in Africa.

Further, Oxfam estimates that between 2008 and 2009, deals by foreign investors for agricultural land increased by 200 percent. (94-95)

I assume the spread of military grade satellite imaging will only make these kinds of massive purchases easier as companies and wealthy individuals are able to spot heretofore obscured investment opportunities in countries whose politicians can easily be bought, where the ability of the public to resist such purchases and minimal, and in an environment where developed world governments no longer administer any oversight on such activities.  

For developing world states strong enough to constrain foreign capital these processes are often more internally than externally driven.  Regardless, much of littoralization is driven the expulsion of the poor as the owning classes use their political influence to chase greater returns on capital often oblivious to the social consequences. In that sense it’s little different than the capitalism we’ve had since that system’s very beginnings, which, after all, began with the conquest of the New World, slavery,  the dissolutions of the monasteries, and the enclosure movement.

What makes this current iteration of capitalism’s perennial features somewhat different is the role played by automation. I’ll get to that in a moment, but first it’s important to see how the same trend towards littoralisation seen in the developing world is playing out much different in advanced economies.

Whereas the developing world is seeing the mass movement of people to the cities what the developing world is primarily experiencing the movement of capital. Oddly, this has not meant that percentage of overall wealth has shifted to the coasts because at the same time capital is becoming concentrated in a few major cities those same cities are actually declining in their overall share of the population.

The biggest reason for this discrepancy appears to be the increasing price of real estate on the coast. Here’s what the US would look like if it was mapped by land values rather than area:

US land area by wealth


As in the case with the developing world much of the change in land values appears to be driven by investments by capital not located in the city, and in many instances located abroad.

In the developed world littoralisation has almost all been about capital. Though an increasing amount of wealth is becoming located in a few great cities, structural reasons are preventing people from being able to move. Foreign money, much of it of nefarious origins has been pouring into global cities such as New York and London and driving up the cost of rent let alone property ownership. Often such properties are left empty while, as Tim Wu has pointed out, inflated property values have turned the most valuable real estate into something resembling ghost towns.

This is a world that in a strange way was anticipated by William Gibson in his novel The Peripheral where Gibson leveraged his knowledge of shady Russian real estate deals in London to imagine a future in which the rich actively interfere in the past of an Appalachian society in a state of collapse.

The evidence I have for this is merely anecdotal, but many of Dominicans who are newly arrived to small Pennsylvania cities such as Bethlehem and Lancaster are recent refugees from the skyrocketing rent of New York. If this observation is correct ethnic communities are being driven from large cities where wealth is increasing to interior regions with declining job prospects, which have not experienced mass immigration since the 1920’s. In other words we’ve set the stage for the rise of political nativist.

I said automation plays a role here that might make our capitalist era distinct from prior ones. The developed world has witnessed the hollowing out of the interior through automation before when farm machinery replaced the number of farmers required as a percentage of the population from 64 percent in 1850, to around 15 percent in 1950, to just two percent today. The difference is the decline of employment in agriculture occurred at the same time manufacturing employment was increasing and this manufacturing was much less concentrated, supporting a plethora of small and mid-sized cities in the nation’s interior, and much less dependent on high skills, than the capitalism built around the global city and high-end services we have today.

Automation is manufacturing has been decimating employment in that sector even after it was initially pummeled by globalization. Indeed, the Washington Post has charted how districts that went for Trump in the last election map almost perfectly where the per capita use of robots has increased.

Again speaking merely anecdotally, a number of the immigrants I know are employed in one of Amazon’s “fulfillment centers” (warehouses) in Pennsylvania. Such warehouses are among the most hyper-automated an AI directed businesses currently running at scale. It’s isn’t hard to see why the native middle class feels it is being crushed in a vice, and it’s been far too easy to mobilize human against human hate and deny- as Steven Mnuchin Trump’s Treasury Secretary recently did- that automation is even a problem.

These conditions are not limited to the US but likely played a role in the Brexit vote in the UK and are even more pronounced in France where a declining industrial interior is the source of the far-right Marine Le Pen’s base of support.  

The decline of industrial employment has meant that employees have been pushed into much less remunerative (on account of being much less unionized) services, that is, if the dislocated are employed at all.  This relocation to non-productive services might be one of the reasons why, despite the thrust of technology, overall labor productivity remains so anemic.

Yet, should the AI revolution live up to the hype we should witness the flood of robots into the services a move that will place yet larger downward pressure on wages in the developed world.

The situation for developing economies is even worse. If the economist Dani Rodrik is right developing economies are already suffering what he calls “premature de-industrialization” . The widespread application of robots threatens to make manufacturing in developed countries- sans workers– as cheap as products made by cheap labor in the developing world. Countries that have yet to industrialize will be barred from the development path followed by all societies since the industrial revolution, though perhaps labor in services will remain so cheap there that service sector automation does not take hold. My fear there is that instead of humans being replaced by robots central direction via directing and monitoring “apps” will turn human beings into something all too robot-like.

A world where employment opportunities are decreasing everywhere, but where population continues to grow in places where wealth has never, and now cannot accumulate, means a world of increased illegal migration and refugee flows- the very forces that enabled Brexit, propelled Trump to the White House, and might just leave Le Pen in charge of France.

The apparent victory of the Kuchner over the Bannon faction in the Trump White House luckily saves us from the most vicious ways to respond to these trends. It also means that one of the largest forces behind these dislocations- namely the moguls (like Kushner himself) who run the international real estate market are now in charge of the country. My guess is that their “nationalism” will consist in gaining a level playing field for wealthy US institutions and individuals to invest abroad in the same way foreign players now do here. That, and that the US investors will no longer have their “hands-tied” by ethical standards investors from countries like China do not face so that weak countries are even further prevented from erecting barriers against capital.

Still, should the Bannon faction really have fallen apart it will present an opportunity for the left to address these problems while avoiding the alt-right’s hyper-nationalistic solutions. Progressive solutions (at least in developed economies) might entail providing affordable housing for our cities, preventing shadow money from buying up real estate, unionizing services, recognizing and offsetting the cost to workers of automation. UBI should be part of that mix.

The situation is much more difficult for developing countries and there they will need to find their own, and quite country specific solutions. Advanced countries will need to help them as much (including helping them restore barriers against ravenous capital) as they can to manage their way into new forms of society, for the model of development that has run nearly two centuries now appears to be irrevocably broken.

In defense of the administrative state


A few weeks back Steve Bannon, Trump’s Rasputin-like chief strategists, while in a panel discussion at CPAC laid out the agenda for the new administration. According to Bannon that agenda consisted of three parts re- establishing national security and sovereignty, economic nationalism, and what he called “the deconstruction of the administrative state.” It was the latter which Bannon’s comments suggested was behind Trump’s otherwise Bizzaro cabinet appointments where, for instance, a raging opponent of environmental protections- Scott Pruitt, could be named head of the EPA, and promoter of the privatization of education, or Betty Davos, could be put in charge of the Department of Education. You only put the fox in charge of watching the hen house if you want the hens dead.

Back in 2016 Newt Gingrich had gleefully predicted something like this, arguing that the first term of the Trump administration would be years of vicious conflict between the new administration and the federal bureaucracy.  The first month of the administration appear to be proving correct as Trump’s rage over leaks shows an administration unprecedentedly at war with its own intelligence agencies.

A person brought from say the 1930’s into 2017 might find it unfathomable to see the political right which at that time worshiped the power of the state to today be so obsessed with the state’s deconstruction. It would seem as if fascist confused themselves with anarchist, one of the groups the police state of fascism set out to crush.

This move by the right from being the party representing the power of the state to being its most vociferous opponent has been a long time in coming, and one can see it developing by looking at the history of the best film on the dystopian aspects of bureaucracy ever made, Terry Gilliam’s dark comedy Brazil. When Gilliam directed Brazil he was tapping into a long tradition in the left of rebellion against the soulless machine of government, 19th century anarchists yes, but especially the individualistic left of the 1960’s who protested wearing mock computer punch cards mocking the bureaucratic society in which they were trapped that read “do not fold spindle or mutilate.”

Brazil depicts a world suffocating in tubes, the plumbing of a bizarre, ubiquitous air-conditioning system but also pneumatic cords of surveillance and control run by incompetent bureaucrats whose only job seems to be to prevent the independent action of everyone locked in the system’s iron cage. (Strangely we ourselves live precisely in such a world, though ours tubes are ones we cannot see.) It’s a word so drowning in paperwork that people can be intimidated by pointing out that they need to fill out a form.

In the film a typing error caused by a fly leads to the accidental arrest, and death under interrogation of Archibald Buttle instead of a renegade air-conditioning repair man Archibald Tuttle- played by Robert De Niro.  The core of the story is a romance between Jill Layton who is struggling against the labyrinthine bureaucracy to gain restitution for the widowed Mrs Buttle and Sam Lowry a low level bureaucrat sent to rectify the error that led to Buttle’s death. After Sam destroys government records in order to prevent Jill’s arrest, he himself is arrested by the Ministry of Information. He is about to be tortured into confession by a man who is his friend when it appears Sam is rescued by Tuttle and the resistance who blow up the Ministry of Defense and allow him to reunite with Jill. It is only an appearance, for in reality he has been tortured to the point of insanity.

Gilliam had set out to make a film critical of bureaucracy in the tradition of the romantic strain of the left. Yet the movie’s most notorious fan turned out to be Timothy McVeigh who was known at the gun-shows he frequented as Tuttle or Buttle and like the film’s characters of the resistance who blew up the Ministry of Information set off a truck full of explosives that destroyed the Alfred P. Murrah Federal Building in Oklahoma City. An act which killed 168 people including children. The unstable characters perfected by De Niro seem to have an uncanny ability to inspire unstable people in real life.

Of course, hatred of government bureaucracy and the attempt to unwind it was a large component of the neo-liberal agenda. Ronald Reagan with his gift for memorable quips expressed the sentiment best when he said: “The most terrifying words in the English language are: I’m from the government and I’m here to help.”

Yet even if the anti-government hysteria of the far-right has been used as a tool by neo-liberals to try to mantle regulatory protections and redistributive taxation which threaten their interests, the far-right remains different.

Driven by the conspiracy theories that center around the fear of a world government, the far-right sees not only the instruments of hard-power which the progressive right correctly rails against as well, but any facility of state power as uniquely aimed at crushing the “real” citizenry and their way of life.

The far-right’s perspective is, for all its ugliness, not completely irrational. From the very beginning of its settlement wealthy elites had considered the interior of the American continent a dumping ground for what they considered the refuse of Europe- the origins of the phrase “white trash”. The American west was settled as an imperial project by a federal government newly empowered after the Civil War and continues to this day to have land ownership patterns that reflect that fact and which might make an easterner flinch-  84 percent of the land in Nevada– the site of the recent Bundy Standoff is owned by the federal government, 61 percent of Idaho– where the deadly Ruby Ridge confrontation of the early 90’s occurred is likewise owned by the federal government.

The costs of desegregation was largely born by lower class whites rather than their richer compatriots, as was the cost in blood (if not treasure) of the poor and lower middle class of all races who died in the failed wars- Vietnam, Afghanistan and The Second Gulf War,  initiated and supported by elites until their costs became unbearable and their stupidity impossible to deny. As many left- wing writers willingly admit, the boogie man of the far-right- globalism- is not a mere fantasy. Globalism began the process of eroding the the livelihood of the working class, which automation now promises to kill.

Still, if the nightmare of the libertarian far-right is the all powerful state that crushes all opposition with an iron heel, what they now have in the form of the Trump is an administration that makes these fears far more likely. Impregnable borders can be used just as much to lock people in than to keep people out. Extensive government powers to hunt down “Islamic terrorist”, criminals, or illegal immigrants can just as easily be turned on any political enemy. An even larger military and engorged police forces are but more of precisely the kind of “standing army” the Founders warned threatened the survival of the Republic.

In addition to all of this, the right lives under the delusion that by deconstructing the state they will be restoring freedom rather than, what actually will happen, which is that public bureaucracies will be replaced by private ones, for bureaucracy, rather than being a consequence of government interference, is simply the way modern organizations in complex societies are run.

The deconstruction of state bureaucracies would leave us in a bifurcated world of private entities where the rich will be able to shop in a competitive marketplace for services while the poor and middle class are locked into labyrinthine organizations now impossible to influence through democratic means, and whose primary purpose will be the extraction of rents. Exchanging public bureaucracies for private ones will have meant giving up the public control that comes from politics for the rule of money only the very few have.

Yet it’s not the right alone that lives in the fantasy that we can live in a world where the administrative state is no more, many on the left share a similar dream. The key for the left is to find a way to restore freedom, which the bureaucratic tubes of the state certainly strangle, with the needs of complex societies for precisely such entities in order to function at all.


XIR164723 Pantagruel's meal, from 'Pantagruel' by Francois Rabelais (1494-1553) engraved by Paul Jonnard-Pacel (d.1902) (engraving) (b/w photo)  by Dore, Gustave (1832-83) (after); Bibliotheque Nationale, Paris, France; Giraudon; French, out of copyright

So, literally overnight, we entered the stage of the great normalization. We’ve gone from the almost universal belief among the elites, media and a large number of the American public that electing Trump would be a disaster for the country, the economy, our liberty to an apparent shrug of the shoulders and sycophantic search for advantage in the new order.

We’ve gone from a candidate whose last act of his active campaign was to release a two minute ad that pledged resistance against a global financial elite that supposedly holds the white working class in its squid like death grip to a dizzying stock market rally upon his actual election.

What that tells me is that those so-called financial elites whose fortress Trump portrayed himself as storming at the head of an army of the forgotten aren’t all that scared and believe they will do just fine in the new order.

Perhaps that signals that Trump was merely play acting all along. His pulsating crowds shaking their fist at journalists or threatening minorities, and to imprison or even execute a former first lady, senator and secretary of state no more than a sideshow as unreal as Trump as in the ring of a WWE match.

Given his unreality, whatever emerges from the age of Trump is unpredictable and perhaps the man himself doesn’t know with the exception that he hopes to play the type of Moses leading Americans back to the promised land which would make Charlton Heston proud.

Apparently, the US stock market is rallying like Pavlov’ dog at the sound of coming tax cuts which will only exacerbate soaring inequality. On a more positive note they are also anxiously awaiting the kinds of infrastructure spending liberals like Paul Krugman have been arguing in favour of for years.

As the Steve Bannon the head of the alt-right media organization Breitbart, and the true genius behind Trump’s successful campaign strategy has laid out:

It’s everything related to jobs. The conservatives are going to go crazy. I’m the guy pushing a trillion-dollar infrastructure plan. With negative interest rates throughout the world, it’s the greatest opportunity to rebuild everything. Shipyards, iron works, get them all jacked up. We’re just going to throw it up against the wall and see if it sticks. It will be as exciting as the 1930s, greater than the Reagan revolution — conservatives, plus populists, in an economic nationalist movement.

This might mark an end to austerity and over reliance on central banks to keep the economy afloat, and though sorely needed it is not the same as support of social infrastructure which is maintained by many of the government  programs Trump and the GOP will aim to gut. Given how tight labor markets have become, it also might cause hyper-inflation or soaring interest rates as bond holder exit from the market and into an atavism like gold.

For now though the markets are far removed from the kind of crash that many thought a Trump victory would bring with the only group to have sunk with the election results being tech stocks. More on that in a bit.

What exactly Trump himself thinks about economics is something of a mystery. Other than seeing it as the ultimate game that creates the world’s winners and losers, where the most disreputable aren’t those obsessed by money or fame but those too stupid or lazy to play along with those who manipulate the rules so they can win.

Aside from that, Trump is like something out of another era- a kind of nationalist who thinks of the economy as almost synonymous with heavy industry. Inspired by his anti-globalism and the suffering of the rust belt men who launched him into office, Trump may be able to improve trade agreements at the margins and may even accelerate already apparent moves towards the “reshoring” of manufacturing. What he will not be able to do is restore manufacturing employment, which like agriculture before it, is seeing humans replaced with machines- and not just in the US.

I suppose even greater investment in manufacturing resulting in even further automation may improve US productivity, but not in the area where the majority of people work- that is services- where productivity gains are needed most- but where they’re needed least because those of us in rich countries are already drowning in stuff.

Perhaps Trump will try to a second great trust buster. That is, he will make an attempt to break up large banks and other multinational companies and especially the big 5 that dominate technology- Apple, Amazon, Alphabet, (Google) Facebook and Microsoft. At a minimum, Amazon appears to be in his sights.

Such a solution might go some way towards solving the fundamental economic problem of the age- namely the ever increasing accumulation of capital by only a handful of global companies and individuals. Yet it’s almost inconceivable that even a congress terrified of further populist revolt would go along with this. And even if they would, unless trust busting was truly global, such breakups would amount to the unilateral surrender of most of the world’s markets to the large multinationals based in other countries. Baidu and Taobao would fill the void left by a shattered Google or Amazon.

Trumponmics as of now is merely a set of assumptions and aspirations that are unlikely to survive their impact with reality because they reject or ignore the last several decades of economic change, namely, the move towards services and the rise of truly global companies. We’ll thus have to look elsewhere if we want to see how Trump will try to shape the current economic order while actually recognizing the economic order as it exists today.

I think one of the best places to look for this shape of Trumponomics would be in the thoughts of one of his smartest and richest advisers Peter Thiel (under any other administration I would say notorious) who lucky for us just wrote a book on the subject right on the eve of the election.

In an interview Theil rightly pointed out how the financial bubbles of the last generation have been catastrophic- that the system doesn’t work- and that what separated Trump from Clinton was his open acknowledgement of that fact. Theil also thought Trump’s move away from regulation would shift the balance back towards small business because large firms were not only able to better absorb the costs of regulation but often actively encouraged regulation to thwart upstart competitors.  In his book Zero to One Theil lays out a somewhat different and much deeper view of the current economy, what he sees as its problems, and his proposed solutions to them.

The big problem, as Theil sees it and explains in  Zero to One is that the present has failed to live up to its potential. We are living in the future that was imagined in the 1950’s and 60’s that was full of flying cars, space cities, and house robots, and though the technologies we possess are indeed wonders, we’ve certainly fallen short of those original dreams.

Part of the origin of this failure to reach our technological potential Theil lays at the feet of globalization. It’s not only that he thinks technology is a far more important driver for progress than globalization, he seems to think that globalization has slowed the pace of progress down- as cheap humans fill the role that should have been that of advanced machines or augmented, hyper-productive individuals.

That globalization is an unalloyed good is just one of a whole set of false assumptions Thiel believes is holding us back from our potential. Others include our belief that capitalism and competition are the same thing. In fact they are opposites, the whole goal of capitalism is to establish monopolies (zero to one) that then become the engines of progress.

Another would be that the shape of the future should not (or cannot) be defined in advance. The belief that the future will be better than the present but we have no idea what it will look like Theil calls the “curse of indefinite optimism”. The ultimate consequence of this is the move towards the financialization of the economy:

Finance epitomizes indefinite thinking because it is the only way to make money when you have no idea how to create wealth. (70)

In an indefinite world:

money is more valuable than anything you do with it. (71)

Thiel thinks this absence of an definite future we are trying to build means that the government spends its revenue on transfer programs rather than solving complex problem like “atomic weaponry and lunar exploration.” Such lack of a definite future also infects political philosophy both in its dominant egalitarian (Rawls) and libertarian (Nozick) forms where the goal is the adherence to a principle rather than the achievement of any particular form of society.

Darwinian probabilistic theory has also replaced intelligent design in the biological sciences (I’ve heard this before) the consequence of which is that we’ve lost sight of goals such as indefinite life extension. Yet wouldn’t the shift away from globalization and financialization to domestic production and the real economy not only promote accelerated automation (which Theil wants) but also demand even larger government transfer programs (such as a guaranteed income) which he derides as the application of advanced machines results in Marx’s “army of the unemployed”?

Thiel doesn’t think so but rather sees machines as a way to augment rather than replace human labor and thus better for domestic workers than globalization which truly does replace one worker with another (lower paid) one.

And he doesn’t just think the choices we make are mere political ones about what type of society we want to live in over the next century, but existential questions that will decide our very survival. Theil uses Nick Bostrom’s idea of 4 general futures for humanity- cycles of rise and fall, plateau, extinction, and take off, and argues that only road to human survival is to accelerate our pace towards take off because cycles of rise and fall have become unlikely now that knowledge is global, and plateau in a world of resource competition would likely result in extinction level conflicts.

Who knows how much, if any, of Theil’s views will inform the eventual economic policies of the Trump administration. And while there is certainly some truth to Theil’s diagnoses of our current malaise, what his vision of the future deeply lacks is any vision of justice, global responsibility, sustainability, or concept of the good life. His future is all about building an ever more powerful machine. I can see it in neon floating in space now: The Singularity: brought to you by the “God Emperor” Donald J. Trump.