Survival+ 10: When Belief in the System Fades   (April 9, 2009)

Though I just announced that I'd be straying from Survival+ for a few days, Survival+ 9: Squeezing the Middle Class (April 7, 2009) required a follow-up.

Back on March 12, 2008, I posted When Belief in the System Fades, which likened the faith of those pouring their lives into sustaining the status quo to religious belief.

The entry drew a mixed reaction ranging from "you nailed it" to dismissal. Now that a year has passed and the global financial structure has succumbed to gravity, I wonder how many readers who dismissed it all would now modify their reaction. Certainly those receiving pink slips might ponder how suddenly faith in the system can be lost.

The entire Survival+ analysis centers on trying to understand the multilayered ways the middle class is being squeezed to exhaustion / insolvency. My good friend G.F.B. (also a small business owner, as you could have guessed) likened the tax and fee-for-services (or whatever we deem a service, like you operating a business in our jurisdiction) system to a parasite and host. The parasite is careful not to extract too much, lest the host die.

But sometimes parasites become so numerous and greedy that they end up killing the host and thus themselves. Perhaps the single key task of the Plutocracy/State (two sides of a single coin) is to convince the host (the middle class) to keep laboring despite the ever-increasing extraction of their earnings and wealth.

The task requires an actively supported mythology (you too can be Bill Gates!) and a subtle cultivation of interlocking beliefs in the fairness and rightness of the system. The overriding faith that hard work and individual greed will both be rewarded as long as the middle class believer "keeps his nose clean," i.e. plays along with the set rules, is carefully nourished.

If we withdraw from the 24/7 propaganda of the Mainstream Media, the absurdity of these constantly repeated themes becomes painfully clear. For example, "Socialism is bad and evil because it redistributes wealth." Well, now that's interesting, because Crony Capitalism does the same thing, gathering heavy taxes from the productive class and funneling it into the hands of a Plutocrat class who shoulder relatively modest tax burdens while reaping vast rewards via government contracts, bailouts, tax loopholes, special legislation, etc.

In other words, the key difference between Euro-style Socialism and Crony Capitalism as perfected in the U.S. is the middle class receives few benefits from their onerous tax burdens. In much of Europe, college and medical care are mostly paid by taxes; here in the U.S. productive citizens pay stupendous taxes and yet they also pay tens of thousands of dollars for a university education and huge, wealth-destroying co-payments for medical care--if they even have insurance.

This is truly Orwellian: the middle class is conned into supporting income redistribution which favors the super-rich and those paying no tax whatsoever (for instance, undocumented laborers). Nice gig if you can get it: reap the rewards, pay no taxes. Unfortunately, middle class wage-earners don't get that option.

Here's another howler: "The U.S. healthcare system is the finest in the world." Ooh, I have to be careful not to laugh too hard--I can't afford to hurt myself. Just today my dermatologist prescribed a "been around for 20 years" topical cream to burn off the sun-damaged spots on my hands and arms. I've used this cream for a decade: Efudex is the brand name, and it's not some "new miracle drug" which cost billions to develop as per the pharmaceutical industry propaganda.

Some years ago a small tube of the stuff cost an absurdly high $79. Then it jumped to an even more insane $120 for a few ounces of cream. Even though the patent has long expired, it jumped to $218 per tube a few years back. Guess the current price: $272 per small tube.

How can any system justify a four-fold jump in the cost of a cream which was developed decades ago, other than rampant, uncontrolled greed and avarice? (Needless to say my own self-paid bare-bones medical insurance has no drug, dental or eyewear coverage.)

The pharmacist, herself a recent immigrant judging from her accent (I leave her ethnicity out other than to note she was non-Caucasian) shook her head and noted that in this country, you either have to be poor or rich. She added that undocumented workers get Medicaid (i.e. they pay nothing in taxes or fees) while people who have worked for decades get nothing. (Unless they hang on long enough to qualify for Medicare, of course, at 65.)

Those fortunate enough to have excellent medical insurance would co-pay $5 or $15 for this $272 tube of cream, and never know how much it cost the insurer/employer. Far from being "the best system in the world," the exact opposite is true: without any doubt, the U.S. has the worst medical/sick-care system of all industrialized nations. If you think it's great, that's because your costs are being paid by someone else; try asking for the "real cost" of the meds and services you've received, or better yet, paying for them cash. Your faith in just how wonderful the system is will dissipate with truly amazing alacrity.

The middle class citizens now losing their jobs are receiving just this "lesson" in how fast faith in the "best in the world" system can vanish as they face paying COBRA fees of $1,000 or more per month for stripped/simulacrum healthcare insurance, or find themselves without any healthcare at all.

I reworked the theme for Survival+:

At some point--perhaps a "tipping point" or just an erosion--the middle class bails out of the increasingly burdensome task of propping up the state and the Plutocracy. I call this phenomenon "When Belief in the System Fades."

There are elites in every human culture (and in the social apes as well). But unlike a troop of chimps ruled by an alpha male, today's elites cannot operate the vast complex structure of the U.S. economy, government and society themselves. They need hundreds of thousands of well-educated, hard-working people to believe in the system of meritocracy, justice, opportunity, etc., people who will choose to invest their entire productive lives in sustaining the structure which the elites influence/control.

The corollary to this structural need for highly motivated, dedicated people to work the gears is that if their belief in the machine fades, then the machine grinds to a halt.

In the Armed Forces, the key layer of staffing is in the middle: lieutenants, captains, chief petty officers, etc. If those non-coms and junior officers leave the service, the Force is essentially gutted, regardless of the generals and admirals and high-tech weaponry and the valor of the recruits.

There is some evidence that just such a migration is occurring.

In a large law firm, the essential layer is the hungry-to-be-partner attorneys who labor insane hours for years, enriching their bosses as they pursue the carrot of "partner."

In the retail world, it is the store managers and assistant managers who keep the store running smoothly.

In construction, it is the foremen/women and onsite supervisors who get the building built.

In every case, the person takes on the burdens in the belief that their career will be enhanced and they will make more money/gain more prestige. Yes, we all understand this. But they also must believe in the structural fairness, justice, opportunity, security, meritocracy, etc. of the machine they willingly serve—even if their belief is subconscious or rarely in their conscious thoughts.

This belief is far more vulnerable than the Powers That Be seem to understand. You see the alienation, the bitterness, the disbelief, in factory workers when the factory shuts down, and their livelihoods are gone—and all too often, so too are the pension and benefits they were promised.

You see it in the face of an academic who worked long hours for years "on the tenure track," carrying much of the department's teaching load, when she/he is ultimately denied tenure. Thank you for working for $40,000 a year for years alongside people doing the same work for twice the salary; good night and good luck.

When the most dedicated servants of the system awaken to the realization that they are not benefiting from their service as they'd once believed, that their near-religious faith in the System has been bruised by the grim knowledge that the few are benefiting from the lives and sacrifices of the many, then they simply quit, or move down the chain to an undemanding position.

You can still work in law without having to bill 80 hours a week. You can resign your commission at 20 years and go live on a farm and leave all the headaches behind. You can resign from the commissions and boards and "career-enhancing" stuff you've crammed in after your regular hours. You can refuse the offer of the position of supervisor, or manager, or head of sales, because you now see the extra pay and phony prestige isn't worth it.

In a way, a belief in the value, transparency, trust and reciprocity of the System is like a religious belief. The converts, the true believers, are the ones who work like crazy for the company, or the Force or the firm. And when the veil of illusion is tugged from their eyes, then the Believer does a reversal, and becomes a devout non-believer in the System. He or she drops out, moves to a lower position, or "retires" to some lower level of employment.

One trigger of such destruction of belief in the worth of the System is the loss of a job or house—an event I unfortunately anticipate will become very common. "But don't these people have to work to support their lifestyles?" Yes they do, until they realize they can live on half the money they thought they needed as an absolute minimum.

Not that most people choose this—they find out via bankruptcy or being laid off, or by watching their buddies and friends getting laid off (or killed/wounded) around them. Their belief in the goodness and reciprocity of the System—that if you work hard and keep your nose clean, we're gonna take good care of you—fades and then dies.

Immigrants are by self-selection believers, and the rise from poverty to relative wealth they see around them offers visible proof that sacrificing one's productive life for the System is rewarding.

But once you've reached the plateau of relative wealth, then the proposition becomes contingent on exactly what happens to you and your family. If your kids all get advanced degrees and they can't find a decent job in their chosen profession, then you start wondering. If you get laid off, despite your decades of selfless service, then you start wondering. If you get passed over in favor of some brown-noser, you start wondering.

And then you realize you don't have to work 60 hours a week, or live in a big house. An apartment works just fine, and 30 hours a week is enough. Let somebody else step up and take all the heat and the guff and the never-catch-up endlessness of the work.

At that point—a point I anticipate will come to pass in the next 5-10 years—then the Elites' machine grinds to a crawl. People don't have to throw their bodies on the gears of the machine—they just have to stop believing, stop taking that promotion, and stop wanting to trade their entire lives for a thin slice of more more more.

If that day comes, then the social contract will have to be rewritten, or an entirely new set of Elites will have to emerge with a new social contract which people are willing to believe and trust.

Another way of stating "when belief in the system fades" is this: when the Plutocracy over-reaches. As noted above, societies collapse not just from foreign invasion or drought or environmental implosion but when the productive citizenry realize it's easier to let the increasingly burdensome structure collapse of its own weight than continue to support it.

Once the productive class removes its political and economic will to preserve the institutions via taxes, the institutions will fall. In our current situation, we can say that once the middle class opts out of the system, the burdens of Empire and entitlements will bring the Federal government to insolvency.

The social contract between the government/state and the middle class in advanced post-industrial democracies is fundamentally this: we pay substantial taxes, and you the state will handle the infrastructure of our society via various costly bureaucracies which don't require our input or oversight: Department of Defense, the judiciary, highway maintenance, etc.

But as the state over-reaches—and by that I mean the both the state over-extending its powers and its functionaries claiming ever-higher shares of the national income—then the social contract breaks down. The middle class is dealt ever-higher taxes and fees, yet it receives less and less benefit as the less productive class and the Elites leverage their patronage of the status quo at the expense of the middle class.

The middle class sees their income as measured by purchasing power declining, even as the roads fall into juddering disrepair, the public education they counted on to educate their children falls under the costly sway of ideological fads and special interest groups and every bureaucracy slips into grandiose self-serving spending as oversight vanishes.

The upper middle class which pays the majority of the taxes then finds itself in an unfamiliar and increasingly unsustainable bind. The unspoken social contract with the state not only guaranteed working roads and a responsive, efficient bureaucracy for the high taxes paid; the status quo was supposed to offer its citizenry free expression. The ideals of personal liberty translated into leisure to pursue individual interests and to indulge in personal expression via music, the arts, sports, etc.

Now the middle class finds itself in an ever-tightening vise. To maintain its lifestyle and pay the higher taxes demanded by the state, it finds that leisure and the opportunity for free individual expression have diminished. Instead of expression, the middle class experiences the stress of financial insecurity and overwork.

With growing resentment, it looks at the entitlements granted the less productive classes in exchange for their passive acceptance of the status quo, and the increasing share of national income and wealth garnered by the self-serving Plutocracy.

In nations where the citizenry are still struggling for basic survival, free expression is not a key value; traditional restrictive "glues" of the social order like arranged marriage and unquestioned gender inequality hold firm sway.

In terms of human nature, we might surmise that these traditional societies are perched so close to the edge of survival that innovation is simply too risky; the potential gains do not outweigh the potential disruptions to a fragile, precarious order.

In advanced post-industrial societies, on the other hand, innovation and transformation of the economy and institutions are seen as essential adaptations; failure to compete globally via innovation is recognized as a sure path to national poverty.

There is a certain irony in the political and economic decline of the middle class. The very success of the middle class in becoming productive enough to gain leisure and the opportunity for individual expression was won at the cost of relinquishing involvement and oversight of the state.

Freed of the restraint of oversight, the state was free to extend its powers, and its functionaries were free to feed on the rising taxes paid by the productive class. Now that the middle class finds itself squeezed on all sides, it has only three choices, none positive:

  1. attempt to preserve the institutions of the status quo by working harder and paying more taxes, surrendering meaningful individual expression
  2. opt out ("when belief in the system fades"), quit the high-paying, high-pressure, high-tax jobs and slip into the low-tax informal economy
  3. challenge the self-serving Elite and state by demanding oversight and democratic limits on "bread and circuses," the state's powers and the wealth being peeled off by the state's functionaries.

Unfortunately for the middle class, today's "democracy" has been reduced to a sad simulacrum. When 97% of the incumbents win re-election via gerrymandering and propaganda (the remaining 3% either resigning in disgrace or dying in office) then exactly what is this "democracy"?

Any middle class attempt to build a meaningful political voice will be fiercely resisted by the state and its employees and dependents. "Class warfare" will be invoked, not between the Plutocracy and the middle class, which would at least reflect reality. No, the state and the Plutocracy will task the propaganda machine of the Mainstream Corporate Media to place the conflict between the middle class and the less-productive class (those not productive enough to pay much taxes). Any claim to lessen the burden on an increasingly overwhelmed middle class will be shaped into an attack on the inalienable rights to various entitlements at the state's expense.

It is in the self-interests of the Plutocracy and state to gin up a phony "class war" to distract the middle class from their true opponents: the state and its masters in the Plutocracy.

We need only look at the millions of prescriptions for anti-anxiety and anti-depressant medications to measure the toll this ever-increasing burden is taking on the middle class.

For each productive individual, opting out is far easier than trying to engage in a long, exhausting political battle. After all, the Plutocracy has immense resources and a huge stake in the outcome, as do state employees and those receiving benefits without paying taxes.

Each of these constituencies recognizes the fight to maintain the status quo (i.e. to keep the middle class productive and paying the lion's share of the taxes) is a fight to the death. Thus the Plutocracy will pull out all stops to defend its influence, just as the public unions and beneficiaries of state largesse will throw their entire forces into maintaining the status quo.

Meanwhile, the middle class productive taxpayer has less at stake; just another junk fee to pay, just another 10% surtax, etc. Pressed by the demands of commute, career, debt, family, etc., the productive citizen has little or no time or energy for a protracted political battle. So the Elite, the state and its beneficiaries will always win.

But what neither the state, nor its public employees or its beneficiaries of government largesse understand is that by denying the middle class some respite and some stake in the political division of the tax revenues, they are insuring the middle class will eventually opt out and let the system collapse. It will simply not be worth the cost or the effort to maintain these top-heavy, high-cost institutions.

Another irony is that the Plutocracy and the state will attempt to define the battle as "preserving our institutions" and "our middle class entitlements."

Sadly, truthfulness plays little role in this structural political battle. We might ask: if the middle class was garnering such stupendous entitlements and benefits, then why are they so stressed, so unhappy, so burdened and so alienated, not just from their state but from themselves? Having been promised free expression and individual liberty, they find instead that they are essentially debt-serfs, working either to pay off debt owed to the Manor Houses of the Plutocracy or crushing taxes and junk fees owed the state.

Some of this can be attributed to structural changes in the very nature of post-industrial work (see "End of Work"), but much can be laid on the divergence of the interests of the state and the Plutocracy from the interests of the middle class which supports them.

So deep is the alienation and confusion that the middle class citizen, anxiety-ridden, staggering beneath worrisome debt and an ever-rising workload, popping countless bottles of psychotropic prescription drugs to maintain a semblance of "normalcy," blames their own inadequacies for their deep unhappiness and inability to bear the burdens imposed by the broken social contract.

Indeed, opting out isn't just the best choice for many; it may be the only choice that enables sanity and a return to free individual expression. Once you're distracted by debt and overwork, you lose track of what's been lost.

As always, we must ask: cui bono? To whose benefit? Certainly not the unhappy debt-serf. Yet so powerful are the simulacrum of democracy, prosperity, etc., many believe they are indeed working for their own goals and glory. But if this were true, why are they so unhappy, so burdened, so alienated and so perplexed by their own unhappiness? Would anyone choose this if they were truly acting on their own behalf?

Thank you to everyone who emailed me in the past two weeks. I will try to respond to everyone over the next week. Your patience and understanding are greatly appreciated.

If you'd like to watch me blink a lot and try desperately not to make a fool of myself answering very tough questions, you might enjoy:

Dangerous Minds w/ Richard Metzger Episode 1 Part 1 (interviewing Charles Hugh Smith)

Dangerous Minds w/ Richard Metzger Episode 1 Part 2

Dangerous Minds w/ Richard Metzger Episode 1 Part 3

Dangerous Minds w/ Richard Metzger Episode 1 Part 4

Thank you, Richard, for giving me a rare opportunity to pontificate on Marx.

"This guy is THE leading visionary on reality. He routinely discusses things which no one else has talked about, yet, turn out to be quite relevant months later."
--An anonymous comment about CHS posted on another blog.

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