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It was coined by Werner Sombart, a controversial German historical economist, almost a century ago in his three-volume magnum opus Der Moderne Kapitalismus (published from 1902 through 1927).I don't think this conception is useful. Capitalism doesn't exist in the West, and hasn't for some time. Managerial liberalism does, however, and it has progressed to the same final stage converged upon by distinct ideologies in the U.S.S.R. some decades ago and Rome some centuries before that: Late Stage Bureaucracy (LSB).
Sombart's main contribution was to define three periods of the capitalist economic system: early or proto capitalism, advanced capitalism and late capitalism. In Sombart's analysis, late capitalism referred specifically to economic, political and social deprivations associated with the aftermath of the first world war.
The Final Stage
The single best treatise on bureaucracy is a self-titled tome written by one of my personal heroes Ludwig von Mises in 1944. At that time, Mises noted that America was essentially the world's last hope for liberty and set out to explain why in an extraordinary gift to his new countrymen. Instead of examining this phenomenon by comparing and contrasting socialism with capitalism directly, Mises opted to assess the situation in terms of bureaucratism. This framing ingeniously focuses attention away from abstruse ideology to the principle mechanism by which a society shifts from liberal1 to totalitarian.
The U.S.S.R.
To fully grasp both the aesthetics and potential consequences of LSB, there is no better portrait than that painted by the HBO miniseries Chernobyl. If you haven't seen it, I can't recommend it highly enough if you want to feel how LSB expresses itself in our world. You should really watch it then return to this article, because the mystery of what happened added an ineffable quality to the way the drama unfolds. If you haven't seen it but would like to continue reading anyway, just bear in mind that spoilers follow.
It turns out causing the exact type of disaster that occurred at Chernobyl should essentially be impossible. The reason for this is that no matter how incompetent the individuals operating a nuclear reactor or how many safety protocols they violate, there is a kill switch. This kill switch immediately inserts all available boron control rods into the reactor simultaneously thereby shutting down the nuclear reaction. In the U.S.S.R. this kill switch was named AZ-5.
The economy of the U.S.S.R. was completely dependent on the nuclear power generated by the many reactors that carried this flaw. Correcting this issue was simply not politically expedient. Not only would retrofitting all of the affected reactors be incredibly expensive, it would also result in an unacceptable deprivation of critical power to Soviet industry. Further, and perhaps most importantly in LSB, it would have required an admission of error on the part of some senior bureaucrats. Someone would have needed to take responsibility for putting graphite tips on the control rods in the 1st place. You can't point a problem like that out without begging the question "whose bright idea was this?" Why would a bureaucrat be willing to endure such a headache over something that they couldn't imagine would ever materialize into a genuine problem?
Today we talk of maps and terrain, hyper-reality, and narrative. Back then, it might have been more simply expressed as perception vs. reality. In the highly bureaucratized state, perception became more important than reality. As the gentlemen playing KGB Chief Viktor Chebrikov says in the series "When the bullet hits your skull, what will it matter why?" This statement reflects a disturbing sentiment that becomes pervasive in LSB: The truth doesn't matter, what happens matters. The presumption is that the totalizing State with all of its power will always be able to determine and direct what happens. As Chebrikov states later in the same scene as if to drive this point home, "why worry about something that will never happen?"
The thing is, the truth does matter. As Valery Legasov's character eloquently puts it while providing testimony attempting to ensure a similar disaster could never recur, every lie incurs a debt to the truth. Insofar as reality exists, it ensures that such debts must ultimately be repaid. In the case of Chernobyl, the repayment of this debt took the form of a disaster of such epic proportions that the lies couldn't be fully sequestered from the outside world. As I understand it, the reason an entire continent wasn't lost as a consequence of Chernobyl in spite of LSB can be reduced to two critical factors:
- Failing to address the issue head on would have made controlling perception impossible as hundreds of millions would have been directly exposed to the consequences of radiation exposure, and
- This reality was communicated in a way that earned leadership buy-in because there were still enough people around decent and courageous enough to at least try to communicate the true scale and scope of the situation and competent enough to meaningfully mitigate an expansion of the disaster.
America
Whether or not we retain those two critical factors in America remains to be seen. To set the tone for the overall sense that bureaucratism imbues in the American context I encourage you to read my friend Daniel's excellent piece linked below. It outlines dynamics he encounters in his corporate job that I argue have more or less become the standard of American LSB.
In America, bureaucracy is not in our tradition though. I have little doubt that this is one of the traditional mechanisms by which America ended up as the hegemonic power of the modern age. Going back to Mises, he highlights the truth of this in his preface to Bureaucracy by comparing historical Germany to America:
Nobody minded when the Rector of the Imperial University of Strassburg quietly characterized the German system of government thus: "Our officials ... will never tolerate anybody's wresting the power from their hands, certainly not parliamentary majorities whom we know how to deal with in a masterly way. No kind of rule is endured so easily or accepted so gratefully as that of highminded and highly educated civil servants. The German State is a State of the supremacy of officialdom-let us hope that it will remain so. Such aphorisms could not be enunciated by any American. It could not happen here."Perhaps no American could have enunciated such a sentiment in 1944, but today it is quite common to hear the phrase "trust the experts" with no sense of irony whatsoever. The rationale employed by the managerial class to justify such deference to experts is indistinguishable from what was espoused by the Rector above. To be highminded is to hold and articulate the luxury beliefs of the elite. To be highly educated is to hold some higher degree or credential than the average American. A midwit teacher can loudly proclaim that with her Masters degree she is more capable and qualified of caring for children than any parent without. A scientist who maintains that there are differences between individuals beyond those conferred by socialization isn't highminded enough to be allowed to influence policy at any level.
In the wake of this bureaucratization of America's elite, the prevailing narrative regurgitated by functionaries of every large institution in America has become as totalizing as it is homogeneous. Any departure from this narrative that has an impact on perception is policed with rapid and brutal efficiency. I can say what I say here because my readers number in the hundreds. If they numbered in the millions? I doubt that such perspectives would be tolerated. The narrative pervades the ever growing bureaucracy as it provides the sole justification for its expansion in the face of an American citizenry that still mostly has nothing but righteous contempt for these cretins. They churn upon one another in grotesque hives constructed of perverse incentives such that the least impressive exemplars of humanity among them rise to the top like so much pond scum. These are the individuals who are certain that perception is all that matters, one way or another.
Many of them are convinced that their own narrative conforming perception is reality. Being a completely clueless, smooth brained ignoramus is more of an asset than a liability in LSB, especially if you are lucky enough to be a highborn cultural elite. The lack of cognitive dissonance grants such specimens the capacity to keep showing up to work while executing pointless or even harmful functions for decades without complaint.
2 I can't help but note that during COVID lockdowns the 'showing up' requirement was quietly, and in some cases permanently discarded. I should also note that even people with high IQs like Sam Harris can fall into this category if they are sufficiently lacking epistemic humility.
The more astute among them have the capacity to recognize that there is often a delta between perception and reality, and that this difference is growing ever larger in modern America. These are the individuals who would tell you that perception is more important than reality, that what happens matters, and that the managerial elite will be able to homogenize the world and will therefore always be able to control what happens.
3 Given that I find it unlikely that such a scheme can be successful, what troubles me most is not as much the prospect of their success. The perpetual source of my great concern for the world is that their quest to accomplish this mission of theirs requires lies on a scale never seen before in the known universe. The debt that these lies have incurred is no doubt proportional.
America's Chernobyl
The bureaucrats responsible for the oversight and operation of reactor 4 at Chernobyl relied on the AZ-5 button. In America, we rely on something similar to our peril, namely the current monetary system and concomitant economic order. Our elites imagine that they have an infinite supply of purchasing power. Of course, the peasants are punished heavily by regularly abusing this system as such, but it is a small and righteous for our highminded elite to pay in order to use this mechanism to realize their wildest policy dreams. After all, is punishing the uneducated masses with their disgusting love of backwards traditions really a cost, or just another benefit? Reliance on this mechanism has obliterated America's previously acquired real capital. The ability to manufacture real things requires real infrastructure and real (competent) people. All of these things have become scarce in modern America, especially with respect to what can be controlled by people with large numbers of zeroes in their bank accounts. All that money is very useful to get real things from foreigners, however.
The result of this state of affairs is a widespread assumption among the elite that they will be able to buy their way out of any problem. Perhaps with an international rules based order that requires the use of the dollar as the world reserve currency this is true, but this will not last forever. Foreign countries could decide at any time that they are no longer interested in exchanging real goods for promises emanating from Washington D.C. As our elites flirt with WWIII in Europe and Asia, they might be stupid enough to think that if major conflict erupts the U.S. Military could be rapidly mobilized to meet such a threat. As it stands, I don't think anyone important believes that our military actually has such capacity in its current state. To put it another way, our leaders recognize that our current level of readiness is not able to execute the national defense strategy as written, but they would never admit such in public (remember, perception is more important than reality to them). Recognizing this, I imagine these folks reassure themselves that this is not cause for immediate concern by believing some combination of the following:
- Why worry about what isn't going to happen? (In this case, WWIII erupting)
- We can can throw inordinate sums of cash at the problem in order to rapidly transform our military into one capable of fighting and winning on multiple fronts in large scale combat operations against near peer adversaries should the need arise, in fact, imagine how much money we would make in the process!
- If something does happen and it doesn't work out, we'll be OK! (offshore accounts and such).
Global Fate
The problem with attempting to develop a totalizing global system of governance (what the WEF calls "stakeholder capitalism") is that it has a single point of failure. In a multipolar world, when reality asserts itself on those who put perception above truth the potential damage is limited. In a globally homogenized world not only does it take longer for reality to assert itself in the absence of external competition allowing for a greater accumulation of debt, but the stakes also become global where such an assertion can rapidly dissolve a system that people have grown to be utterly dependent upon. If the enemies of liberty striding atop our thoroughly rotten institutions achieve an unlikely success in their quest to permanently control perception, it will be the end of free will. If they fail, the debt to reality that they amassed along this ill fated journey will be repaid. The longer their journey continues, the more painful such a failure will be. This doesn't mean that we won't survive, though. The U.S.S.R. collapsed, but Russia remains. There is hope for what we may find on the other side.
The Inevitability of Catastrophe
Is there anything anyone could have said or done to get the Soviet bureaucracy to retrofit the many RBMK reactors to address known safety issues before disaster struck at Chernobyl? I don't know. Even in hindsight it is difficult to think of anything that might have worked. Perhaps we are in a similar situation in America today. Perhaps a disaster of similarly epic proportions is the only catalyst capable of shattering the illusory constellation of perceptions advanced by The Cathedral. I'd like to think that COVID was enough, but I wonder. To this day the official death toll at Chernobyl is only 31. In reality nearly 100,000 people probably lost their lives, and the economic cost of dealing with the disaster had untold second and third order effects. Hundreds of millions will die in the wake of COVID. Most of these deaths can be directly attributed to bureaucracy. Let us consider some of the most obvious:
- Gain-of-function research that produced SARS-CoV2 in the first place.
- Economic lockdowns advanced by the public health apparatus that is already pushing millions from 'food insecurity' to outright starvation throughout the developing world.
- Iatrogenocide ranging from suppression of early treatment with repurposed drugs to widespread application of unsafe and ineffective gene therapies.
While I do believe that the way 'the experts' handled COVID has ensured that there is a majority of Americans that grasp the gravity of the situation on some level, their attention is skillfully divided and directed towards more viscerally divisive topics. I don't necessarily think that such topics like abortion and the gleeful sterilization of children with drugs and surgery in the name of progress are unrelated, but I do think that if political solutions are simply focused on these issues we are doomed to fail. Debate about such issues is allowed by the powers that be. It serves their interests. Conservatives can't help but demand totalizing solutions to these issues. The only real solution that will allow us to direct attention to topics of existential relevance to the ruling class lies in federalism, but to accept that, you have to accept that there will be places in America where things happen that disgust you. Now is not the time for outrage, though. Outrage is what the state used to launch the global war on terror. We need to develop the skills necessary to have hard conversations. A part of this is dismissing constraints of any type of speech as required by America's 1st amendment. There can be no exceptions for speech labelled a certain way. The people doing the labeling are the same type of people that would've turned all of Ukraine into a radioactive wasteland in 1986.
Closing Thoughts
We need to find a way to wind down the nuclear reaction that threatens to dissolve our civilization. Thanks to Ludwig von Mises we can better understand the mechanism by which this nuclear reactor is assembled and driven to critical failure. The mechanism is bureaucracy. In America, we have reached its final stage. Man made disasters such as what occurred in East Palestine, Ohio plague our country with such regularity that people assume only malice and enemy action could be responsible. Could it be that this is simply LSB? The bureaucracy must be dismantled, but not by any means, as there are some that will only ensure its rapid return.
There are still political solutions to this problem. It is still possible for the bureaucracy to be dismantled in a manner consistent with the U.S. Constitution. To my mind, the principle means of achieving this lies in political populism and federalism. America is too large of a country with sentiments too diverse regarding what is morally acceptable for domestic policy to be dictated by the Washington D.C. without a massive bureaucracy to enforce edicts that are ultimately unpopular with many Americans. If we can recognize this, then perhaps we can let go of the desire to control others and be rid of the mechanism the binds us to a disastrous fate that follows late stage bureaucracy.
References
1 As in classically liberal. That is a great word that has essentially been inverted. Today people who call themselves liberal are intensely illiberal in almost every conceivable way. This word is too far gone, however. I use it here because it is the word Mises would have used as a true liberal himself (a liberal that called Milton Friedman a socialist to his face).
2 In a free market such inefficiency is generally met with the rapid failure of the institution in question. The home of the largest and most powerful government in the history of the world is not a free market, though.
3 This is the end state that all freedom loving men and women the world over ought to be fighting against.
The system is not broken, it was designed this way. The Constitution of the United States is just an equity contract used for commercial purposes. It has little to do with natural rights.
The CONstitution is basically a wealth-transfer mechanism while creating an organization in society which attempts to maintain a monopoly of the use of force and violence in a given territorial area.