When Elite Privilege Breaks


Finding parallels with Rome is a fun topic for writers, and just recently I came across some very interesting ones. They grabbed my attention, and they may grab yours as well.

These passages (in bold) are from The Rise of Western Christendom: Triumph and Diversity, A.D. 200-1000, by Peter Brown:

[E]mperor, military, and civilian populations alike needed the idea of a “barbarian threat” to justify their own existence.

Just as our grand states need terrorists to justify their existence, immigrants to threaten the populace, and outsiders to blame.

Note also that the “civilian populations” required a barbarian threat. That directly translates to today’s defense workers, intel agency workers, militarized police forces, and all the millions who’ve merged their identity with “our heroic protectors.” With no big threat, all of that becomes meaningless.

The peasantry had to increase production so as to earn the money with which to pay taxes.

Have you noticed how obsessively young people work these days? People talk about Millennial slackers, and there are some, but I see young families where both parents have to work full time, who work on their smart phones long after business hours, and who are taxed to the hilt without remorse.

My complaint with these millions is not that they’re slackers; it’s that they’re allowing themselves to be driven too hard. They shouldn’t take the abuse they do. They are working harder than their parents did… too hard.

Rome slowly lost its grip on the imagination and on the value systems of the inhabitants of the empire and their neighbors in the course of the fifth and early sixth centuries.

This is going on now. Who still believes in politicians as virtuous leaders? As noble statesmen? Who believes that school systems are serving the citizens rather than themselves? Who doesn’t have horror stories to tell about the police?

And how many people in other countries believe in the God-ordained, virtuous United States?

To the extent that Hollywood informs our imaginations, our Rome is holding on, but only because it more or less controls Hollywood. And that may fail as well; cracks may already be appearing.

[T]here was one thing the fourth-century Roman state did well, which was to extract money from its subjects.

This one is interesting, because while it’s true that our Rome is superb at skimming money from its subjects, it gets an equal or greater amount through what we can call for simplicity’s sake “money printing.” Rome couldn’t do that.

The collection of taxes offered unparalleled opportunities for enrichment for landowners, tax collectors, and bureaucrats. What was gathered through taxes was redistributed at the top, in the form of gifts and salaries paid in solid gold. This process created a swaggering new class….

Can you say, “top one or two percent”? And note that the money was “redistributed at the top,” precisely as now. Redistribution goes to the first hands at the spigot of printed money; to Wall Street, being the one and only destination for investments; and to those who purchase favors from the state. These people have indeed formed “a swaggering new class.”

So, putting all of these together, we get:

  • Fears, manufactured or otherwise, to keep the state thriving.

  • People overworking themselves to keep up with the burdens placed upon them.

  • People who no longer believe the myth of the glorious state and its righteous leaders.

  • States that excel only at stripping money from its masses and (now) creating it out of thin air.

  • Stripping the masses to redistribute money at the top, thus creating a new, luxury-purchasing class.

I think those are rather interesting parallels. And so are the consequences that followed:

[W]e end, around the year 600 A.D., with a world of smaller units, ruled by low-pressure states.

Decentralization, in other words; in my opinion a very good thing.

[T]he villas of the West had been turned into farmhouses.

Notice that the “elite dwellings” were now being turned into working buildings and non-elite dwellings. When centralization and enforced privilege break down, non-elite people return to prosperity.

[I]n one way, the barbarian invasions and the civil wars of the early fifth century did prove decisive. They broke the spine of the empire as a tax-gathering machine.

Here again, I think of money printing rather than tax gathering only. And if the fraying of our “empire” results in “breaking the spine” of money printing and tax gathering, many of us will be thrilled. And given that these systems can only remain intact if the populace is mindlessly compliant, breaking them may not be as difficult as it seems.

Within a century, they had overturned one of the “pillars of bigness” on which not only the court and the army, but the economy and the high pitched social structure of the later Roman empire [sic], had depended.

The pillars of bigness: One nation, under God, with liberty and justice for all, and so on. This self-congratulatory myth needs to be overturned if we ever hope to live in a sane, just world. So does “we’re the biggest badass on the planet.”

[I]f anyone was happy in the early Middle Ages, it was the peasantry. Freed at last from the double pressure of landlords and tax collectors, they settled back to enjoy a low-profile golden age.

As I’ve detailed in the subscription letter, the so-called “Dark Ages” were a period of liberation for non-elite people.

And how might we – the peasantry, the people of flyover country – feel about a world without tax collectors, money-scammers, and self-righteous oppressors? I think most of us would welcome it as a golden age.

So, there you have them. I’m not saying that all these parallels will turn out precisely this way, but they do make a very interesting model to work from.

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The Blow That Killed America 100 Years Ago

1913“There is a lot of ruin in a nation,” wrote Adam Smith. His point was that it takes a long time for nations to fall, even when they’re dead on their feet. And he was certainly right.

America took its fatal blow in 1913, one hundred years ago; it just hasn’t hit the ground yet. This is a slow process, but it’s actually fast compared to the Romans. It took them several centuries to collapse.

The confusing thing about our current situation is that America – and by that I mean the noble America that so many of us grew up believing was real – has long been poisoned. Its liver, kidneys, and spleen have all stopped functioning. Its heart beats slowly and irregularly. But it still stands on its feet and presents itself as alive to all those who would let their eyes fool them.

And I’m not without sympathy for those who want to believe. They find themselves in a world where politics is almighty, and where their comfort, prosperity, and perhaps their survival all hang in a delicate balance. They don’t want to upset anything, and questioning the bosses is a good way to get yelled at.

But just because someone wants to believe doesn’t make it so. We are not children and we are not powerless. We Producers should never be intimidated by those who live at our expense. So let’s start looking at the facts.

1913: The Horrible Year

For all the problems America had prior to 1913 (including the unnecessary and horrifying Civil War), nothing spelled the death of the nation like the horrors of 1913.

Here are the key dates:

February 3rd:

The 16th Amendment to the United States Constitution was ratified, authorizing the Federal government to impose income taxes on individuals. An amendment to a tariff act in 1894 had attempted to do this, but since it was clearly unconstitutional, the Supreme Court struck it down. As a result – and mostly under the banner of bleeding the rich – the 16th amendment was promoted and passed.

As a result, the Revenue Act of 1913 was signed into law by President Woodrow Wilson in October. Income taxes began in 1914, with the government swearing (as in, “only a crazy person would say otherwise!”) that the rate would never, ever go higher than one or two percent.

And, by the way, the amendment was introduced by Senator Aldrich of Rhode Island, to whom we’ll come again shortly.

April 8th:

The 17th Amendment to the United States Constitution was ratified, taking the powers of the states and transferring them to Washington, by mandating the popular election of senators.

Previously, senators were appointed by state legislatures, restraining the power of the national government. This change gave political parties immediate and massive power, nearly all of which was consolidated in the city of Washington.

The amendment was ratified in the name of restraining the rich and making government into a force for good. It was true that state governments were often corrupt, but the implied idea that Washington was pristine was and remains a bad joke. A structure featuring small, separate pockets of corruption is far less dangerous than one featuring a single, large seat of corruption, to which oceans of money are gathered. As Thomas Jefferson wrote:

It is not by the consolidation or concentration of powers, but by their distribution that good government is effected.

December 23rd:

Woodrow Wilson signs the Federal Reserve Act, which had passed Congress just the previous day. This system – called the Aldrich Plan, and promoted by Senator Nelson Aldrich of Rhode Island – gave a monopoly on the creation of dollars to a consortium of large banks.

The Act was passed, by the way, in the name of financial stability.

And Senator Aldrich? Wikipedia says this about him:

He… dominated all tariff and monetary policies in the first decade of the 20th century… Aldrich helped to create an extensive system of tariffs that protected American factories and farms from foreign competition, while driving the price of consumer goods artificially high… Aldrich became wealthy with insider investments in streets, railroads, sugar, rubber and banking… His daughter, Abby, married John D. Rockefeller, Jr., the only son of John D. Rockefeller.

I’ll leave you to connect the dots on Aldrich, his family, the Rockefeller banking empire (Chase Manhattan and others), high political offices (such as Governor and Vice President Nelson Aldrich Rockefeller) and so on.

The Combination

Here is why I say that these three changes of 1913 killed America:

They robbed every producer in America of their money and handed it to politicians.

Until 1913, ordinary people kept their money. Carpenters, grocers, and repair men were able to make business loans and to retire on stock dividends. Once the income tax came in, however, politicians were empowered to skim off more and more of their money, which is precisely what happened. While the modern skim is multi-faceted, the average producer is now stripped of half his or her earnings every year, leaving politicians to spend it.

They consolidated all power in Washington DC.

This is precisely what James Madison wished to avoid when writing the US Constitution. (Again, note the Jefferson quote above.) By depriving the states of their remaining power, the City of Washington had no opposition. Since then, the Washington government has taken over practically everything on the continent and is choking it to death… a lot like the city and empire of Rome before it.

They created a money empire that took over almost everything.

When you start talking about the immense power of central banking, people generally turn away from it, because it’s just too much to take. So, let me say it this way:

How much money could you make, if you knew precisely when interest rates would go up or down?

A lot, right? Well, that’s exactly the power that these bankers have – because they’re the ones who set the rates.

Then, with that money, and with that foreknowledge, how many politicians could you pay off? How many pieces of legislation could you buy? Through all the financial problems of the past few years, which is the one group that has been protected at every step? Ever wonder why?

I could add more, but I think my point is made. America, as we grew up thinking of it, is dead. Whether the carcass hits the ground in days or decades is almost irrelevant; it’s over.

The question that remains is what we’ll do about it.

Paul Rosenberg

Government Against the People: It Gets Worse In the Late Stages

government against the peopleAll governments – communist, capitalist, fascist, monarchy, theocracy, whatever – survive on the skim. They take money from productive people, by force or threat of force. However prettied-up or justified this fact may be, it remains the central fact of rulership.

It’s a simple but disturbing truth: A late-stage state’s modus operandi must always be “government against the people” – an MO that is inherently predatory. And it’s not because the participants are all sociopaths (though many are).

At most times, governments try very hard to skim quietly, as with payroll taxes, where the producer’s money is taken away before he or she ever holds it in their hands. That’s also why tariffs were a traditional tax – the average person never saw it, and didn’t feel violated.

But when governments are massively over-extended, they lose the luxury of the quiet skim and become more aggressive. This is simply what happens in long-established, monopolistic institutions, like governments. They spend wildly to make themselves look good, then find they need more money. Not willing to cut their spending, they have two choices:

  1. Debasement of the currency, which they always do first. But this trick never works for very long, since people do engage their minds when conducting commerce and adjust their prices to counteract the debasement.
  2. Squeeze the producers dry, any way they can.

The Problem of Legitimacy

You may wonder why the governments don’t just cut their spending. That would seem an obvious choice. But they can’t cut spending without tarnishing their image as the mighty protector and the great fount of human compassion. People pay taxes willingly because of this high and mighty image; lose the image and you lose tax compliance.

Think about it: the governments of the West portray themselves as the saviors of the weak, the healers of the sick, and the fixers of every problem. But if they stop paying off the poor, there will be riots, and the producers will get hurt. No longer being protected, they may no longer consent to having their money taken away from them day by day.

Governments function on legitimacy more than force. If they lose their legitimacy, they are done. Therefore they cannot cut spending.

The Philosophy of “Government Against the People” at Work

Our Western civilization is at a late stage, just like Rome in the 5th century, or Greece in the 3rd and 4th centuries BC, or like the Egyptians and Sumerians before them. The same basic suite of problems engulfs them all at these stages, but we will use Rome as example, since that is the closest to us in both time and temperament.

Take a look at the two graphs below.

This one shows the Roman debasement, which involved mixing cheap metals (such as lead) into their silver coins:

government against the people

Now look at this one, showing the debasement of the dollar, which involved the creation of debt-based currency:

government against the people

 These are essentially the same chart, showing the same phenomenon.

What came next for Rome was the abuse of the producers.

Rome taxed in very different ways than modern governments, so I won’t take pages to describe it all, but I will give you a few highlights:

  • The local elites who were charged with collecting taxes couldn’t keep up with Rome’s demands and started running away. Rome couldn’t find anyone willing to accept these very high positions, no matter how much prestige was attached.
  • People adapted to avoid taxes, and Rome passed new laws in response. (This helped create the serfdom of the middle ages.)
  • People ran away to the Germanic and Frankish areas that surrounded Rome. To illustrate that fact, here’s a quote from a man named Salvian the Presbyter, from about 440 AD:

Thus, far and wide, they migrate either to the Goths or to the Bagaudae, or to other barbarians everywhere in power; yet they do not repent of having migrated. They prefer to live as freemen under an outward form of captivity, than as captives under the appearance of liberty. Therefore, the name of Roman citizens, at one time not only greatly valued, but dearly bought, is now repudiated and fled from, and it is almost considered not only base, but even deserving of abhorrence.

I could go on at length, but I think you get the picture. There were taxes on income, taxes on sales, arbitrary taxes, farm taxes, plain confiscations, and so on. If you had a friend close to the emperor, you had a chance to be ignored, but if not, you were mercilessly bled dry. (And even a friend with the emperor’s ear might not help.)

Your Choices Now

I think it’s quite clear that we’re in the same civilizational stage as late Rome. What happens to us won’t be identical, but it will be similar. The one great advantage we have now is information. If we pay attention, we are able to see what is happening before it hits. We can also adapt to avoid most of the consequences. We may not like it that we have to adapt repetitively, but history doesn’t give us many options – late stage mega-institutions will behave like late-stage mega-institutions.

And in the short term, the “Government against the People” philosophy is not going to disappear. In fact, it’s likely to get much worse. Our choice is to get out of the way, or not.

Paul Rosenberg

[Originally published at Nestmann.com]

Westphalia’s End Part 4: What Comes Next?

The Westphalian Order of States is in TroubleIf you have not read the first three parts of this series, please do that first: They are a necessary prelude:

Westphalian Orders’ End Part 1
Westphalian Orders’ End Part 2
Westphalian Orders’ End Part 3

I have thus far made quite a few arguments why the Westphalian order of states is in trouble. Presuming that I am correct, and that the current state model fails, the great question is what comes next?

The Two Classes

Impolitic though it may be, any sensible analysis of states in transition has to divide the inhabitants into two groups: the Rulers and the Ruled. We can seek tamer terms if we like (such as officials and citizens), but those terms invariably muddle the issue. There are two groups that matter: those that make orders and those who take orders. These two face massively different challenges and incentives; separating them clearly is the only way to arrange a reasonable discourse.

I will begin with the rulers:

Imagine being a big boss of a big country: You and your predecessors have promised free everything to your voters, but you have now failed to deliver. They are angry, but there’s nothing you can do; there are no more buyers for your bonds and inflation has made your currency almost worthless. You are out of options. At the same time, you can’t just walk away – being the boss is something you need. So, what do you do?

Your first job will be to keep the people with you, rather than against you. You must give them someone else to blame and to make them feel horrible about the prospect of your system vanishing.

Finding outsiders to blame is always easy. (Jews and immigrants being the perennial favorites.) Making people feel like they need you, however, isn’t so easy, especially when your promises have just come up painfully short. You need some majestic promise for them to believe in: something that makes them special, provides a credible promise of more than they deserve, and/or makes them part of some magical uber-entity. In other words, you need an appealing new myth.

The problem, of course, is that large new myths are not created in a day, and certainly not by people who can’t deliver much. So, you have to use whatever respected myths remain, make them more grandiose, and run with them. (This is precisely what happened at the end of the Roman Empire, as I will explain in Free-Man’s Perspective.)

Westphalia's End: What Comes Next? - Freeman's Perspective
Fall of the Roman Empire

Right now, the only big myths are of the globalist strain, such as climate change, save the rainforest (or whales, or trees, or children, or…), the value of politically correct speech and so on. Judeo-Christianity remains, of course, but it is a horrible mythology from a ruler’s point of view, is more or less incompatible with the globalist myths, and has been driven from respectable circles in most of the west anyway.

So, the mythologies chosen by the rulers will have to be based upon environmentalism, anti-capitalism, and associated guilt-centric ideas. For lack of a better term, the new mythology will probably have to be globalist, with the many nation states and their scattered strategies being blamed for the crisis. The solution to the crisis, of course, will almost certainly be unified management by proper elites.

But if globalist, elite rule is to be the next model, a modification of the social contract will be necessary. This will be the great moment of opportunity for intellectuals. Devising a legitimacy myth for the new order will be a ticket to fame and fortune.

As strange as it sounds, there is another group associated with the rulers that must be included in this discussion, and they are the dependent class. People who survive on government checks are not what we usually think of as rulers, but they are necessarily joined to them. Together with the elites, they form a high-low ruling coalition.

The vast majority of the dependent will support the rulers (or at least the replacement rulers), almost regardless of what the rulers do. Even if their checks stop, promises of future checks will keep them faithful. The other choice is to utterly reform their lives, and very few will be of any mind to do so. They may complain or even riot at the moment when their checks stop, but being faced with either radical change or supporting the rulers and hoping for restoration, they will choose the latter. And, most unfortunately, this is a very large group.

The Other Side

Now – and this will not be hard for most of my readers – imagine that you have behaved well and worked hard; that, after being challenged by numerous obstacles, you have carved out a comfortable, stable life. Then imagine that it has been turned upside down. Everything is a mess, and you want things to get back to normal so you can work and enjoy life. What do you do?

This is where the formation of the future gets interesting. The Rulers may come up with a few surprises, but their strategies are more or less predictable. The productive ruled, however, are a wild card. Ultimately, they control everything, but they don’t know it.

Rulers do not make, they only take. The productive make. If they ever decided, en masse, to stop giving in to the rulers, the rulers would be soundly defeated, and in short order. No matter how many armed tax collectors they employed, it wouldn’t be enough for an unwilling populace, not to mention that paying the armed collectors gets very difficult when there is no more money coming in. And if the mechanic refuses to fix state vehicles, if the HVAC man refuses to fix their air conditioning, and so on, the end comes much faster.

The above is precisely what happened at the end of the Roman Empire: Harsher and harsher tax laws brought in less and less silver. People ran away to Germania, Britannia and Gaul to escape. The ruling structure failed.

But, as mentioned above, the productive middle does not believe that they have the right to make their own political decisions; they feel free to choose between Party A and Party B, but not to demand a new structure.

If, somehow, the productive class does decide they are worthy of such choices, it will be a small matter for them to begin organizing with their neighbors, cobbling together ground-up systems of law and markets, and arriving, over time, at a structure that suits them. They would almost certainly end up rediscovering John Locke, the common law, and sound money. But will they?

The Cognitive War

Though most of us have seldom realized it, we have been living through a continual war for our minds and our wills. We feel confused a great deal and suspect that it is our own problem; a problem that we hide, rather than risking shame. This equates, roughly, to a surrender in the cognitive war.

Anyone who seeks to make us do things without thinking, wages war against our wills. Whole industries are built on this, as we all know: “Look at the pretty, happy people; buy the beer,” “don’t vote for that horrible, scary candidate,” “look here at the sexy girl,” and so on. We all swim in a soup of it.

This battle will determine what comes out of Westphalia’s crisis. If the Lockean productive class is too confused and intimidated to assert their wills, the globalists will be able to regroup as they wish. If, somehow, the producers regain their nerve, they can more or less do as they wish. They will have an initial difficulty in overcoming the globalists’ death throes, but in endurance they will reclaim their world.

A Second American Revolution

The last time a broad group of producers asserted their will and stuck to it was the American Revolution. Contrary to any conventional wisdom of the time, they defeated the mightiest empire on the planet and changed the world. The American Revolution, as I have explained elsewhere, is misunderstood and used badly for propaganda purposes, but it was a unique and potent event. Producers have, at other times, pushed rulers to reform, but very seldom have they gathered the courage to say, “get lost, we’re doing it our way.” In order to achieve this goal the early Americans required separation, Christianity and the philosophy of John Locke. There are wonderful Lockean thinkers and teachers in the West today, but they are usually drowned out by the 24/7 clamor of 500 entertainment channels, music in nearly all public places and the recent Blackberry, texting and iPod fetishes.

Withdrawal from the Circus

The one real hope for the Lockeans is withdrawal from the great Western circus of mainstream TV, movies and music.

In a previous article, I wrote that free news may begin vanishing, and that if it does, people will begin to choose more carefully. The thing I didn’t mention, however, was that this is occurring already. And the people who have been wandering away from the circus are mainly the producers. The first among the Lockeans are headed slowly away from the big noise. These people will begin to reclaim the right to their own opinions, even regarding how they choose to be ruled (or not).

If this grows, there will be many people who don’t believe that they need to be coordinated and ordered by central elites and that Adam Smith was right: If you leave people alone, most of them will provide things needed by others, as if guided by an invisible, benevolent hand.

In order to avoid this, the globalists will have to preserve media above all. Whether this includes subsidies for cable TV, free Internet services, or whatever, it will be strongly in their interests to provide them. If the circus ends, the young will start to ask impertinent questions.

Lockean organization is effective, but it isn’t loud and flashy. Globalist organization is parasitic, but it comes with engaging stories and entertainments. If the circus reigns, the producers stand to be overwhelmed… yet again.

The Exercise of Will

I leave you with two quotes to consider, and I hope that you do so:

The will of men is not shattered, but softened, bent, and guided. Men are seldom forced by it to act, but they are constantly restrained from acting. Such a power does not destroy, but it prevents existence. It does not tyrannize, but it compresses, enervates, extinguishes, and stupefies a people, until each nation is reduced to be nothing better than a flock of timid and industrious animals, of which the government is the shepherd.
— Alexis de Tocqueville

Mankind is made great or little by its own will.
— Friedrich Schiller

Paul Rosenberg