"The Limits to Racketeering"

From Volatility:

According to Joseph Tainter’s theory of imperial collapse, as societies become more complex, they must expend an ever greater portion of the energy they have available simply on maintaining their complexity. Although social and technological advances may achieve profitable returns for awhile, once a certain level of complexity is reached, diminishing returns set in. Eventually, at the late imperial stage, the complexity of the power structure, the military infrastructure, the bureaucracies, all the rents involved in maintaining an ever more bloated parasite class, their luxuries, the police state required to extract these rents and keep the productive people down, and the growing losses due to the response of the oppressed producers, everything from poor quality work to strikes to emigration or secession to rebellion, reaches a point where the system can only cannibalize itself and eventually collapse.

 

Julian Assange’s theory of the secrecy tax he’s trying to impose through Wikileaks is one example of these diminishing returns on imperial complexity. All the indications are that Wikileaks has been successful in this.

 

One dynamic of the system which makes citizen action so difficult is its distributed responsibility for repressing the people. But perhaps the same dynamic also generates an inner weakness.

 

The way things are today, anyone who wants to reform anything, anywhere (or in the case of politicians, pretend to try to reform) finds himself blocked by some vested interest which pops up to resist. There’s always a particular criminal who, in defending his own piece of the action, also takes the lead in defending the corporatist system as a whole, in that particular fight. The resources of change are always more thinly and broadly distributed than the force of the status quo, which concentrates immediately in the form of that special interest. That’s the way kleptocracy works. That’s also part of the reason regulation of rackets can never work.

 

However, there’s also a reverse vector here. The system is dedicated to the growth of every wealth and power cell. So the federal government never has any intention of rigorously regulating anybody. If it ever tried, it would face the same concentration of resistance. But it’s also constantly importuned by the aggression of those same concentrations, usually many or all of them at once. Each interest is not only a conservative defender of the status quo, but a reactionary aggressor.

 

So we have the vector of reform blocked and shattering itself on the immovable object of the entrenched racket. And in the same way we have the vector of that same racket’s insatiable greed and aggression as an irresistible force pushing the inertial government and power structure as a whole. As physics equations, these are identical effects, although in one case the racket is stationary, in the other it is in motion. In both cases its inertia is immutable.

 

The vector of racket greed, what Marx called the siren song luring the racketeer, cooing “Go on!…Go on!”, is always in the direction of greater expansion, greater complexity, monopolizing more of the finite system resources for itself. The system as a whole cannot achieve sufficient concentration at any point to resist this aggressive concentration.

 

It follows from this that there’s no way the system can rationalize itself or retrench in its own self-interest. Trying to do this, it would run into the same special interest resistance at each point. It too would find itself more dispersed than the concentration which resists. Nor can it even keep up its sham pretenses to democracy, two conflicting parties, the rule of law, since there’s no way for it to distribute responsibility for anyone in particular sustaining a loss. Nor is there anyone who would be rewarded for imposing this loss on anyone within the fraternity. Each racket or individual racketeer says, “Why should I take the hit for the common (elite) good? Let someone else take it.”

 

The recent doubling down on the ethanol mandates is a good example. The ethanol racket is absurd even by this kleptocracy’s standards....MORE

HT: naked capitalism