Tag Archives: #inequality

Degenerate Matter

10.XI 2019

When a star exhausts its nuclear fuel, the balance tips in favor of gravity, and the star starts to collapse. In its final stage, it expels most of its outer material leaving the core as its only remain. This core becomes a very hot white dwarf. Rules governing “life” on a white dwarf are quite different from those on a normal star[1]. Highly compressed mater exposes the quantum mechanical nature of its constituents, which, when stripped down to their irreducible selves, obey the exclusion principle: no two particles can occupy the same state. As the density of such matter increases, so does its energy, pressure and temperature. In the dense matter, particles cannot slow down completely all at the same time. Some of them can, but once they occupy the low energy levels, those levels become inaccessible to the rest, so they start populating the next lowest levels and when those are filled, there come the next higher etc. When all available energy levels are filled, this is referred to as degenerate matter – it is an overcrowded environment where everyone suffers from acute claustrophobia.

Economic progress is intrinsically coupled with exclusion and exclusion with the production of excess population – those who fall through the cracks and cannot be reintegrated into the normal functioning of society. They represent a surplus of humanity that is unwanted, inconvenient, and ultimately displaced and are earmarked for transport outside of the enclosure of prosperity. Their presence creates discomfort inside the enclosure and changes the underlying social dynamics. The longer the excess population rubs shoulders with “normal” folks, the more palpable precarity becomes everyone’s prospect and the less reassuringly safe anyone’s position seems[2].

The volume of excess population has come close to exceeding the managerial capacity of the planet. This is one of the biggest and most acute problems of the developed world today. Every political administration in the USA has had a different proposal for managing the latent anxiety associated with it. This issue has shaped the transformation of the neoliberal state in the last decades from the welfare to the penal modality of its functioning[3]. The neoliberal response to the problem of growing excess population has been centered on the proliferation of underclasses as a counterweight to the prolapse of the eroding middle class and reinforcement of their illusory comfort. As a consequence, poverty has become more granular. In the last 50 years three new classes have emerged at the bottom. In addition to the four existing classes, The elite plutocracy, The Salariat, Proficians, and Proletariat, there are the three new structures at the bottom[4]: The precariat, The unemployed, and The lumpen precariat.

While the standard of living of the working class remains underwritten by forms of income other than money wages (e.g. welfare, social security, unemployment insurance, Medicare…), for the precariat, those benefits have largely disappeared. The combination of employment instability and income vulnerability defines the economic precarity of the precariat.

Precariat position centers on the increasing marginalization of many people from the rights normally associated with citizenship (disenfranchised, homeless, former prisoners, illegal immigrants…). The intersection of economic precarity with political marginality is what distinguishes the precariat from the working class. The precariat lacks the seven forms of labor-related security: labor market security, employment security, job security, work security, skill reproduction security, income security, and representation security[5].

Mathematics of poverty

When it comes to wealth distribution, there is a general misconception about the role of randomness. Almost by default, randomness is misidentified as a sine qua non for fairness: If we let the chips fall where they may, randomness would guarantee equitable distributions — everyone will be happy. The false equivalence between randomness and fairness is incorrect and nowhere is it more forcefully invalidated than in the case of wealth accumulation and its distribution. In fact, the very opposite holds true: If it were up to the forces of randomness alone, unregulated and unattended, the outcome would be extreme wealth disparity – there would be very little in the middle of the distribution and most of it would be in the tails.

Extreme wealth goes hand in hand with extreme poverty and the depletion of the middle class. This is the mathematics of wealth accumulation alone, and holds true even if we do not account for the power, political influence, and intergenerational reinforcement it brings. The figure below shows the distribution of wealth determined by a repeated coin toss[6]: each participant gains or loses a unit of wealth if they get heads or tails respectively. This is repeated many times. The total wealth is displayed as a fraction of favorable tosses. For example, 0% means not a single heads outcome – the player is considered poor at the end; 50% reflects an equal number of favorable and unfavorable tosses – the wealth is unchanged; 100% is all favorable tosses – the wealth accumulation is maximal.

ArcSinDistribution

While new wealth (or its depletion) arrives in random installments, total individual wealth is mostly either steadily increasing or decreasing (with a relatively small fraction remaining stable). Most of the distribution is in the wings: 40% of the people are poor and 40% are rich, while only 20% are in the middle. Visually, this is a mirror image of the normal distribution where 2/3 of its mass resides in a two standard deviation band around the mean.

In reality, wealth is even more concentrated than this. The disparity due to randomness is amplified with each generation as initial conditions reinforce it further. This is exactly our current predicament. 20th century capitalism is a spectacular confirmation of this mathematical result. As much as this most amazing period of human history had been about enlightenment, emancipation, science, progress, and wealth, it had generated a staggering amount of poverty along the way.

Poverty used to be a safe place

Wealth is inherently empowering and motivating; poverty is neither [Jeffrey A. Winters].

The presence of wealth focuses the political attention of the rich on wealth defense; its absence has no parallel effect on the poor. Poverty by itself neither motivates nor provides a core set of common interests for the poor the way wealth does for the rich.

Capitalism never recognized poverty as its own, its endogeneity always denied and rationalized by deploying exogenous factors or attributed to imperfections of implementation. As it grew bigger and deeper, poverty became self-reproducing and multiplying.

No one has captured the essence of poverty better than the French poet Charles Péguy in his 1913 essay[7]: Poverty was an unspoken contract between man and destiny, and before the outset of post-modern times destiny had never reneged on this contract. We had known the times when a man condemned to poverty was at least secure in poverty. It was understood that those who wished to escape poverty, those who gambled, risked everything. Those who gambled could lose, but those who didn’t gamble could not lose. They could not have suspected that a time would come, that it was already here – and this, precisely is modern times – when those who do not gamble lose all the time, even more assuredly than those who do.

In postmodernity, this only became more extreme with the 21st century delivering the complete transformation. Paradoxically, the metamorphosis of poverty has been most striking across electoral democracies in developed economies where poverty became not only risky, but shameful and, with time, its criminalization became one of the main neoliberal projects[8] resulting in systematic social precarization and large-scale loss of citizens’ rights contributing to the rise of new underclasses. This particular mode of permanent exclusion short-circuited the feedback loop between their discontent and the political process. And nowhere has this transformation been more extreme and thorough than in post-modern America where the gambling mindset became a new paradigm, and gamblers new folk heroes, and where society gradually transformed from that of workers to risk takers and lottery winners.

The physics of social downgrade

There are always too many of them. ‘Them’ are the fellows whom there should be fewer – or better still none at all. And there are never enough ou us. ‘Us’ are the floks of whom there should be more. (Zygmunt Bauman)

At the bottom of the social scale, the stakes are lower and risks higher. Migrants, the new underclass of precariat, who flee their homes out of desperation represent the highest level of risk taking. They trade the certainty of poverty at home for the risk of precarity abroad, in the developed world and agree to populate the lowest social strata in exchange for an objectively infinitesimal chance of a better future.

Exhaustion of social libidinal energy, the equivalent of the nuclear fuel of a star, is the beginning of the creation of social degenerate matter. The more society is shaped as the winner-takes-all, the more extreme risk taking is set off and the more dire the consequences and deeper the downfalls, resulting in more crowding at the bottom layers of social underclasses.

Nothing frightens people as much as the prospect of their social degradation, of losing their social status or facing a class downgrade. This fear is managed by the creation of social underclasses. The rise of new modes of xenophobia is a result of the underlying class struggles at the bottom.

In post-war Western Europe, immigration issues were rarely (if ever) an important part of a political platform. An influx of immigrants was driven by demand for labor; their social position as precariat was controlled both administratively and culturally. Immigrants practically never had a shot at citizenship and neither did their offspring. There was no mixing with local folks due to impenetrable cultural barriers which were practically never challenged.

Celebrated by the capital for removal of economic rigidities and as a catalyst of free capital flow, globalization was, at the same time, a major disruption of the social equilibrium. By its very constitution, globalization guarantees porous boundaries for capital, and the basic condition for restoration of equilibrium requires that the same holds for labor. Social precarization, thus, became the process of formation of a new equilibrium, a consequence of a tradeoff between poverty and precarity. However, lumpy, intermittent surges in supply of precarity, sometimes as much as one million people at a time, put enormous stress, both fiscal and social, on domestic middle and lower-middle classes and threaten their social standing, especially in times when the crushing forces of the economic zero-sum game have become inescapable due to the depletion of growth and general libidinal forces. This has only become more acute in post-2008 years as policy response aimed at covering the costs of capitalist excesses began to exaggerate already preexisting social imbalances.

The lower middle class and domestic excess population don’t really mind minorities or immigrants as such, they just don’t want to see them climbing the existing social ladder – they want them and their offspring segregated and permanently prevented from getting a shot at it. The lower echelons of society need assurances and a buffer (political, institutional, and physical) that separates them from the true underclass. This is their new political demand, which they are being promised by the new populist leaders.

The images of detainment facilities and overall dehumanization of target groups (immigrants and minorities), tried and exploited so many times before, whose replay we have been seeing in the last years, are very powerful assurance tools in that context. Ritualistic denial of their humanity with gratuitous displays of cruelty, are essential parts of political strategy and communication tools between populist politicians and their base. Immigrants, in their view, need to be confined to the three lowest social groups and the walls – symbolic, administrative and (preferably) physical — between them and the rest of the population have to be permanent and impenetrable. As a cultural concept, these walls have an immeasurable symbolic value for the domestic underclass. This is the main reason why the issue of immigration has become a central part of every populist movement now (and not before), and why the idea of The Wall, as idiotic as it objectively is, cannot be abandoned by populist politicians if they want to have a chance of staying in power.

White dwarf capitalism

Ever since humanity bowed to the economy, all that is left is the freedom of hostility. The feeling of hate is the only thing that survived in people’s minds since the first days of the 20th century and the beginning of progress. It dominates today’s societies of abundance. (Paul Virilio)

Capitalism will not disappear, it will transform into managerial feudalism. In its final stages, capitalism functions very much like a collapsing star. When it exhausts its libidinal energy, it will turn into an economic and social white dwarf. The rules governing the behavior of such a social structure are very different from the laws describing traditional social organizations.

Degenerate matter, the fabric of white dwarfs, is not composed of atoms and molecules, but elementary particles. Stripped down to their irreducible selves and decontextualized, elementary particles no longer come together and form chemical bonds. There is no chemistry, no biology, and there is no life. Instead, there is a strict hierarchical order establish by particles’ intrinsic intolerance for each other. As basic social structures like family, clan, community, or congregation no longer function, when empathy is extinguished, and only individuals, stripped of their social context and governed exclusively by their own self-interests remain, society becomes a culture of elementary particles and turns into social degenerate matter.

White dwarfs are perfect undead objects. They are eternal[9] — it takes forever for them to cool and lose all their energy, longer than the life of the universe. Their constitution defines a perfect stasis: Everything is in its place inside a white dwarf; there is no room for anything to change. It is a perfect rigid order – a beautiful monstrosity without any attributes of life.

Civilizations rise and they collapse making way to new ones. White dwarfs do not have enough mass to collapse into neutron stars or black holes. They must endure a far harsher sentence than death: Eternity without the capacity to end their existence.

 

[1] As the density increases, so does the pressure, energy and the temperature (which is the average kinetic energy of the system). As a consequence, temperature of the white dwarfs exceeds 100,000 degrees. Density of white dwarfs is typically 200,000 times that of Earth and the gravity on their surface of is 350,000 times that of gravity on Earth. That means a 150-pound (68-kilogram) person on Earth would weigh 50 million pounds (22.7 million kg) on the surface of a white dwarf.

[2] Zygmunt Bauman, Wasted Lives: Modernity and Its Outcasts, Polity; 1 edition (2003)

[3] ibid.

[4] Guy Standing, The Precariat: The New Dangerous Class, Bloomsbury Academic; 1st edition (2011)

[5] Ibid.

[6] Jamil Baz and George Chacko, Financial Derivatives: Pricing, Applications, and Mathematics, Cambridge University Press (2004)

[7] Charles Péguy, d’Argent, Des Equateurs (2008)

[8] While neoliberalism produces social and economic vulnerability, criminalization produces ways to capitalize on that vulnerability. The criminalization of illicit drugs accomplishes three things at once. First, it reinforces socioeconomic vulnerability through a steady flow of pre-trial detainees, prisoners, parolees and families disrupted by harshly punitive sanctions. Second, it makes the economic viability of hard drugs dependent on a willingness to assume risk, especially as entry-level narco-labor. This willingness is a condition clearly associated with the socioeconomically marginalized – those who have little to lose but their “freedom”. Third, it guarantees accessibility of hard drugs to the disenfranchised segment of the population. In this way, the very victims of global capitalism are trapped in the spider web of the carceral state and the more they struggle to survive in it, the more precarious their position becomes.

[9] As the theory goes, white dwarfs should, in principle, gradually cool down and stop emitting light and eventually morph into black dwarfs. However, this is a very slow process – the period of the transformation would take in excess of 14 billion years – more than the age of the universe. Thus, the mortality of the white dwarfs is an entirely academic question. For all purposes, white dwarfs are universally eternal.

The great redistribution and the biopolitical penetration of the American brain

13.V 2017

Wealth is inherently empowering and motivating; poverty is neither [Jonathan A. Winters].

Rising inequality is not the result of economical rationality and neither is it only a function of erosion of empathy or moral fiber (although the latter is its sine qua non). It is rather a direct reflection of redistributive policies that have helped the richest get richer. On the other hand, poverty by itself neither motivates nor provides a core set of common interests for the poor the way wealth does for the rich. The presence of wealth focuses the political attention of the rich on wealth defense; its absence has no parallel effect on the poor[1].

Inequality has always been a topic in public discourse. However, after the 2008 financial crisis, the destruction of wealth on a massive scale awakened much larger segments of society to the reality that they were unable to finance the lifestyles they had previously enjoyed. Response to the crisis has been articulated through an unprecedented injection of “easy money”. But, this money was hoarded by capital and did not filter down to labor. Rather than serving the collective interest in financing general economic progress, “easy money” turned into the extraction of resources from increasingly impoverished societies. The case of airlines industry presents an illustrative example of this mechanism. Even as the price of fuel collapsed, little of that benefit was passed on to consumers or airlines’ employees: Air travel is as uncomfortable as ever, ticket prices have gone up and none of the profits resulted in higher wages of the airlines employees. Most of the “easy money” has been used to reinforce their monopolistic power.

Democracy requires commonality, inequality undermines it. The democratic process was originally conceived as a way to peacefully resolve economic disputes between people who share common values, either cultural, religious, or in terms of lifestyles or visions of the future. When inequality reaches the critical point, the bonding tissue that keeps society together begins to tear and democracy becomes compromised. In the absence of commonality disputes can no longer have peaceful resolve. Instead, the resolution occurs through negotiation or war. As electoral democracy alone can no longer safeguard the economic interests of the many people from American oligarchs, economic initiatives are no longer effective. A quest for social change takes center stage and a search for a new equilibrium is set in motion.

Social stability defines equilibrium. Social transformations, therefore, represent a change of equilibrium. They are always disruptive and have the appearance of discontinuous processes. Economic changes always take place against a particular social backdrop: When a social equilibrium is reached, society stabilizes allowing the economics to set in. The subsequent economic developments are typically linear – small departures always revert back to the equilibrium — restorative forces overpower those that destabilize the system.

2008 was a paradigm shift not only for economics but for the entire way of empirical approach to reality, which has laid the foundation of rationality and has dominated the Western thought. The crisis has set in motion a social change – the system has begun to search for a new equilibrium, announcing the end of 500 years of history. And, as history is getting unwound, the repositioning in the oligarchic space is taking the center stage. There is no left or right any more. The only meaningful distinction that reflect the type of oligarchic redistribution and its re-functioning is their emancipatory or regressive orientation.

The mindfuck

Where there is inequality of estates, there must be inequality of power. (James Harrington)

Oligarchy rests on the concentration of material power, democracy on the dispersion of non-material power. The American political economy is both an oligarchy and a democracy — a distinctive fusion of equality and inequality. Civil oligarchies represent the most significant political innovation, never seen in history before the creation of the modern state. As a characterization of the Western (predominantly American) political system, civil oligarchy is the result of a shotgun marriage of two contradictory concepts, brokered by an interesting play of numbers: The vast majority of citizens exert very little concerted material power in politics, but a small number of individuals each have at their disposal the resources it would take tens of thousands of their fellow citizens acting in sustained coordination to match[2]. The two groups stand in constant opposition — their conflict never disappears, but defines the driving force behind the underlying sociopolitical dynamics. It pushes all other themes out and becomes the main axiom of the political economy. This disparity of numbers forces a continuation of underlying antagonisms until one side declares victory. As a result, the political process loses its connection with democracy.

The reconciliation of oligarchy and democracy requires a Hegelian Aufhebung, a non-linear logical maneuver whereby the resolution of the inner contradiction is suspended until the concept is completed during synthesis — abolition of the Real to realize the Idea.

Oligarchs represent individuals endowed with enormous wealth which both empowers and exposes them to threats. In America, they constitute only a fraction of one percent of the population and have at their disposal material “voting” power that is hundreds, and in some cases tens of thousands, of times that of the average citizen. To understand the power multiplier, which reflects the underlying wealth differential, one should think of wealth as an instrument that enhances the persuasive power and influence of an individual. For example, being able to convince poor people to vote against their direct interests and in favor of the oligarchs, and to convert these things into laws and tax codes – the essence of the Republican Southern Strategy program as outlined by Lee Atwater — requires considerable resources and access to media, religious and secular institutions, lobbyist and a variety of political consultants that only money can bring. Mind-fuck is an essential ingredient for the functioning of civil oligarchies; without it, they could not persist.

The Material Power Index (MPI) is a way of quantifying the disparity of democratic participation. MPI assigns a base value of one to the average material power position of Americans across the bottom 90 percent of the population. The weakest American oligarchs have between 125 and 200 times the material power of an average citizen. Oligarchs at the very top of American society have an MPI just over 10,000, which happen to approximate the MPI of Roman senators relative to their society of slaves and farmers[3]. This has gone even more extreme after the 2010 Citizens United ruling. In this way oligarchs can legitimate their position with all of their power and influence, without resorting to force – which time and again has proven to be an expensive and fragile tool of stability.

It is not very difficult to see haw a handful of super rich oligarchs can tip the scales of any election. According to 2007 data, the 400 richest Americans have an MPI in excess of 10,000; these 400 top oligarchs have the “voting power” of four million people. Outside of this group, the average MPI of the 1/100th of a percent of the top earning taxpayers (who own about 2% of all American wealth), about 15,000 people, is around 1000. This means that 1/100th percent of the population had the “voting power” of 20 million. This is a significant fraction of the voting population (about 130 million in the 2016 US elections). Normally, elections are most often won within 1-2 million margin. Therefore, a victory can be achieved by attracting 100-200 top oligarchs.

Synthesis: Oligarchies as new cognitive coordinates

The essence of oligarchy within democracy rests on the near-veto power oligarchs retain on threats to concentrated wealth. The wealth protection instinct has been one of the strongest sociopolitical forces in human history. Although the attitude towards all kinds of inequality like slavery, racial and gender exclusions had been revised in the past, the same cannot be said for wealth inequality. The resistance against radical redistribution of wealth has been remarkably robust and resilient across a variety of political systems, from dictatorships, monarchies, peasant societies, to post-industrial formations and democracies[4].

As an approach to the problematics of comparative politics, oligarchy as the politics of wealth defense emerges as a better candidate for a unifying framework than the traditional framework based on assumptions that the dominant dimension of a country’s political actions is geographically conditioned. The oligarchic landscape defines new cognitive coordinates necessary for understanding current geopolitical developments. A variety of complex socio-political configurations and their transformations gain instant clarity and simple intuitive interpretation when seen from the point of view of oligarchic redistribution and repositioning.

The mechanism and logic behind this is relatively simple. Oligarchy should be understood as the politics of wealth defense. Outside of the context of wealth defense, different oligarchs can, and generally do, have vastly different agendas (e.g. democrats vs. republicans in the USA, pro-choice vs. pro-life, Tesla vs. Uber, or Bill Gates vs. the Koch brothers). However, they are all united in one common goal – their wealth preservation. This explains why one single common driver alone captures such a wide diversity of developments that sometimes, on the surface, appear to have no logical or rational connections.

[1]  Jeffrey A. Winters, Oligarchy, Cambridge (2011)

[2] ibid.

[3] ibid.

[4] ibid.