Demos Kratia 9 – The Fall of the Technocracy?

Barbara Tuchman, who knew a bit about history, tells us that a ruler’s authority during the fourteenth century rested on a sort of social contract.  In her words:

“Its basis and justification remained the duty to protect, as embodied on the lord’s oath to his vassals, which was as binding in theory as theirs to him — and theirs was binding ‘only so long as the lord keeps his oath.’  Medieval political structure was ideally a contract exchanging service and loyalty in return for protection, justice and order.”

In our modern world this reciprocal arrangement has been replaced by a different sort of contract.  It finds itself best expressed in the commitment contemporary capitalism offers us: the myth of unending growth.  

Since the great enrichment — to use Deidre McCloskey’s phrase for our modern prosperity — began in earnest back in the late 1870s we have all been asked to set aside the pretense of such formal arrangements and rely instead on the ability of something called “the market” to deliver more and more.  The abundance of which will offset any social, cultural, or political deprivation and loss of tradition we experience along the way.  Capitalism bases its legitimacy on this vision of infinite growth stretching out before us unhindered by periodic crises such as pandemics, environmental distress, or demographic collapse.  We will always be better off in the future than we were in that past.

That is the promise.

In return we surrender ourselves to the machinery of corporate and state domination, surveillance, and the possibility of being made irrelevant by the emergence of yet another great new technology.  

To question the possibility of infinite growth is to be laughed at as being an imbecile uneducated in the ways of markets and modern economics.  Creative destruction, we are told, will tear down and rebuild.  What it produces anew is inevitably an improvement.  Any dislocation or disruption is temporary and best endured so as to allow the new to develop freely.  

So when members of the capital owning Silicon Valley speak openly of displacing workers we must not react, even cautiously, for they are the forces that will lead us into our next chapter.  Which will be inevitably richer.

We must not question their motives.

We must not question their intent.

For they are creators.  We are mere consumers.  They are makers.  We are users.

They are winners.  We are losers.

The dichotomy is stark.  And justified by our latter-day capitalist ethics.  

They are the elite.  We are the mob.

This modern capitalism is a creature of the modern state.  Our great corporations act like medieval manors: they control the lives of their employees.  They dictate our day-to-day activities.  They organize us.  They impose method on us.  Corporate governance.  Best practice.  They obey the rules set by the state with whom they have an alliance.  For it is the state that gives the owners of a modern corporation the protections of legal personhood and limitations on risk that makes owning the equity of such an organization the route to wealth that it has become.  It is the protective embrace of the state that allows the great corporations to behave with the freedom that they possess.  And in return for this legal largesse our corporations are supposed to provide society with material abundance.

Above all else the modern corporation is home to a technocratic class — consultants, lawyers, managers and so on — that act as intermediaries between capitalists and the working masses who animate the business.  This “clerisy” benefits from being such an intermediary.  It gains status, power, and wealth as long as it enforces the manorial rules and represses any potential uprising.  It also acts as a vector for the latest ideas flooding out of business oriented academia.  Outsourcing, agency theory, shareholder supremacy, core competency, the gig economy, and other organizational technologies have all been implemented by the clerisy to the benefit of the capitalists who own stock in the corporation.  The elimination of benefits, the reduction in retirement savings, stagnant wages, and no guaranteed hours contracts have been imposed by the technocrats in order to bolster returns to capital and to reduce the cost of labor.  The technocrats have surrendered morality in order to enjoy wealth in the coattails off capitalism.

And the state has acquiesced at every step along the way — no matter which political party was in power.  The consistent narrative of the past few decades has been the steady imposition of ever more restrictive work practices, the diminution of the return to labor, and the steady atrophying of the so-called American dream.

This began with Reagan.  It continues today.

The consequence is the exposure of an increasing gulf between the rich and poor that threatens social peace.  As the working poor and an ever larger share of the middle class is squeezed into relative destitution in order that the technocrats and capitalists can maintain their own status, power, and wealth, the likelihood of a popular upswing and reaction increases.

Note though my careful use of the word “relative”.

For therein lies the struggle.  If ever that relativism becomes absolutism capitalism crumbles.

Capitalism has a moral justification only so long as it provides the goods akin to the Medieval arrangement that Tuchman notes.  Once that implicit contract is broken, once capitalism fails, once the oligarchs over reach and once the plutocrats and technocrats lose all empathy with the masses, the contract is shattered and we enter a period of history that will repeat the past.  

There is no Hegelian progression through time.  There is only elite overlordship, elite over reach, and then rebellion.  To be repeated in various regime forms whether democratic or autocratic.  Whether democratic or authoritarian.  The cycle remains the same.  The elite must deliver.  Or change will be inevitable. 

In such a period grotesque corruption, struggle, and upheaval will be the norm.  The mob is well aware of the self-serving nature of the elite.  It cares much less about the abstractions that so entertain the elite.  It cares more about the possibility of progress towards greater prosperity.  It seeks fairness not equity.  It seeks safety and protection from the uncertainties that can destroy the lives of those with less.  That means health care.  It means housing.  It means employment.  It means law and order.  And it often means a connection with traditional lifestyles.  

And in such a period we can reconsider what we mean by democracy.

Elites like to view democracy as a structure.  To them, like much of what they observe, it is a legal entity.  It is a set of institutions that interlock and allow periodic peaceful regime change.  But it is sufficiently boxed in that it never undoes the underlying flow of power withheld from the masses and embodied in the knowledgeable technocratic intermediators acting on behalf of the capitalist overclass. 

Such a democracy is, however, an illusion.  It relies on the observance of rules and norms that are easily sidestepped.  It relies on networks of shared education, experience, and culture that binds the technocrats tightly under the thumb of their overclass.  Once there are competing networks or leaders willing to smash through norms the fragility of this faux democracy is exposed.

In our current crisis it is the undoing of the arrangement between the educated class and the capitalists that is most threatening.  Faced with declining growth rates and the consequent fading promise of future rewards, our overpopulated elite is at war with itself.  The search for status and power has torn it apart into warring camps separated by cultural rather than economic divisions.  The capitalists also face diminishing returns.  So they demand ever more restrictions be placed on the masses, and so they have turned to one more great technological throw of the dice to keep their dominance safe: artificial intelligence.

The great enrichment was founded on the persistence of the exchange of capital for labor.  This produced productivity gains that funded growth throughout society.  Labor left agriculture and flooded into manufacturing.  Then it left manufacturing and flooded into services.  Along the way a modernized education system produced that great clerisy needed to manage the ever more complex interconnections that the constant division of labor produced.  At all times the promise, our latter day social contract, held up even if interrupted periodically by the inevitable crises that capitalism produces when it runs up against its own contradictions.

At every step in this modern narrative there has been a new general technology that provided the impetus and foundation for the next.  The steam engine.  Electricity.  The modern corporation.  At each step method and organization became more important to maintain order in production and the promise of the future.  So there was always a safety valve that absorbed redundant labor.  More organization requires more labor.  More method organizes that labor more efficiently.  More efficiency produces more productivity.  More productivity produces more opportunity.  More opportunity produces more work.  More work requires more labor.  

The game seems inevitable and infinite.

But marginal gains are diminishing.  Which sets up a struggle over distribution.  Which undermines the social contract.

And ends democracy.

The new feudalism coming into view on the horizon is not an illusion.  It is a warning.  Once democratic values were shed in order to squeeze the masses for the benefit of the capitalists, the demise of democracy was inevitable.  Because democracy, true democracy, is a shared value system not a set of institutions.  It is the search for fairness.  It is the modern incarnation of that contract Tuchman spoke of.  Which when abandoned by our contemporary lords of the manor — our corporate bosses, their professional hangers-on, and their academic advisors — brings the system crashing down into autocracy.

Inevitably.

It is the moral collapse of our technocrats and academics who surrendered too easily to the allure of status and power offered by the capital owners that has undone us.  Too enriched by their attachment to the overclass, they tremble in fear of loss.  So they remain silent.  Useful idiots.  Morally bankrupt.  They watch frozen as the world in which they thrive is invaded by a new technology able to displace them just as they enabled the displacement of workers from the field and factories before.  

The de-skilling and displacement of the educated class is beginning.

Where will it end?

I have no idea.  But the process of capital replacement of labor goes on.  

No period of history has persisted without interruption.  No empire has endured.  Only the cycle of elite rule upset by the mob is the one that re-occurs.  We are leaving our age of democracy and entering something new.  Quite what that is will depend on the masses, not the educated class.

Demos kratia!