More on this book
Community
Kindle Notes & Highlights
by
Martin Gurri
Read between
June 27 - July 24, 2021
persuasion has always trumped compulsion or bribery. The authorizing magic of legitimacy can channel social behavior more deeply and permanently than the policeman’s club or the millionaire’s check.
When asked about the impact of the French Revolution, Zhou Enlai was supposed to have responded: “It is too soon to say.” In that one instance, if true, Zhou spoke as an honest political analyst rather than a revolutionary prophet.
failure: the painfully visible gap between the institutions’ claims of competence and their actual performance.
Today failure happens out in the open, in public, where everyone can see. With the arrival of the global information sphere, each failure is captured, reproduced, multiplied, amplified, and made to stand for authority as a whole.
Power and money can never be wholly dispensed with: a source of satisfaction to conspiracy theorists.
The emails showed the world’s leading climatologists busily working to organize a research cartel. Peer review was a legitimate source of authority when the process supported their positions. It was compromised, if not malicious, when it offered critics of the orthodoxy a platform.
It was the act of being questioned by a trespasser—a novelty since Einstein’s day—that the scientists found intolerable.
Legitimacy, like marriage, is a yes-or-no proposition. You can’t be partially married, and you can’t be partially legitimate.
The Risk Commission experts were convicted because they had been unwilling to admit, in public, to the degree of uncertainty which science imposed on them.27 They had been unwilling to say, out in the open, “We don’t know whether or not a major earthquake will strike L’Aquila in the short term.” In this unwillingness, they behaved in a manner typical of the Center hierarchy.
The Italian experts were convicted because they had stumbled into the ditch between their aspirations as scientists and their power as authoritative bureaucrats.
The public, in command of the information sphere, has found corruption everywhere at the Center, and has wielded its new persuasive power to attack the legitimacy of every authoritative institution.
They presupposed powers of prophecy and control wholly detached from economic reality. The chairman of the Fed, like the genie in the Arabian Nights, was expected to tame the whirlwind.
Greenspan himself avoided making this claim. Like every good analyst, he understood that the future was unknowable, and he felt keenly the limits of his ability to influence the economy.
Greenspan’s most significant achievement had been to persuade the elites and the public that the pursuit of material happiness required supervision by a brilliant specialist.
Put in simpler terms: governments craved control, and the experts, in exchange for a place in the hierarchy, offered to demonstrate how it could be imposed.
Consider the following very partial roster of the economic institutions maintained by the Federal government at the time of the 2008 financial crisis: Office of the Comptroller of the Currency (established in 1863), Federal Reserve System (1913), Securities and Exchange Commission (1934), Federal Deposit Insurance Corporation (1934), National Credit Union Administration (1934), Commodity Futures Trading Commission (1936), Federal National Mortgage Association (1938), Financial Industry Regulatory Authority (1939), Federal Loan Home Mortgage Corporation (1970), Bureau of Economic Analysis
...more
Primitive emotions blinded the public to the big picture and the common good. The expert, however, was a disinterested seeker after knowledge. Given a measure of political power, transformed into an expert-bureaucrat, he would predict the economy’s trajectory and achieve outcomes beneficial to all—higher
The blithe unawareness of the expert class as it drove the financial system over the brink, and the obvious confusion, often amounting to panic, with which it confronted the disaster, falsified in pain and loss its claims to competence. Every institution in the system failed catastrophically, beginning with Greenspan’s Fed, which encouraged a casino atmosphere by flooding the markets with easy money.
It was a total bankruptcy of the elites—only the public paid the bill.
Unemployment peaked at 10.1 percent after the stimulus bill passed, and didn’t touch 8 percent until late 2012—much worse than the worst-case projections without the stimulus.49 In human terms, the White House numbers had missed the plight of over three million unemployed Americans.
it was equally impossible for a personage high in a structure of authority—a sitting president, a White House economist—to acknowledge, in public, the impossibility of prophecy.
The elites’ failure in economic governance confronted a public unwilling to do much more than condemn and punish. The non-economic consequence of the 2008 financial crisis, therefore, was a feast of negation, celebrated with rare unanimity in both mass and social media.
they meant to protest, not replace. Anti-capitalism was never an alternative to capitalism. It was another path to negation—when pushed hard enough, to nihilism.
According to Richard Foster, the average lifespan of a company on the S&P 500 has declined from 67 years in the 1920s to 15 years today.
The market is pure trial and error. In business, as in nature, most new trials fail. This is true of every sphere of human activity. Most new government policies fail to meet their intended goals, for example.
Many of the structures battered by the global struggle between the public and the elites have been captives of single-trial processes, and sought to define success hierarchically, from authority. New initiatives typically have failed—and failure has been typically explained away and doubled down on. The CIA, we saw, demanded and received more money after 9/11.
The quickening of the rate of extinctions has represented the remarkable adaptation of capitalism, as a system, to the hostile conditions of the Fifth Wave, including the pervasive anti-authority sentiment.
businesses have proved no wiser, more far-seeing, or successful than other institutional actors. But capitalism, as a whole, has made more productive use of the failure of its parts than most institutions under assault by the public. To borrow Taleb’s terminology, capitalism appears to be “antifragile”: it “regenerates itself continuously by using, rather than suffering from, random events, unpredictable shocks, stressors, and volatility.”
At the level of the single company, the new marketplace, dominated by personalized demand, resembles the larger conflict I have described in this book, only in miniature and on fast forward.
Unfortunately, the trouble isn’t cultural or psychological. It’s structural, and it threatens the authority of powerful persons and groups within each corporation. Few of them can be expected to embrace the threat.
Beyond the intrusion of business consultants skimming billions off their corporate clients, little has changed structurally since Henry Ford’s day.
my story concerns a collision of worlds far below the horizon of cultural awareness. Most Victorians, I imagine, had no idea that they were living through an industrial revolution.
If I were a doctor attempting to diagnose this particular sickness—the crisis of authority—I would look for definite causal patterns and symptoms. Among the patterns I would include exaggerated expectations by the public, abetted by exaggerated claims of competence by authority.
I must believe that seismologists can save me from earthquakes, that the chairman of the Fed has tamed the business cycle: and these authorities must either believe the same thing, or, at a minimum, collude in my delusions.
Each vital community formed by amateurs interested in an affair becomes a threat to the authority of the institutions.
The political and expert classes claimed competence over settled truth. That’s who they were, what they did: they produced certainty and erased doubt.
Sixty years ago, Einstein spoke with the voice of God. Thirty years ago, Walter Cronkite every day told us “the way it is,” and the New York Times delivered to our doorsteps “All the news that’s fit to print.” Twenty years ago, Alan Greenspan applied infallible formulas to ensure our prosperity.
Back then, the world of information was shaped like a pyramid. Those at the top decided signal from noise, knowledge from fraud, certainty from uncertainty. The public and mass media embraced this arrangement.
Today we drown in data, yet thirst for meaning.
And the more you know, the less you trust, as the gap between reality and the authorities’ claims of competence becomes impossible to ignore.
Lack of certainty isn’t ignorance: it’s a splinter of doubt festering in all we know, a radical disillusionment with the institutions of settled truth.
At every opportunity, institutional actors attacked the public on the grounds of its uncertainty: for example, the public stands accused of cocooning into a daily me, of conducting a “war on science,” of indulging in unprecedented partisanship, and more. Such nagging gives the game away.
Regimes frozen solid for decades, like those of Tunisia and Egypt, suddenly melt into air.
The world of hard facts confronting our perceptions has become unmoored from the past, and appears to be in the process of devouring itself.
For the governing classes and articulate elites of the world, this turn to religion is both appalling and incomprehensible—but this is a denial of human nature. If the City of Man becomes a passing shadow, people will turn to the City of God.
there’s no more searing image of impermanence than that of the collapse, in fire and dust, of the World Trade towers.
Uncertainty and impermanence are symptoms of social life under the conditions of the Fifth Wave.
Uncertainty, in this struggle, reflects a negation of the standing structures of knowledge. Impermanence signifies the demolition of the current structures of power and money.
Liberal democracy has been the chief mechanism for mediating such internal flaws. The question of nihilism, now inextricably tangled with the crisis of authority, will be answered in terms which either affirm or negate the legitimacy of the democratic process.
at some point the entire system must become implicated in failure—the cumbersome machinery of representative democracy will then appear, to those impatient for change, as part of the reason for failure.
