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How Our Rulers Transformed Into “Debt-Based Parasites”: A Repeating Tale of Societal Ruin

Charles Hugh Smith
October 4th, 2016
Of Two Minds
Comments (44)

govt-parasites0

This article was written by Charles Hugh Smith and originally published at his Of Two Minds blog.

Editor’s Comment: In the rise and fall of civilizations, the United States is falling hard right now. As Charles Hugh Smith rightly points out, the decline and ruin is spread across many factors, not just economic. They have broken the spirits and the backs of the people time and again throughout history.

This is our time – the decent streak of a vibrant middle class and a country based around the principles of limited government and the recognition of individual rights is fading. Cyclical corruption is taking its toll, and the balance of power has shifted to a cynical and concentrated point.

When Did Our Elites Become Self-Serving Parasites?

by Charles Hugh Smith

Combine financialization, neoliberalism and moral bankruptcy, and you end up with self-serving parasitic elites.

When did our financial and political elites become self-serving parasites? Some will answer that elites have always been self-serving parasites; as tempting as it may be to offer a blanket denunciation of elites, this overlooks the eras in which elites rose to meet existential crises.

Following in Ancient Rome’s Footsteps: Moral Decay, Rising Wealth Inequality (September 30, 2015)

As historian Peter Turchin explained in his book War and Peace and War: The Rise and Fall of Empires, the value of sacrifice was a core characteristic of the early Republic’s elite:

“Unlike the selfish elites of the later periods, the aristocracy of the early Republic did not spare its blood or treasure in the service of the common interest. When 50,000 Romans, a staggering one fifth of Rome’s total manpower, perished in the battle of Cannae, as mentioned previously, the senate lost almost one third of its membership. This suggests that the senatorial aristocracy was more likely to be killed in wars than the average citizen….

The wealthy classes were also the first to volunteer extra taxes when they were needed… A graduated scale was used in which the senators paid the most, followed by the knights, and then other citizens. In addition, officers and centurions (but not common soldiers!) served without pay, saving the state 20 percent of the legion’s payroll.

The richest 1 percent of the Romans during the early Republic was only 10 to 20 times as wealthy as an average Roman citizen.”

Now compare that to the situation in Late Antiquity Rome when

“an average Roman noble of senatorial class had property valued in the neighborhood of 20,000 Roman pounds of gold. There was no “middle class” comparable to the small landholders of the third century B.C.; the huge majority of the population was made up of landless peasants working land that belonged to nobles. These peasants had hardly any property at all, but if we estimate it (very generously) at one tenth of a pound of gold, the wealth differential would be 200,000! Inequality grew both as a result of the rich getting richer (late imperial senators were 100 times wealthier than their Republican predecessors) and those of the middling wealth becoming poor.”

Do you see any similarities with the present-day realities depicted in these charts?

Correspondent Jim B. summarized historian Arnold Toynbee’s study of the rise and fall of civilizations: “Civilizations fail when their elites change from an admired dynamic creative class to a despised Establishment of corrupt rentiers, an entrenched governing class unfit to govern.”

I would trace the slide into self-serving parasites to three dynamics: financialization, neoliberalism and moral bankruptcy. While definitions of financialization vary, mine is:

Financialization is the mass commodification of debt and debt-based financial instruments collaterized by previously low-risk assets, a pyramiding of risk and speculative gains that is only possible in a massive expansion of low-cost credit and leverage.

Another way to describe the same dynamics is: financialization results when leverage and information asymmetry replace innovation and productive investment as the source of wealth creation.

Neoliberalism is the belief that the social order is defined and created by markets: if markets are free, participants, society and the political order are also free.

This conceptual framework is the perfect enabler for the dominance of credit-based, leveraged capital, i.e. Neofeudalism. In a “free market,” those with access to nearly-free money can outbid everyone who must rely on savings from earned income to finance borrowing. In a “free market” where those with access to leverage and unlimited credit are more equal than everyone else, the ability of wage earners to acquire rentier assets such as rental housing, farmland and timberland is intrinsically limited by the financial system that makes credit and leverage scarce for the many and abundant for the few.

The moral bankruptcy of our financial and political elites is self-evident. Combine financialization, neoliberalism and moral bankruptcy, and you end up with self-serving parasitic elites.

This article was written by Charles Hugh Smith and originally published at his Of Two Minds blog. Charles Hugh Smith’s new book is: Why Our Status Quo Failed and Is Beyond Reform or visit the book’s website.

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Author: Charles Hugh Smith
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Date: October 4th, 2016
Website: http://www.oftwominds.com/blogoct16/parasitic-elites10-16.html

Copyright Information: This content has been contributed to SHTFplan by a third-party or has been republished with permission from the author. Please contact the author directly for republishing information.

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44 Comments...

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  1. Warchild Dammit! says:

    I would say we need something that consumes parasites as a solution.

    • Braveheart1776 says:

      Stolz, I saw a similar article on the guardian’s website last year about that same issue. They’ll try it here eventually. No way my family and I will give up our homes in the mountains. On the parasites, yes something is needed to consume Uncle Scam. That cartoon hit the nail on the head.

      • Braveheart1776 says:

        Stolz, I forgot to add that disgusting ‘tribe’. My apologies.

      • WhoWTFKnows... says:

        “Our” homes? Hey brave, when did you all the sudden get a house in the mou tain? You havent even started squatting in your van yet, and now you took ownership of their homes? Hey everybody the 2 week in Oct im going to my BOL. Hey everybody. Oct im leaving and going to N GA. Heard that BS talk for 6 months every article on here.

        Well ten times in one article you told is that repeatedly. Well, Its now the 2nd week in Oct and you are still in TN. You are the #2 biggest BS’er on this website. Now its “our homes?” in the Mountains. You are going to squat in your van in your Cuz’s back yard by the shed remember? “Our houses?” LMFAO!!! Lots of big talkers here people beware. Like why lie about it? Another bigger than life BS’er.

    • WhoWTFKnows... says:

      We know exactly who the (((parasites))) are, don’t we.

      Let the great culling of the (((locusts))) commense.

      -WWTI… Let er’ Rip!!

    • Hey Stolz, the article isn’t coming up for me….

  2. Old Guy says:

    Ive often posted that too many parasite takers and too few making producers is not long term sustainable. They have used debt to keep the system operational.

  3. Braveheart1776 says:

    Old guy, you’re right. That setup will work for only so long. I’m surprised the house of cards is still standing.

  4. the Lone Ranger says:

    In the last 50+ years, Corporate taxes have been LEGISLATIVELY reduced!

    This continually shifts the tax burden MORE & MORE to the INDIVIDUAL taxpayer– me and YOU.

    Governor Christie’s eight-year failed ‘leadership’ is evidenced by his raising NJ’s residents’ gas tax because he (still) lacks the testicular fortitude to reassert corporate taxes that got reduced and with the same cowardice refuses to tax the wealthiest fifteen percent. So, the middle and lower classes see their economic strength once again sapped.

    He even refused to penalize cigarette sellers by $1,000 for selling to underage minors who were too lazy to check I.D.s. By the way, his decision will result in the deaths 40 years from now of NJ teens who will get cancer at mid-life and leave behind children and other loved ones.

    By refusing to make the courageous decisions to make our states and country a SURPLUS economy and instead a deficit economy, the elite rich, including the wannabes like NJ’s governor, continue to strap us.

    But we can rise UP and say, “no mas”, no more.

    Tax the rich.

    Then tax wealth.

    For centuries it’s been tax the non-rich and tax those with weaker financial strength.

    That’s why they are so terrified/scared– because they know they are wrong and we are in the majority.

    Seize the day my friends.

    As JFK said, “Those who make peaceful revolution impossible make violent revolution inevitable.”

    – the Lone Ranger

    • Archivist says:

      Rich people and corporations don’t pay taxes. If you tell them they have to pay tax, they just raise their prices to cover it.

      Only producing laborers actually pay taxes.

  5. skeptic says:

    It’s 7:37 Pacific time. Nothing from Julian Assange. Is he just a bullshit artist. I was really hoping he would punish the monkey and let the organ grinder go today.

  6. rabbitone says:

    There are currently not enough taxpayers to support socialism in America! For 50 years our government has filled the law books with bills that give out pay outs. However in this ponzi scheme they forgot that it requires new tax payers to keep the system afloat.

    Socialism failed its own purposes. Once white people took up socialism they bought into its promises and they stopped having large families (who would have supported them if there was no government support). Add to this abortion and the pill and white people in America and Europe did not produce enough tax payers to support the socialist Ponzi scheme.

    Without enough tax payers to pay for socialism’s promises western governments decided to import immigrants who still have large families (and produce lots of tax payers). Typical of those imported immigrants with large families are poor Muslim’s or poor Hispanics. So until they have the boat load to tax payers they need Western countries have large numbers of refugee’s to fill the tax payer void and will continue to run deficits and raise taxes to try to pay for the Ponzi scheme.

    Connect the dots:

    The biggest event in America today is we have l0,000 Baby Boomers retiring each day for years to come. The biggest problem in America is we cannot for the duration support these retiring Baby Boomers. The reason we cannot support these baby boomers is we have not produced a large enough group of supporting taxpayers.

    Why are there not enough taxpayers to support retiring Boomers? Government eliminated 60 million future tax payers with making abortion legal. Also it is estimated up to 30 million tax payers were prevented by the cheap birth control pill. And lastly the dissolution marriage as an institution in America has created much smaller family units than prior generations and single family moms have had 20 million fewer babies. This means 120 million tax payers are missing to pay for the retiring baby boomers.

    How is our government replacing the missing revenue from lack of taxpayers? To replace these missing tax payer’s government has allowed 61 million immigrants plus into America to replace our missing tax payers to support the boomers (the total is estimated to be 94 million). These immigrants are fast tracked getting jobs our youth should have using subsidies from the government. Dems and Repubs are together on this. Democrats want the immigrants as future party supporters. Republicans want the cheap labor.

    Why are Muslims the primary people imported? Muslims don’t have abortions, take the pill and Muslim women are not single moms. It is not uncommon for Muslims to have the 6 to 10 children like white families used to have in America. Congress is counting on this group to generate the missing tax payers.

    Why is America a bankrupt government? Revenue from current taxes is too low to pay for increasing entitlements and retirees. Deficits and debt plug the entitlement hole until immigrants produce enough taxes to fill the entitlement hole . Government is betting immigrants will produce the taxes to pay for retiring Baby Boomers before America goes belly up. Once the U.S. world reserve currency runs out and the government can no longer print bucket loads of money and debt they will strip the U.S. citizens cupboards bare to keep going. Need more proof on America’s bankruptcy? Look up Kotlikoff’s senate testimony last year.

    • Plan twice, prep once says:

      The Muslim immigrants reject western values, they reject our educational system, our legal system, our technology, our art and culture, our historical morals (what’s left of them anyway). And yes they will make babies until they can win all the elections and take control our democracy.

      Importing millions is suicide.

    • Frank Thoughts says:

      I agree this is the plan: use Muslim migrants to generate consumer demand and to be the replacement population that will ‘pay’ the taxes to support the retired boomers. I have had many conversations with boomers who say this exactly. They get all cutesy, cutesy about the Muslim migrants and people are bigots for not welcoming them.

      They fail to take on board the experience of Europe, where integration has been very difficult and the economic benefits not what people were told. In the Middle East, the only reason those economies even function is the free money they get from oil and gas. Their economies provide nothing of value outside of that. They also all have very high rates of male under-employment and make-work programmes.

      Most employers, at first, leap at the opportunity to hire a ‘cheap’ Muslim. But, a couple years down the road, faced with lawsuits over workplace rules (the Muslims will insist on dropping tools five times a day, separate places for women and men, refusal to wear safety gear because it is un-Islamic, halal food demands, etc.), they soon find they are more trouble than they are worth. They are not the solution to the West’s problems. They have very different cultural expectations and will not be so interested in the same consumer demands as people do today. As an example, fashion thrives from our freedoms, especially the freedom women have to wear what they like. But can that happen when miniskirts are haram, when women must dress modestly? Nightclubs, the arts – all of it needs freedom to thrive. Take that away, and these places will shut down. This has occurred in Europe, where bars and pubs have shutdown as people no longer go to them. Much of our economies now need women and the ‘pink dollar’ (the gay economy) to thrive. These things are very un-Islamic. Good luck trying to get Muslims to serve these customers with any enthusiasm.

    • ladybugrules says:

      Actually,those immigrants are not paying taxes.They get to start a business tax free for many years,when that time runs out they just add another family member as owner so,in reality,they never pay taxes.And most immigrants go straight on welfare and never work

    • Braveheart1776 says:

      Rabbitone, that was a top-notch post. I have to agree totally.

  7. Sgt. Dale says:

    This happens in every great Society. Just look back though history. Nothing new here. TPTB will self destruct and take very thing down with them.
    Sgt.

  8. Nailbanger says:

    Ill sit at home and pick my nose before i bust my hump to support politicians, welfare recipients, foreign aid and foreign wars,,,, just not going to happen, push harder i slack off more and find other ways around it, but by all means keep pushing, just makes me stronger

  9. Nailbanger says:

    Why does the picture of this brunette with the big boobs on the side adds on my page always have a different color shirt on? Honestly, rather see her topless!

  10. swamp rat says:

    To put it bluntly, America has become a major grasshopper breeding ground. The grasshoppers feel a great sense of entitlement these days as long as the political class will feed them for their votes. We ants are going to feel a great lot of pain because of this arrangement and our very survival is at sake. I hope for the best for America but try to prepare for the great storm that I know is coming says the old swamp rat.

  11. Anonymous says:

    Add some discord to the mix.

  12. Plan twice, prep once says:

    Just watched the VP debate. Again there seemed to be problems with the microphones.

    I saw a post on this that said: It seemed to me the media was playing games with the microphones again. There are electronic audio compression methods used by advertisers to create a more intense audio track that is perceived as louder.

    I wonder if a similar method was used to provide an advantage to Democrats in this and the last debate. People in the room after the debate all agreed that Kaine was mysteriously much louder than Pence.

    Isn’t there someone here who has lots of experience with audio processing, but I can’t remember who? Are the liberal media tampering with the audio signals? I’d love an expert opinion.

    • Plan twice:
      I watched the Vice Presidential debate.

      Kaine not only interrupted Pense, he repeatedly persisted in talking over him as well. It reminded me of an ignorant black female out shouting her opponent during an argument.

      It was arguing rather than debating. There was the conspicuous by absence moderator. She, a young dark skinned woman (not sure if she is black, brown, Asian and black or brown, or what); never said a word to end the rude conduct by Kaine, and the occasional interjection by Pense. I was unable to hear toward the end. She may have tried to control the two men sitting across from her at a large table, I don’t know. Too little, too late. It was bogus.

      Pense did hit hard on the abortion issue. It was his only moment holding Kaine’s feet to the fire. But otherwise, Kaine bullied Pense, and Pense remained calm and pretty much neither retreated or attacked. At the end, after being treated so disrespectfully by Kaine, I was disappointed Pense never called out Kaine for talking over him, but instead became so polite and nice toward him, Pence’s strong stance on abortion lost momentum. Neither man came out a clear winner.

      This debate will change nothing. It was a waste of time. If you missed it, you didn’t miss much.

      __

  13. WhoWTFKnows... says:

    Post VP~Debate POLLS has Pence winning the Debate by a landslide, 87%.

    Kane is a little Irish Hothead. Had his scripted one liners, all set up like Hillary. Its very immature for a Pres contest. People are looking for results driven success in solving real life problems, not to see how many zingers you can hurl. Yeah I was trying to hear Pence talk and the loudmouth kept talking and interupting him, I wanted to reach in and slap the shit out of that Kane Clown. Very rude just like the Hildabeast.

    -WWTI…

  14. Anonymous says:

    Most people think the same about you, gay campfire cowboy.
    Hope the hurricane wipes you out.

  15. Mr Smith says:

    Deal with the jewish bankers who took over the USA on 9/11 or face the prospects of being nuked and dieing a slow death.

    This is what the bankers have brought us too because they don’t have the money to pay your pensions and you cannot all sell up your property in old age and live like kings.

    1. WWIII with India/China/Russia
    2. Race wars with many whites joining the blacks due to shoot to kill
    3. Deal with 9/11 once and for all.

    It’s not hard to work out

  16. Satori says:

    I’ll bet we’ll see Pence make a 2020 run for the Presidency himself

    he did a poor job of defending Trump,
    Pence was deliberating distancing himself
    and Pence is very much an ESTABLISHMENT type politician

  17. Satori says:

    U.S. Army Chief Threatens War With Russia

    h ttp://www.prisonplanet.com/u-s-army-chief-threatens-war-with-russia.html

    Infowars publishes about 99% crap nowadays
    so who knows if this is accurate

    I love the supposed quote from General Milley

    “We will beat you harder than you have ever been beaten before”

    but I think the exact same quote is attributable to
    Napoleon and some guy with the first name of Adolf (last name escapes me)

  18. TEST says:

    “Societal ruin”: Saul Alinsky must be applauding from his seat located right before that entity to whom he dedicated Rules for Radicals – called Lucifer.

    I own the book, and yes it IS dedicated to Lucifer. Of course, I guess you could say that depends on what the meaning of “is” is.

  19. anon says:

    Don’t know which is worse. The political debate or watching the weathermen hype the hurricane that changes direction with each report. Both slow and boring.
    Hope all those in the southeast have prepared for the storm. Have to see how those evacuations turn out.

    “Should I stay or should I go”, as the song says.

    If I get away with only some power outage than that is fine with me.