There is a war.

Link post

House­holds vs markets

The first symp­tom was the clut­ter on the kitchen counter. One cut­ting board, two pans, one knife. My col­leagues had ar­rived at the rented house the day be­fore, so they’d had plenty of time to ar­range things to their lik­ing. I was sure the clut­ter was not to their lik­ing, if they no­ticed it at all.

A teach­able mo­ment. In­stead of tidy­ing the counter my­self, and ac­cret­ing a small amount of re­sent­ment, I sug­gested to one of them that she think of the things on the counter as things that were in her power to ar­range how­ever she liked, to suit her taste, self­ishly. (“Just as you might op­ti­mize your text ed­i­tor to suit your work­flow,” my other col­league chimed in.) She took this sug­ges­tion, and spent a few min­utes ar­rang­ing and re­ar­rang­ing the items on the counter. She put away the knife in the knife block.

A puz­zle. She noted that she doesn’t usu­ally think of the items in her home this way. In­stead, house­hold chores feel as though they are im­po­si­tions from an ab­stract, out­side au­thor­ity. She was ca­pa­ble of ac­cess­ing this other, more pleas­ant way of work­ing on the things around her. Why wasn’t it nat­u­ral for her to feel that way in her own home?

An hy­poth­e­sis. In our usual mode of life, there is a sep­a­ra­tion be­tween a job—which is done for some­one else, to satisfy some­one else’s stan­dards, out­side the home—and con­sump­tion, which is at least os­ten­si­bly done to suit one’s own taste. One of the goods you can buy with an in­come from a job is a nice place to live, and you can also buy ser­vices to keep the place clean and tidy. For the most part, you main­tain the place you live by leav­ing it, and en­ter­ing the do­main of an out­side au­thor­ity. House­hold chores are the re­main­der that can­not effi­ciently be out­sourced, or an echo of a pre­vi­ous era in which such out­sourc­ing was less com­mon.

A house­hold. I pointed out that in the past, peo­ple mostly did not work for a salary. In­stead, they worked on things in their lo­cal en­vi­ron­ment. For the most part, this was not in or­der to re­ceive money, but in or­der to have the thing, even if it was part of a pro­cess di­rected to­wards pro­duc­ing goods for trade. Home im­prove­ment used to be, not a hobby or spe­cial in­ter­est, but what one did if one wanted an im­proved home. Even those with­out a sub­stan­tial amount of arable land to work might keep a gar­den. A minor­ity en­gaged in trades or pro­fes­sions. Loops were mostly closed, ei­ther at the level of the house­hold or at the level of the village.

A leak. My col­league pointed out that tax­a­tion means you can’t ac­tu­ally just have a closed loop any­more, even if you were will­ing to do with­out mod­ern in­con­ve­niences. To oc­cupy a space, even a space you legally own, un­en­cum­bered by any debt or lien, one must pay rent in the state’s cur­rency. If you don’t pay, you have to leave. This means that at least some of a house­hold’s ac­tivity has to be, in effect, defense spend­ing: pro­vid­ing the state with mer­ce­nary ser­vices, di­rectly or in­di­rectly.

Ex­ter­nal stan­dards. It’s worth not­ing that the phrase “good enough for gov­ern­ment work” was origi­nally a com­pli­ment; it referred to the ex­act­ing pro­cure­ment stan­dards of the US Govern­ment, more pre­cise than the stan­dards peo­ple were oth­er­wise ac­cus­tomed to. Things need to be ma­chined with more leg­ible pre­ci­sion if the cus­tomer can’t just go con­sult with the crafts­man.

Tribute. Like­wise, it’s a com­mon­place that a village can’t im­prove its prospects by tak­ing in each other’s wash­ing. But, ac­tu­ally, a village can’t im­prove its prospects by en­gag­ing in any sort of closed-loop com­merce; some­thing must be pro­cured as trib­ute. In a coun­try with an in­come tax, ex­chang­ing ser­vices—if leg­ibly enough to be de­tected—ac­tu­ally causes an out­flow of wealth.

Why are we do­ing this to each other?

Tax­a­tion is mobilization

Imag­ine a peace­ful village with a closed econ­omy. Much of the villagers’ pro­duc­tive ac­tivity is not trans­ac­tional, but sim­ply work­ing to make the village a bet­ter place. The re­ward for pro­duc­ing food is that the village has more food. Per­haps some trans­ac­tions are mar­ket-based, though few will be arms-length. If so, it is easy to imag­ine that a pre­cious metal like gold might be, if not an ac­tual medium of ex­change, at least an unit of ac­count. In ad­di­tion, peo­ple of­ten main­tain their own house­holds, and im­prove them. Again, the re­ward is an im­proved house­hold, not money.

This way of life af­fords a free­dom to which the peo­ple of my gen­er­a­tion and the gen­er­a­tion be­fore are not ac­cus­tomed: if you don’t like the ac­tivi­ties by which one might get gold, you can just not do those things. Ac­cord­ingly, so­cial polic­ing has to be com­par­a­tively di­rect. If you want to ex­clude some­one from village life, you have to ac­tu­ally co­or­di­nate to run them out of the village. Espe­cially if they own land to de­prive them of their liveli­hood you have to phys­i­cally ex­pel them from their own house and land. Any­thing less is merely an in­con­ve­nience.

Sup­pose the Golden Benev­olent Em­pire de­cides that this village, like many oth­ers along its bor­der, needs defend­ing against the Bar­bar­ian Horde. The Golden Benev­olent Em­pire has limited re­sources, and in­sists that villages con­tribute to their own defense, in the form of pro­fes­sional sol­diers.

One way to do this would be to de­mand spe­cific in-kind con­tri­bu­tions from each village. But cen­tral­ized re­source al­lo­ca­tion of this sort is tricky, es­pe­cially with­out re­li­able record col­lec­tion and a very large com­puter, so it set­tles on a sim­pler ex­pe­di­ent. Re­quire a cer­tain, small quan­tity of gold from each villager (a head tax, or maybe a land tax), on pain of death.

Now, ev­ery­one in the village needs to come up with at least a lit­tle gold. Not only will some peo­ple be happy to ac­cept pay as pro­fes­sional sol­diers, but the other villagers will be ea­ger to provide what­ever goods and ser­vices your army needs—so long as you are will­ing to pay in the same coin you de­mand from the villagers. Like magic, your army is fed, clothed, and equipped.

But some­thing else hap­pens. In the village, gold—which was per­haps used oc­ca­sion­ally, ei­ther for trans­ac­tions of rit­ual sig­nifi­cance, the oc­ca­sional for­eign trade, or largely op­tional mar­ket trans­ac­tions—is now just as nec­es­sary to sus­tain life, as food and wa­ter and shelter are.

Differ­ent villages may solve this prob­lem differ­ently. Some may co­or­di­nate to pro­duce trade goods that can be sold el­se­where, oth­er­wise re­tain­ing their ac­cus­tomed mode of life. Others, already in­te­grated into larger mar­kets, may sim­ply shift their pro­duc­tion per­son-by-per­son slightly more to­wards trade. On the mar­gin, closed-loop house­holds are de­stroyed; no one can be fully self-suffi­cient. Villages near­est the mil­i­tary en­camp­ments will be in a good po­si­tion to serve as in­ter­me­di­aries. Villagers from poor or re­mote villages, that can’t af­ford their tax, may move closer to these trade cen­ters, or ac­cept em­ploy­ment as mer­ce­nar­ies them­selves.

In any case, all across the Golden Benev­olent Em­pire, pro­duc­tion shifts to­wards things that can be traded for gold, and peo­ple are more ea­ger to keep ac­counts. Com­merce, in other words, is boom­ing.

In some ways, this points to­wards our pre­sent-day situ­a­tion. We pay taxes, and this would be suffi­cient to ex­plain why we can’t have to­tally closed loops. Small towns are dy­ing, and peo­ple are mov­ing to­wards par­ti­ci­pa­tion in the global econ­omy when they can. What it doesn’t ex­plain is our ap­par­ent re­li­ance on this pro­cess, such that when the de­mands made on us by the econ­omy de­cline, our so­ciety doesn’t re­vert to more home pro­duc­tion; in­stead, we anx­iously seek out em­ploy­ment, and hope the state will stim­u­late ad­di­tional de­mand.

Mob­sterBucks: an interlude

The need to con­cen­trate re­sources to ad­minister the Golden Benev­olent Em­pire has led to the emer­gence of a few very large cities, where its ad­minis­tra­tors and sol­diers have gold to spend. This drives up wages, which draws peas­ants from the poorer villages, the villages which are not pro­duc­tive enough to bear the bur­den of their land taxes. There are also great mer­chant ports, en­abling gains from trade that could not have been re­al­ized be­fore so many lands were unified and paci­fied un­der Im­pe­rial rule. Both of these cities also draw im­mi­grants from other lands, be­cause gold has no na­tional alle­giance.

The growth of these cities has out­paced the Em­pire’s abil­ity to en­force its own laws, and in one of them, some­thing strange and new is hap­pen­ing.

It is not at all un­com­mon that im­mi­grant com­mu­ni­ties shar­ing a na­tion of ori­gin have their own cus­toms, norms, and ways of en­forc­ing these. This can take the re­fined form of the Ot­toman mil­let sys­tem, or the crude form of street gangs.

What is un­com­mon is how one of these gangs is ad­minis­ter­ing its ter­ri­tory.

It is not at all un­com­mon for a gang to de­mand pay­ment from the res­i­dents of its ter­ri­tory, in ex­change for “pro­tec­tion”—both from out­siders, and from the gang it­self. But in many neigh­bor­hoods, the amount of hard cur­rency available is nearly nil—the peo­ple live on credit. De­mand­ing in-kind pay­ment is ad­minis­tra­tively difficult, for the same rea­son the Golden Benev­olent Em­pire ul­ti­mately de­cided against it. One en­ter­pris­ing gang has a solu­tion: Mob­sterBucks.

The propo­si­tion is sim­ple, per­haps in­spired by a folk tale about a village op­pressed by archers. Each per­son in this gang’s ter­ri­tory has to pay one Mob­sterBuck per year, lest they meet with some sort of mishap like a bro­ken kneecap or worse. How does one ac­quire Mob­sterBucks? Well, the gang is the sole is­suer of said cur­rency, and is happy to ex­change it for goods and ser­vices it needs. Soon, the in­ter­nal econ­omy of this com­mu­nity is de­nom­i­nated pri­mar­ily in Mob­sterBucks.

Hav­ing im­ple­mented this scheme, this en­ter­pris­ing gang now needs a mon­e­tary policy. If it spends too many Mob­sterBucks, then peo­ple will be less afraid of in­jury for want of Mob­sterBucks, and the ex­change value of the cur­rency will de­cline. This can of course be cor­rected by sim­ply rais­ing the rate of tax­a­tion—de­mand­ing more Mob­sterBucks from each per­son.

On the other hand, with an im­bal­ance in the other di­rec­tion, an in­effi­ciently high num­ber of peo­ple will be kneecapped, per­ma­nently re­duc­ing the pro­duc­tive ca­pac­ity of the gang’s ter­ri­tory. Another prob­lem with defla­tion is that in­side the gang’s ter­ri­tory, debts are now de­nom­i­nated in the con­ve­nient unit of Mob­sterBucks. Any­thing that in­creases de­mand for Mob­sterBucks may un­sus­tain­ably im­miser­ate a large num­ber of debtors, forc­ing them into less-pro­duc­tive debt slav­ery, and sub­stan­tially erod­ing any good will to­wards the gang.

What to do if the gang is spend­ing too few Mob­sterBucks? Giv­ing money di­rectly to the peo­ple lack­ing money would elimi­nate the in­cen­tive to work, which would re­duce the pro­duc­tivity of the gang’s ter­ri­tory, but the gang can cor­rect the im­bal­ance in­di­rectly by in­creas­ing spend­ing or re­duc­ing taxes.

One might imag­ine that to avoid ei­ther an ex­cess or short­fall of Mob­sterBucks, the cor­rect policy would be a bal­anced bud­get: de­mand­ing and spend­ing the same num­ber of Mob­sterBucks each year (or other bud­getary pe­riod). But in prac­tice, some wealthy peo­ple in their ter­ri­tory may hoard Mob­sterBucks against a fu­ture need, leav­ing less than noth­ing for oth­ers, who may go into debt—lead­ing ul­ti­mately ei­ther to debt slav­ery to the richer ones, or to kneecap­ping. So the op­ti­mal Mob­sterBucks spend­ing and tax­a­tion lev­els are not ob­vi­ous, and re­quire con­sid­er­able sen­si­tivity to eco­nomic con­di­tions.

A sec­ond ques­tion the gang may face is the op­ti­mal level of re­source ex­trac­tion. If the neigh­bor­hood is tran­sient, or they face an emer­gency situ­a­tion that re­quires all the re­sources they can bring to bear, they may as well ex­tract all they can, as quickly as they can. On the other hand, if the neigh­bor­hood is com­par­a­tively sta­ble, they may want to ex­tract as lit­tle as they can, in or­der to al­low the rein­vest­ment of pro­duc­tive re­sources. The ex­cep­tion is the oc­ca­sional pub­lic good; where the gang is well-po­si­tioned to make pro­duc­tivity-en­hanc­ing in­fras­truc­ture im­prove­ments to the neigh­bor­hood, or sub­si­dize oth­er­wise un­der­com­pen­sated ac­tivity.

To some ex­tent the Golden Benev­olent Em­pire must ac­count for the same things, but these are some­what ob­scured by the fact that gold also has for­eign ex­change value, limit­ing the Em­pire’s free­dom of ac­tion. I waited for Mob­sterBucks to in­tro­duce these com­pli­ca­tions, as a sim­pler ex­am­ple.

War­time inflation

The Golden Benev­olent Em­pire is at war! Its very sur­vival is at stake! More sol­diers are needed! More equip­ment is needed! The trea­sury is spent down, and taxes are raised. Whole villages are re­or­ga­nized, to meet the in­creased de­mand for arms, sup­plies, and sol­diers. Peo­ple swarm to­wards the cities and fortresses and arms fac­to­ries, where the money is flow­ing. Areas that are not so use­ful to the state suffer un­der the new taxes, and sink into debt.

The value of money changes dur­ing this pe­riod. The Em­pire’s de­mand for ad­di­tional re­sources is greater than its ter­ri­tory’s abil­ity to sup­ply them, and more money chases in­creas­ingly scarce goods. Prices rise, and com­mon cit­i­zens must make do on less. In war time, one needs na­tional econ­omy.

In­ter­est rates also change. As the de­ci­sive bat­tle ap­proaches, the Em­pire would much rather have money now, than a year from now. It is will­ing to bor­row, even at high rates of in­ter­est, since if it loses this bat­tle, it loses ev­ery­thing. The towns and villages of the em­pire ac­quire a cor­re­spond­ingly high time prefer­ence. If you can get a bet­ter re­turn on your money by lend­ing it, than by rein­vest­ing it in pro­duc­tive as­sets, then it is more prof­itable to do the former than the lat­ter. This, too, is ap­pro­pri­ate be­hav­ior for wartime; spend down re­sources, and re­cover once you are at peace.

But a side effect of this policy is that the poor sink into debt to pay their taxes, while those with money are fur­ther en­riched by a high re­turn on in­vest­ment.

Then the de­ci­sive bat­tle is won, and the Golden Benev­olent Em­pire is at peace. Soldiers are re­leased from duty, and sent back to their villages. Con­scien­tious ad­minis­tra­tors and com­mon cit­i­zens al­ike breathe a sigh of re­lief, and ex­pect that af­ter the aus­ter­ity of war, they will reap the re­wards of peace.

But things are not so easy. En­ter­prises that sprung up in the cities to serve the war effort find them­selves sud­denly out of busi­ness. The pop­u­la­tions brought into the cities dur­ing wartime now find them­selves with lit­tle to do. Many of them go back to their villages, but the villages them­selves have less of their former char­ac­ter, and are ori­ented to­wards serv­ing the na­tional econ­omy.

What’s more, while spend­ing is re­duced, this is not so much true of tax­a­tion. The Em­pire is hon­estly ad­ministered, and if it bor­rowed, then now it must pay back its debts. But this defla­tion­ary policy forces in­debted farm­ers off their lands, re­duces busi­nesses that bor­rowed to sup­port once-prof­itable en­ter­prises to bankruptcy, and im­miser­ates whole villages.

The Im­pe­rial gov­ern­ment is not pleased. Im­pe­rial ad­minis­tra­tors have hearts, like any­one else, and they did not fight a war to im­miser­ate their cit­i­zens. In the heart of the Im­pe­rial Trea­sury, a clever bu­reau­crat from hum­ble ori­gins in a poor area of the cap­i­tal city comes up with a plan, based on what he saw his neigh­bor­hood’s street gang do.

In his plan, the Em­pire will con­fis­cate all gold, and re­place it with a scrip is­sued by the Em­pire: Gold­enBucks. Cred­i­tors must now ac­cept pay­ment for all pri­vate debts in this cur­rency, and it can also be used to pay pub­lic debts—taxes. The gold will be enough to pay off for­eign cred­i­tors, but the Em­pire is no longer con­strained by honor to tax as much as it spends. It can sim­ply is­sue more Gold­enBucks. As the peo­ple need em­ploy­ment, the Em­pire will spend or lend its newly minted Gold­enBucks, un­til de­mand matches sup­ply.

A mas­sive, dis­rup­tive deur­ban­iza­tion is thus averted, and the Im­pe­rial econ­omy con­tinues its op­er­a­tion. How­ever, the re­sult­ing tax­a­tion means that re­sources and at­ten­tion still flow to­wards the places the Em­pire spends its money.

Of course, the gov­ern­ment will still be con­strained by a need to pre­serve the value of Gold­enBucks—it would not do to dis­rupt the na­tional econ­omy too much, too quickly—so taxes will still be col­lected.

The world wars

In the first half of the 20th Cen­tury, the world or­der was shat­tered by two suc­ces­sive, cat­a­clys­mic wars. Great em­pires were brought down. The coun­try that ul­ti­mately emerged vic­to­ri­ous—and be­came the world’s sole su­per­power—won with a strat­egy of com­plete eco­nomic mo­bi­liza­tion. In be­tween these world wars, this coun­try ex­pe­rienced a mas­sive eco­nomic dis­rup­tion in which a full quar­ter of peo­ple who wanted a job could not find one. The gov­ern­ment re­sponded by con­fis­cat­ing all hard cur­rency, and sub­sti­tut­ing pieces of pa­per that its cit­i­zens were re­quired to ac­cept for debts pre­vi­ously de­nom­i­nated in gold. It then en­gaged in mas­sive pub­lic works pro­jects, paid for by this new, fiat cur­rency.

The sym­bol­ism of this new cur­rency is a bit too on the nose for me to in­clude in a fic­tion­al­ized nar­ra­tive. On the ob­verse, a por­trait of the coun­try’s high­est-rank­ing gen­eral, and a state­ment that this note is le­gal ten­der for all debts, pub­lic and pri­vate. On the re­verse, a pyra­mid, per­haps the most fa­mous of mon­u­ments built by cen­trally planned, con­scripted la­bor, topped with an eye, a sym­bol of surveillance. And a bird of prey, hold­ing an olive branch and an ar­row; pro­duc­tion and vi­o­lence bound to­gether by the agency of an apex preda­tor.

Th­ese world wars co­in­cided with un­prece­dented lev­els of ur­ban­iza­tion. At the be­gin­ning of the cen­tury, 40% of the coun­try’s pop­u­la­tion lived in cities. Halfway through, af­ter the wars, 64% did. Th­ese wars were not iso­lated events. The tran­si­tion to a state of to­tal mo­bi­liza­tion was hap­pen­ing be­fore them. (In 1860, at the be­gin­ning of the US Civil War, only 20% of the US pop­u­la­tion was ur­ban­ized.)

The timeframe of this mas­sive ur­ban­iza­tion has roughly co­in­cided with the timeframe in which re­ces­sions be­gin to be a thing. In ear­lier so­cieties, we hear about im­miser­a­tion, about famines, about dis­rup­tions in trade, about heavy tax­a­tion and debt serf­dom, but not re­ces­sions. That’s a mod­ern thing—we start hear­ing about them and re­lated fi­nan­cial pan­ics af­ter the US Civil War, which was per­haps the first mod­ern war with to­tal eco­nomic mo­bi­liza­tion.

What’s per­haps more sur­pris­ing is that the trend has con­tinued. After the con­clu­sion of the sec­ond world war, the vic­to­ri­ous US elected its fore­most gen­eral as pres­i­dent. In his two suc­ces­sive four-year terms as leader of the free world, he presided over a tran­si­tion from a sys­tem with the ca­pac­ity to mo­bi­lize on de­mand, to a sys­tem of per­ma­nent readi­ness, the mil­i­tary-in­dus­trial com­plex he de­scribed in his vale­dic­tory speech:

Our mil­i­tary or­ga­ni­za­tion to­day bears lit­tle re­la­tion to that known by any of my pre­de­ces­sors in peace­time, or in­deed by the fight­ing men of World War II or Korea.
Un­til the lat­est of our world con­flicts, the United States had no ar­ma­ments in­dus­try. Amer­i­can mak­ers of plow­shares could, with time and as re­quired, make swords as well. But now we can no longer risk emer­gency im­pro­vi­sa­tion of na­tional defense; we have been com­pel­led to cre­ate a per­ma­nent ar­ma­ments in­dus­try of vast pro­por­tions. Added to this, three and a half mil­lion men and women are di­rectly en­gaged in the defense es­tab­lish­ment. We an­nu­ally spend on mil­i­tary se­cu­rity more than the net in­come of all United States cor­po­ra­tions.
This con­junc­tion of an im­mense mil­i­tary es­tab­lish­ment and a large arms in­dus­try is new in the Amer­i­can ex­pe­rience. The to­tal in­fluence—eco­nomic, poli­ti­cal, even spiritual—is felt in ev­ery city, ev­ery State house, ev­ery office of the Fed­eral gov­ern­ment. We rec­og­nize the im­per­a­tive need for this de­vel­op­ment. Yet we must not fail to com­pre­hend its grave im­pli­ca­tions. Our toil, re­sources and liveli­hood are all in­volved; so is the very struc­ture of our so­ciety.
In the coun­cils of gov­ern­ment, we must guard against the ac­qui­si­tion of un­war­ranted in­fluence, whether sought or un­sought, by the mil­i­tary-in­dus­trial com­plex. The po­ten­tial for the dis­as­trous rise of mis­placed power ex­ists and will per­sist.
Another fac­tor in main­tain­ing bal­ance in­volves the el­e­ment of time. As we peer into so­ciety’s fu­ture, we—you and I, and our gov­ern­ment—must avoid the im­pulse to live only for to­day, plun­der­ing, for our own ease and con­ve­nience, the pre­cious re­sources of to­mor­row. We can­not mort­gage the ma­te­rial as­sets of our grand­chil­dren with­out risk­ing the loss also of their poli­ti­cal and spiritual her­i­tage.

We do not seem to be in the mid­dle of a cat­a­clys­mic war. Even the “cold war” against Rus­sia ap­pears to have been de­ci­sively won by the liberal An­glo-Amer­i­can sys­tem. But we be­have as though we are still at war. I don’t just mean the rou­tine bomb­ing of for­eign­ers, or main­te­nance of a huge per­ma­nent mil­i­tary es­tab­lish­ment. I mean that we still have an ele­vated time prefer­ence, as though we were in a state of emer­gency; 10% is not an un­usual in­ter­nal rate of re­turn for ma­jor cor­po­ra­tions. Many busi­nesses’ effec­tive time prefer­ence is even higher. Per­haps we have be­come so ac­cus­tomed to wartime mo­bi­liza­tion that we don’t re­mem­ber any other way of life.

The scarcity factory

Re­call that be­tween the world wars, the US (and much of the rest of the world) ex­pe­rienced, not peace­time pros­per­ity, but a mas­sive eco­nomic con­trac­tion lead­ing to im­miser­ated la­bor­ers, driven out of their homes and forced to wan­der as va­grants.

The or­tho­dox policy solu­tion is to cre­ate de­mand for la­bor. To man­u­fac­ture scarcity. To cre­ate a pres­sure differ­en­tial be­tween money sources and money sinks, such that al­most ev­ery­one in the coun­try is re­quired to do things, to alle­vi­ate that pres­sure.

But in the pro­cess we have be­come ac­cus­tomed to ac­cu­mu­lat­ing wealth in the form of fi­nan­cial in­stru­ments and ris­ing prices, rather than im­proved home­steads. Th­ese are the sort of wealth one can ac­cu­mu­late dur­ing wartime, but are only valuable as claims on the work of oth­ers. We can’t be­come richer by all go­ing into debt to each other. So some­one has to be­come poorer.

The com­po­si­tion of ma­jor busi­nesses re­flects this. The growth of the fi­nan­cial ser­vices in­dus­try is of­ten cited in this con­text, but a clas­sic busi­ness with a real phys­i­cal product, like Coca-Cola, is a mar­ket­ing com­pany ded­i­cated to per­suad­ing peo­ple to drink fla­vored sugar wa­ter. Face­book is mostly try­ing to max­i­mize the at­ten­tion it uses up. More gen­er­ally, busi­ness as we know—es­pe­cially weighed by prof­ita­bil­ity—is largely mar­ket­ing, in the sense of cre­at­ing needs. When it isn’t, it’s of­ten about bot­tle­neck cap­ture. (There are of course ma­jor ex­cep­tions.) This is a bat­tle for con­trol of a fixed re­source (cash flows), not pro­duc­tion. Busi­ness books and news ar­ti­cles rou­tinely use the fram­ing of war to de­scribe the run­ning of a busi­ness. One is re­minded of sto­ries about how groups of chimps that en­counter a sta­ble food source be­gin to fight over it.

Our rulers didn’t cre­ate this sys­tem out of per­ver­sity; they did it to win two suc­ces­sive world wars. We can think of coun­tries as en­gaged in an ad­ver­sar­ial game, mak­ing trade­offs be­tween cre­at­ing re­sources, and us­ing re­sources in ad­ver­sar­ial con­tests. The char­ac­ter of mod­ern war has been such that while rapid mil­i­ta­riza­tion typ­i­cal of the Ger­man strat­egy has failed, per­sis­tent eco­nomic mo­bi­liza­tion of the kind em­ployed by the An­glo-Amer­i­can al­li­ance has dom­i­nated. Coun­tries that suc­ceeded in re­lax­ing back to peace­time stan­dard were per­haps sim­ply se­lected out of the pool by means of con­quest long be­fore.

That doesn’t make the con­se­quences of per­ma­nent mo­bi­liza­tion any less un­for­tu­nate. Lifes­pans are de­clin­ing at the cen­ter of the em­pire, though not yet at the periph­ery. This sug­gests that near the cen­ter time prefer­ence has in­creased to the point where we’re cre­at­ing scarcity faster than we’re alle­vi­at­ing it, while at the periph­ery scarcity is still ac­tu­ally be­ing alle­vi­ated be­cause there’s enough scarcity to go around, or per­haps marginal ar­eas do not suffer so much from to­tal mo­bi­liza­tion.

The friends I grew up with still live in a world where they can’t help with the fam­ily home­stead be­cause there is no home­stead, even though in most cases they grew up not in a city, but in a house in the woods. If they can’t find a job with wages, they’re in se­ri­ous trou­ble, even if they’re will­ing to work, even though there’s no war on, and no con­scrip­tion. A high cost of hous­ing, and tax bur­den, means you can have a situ­a­tion, but not re­ally prop­erty. The state will be happy to kick you off your land if you don’t cough up trib­ute, and this is the new nor­mal.


Thanks to Jes­sica Tay­lor for helping me think through the house­holds ex­am­ple, Jack Gal­lagher and Ben Pace for in­de­pen­dently sug­gest­ing the idea of Mob­sterBucks, Wei Dai for point­ing out the pos­si­bil­ity of strong se­lec­tion for poli­ti­cal or­ders that can en­gage in to­tal mo­bi­liza­tion, Michael Vas­sar for in­de­pen­dently not­ing that WWII in a sense never ended, and I owe a debt to David Grae­ber for the ba­sic frame­work of tax­a­tion as mo­bi­liza­tion.