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The Debt-Dollar Discipline: Part III - Future Reorganization

Politics / US Politics Dec 13, 2010 - 10:40 AM GMT

By: Ashvin_Pandurangi


Best Financial Markets Analysis Article"There are more ideas on earth than intellectuals imagine. And these ideas are more active, stronger, more resistant, more passionate than ''politicians'' think. We have to be there at the birth of ideas, the bursting outward of their force: not in books expressing them, but in events manifesting this force, in struggles carried on around ideas, for or against them." - Michel Foucault


    Parts I and II of this series explored the relatively rapid emergence and collapse of global society's debt-dollar discipline, formalized by the Bretton Woods Agreement of 1945, which established the dollar as a global reserve currency. This financial order, currently being disassembled,  was analyzed in the context of Foucault's theory of disciplinary society and Holling's adaptive cycle of complex ecosystems. [1]. The fourth phase of this cycle, following release, is a reorganization of the system's components at a different scale and in a different form. Although the new organizational form will certainly be different from the previous one, it could retain similar properties and evolve in a similar manner, depending on the extent to which previous structures survive the release phase.

     The specific behaviors of a complex system in chaotic release cannot be predicted with any significant degree of accuracy. Broad-based outcomes, however, can be analyzed according to their likelihoods of occurrence, given our knowledge of the present circumstances and the dynamic behavior of complex systems. Once it is established that existing structures of the global financial system will be radically simplified, once can ask to what extent this simplification can be managed and what general forms of organization may emerge.

     A highly-debated issue surrounding the collapse of debt-dollar discipline is whether financial structures in the developed world will first simplify through an episode of significant deflation, or instead an episode of hyperinflation and an ensuing currency crisis. Numerous articles have been written on this topic, including this probabilistic assessment I wrote summarizing some of the main factors involved (for the U.S.), and so that topic will not be rehashed here. Instead, the final part in this series will explore more generalized "big picture" issues, introducing Deleuze's theory of "control society" and then returning to Foucault's original analysis of discipline.

Visions of Comprehensive Control

     An insightful reader of Part I in this series directed me towards another French philosopher who can shed some light on potential outcomes of systemic release, named Gilles Deleuze (1925-1995). He wrote a few essays in the 1990s about the post-WWII transition from Foucault's disciplinary society to a "control society" in the developed world. Although I had never heard of Deleuze's work before, his ideas are remarkably similar to those laid out in the prior two articles of this series. In his essay, Postscript on the Societies of Control [2], he even made reference to what I have termed "debt-dollar discipline", and its fundamental importance to the underlying structures of power:

"Perhaps it is money that expresses the distinction between the two societies best, since discipline always referred back to minted money that locks gold as numerical standard, while control relates to floating rates of exchange, modulated according to a rate established by a set of standard currencies. The old monetary mole is the animal of the space of enclosure, but the serpent is that of the societies of control."

     Deleuze correctly perceived the parasitic nature of the financial capitalist system,  which had managed to commandeer and expand the disciplinary functions of institutions operating under the framework of industrial capitalism. Instead of enclosed institutions methodically disciplining "individuals" to be more specialized and efficient, the control society  features "free-floating" corporate networks that continuously interact and dominate the lives of the consuming masses. The latter essentially reflects a transition from a production-based society to a consumption-based one, in which the power structures wish to "sell services and buy stocks".

     One can debate whether these new structures of power reflect the emergence of a distinct "control society" that is non-disciplinary, or rather a more complex and abstract iteration of disciplinary society, as was suggested in Part I and Part II. It appears to me that the evolutionary state of a complex system is entirely dependent on its initial conditions and previous states, which would then suggest that Deleuze's "control society" is simply a novel mode of exerting Foucauldian discipline. Regardless, it is critical to understand the new control (or disciplinary) mechanisms articulated by Deleuze in order to get a general sense of where global society may be headed.

     The disciplinary society of the 19th and early 20th century was primarily marked by the factory system and its machines of production, while the financial disciplinary society has been marked by the corporate system and computer technology. Deleuze explained that financial power structures use these new technologies to influence the interactions of those existing under them in a limitless fashion. Individuals are no longer viewed as component parts of a mechanistic group, but as data sets that can be constantly "modulated" by corporate marketing and political propaganda.

     Electronic banking records can track financial transactions, library records can track the dispersion of knowledge, satellite GPS systems can track movement through space and the Internet can track electronic communications. Every aspect of a person's existence under the financial system is monitored, analyzed, molded and exploited to extract economic rents. These new "control" mechanisms are largely masked from public awareness by the financial system's evolved complexities. Indeed, as Deleuze proclaims, "the coils of a serpent are even more complex than the burrows of a molehill".

     The question then becomes to what extent these elements of Deleuze's "control society" can survive the ongoing collapse of Foucault's disciplinary society, including the elimination of debt-dollar discipline. Some people argue, as an extension of Deleuze's thoughts, that financial power structures will not disappear, but will rather be re-organized at an even higher level of centralized control. The system will be less complex in the sense that there is more explicit top-down control, instead of reliance on "self-regulating" networks, but complexities associated with technological control will be retained. The financial crisis will be used as a justification for eliminating the fiat currencies of nation-states and establishing a global currency of exchange, to be managed by an institution such as the IMF. [3].

     This currency will not merely inherit the reserve status of debt-dollars, but will be the primary means of domestic and international exchange for all countries. Not only that, but the entire political and economic apparatuses of sovereign states will be subject to the rules of global institutions, and control technologies will be used to maintain and reinforce this new order. Perhaps each country will be allocated a set amount of public credit that can be used for domestic spending, as long as they maintain adequate tax revenues to service the debt. In such a manner, the complex mechanisms of Orwellian control will be fully revealed to a global population that has no effective means of resistance.

     A limited version of this scenario is already playing out in Europe, where sovereign states such as Greece and Ireland (and soon Italy, Spain, Portugal) are forced to "resolve" their debt crises by accepting IMF-sponsored "bailouts" with numerous conditions attached. These conditions effectively erode national sovereignty and compel the citizens of such states to subsidize the re-establishment of financial discipline. State politicians who rely mostly on financiers and other institutional actors for re-election, rather than actual voters, will voluntarily accept these oppressive packages. The subsidies will take the form of higher taxes, fewer entitlements and/or higher costs of living due to a devalued currency.

     As explained in Part II's section on "financial conservation", austerity programs implemented under a financial disciplinary system will actually serve to make sovereign debt problems worse, and will ultimately collapse the underlying currency. The conditional "bailouts" are essentially a clever ruse designed to make sovereign states entirely dependent and subservient to global power structures. These states will continue to pay interest on public debt for some time, and once they become utterly insolvent from a combination of deleveraging, austerity and speculation, they will be systematically put into "receivership", paving the way for the new global currency and control society to emerge.

     On the other hand, Europe also illustrates a socioeconomic dynamic that may preclude the establishment of this global control society. Citizens of states currently undergoing austerity programs have already begun protesting, striking and rioting in large numbers, after relatively small tax increases, tuition hikes or spending cuts have been made or proposed. These initial austerity measures are by no means insignificant, but are rather perceived as portending the future suffering to be imposed on the middle and lower classes of developed society. Therefore, as the financial power structures proceed forward with their "plans" of global control, they will encounter a disproportionately powerful resistance by the global population.

    Deleuze himself stated that, with respect to the evolving control society, "there is no need to fear or hope, but only to look for new weapons". The virtually organized attacks by the international hackers described in Part II are a great example of such a new weapon (hacks and viruses were explicitly mentioned by Deleuze), and it already appears to be working. Popular forms of resistance, such as those mentioned above, also seem to be an effective method of disrupting attempts at control. Perhaps the most potent weapon that will be used against attempts to form a global control society derive from the foundational system of all organizational forms, the energy system.

    Foucault's industrial disciplinary society, and Deleuze's financial control society by evolutionary extension, were entirely made possible by the discovery and vast utilization of incredibly efficient fossil fuels. The International Energy Agency's 2010 report officially confirmed what peak oil theorists have been emphatically stating for decades, mainly that the world's conventional oil production terminally peaked in 2006. Those people who had been following the IEA's annual reports would have noticed that they consistently ratchet down their estimates of future oil production rates each year, and this trend can be expected to continue in upcoming years. [4].

    Machines of societal oppression, whether they are assembly equipment or computerized devices, cannot continue to function at their current rates of activity without access to increasing amounts of net energy. Currently, there are no forms of renewable energy or technologies of energy efficiency in place which could realistically offset the terminal declines in net energy faced by global society. The time after which a wide-scale implementation of such energy infrastructure becomes impossible is approaching very soon, if it has not already passed.

    For this reason, it is highly unlikely that the release of financial disciplinary structures will lead to re-organization at a more centralized level of operation anytime soon. It is significantly more likely that developed societies will re-organize at much smaller scales of economic and political activity, in which states, cities and local communities become more important to the "individual" than regional blocs or even nations. People will be forced to rely on their immediate environments as a means of acquiring basic goods and services. The mechanisms of discipline and control, if they exist at all, will only be able to operate within a localized range for limited purposes.

    This scenario should not be taken lightly, however, because it will certainly involve a transitional period rife with disorder and violence. These symptoms are especially likely if there is an initial period of physical conflict between governmental power structures and their resistant populations,  which should be expected. Although the increasingly impoverished citizenry of the world obviously outnumber the disciplinary elites by a large factor, these elites have a not-so-secret weapon to combat many of the obstacles mentioned above. With that sullen thought in mind, we can then bring the discussion back to Foucault's original analysis of discipline.

Of Militarism and Monastic Order

"The lyricism of marginality may find inspiration in the image of the ''outlaw,'' the great social nomad, who prowls on the confines of a docile, frightened order." - Foucault

    According to Foucault, the roots of discipline can be traced back to two very different organizations. [5]. The first one is the army, which, throughout history, has disciplined its soldiers to be obedient, self-regulating and deadly efficient by implementing strict restrictions on their movement through time and space. Everything about a soldier's existence in the barracks is tightly controlled through confined quarters, strict daily schedules, drill exercises, required conduct, etc. Although modern global society is publicly characterized as a place of diplomacy and peaceful negotiation, it has actually retained the most deadly military forces with the most deadly weaponry to match.

    The U.S. military, for example, may eventually face a legitimacy crisis of its own, but the unwavering loyalty of its commanders and soldiers should not be underestimated.  The structures of command within the military are kept almost entirely under the purview of the executive branch, and this design will make it difficult for elements of popular dissent to infiltrate its operations. After all, it is only natural that the institution to first, and most powerfully, implement disciplinary principles within human civilization should be the last to lose that disciplinary character.

    In this sense, military institutions and arsenals provide the last line of "defense" for desperate power structures battling the scarcity of vital resources and the chaos of popular dissent. Indeed, the U.S. has already strategically positioned its military throughout the Middle East, which is obviously the most oil-rich region in the world. [6]. When availability and expense begin threatening the U.S. share of global oil production, these forces can be readily mobilized to secure production facilities and trade routes. There is no doubt, however, that such actions by the U.S. will be met with even more popular resistance than it is currently experiencing.

     It is also most likely the case that detailed plans are already in place to institute martial law on the American population in the event of disciplinary break down. A program called "Unified Quest 2011", consisting of wargames, seminars, workshops and conferences, is self-described as being "the Army Chief of Staff’s primary mechanism to explore enduring challenges and the conduct of operations in a future operational environment." [7]. It would be naive to assume that American states and cities are not some of the "future operational environments" that they are preparing to conduct operations in. The government, of course, will insist that it is simply maintaining stability and doing what's best for its citizens, but the crucial question is whether the masses will voluntarily submit.

    The U.S. citizenry is the most heavily armed in the world (90 guns per 100 people [8]), and they may refuse to submit without a fight. The American people were more than willing to relinquish many of their Constitutional rights after 9/11 for the sake of perceived security, but this time the circumstances will be drastically different. There will be millions of painfully destitute people, who possess rapidly diminishing faith in their government's ability to aid or protect them, and have precious little to lose from active resistance. During the chaotic, unpredictable release of a complex system, even the best laid schemes of disciplinary governments and their military forces could go awry.

    The discussion then turns to Foucault's second foundational disciplinary institution, which is the monastery. [10]. Like the army, it too has administered strict temporal and spatial rules to discipline its monks. They were disciplined to live a solitary, materially detached existence through silent meditation, physical isolation and restrictions on property ownership. The obvious difference, however, was that these disciplinary mechanisms were mostly implemented for the benefit of the practicing monk. In fact, traditional monasteries were focused on separating their monks out from the grasp of other disciplinary institutions in society.

    One could argue over whether such separation was actually more "beneficial" for the monastic society, but it is clear that their form of discipline was fundamentally different from the others. Unlike the original army, which disciplined its soldiers to be killing machines for the benefit of existing power structures, the original monastery disciplined its monks to discover a natural order and attain a peaceful state of mind. According to Foucault, the structured drill exercises performed by soldiers carried an entirely different connotation than the mental exercises of monks, despite their similar disciplinary elements. Monastic discipline reflected a profound respect for natural systems of egalitarian existence, rather than man-made organizations of distributed power.

    During the growth of debt-dollar discipline, many of the monasteries had transformed to resemble other disciplinary institutions of modern society, acquiring vast estates and even securing funds through financial investments. Still, there are others which have retained their original character and purpose, and in such institutions lie dormant the qualities of humanity long forgotten, but never ceasing to exist. A humanity that thrives on its ability to be self-sufficient, respectful of its natural environment and, perhaps most importantly, comfortable with its own relations of social order.

    There will always be some form of discipline exerted on the individual human being, whether it is a function of biology, ecology, economic relations or a combination of those and other systems. The critical factor is the underlying purpose of such discipline, and the extent to which an individual is aware of its influence. It is now clear that, regardless of how economic and political systems devolve and reconstitute themselves from here, human populations around the world will experience at least a few moments in which they are freed from their disciplinary chains. In these crucial moments, many people will die and many more will suffer, because it is indeed true that "freedom of conscience entails more dangers than authority or despotism". Nevertheless, it is now humanity's mission to ensure that the spirit of monastic order prevails over militaristic oppression when these moments finally end.

    Perhaps national institutions of power in the developed world are simply incapable of voluntarily downsizing and guiding us towards such order. Individual human beings, however, are not required to be identified as a function of the broader group they compose, and alienated by such artificial distinctions. Foucault's disciplinary machine manufactured "individuals" from the bowels of a highly-structured group, so as these structures of power collapse, we must look to form new types of groups from the virtues of well-constituted individuals. Many of us have already found such people, and we are sure to meet many more along our undiscovered paths. We must simply remember that we are no longer the helpless victims of systematic oppression, but the righteous outlaws of disciplinary society

Ashvin Pandurangi, third year law student at George Mason University
Website: "Simple Planet" - (provides unique analysis of economics, finance, politics and social dynamics in the context of Complexity Theory)

© 2010 Copyright Ashvin Pandurangi to - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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