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https://www.oftwominds.com/blogapr21/US-cultural-rev4-21.html

Is a Cultural Revolution Brewing in America?

There is a whiff of unease in the air as beneath the cheery veneer of free money for almost everyone, inequality and polarization are rapidly consuming what's left of common ground in America.

Though there are many systemic differences between China and the U.S., humans in every nation are all still running Wetware 1.0 and so it is instructive to consider what can be learned from China's Cultural Revolution 1966-1976.

China's Cultural Revolution was remarkably different from the Party's military-political victory of 1949. Where the political revolution was managed by the centralized hierarchy of the Communist Party (CCP), the Cultural Revolution quickly morphed from a movement launched by Mao into a decentralized mass movement against all elites, including Party and state elites which had been sacrosanct and untouchable.

The Cultural Revolution is not an approved topic in China today, and that alerts us to its importance.

Although ostensibly launched by Mao (as part of his 1966 purge of Party rivals), the Cultural Revolution very quickly devolved into a decentralized, semi-chaotic movement of Red Guards, students and other groups who shared ideas and programs but who acted quite independent of the Party's central leadership. (In systems language, semi-chaotic dynamics are emergent properties.)

If you examine Mao's statements that supposedly launched The Cultural Revolution, you'll find they're not much different from his many pronouncements in the 1950s and early 1960s, none of which sparked a violent national upheaval. The Cultural Revolution cannot be traced back to Mao's control or plans; rather, Mao served as the politically untouchable inspiration for whatever measures the local cadres deemed necessary in terms of advancing (or cleansing) the people's revolution.

The important point here is that the Cultural Revolution was not controlled by the political authorities, even as they maintained control of the Party and central government hierarchy in Beijing. But this was nothing more than an illusion of control: the forces of the Cultural Revolution had broken free of central command and control, even as the Red Guards expressed their loyalty to Mao and the principles of the Party as the politically approved cover for their rampage.

That's the irony of Cultural Revolutions: the authorities cannot claim it is a political counter-revolution because the cultural revolutionaries proclaim their loyalty to the ideals and principles the authorities claim to be upholding.

Cultural Revolutions in effect claim the higher ground, eschewing political influence for direct action in the name of furthering the ideals which the authorities have abandoned or betrayed.

Given the fragmentary nature of The Cultural Revolution, the history is equally fragmentary-- especially given the official reticence.

A recent academic book, Agents of Disorder: Inside China's Cultural Revolution, provides granular detail on the fragmented, decentralized, rapidly evolving dynamics of the movement:

"(The author) devoted decades to examining the local records of nearly all of China's 2,000-plus county-level jurisdictions. He found that factions emerged from the splintering, rather than the congealing, of class-based groups. Small clusters of students, workers, and cadres struggling to respond to Mao's shifting directives made split-second decisions about whom to align with. Political identities did not shape the conflict; they emerged from it. To explain this process of identity formation, he offers a theory of 'factions as emergent properties' and suggests that similar dynamics may characterize social movements everywhere."

In other words, groups modified their alliances, identities and definitions of "class enemies" on the fly, entirely free of central authorities. Factions splintered, regrouped and splintered again. In the chaos, no one was safe.

Those who lived through The Cultural Revolution are reticent about revealing their experiences. Even in the privacy of their homes in the U.S., their voices become hushed and their reluctance to give voice to their experiences is evident.

The unifying thread in my view is the accused belonged to some "counter-revolutionary" elite --or they were living vestiges of a pre-revolutionary elite (children of the landlord class, professors, etc.)--and it was now open season on all elites, presumed or real.

What generates such spontaneous, self-organizing violence on a national scale? My conclusion is that cultural revolutions result from the suppression of legitimate political expression and the failure of the regime to meet its lofty idealistic goals.

Cultural revolutions are an expression of disappointment and frustration with corruption and the lack of progress in improving everyday life, frustrations that have no outlet in a regime of self-serving elites who view dissent as treason and/or blasphemy.

By 1966, China's progress since 1949 had been at best uneven, and at worst catastrophic: the Great Leap Forward caused the deaths of millions due to malnutrition and starvation, and other centrally planned programs were equally disastrous for the masses.

Given the quick demise of the Let a Hundred Flowers Bloom movement of open expression, young people realized there was no avenue for dissent within the Party, and no way to express their frustration with the Party's failure to fulfil its idealistic goals and promises.

When there is no relief valve in the pressure cooker, it's eventually released in a Cultural Revolution that unleashes all the bottled-up frustrations on elites which are deemed politically vulnerable. These frustrations have no outlet politically because they're threatening to the status quo.

All these repressed emotions will find some release and expression, and whatever avenues are blocked by authorities will channel the frustrations into whatever is still open.

A Cultural Revolution takes the diversity of individuals and identities and reduces them into an abstraction which gives the masses permission to criticize the abstract class that "deserves" whatever rough justice is being delivered by the Cultural Revolution.

As the book review excerpt noted, the definition of who deserves long overdue justice shifts with the emergent winds, and so those at the head of the Revolution might find themselves identified as an illegitimate elite that must be unseated.

I submit that these conditions exist in the U.S.: the systemic failure of the status quo to deliver on idealized promises and the repression of dissent outside "approved" (i.e. unthreatening to the status quo) boundaries.

What elite can be criticized without drawing the full repressive powers of the central state? What elite will it be politically acceptable to criticize? I submit that "the wealthy" are just such an abstract elite.

To protect itself, a repressive status quo implicitly signals that the masses can release their ire on an abstract elite with indistinct boundaries--a process that will divert the public anger, leaving the Powers That Be still in charge.

But just as in China's Cultural Revolution, central authorities will quickly lose control of conditions on the ground. They will maintain the illusion of control even as events spiral ever farther from their control. The falcon will no longer hear the falconer.

In other words, once the social pressure cooker valve gives way, then the unleashed forces soon grasp that there are few limits on what they can criticize as long as they do so within an implicitly approved narrative--for example, "the wealthy" hoarded wealth and power and so it is just to claw it back by whatever means are available. Since the government failed to do so, the people will have to do so.

The extreme inequalities of wealth and power that are now the dominant dynamic in America are heating the cultural pressure cooker, and when the pressure can no longer be contained, then being recognized as wealthy will shift very quickly from something desirable to something to avoid at all costs.

The lesson of China's Cultural Revolution in my view is that once the lid blows off, everything that was linear (predictable) goes non-linear (unpredictable, fragmented, contingent, emergent, prone to extremes, uncontrollable). If America experiences a Cultural Revolution, the outcome won't lend itself to tidiness or predictability.

To use an analogy from previous blog posts, if the pendulum is pushed to an extreme, when it's released, it will reach an equivalent extreme (minus a bit of friction) at the opposite end. That could be an unexpected but entirely foreseeable Cultural Revolution.

Those who claim that can't happen in America are safely outside the pressure cooker, protected by a delusional confidence that since I'm doing great, everyone is doing great. Since real political agency is no longer allowed, then the pressure will find release outside the political system. It's just Wetware 1.0 running defaults few recognize.  

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https://www.oftwominds.com/blogmar21/castles-sky3-21.html

Our "Wealth": Cloud Castles in the Sky

I realize nobody wants to hear that most of their "wealth" is nothing more than wispy Cloud Castles in the Sky that will dissipate in the faintest zephyr, but there it is: that which was conjured out of thin air will return to thin air.

I've assembled a few charts that reflect the illusion of financial wealth that has a death grip on the public psyche. Something for nothing is a powerful attractor, but it doesn't offer a narrative that the delusionally self-important demand: I earned this by working hard and being smart. Oh, right, yeah, sure. It had nothing to do with currency being created out of thin air and made available to insiders, financiers, banks, etc., or being able to leverage this new money into ever-larger bets, all guaranteed to be winning trades by the Federal Reserve. Nope, you're all stone-cold geniuses.

Back in reality, note that tangible assets--real as opposed to financial conjuring--are at historic lows relative to financial-bubble assets: tangible assets represent such a meager proportion of total assets that we might assume they could slip to zero without affecting our "wealth" much at all.

If we compare financial-bubble assets to the nation's Gross Domestic Product (GDP), a (flawed) measure of real-world activity, we find Cloud Castles in the Sky are worth over six times the nation's real-world economy. This reflects what happens to the valuations of Cloud Castles in the Sky when "money" is created out of thin air and then leveraged into fantastic, monstrous illusions of "wealth."

The next two charts illustrates the sole dynamic driving assets higher: the Fed is the greater fool. Assets are chasing their own tails higher, completely disconnected from the real world, a reality visible in the chart of IWM, the small-cap index. Examine the recent rocket launch higher and explain why this is completely disconnected from previous decades' valuations.

The answer is the Fed is the greater fool: since everyone knows the Fed will always save the day should valuations falter, buyers know there will always be a greater fool willing to pay more for an over-valued asset because the Fed has promised us it will always be the greater fool.

Take a look at the chart of M2 money stock, and please explain how this is just plain old normal healthy "capitalism" at work. After you've explained chasing your own tail, then explain who's getting all the Fed's free money for financiers. It isn't those working for a living, as evidenced by the chart of money velocity, which has plummeted into the Dead Money black hole from which there is no escape.

So by all means, lavish yourself with praise for constructing a Cloud Castle in the Sky of "wealth" with your hard work and genius, and keep chasing your own tail because the Fed has promised us it will always be the greater fool. What a pretty cloud, what a pretty fantasy.

Look on my works, ye Mighty, and despair!"
Nothing beside remains. Round the decay
Of that colossal wreck, boundless and bare.