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Telling lies to power

It was surely a stroke of spectacular good fortune that no sooner had the Biden administration altered the internationally accepted definition of a recession (as two quarters of negative GDP) than data was released which – under the old definition – meant that the US economy would have been in recession.  In practice, of course, economists tend to look to a range of economic indicators such as the rate of unemployment and the rate of inflation in addition to GDP to determine the nature and scale of a recession.  Nevertheless, as a helpful rule of thumb, if a nation’s GDP has been negative for six months or more, then, yes, it is in recession.  Not least because those other measures which economists look to are often “lagging indicators.”  Retail outlets don’t, for example, conduct fire sales at the first drop in purchases any more than manufacturers fire their workforce at the first decline in orders.

While we can have – and apparently are having – a heated debate about the definition of a recession, this type of change to the way official data is presented raises a far deeper issue which takes us to the heart of much that is wrong with the contemporary western empire.  Clearly, the Biden administration – which has been losing political support hand over fist – does not want to go into November’s mid-term elections in the middle of an official recession.  But equally clearly, the administration can do nothing to address the real economic woes impacting American voters.  And so, in one sense, it is irrelevant whether we call it a recession, a transition or even a Biden Administration retirement party.  Ordinary Americans are worse off whichever way you cut it.

The same goes for institutional investors.  The fact that yield curves have inverted across the spread – an indicator with a more than 90 percent record of predicting recessions (so, far more accurate than any economics Nobel Prize winner) – tells us that investors have already run for cover; seeking out what they consider “safe” asset investments, even if these come at a real-terms loss.  Businesses will make similar calculations in the coming weeks and months as costs rise and sales decline.  The decision though, to lay-off workers is always difficult for both economic and psychological reasons.  Nobody wants to fire workers that they’ve invested time and money training.  Nor is it easy to look someone in the eye and tell them they no longer have a job – especially in a period of falling living standards.  Nevertheless, job losses are already rising, vacancies are falling, and insolvencies are on the increase.

Casual investors, establishment media pundits and the person who runs your pension fund are the only people likely to fall for the politically-motivated claim that we are not, in fact, in a recession – this happens in every downturn, and it is one reason why ordinary people and small businesses are always the losers – they encourage us to invest just at the point where anyone with any sense is getting out.

Nevertheless, the change in the definition of a recession is hardly the first time the government and the technocracy have altered a statistical definition for cosmetic purposes.  John Williams’ Shadow Stats, famously offers a range of data including unemployment, GDP, money supply and inflation as it had been calculated prior to the cosmetic changes.  Predictably, all of these indicators would have been far more negative than the official, cosmetically altered, data.  Similar “massaging” of the figures has occurred on this side of the Atlantic too.  Being in employment, for example, used to mean having a job.  But this has been altered so that anyone who does an hour or more paid work in a week is counted as being employed.  GDP looks far rosier with the inclusion of non-cash services and with the estimated turnover of prostitution and drug dealing – which is always just enough to hold quarterly GDP to at least 0.1 percent.  Infirmity and disability have all but been defined away so that anyone not paralysed from the neck down or completely comatose is determined to be “fit-for-work” – the unintended consequence being that in periods of labour shortages, such as when the economy emerged from two years of lockdown the official labour force was far higher than the true available and able workforce.

Nor is it only in the area of official statistics that we have arrived at a point where ministers and technocrats are told what they want to hear rather than what they need to know.  Central to the neoliberal revolution of the 1980s and 1990s was the erosion of all mechanisms through which it used to be possible to speak the truth to power.  The destruction of trade unions, for example, deprived managers of a valuable feedback mechanism for understanding what was actually happening on the shop floor.  The same goes for the muting and under-funding of health and safety inspectorates.

The culture of workplace targets also had a detrimental impact on feedback.  Under the Blair government in the UK, for example, the Ambulance Services were charged with answering all calls within ten minutes – which led to the perverse outcome that if the ambulance arrived in 10.01 minutes and the patient lived, it was counted as a failure, but if the ambulance arrived in 9.59 minutes and the patient died, this was counted as a success.  In effect, workers learned to meet – and often cheat – the targets even where this meant not doing the job.  And so, once again, the technocrats at the top received a distorted picture of the organisations and processes they thought they were managing.

Crackpot realism also plays a huge part in neoliberalism, particularly where employment is precarious.  If, for example, an employer insists that workers feign belief in ideas that contradict centuries of biology, said workers have no choice but to do so.  To do otherwise would result in the sack, a dark cloud over one’s future job prospects, reliance on an inadequate social safety net, and one’s replacement by someone who is prepared to mouth the official line.  Even more damagingly, the same goes for highly-qualified engineers and physicists charged with telling the technocracy that it is entirely possible to run an advanced industrial economy on wind and solar energy or, indeed, chemists and agriculturalists paid to tell the technocracy that we can easily feed 8bn humans without artificial fertilisers.  Anyone who even thinks about telling the truth to power in these areas will be labelled a “climate denier,” and replaced forthwith.  And so, from top to bottom, we have a culture in which almost everyone turns a blind-eye to the most absurd policies even when they clearly break natural laws of the kind that cannot be changed by hurt feelings.

What happened in economics was that a particular – neoclassical – school gained control over the university departments, academic journals and book publishers so that nobody with a contrarian view to the prevailing orthodoxy could gain a voice within this technocratic silo.  This is why, for example, they were able to claim that “nobody” could have seen the 2008 crash coming, even though plenty of outsiders did, indeed, see it coming.  What is often called “woke” has similarly captured the departments, journals and publishers of the social sciences.  Meanwhile a particular version of “bright green” has captured the climate science and energy academia, shutting out anyone who might dispute a particular, “green industrial complex” version of the problem and its solution.

The capture of academia, in turn, has infected the entire career structure.  The result is that, instead of true diversity – people from a range of backgrounds whose skills and knowledge have been hammered by life’s ups and downs – every part of the technocracy is steeped in conformity.  As with the paramedic who arrives on time but kills the patient, every wannabee technocrat knows to keep their head down, tick off their performance targets, and to conform to the prevailing orthodoxy.  Just as the human mind regularly “trades safety for peace of mind” – filtering out unpleasant information even if it is essential – so the entire neoliberal technocratic order is designed only to tell those higher up what they want to hear.  At the same time, social media AI and thousands of low-paid narrative-shapers – or “fact-checkers” as they prefer to call themselves – ensure that any discordant data or viewpoints are deleted from the metaverse long before anyone in a position of authority is disturbed by them.

While the scope and technical complexity of the modern neoliberal system is unusual, the process itself can be seen in the pre-collapse stages of empires and monarchies throughout history.  In their way, the “estates” which were shielding Louis XVI and Marie Antoinette from the realities of life in 1789 France were little different to the neoliberal technocrats hiding unpleasant truths about the impending collapse of the western empire today.  Tsar Nicholas II no doubt believed the Russian generals when they promised an imminent offensive in the spring of 1917, shielded, of course, from reports from the front which pointed out that the army lacked everything from food and boots to guns and ammunition.

Among the things the western elites have been shielded from are the fact that without energy, nothing works.  That currency is merely a claim on future energy, commodities and goods which, without sufficient surplus energy, will not be putting in an appearance.  That below target interest rates may not be proof that the central bank has got it right, but – at a time of supply shocks, dollar shortages and energy crises – might be evidence that the big investors are already running for the exits.  But most importantly of all, our current elites are being shielded from the one truth that might otherwise save their system and, indeed, their lives – that, ideological overlays aside – every revolution we have ever had, began with rumbling bellies… just like those anticipated this winter.

As you made it to the end…

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