Let me introduce you to John Robb, fighter pilot, entrepreneur, author, blogger, etc. etc. etc. This is the kind of guy that gives even successful people an inferiority complex.
His blog, Global Guerrillas, covers a wide range of strategic issues on mundane things like defense and really cool things like “resilient communities.” His writing and thinking should be food for thought for both policy wonks and the political community.
I was re-introduced to Robb through this post on Central Planning and The Fall of the US Empire. Scary stuff.
His main point is that centralized bureaucracies are incapable of properly allocating resources. This isn’t necessarily an earth-shattering insight, thought it never hurts to remind people of the obvious. The real insight in this blog is Robb’s view that the cancer of centralization has crept into the private sector, particularly at the top level of both the rich individual, as well as our corporate sector.
I think he’s right.
Central planning took over the decision making process in the US, both through the growth of government and through an unparalleled concentration of wealth.
The parallels between the rapid growth of US government bureaucracy and the Soviet bureaucracy is straight forward. As more and more of US economy was controlled by a narrow group of decision makers allocating government resources, the more sluggish the entire economy became (most of this was due to massive growth and mis-allocation in entitlements and defense). Further, the ability of government bureaucracies to extend their decision making to remaining majority of the economy through regulatory action, is also a form of centralization. However, even with all of this government growth, it’s is still not enough to account for the level of misallocation we are seeing.
There’s is something else at work.
The answer is that an extreme concentration of wealth at the center of our market economy has led to a form of central planning. The concentration of wealth is now in so few hands and is so extreme in degree, that the combined liquid financial power of all of those not in this small group is inconsequential to determining the direction of the economy. As a result, we now have the equivalent of centralized planning in global marketplaces. A few thousand extremely wealthy people making decisions on the allocation of our collective wealth. The result was inevitable: gross misallocation across all facets of the private economy.
This type of thinking probably makes ideological libertarians nervous, as it seems to argue for wealth distribution. Robb doesn’t really go there. That’s probably smart because the only people with the power to “redistribute wealth” are the same, failed, central planners of the government sector.
Robb ends his post with this.
The result of central planning in the US has finally hit the wall. The list of problems is endless. The misallocations range from the dangerous $600 trillion derivatives market to the destruction of the US middle class (by exporting jobs and the substitution of income with debt).
The end result is that our economic and political system has become very fragile. All it will take is is one extremely bad decision and the cascade of failure that follows will catch everyone off guard.
One extremely bad decision? You mean like allowing one investment bank to fail, and creating a currency crisis and a near global financial meltdown, all because private banks and public regulators colluded create protected institutions that were allowed to socialize risks while pocketing rewards? That isn’t capitalism, it’s fraud.
Robb is 100% correct as to the extent of the problem. We likely have no idea how close to the edge we are, and this can’t all be blamed on government. With a corporate sector capable of purchasing its regulators, we are at a point where Big Gov, Big Biz, Big Labor, and Big NGO (a collection of special interests across the spectrum) can conspire to rob regular citizens of their freedom, their currency & savings, and even their ability to reverse the tide. The irony about the great recession and the meltdown was that literally 1000s of people at the top of the food chain saw it coming, and were either powerless to stop it, or actively working to delay the inevitable.
This system won’t decentralize on its own. It must be politically attacked and dismantled. If you aren’t up for that fight, then graze the pastures prepared for you like the sheep you are.
And please disabuse yourself of the notion that Bill Gates or Rupert Murdoch will be better managers than Barack Obama or George W. Bush. If you won’t govern yourself, you will be governed. That is why every American needs a crash course in self-government.