Saturday, December 25, 2010

A Spectre is Still Haunting Europe...

But this time it's not necessarily Communism, or any other label used by humans to conveniently understand their complex forms of socioeconomic organization. It's the spectre of an unrelenting reality, emerging from the depths of history, with no plans to follow but its own. What exactly, then, is reality and why does it have its own plans? These are not easy questions to answer, but many brilliant minds have had much to write and say on the topic. It may be safe to say with near certainty that, if nothing else, reality is constantly evolving and always lingering in the furthest boundaries of our comprehension.

The famous German philosopher, Georg Wilhelm Friedrich Hegel, is most readily identified with using the dialectic process to describe reality. It is the process in which opposing forces of nature push and pull with each other in a very non-linear fashion, until one rapidly gives way to the other or there is a synthesis of both. This framework, of course, is itself a simplifying abstraction used to understand the complex evolution of historical processes, but it also reflects a deep truth that many people fail to recognize throughout their lives.

Although Hegel rediscovered and thoroughly popularized the dialectic method within the social sciences, he somewhat naively believed that human ideas, as a reflection of God's thoughts, were the driving force of reality's evolution. Karl Marx and Friedrich Engels adopted Hegel's method in their socioeconomic analysis, but they completely "turned it on its head". As Marx explained:

My dialectic method is not only different from the Hegelian, but is its direct opposite. To Hegel, the life-process of the human brain, i.e. the process of thinking, which, under the name of 'the Idea,' he even transforms into an independent subject, is the demiurgos of the real world, and the real world is only the external, phenomenal form of 'the Idea.' With me, on the contrary, the ideal is nothing else than the material world reflected by the human mind, and translated into forms of thought." (Capital, Volume 1, Moscow, 1970, p. 29).
One of the the hot topics in the "material world" right now is the European Union and its increasingly imminent disintegration. Toxic debts from sovereign nations across this region can no longer be serviced at their true cost, so everyone is clamoring to find the "best" way to subsidize such debt and avoid a wholesale restructuring, in which all the imaginary wealth on the balance sheets of major banks would simply evaporate. Many commentators are enraged at the idea that U.S., French or German taxpayers would have to subsidize the profligate ways of Greece, Ireland and those soon to follow in their footsteps. At the very least, these bailouts should be preceded by or conditioned with strict austerity measures designed to bring an end to the failed welfare/entitlement state and re-establish values of "personal responsibility".

Some of the more astute commentators are enraged at the idea that Greek, Irish and other EU citizens will soon be forced to live with much fewer public benefits and much higher taxes to keep malicious banks and their crony governments in power. They correctly point out that such a path of austerity is "economic suicide" and will only lead to more suffering in the long-run. Instead, they advocate that these countries should refuse to honor their unproductive debts to banks, break away from the monetary union and reissue their own national currency. While this "option" will certainly lead to uncertainty, disorder and a significant destruction of both real and imaginary wealth in the short-term, it represents the only true path to a just and sustainable future.

However misguided the bailout/austerity advocates may be, or correct the "sovereign defaulters" may be, they both seem to place themselves outside of a larger dialectic process. For the latter especially, it is absurd that anyone could possibly think bailouts conditioned on harsh austerity measures could be a good path forward for the countries involved. Why can't these people see that too much debt is the problem, and subsidizing existing debt or adding more debt will not solve it? Isn't it clear by now that TBTF banks are parasites, constantly sucking productive capital out of the global economy, and no amount of austerity will positively impact sovereign debt problems as long as they remain in operation? Perhaps the answers to those questions lie outside the realm of conscious human decision, and in the realm of complex historical evolution.

There is an ever-present debate which occurs over big government vs. small government , public entitlements vs. privatized markets, public spending vs. austerity, etc. These concepts are typically perceived as independent ideas that exist so humans can choose one over the other, but they are actually two sides of the same coin, one side being necessary for the other side to exist. Looking at only the most recent period of history, it was the credit bubble and subsequent housing crash which created the "need" for European states to respond forcefully with deficit spending.

This universal spending across the developed world, in turn, contributed to the runs on sovereign bond markets in the Eurozone, creating the "need" for regional/global institutions to respond forcefully with plans of bailouts and/or austerity. Despite these measures, the housing markets across these countries remain extremely fragile and bond markets across Europe continue to show symptoms of an incurable disease. The dialectic evidence is right in front of our eyes, where it will remain, as one force rapidly gives way to another.

The opposing forces of modern times are different from those of Marx and Engels only in form, but never in function. It is the ongoing clash between the increasingly rich and increasingly poor, the extractors of  economic rents and the sellers of debt, the oppressors and the oppressed. Whatever the specific characterization of the simple dialectic involved, it must be viewed as a direct product of historical processes that have evolved over time. There should be absolutely no surprise at the fact that people hold diametrically opposed ideas on how nations around the world should proceed to deal with their debt issues. They are just ideas, after all, and they reflect an underlying tension in the material relations of human existence.

The general outcome of our current dialectic struggle will not be governed by these ambitious ideas, but by the natural forces of antagonistic evolution. Large swaths of unproductive private and public debt will not be repaid, and sovereign countries will default on their obligations. International monetary, political or strategic unions that rely on economic stability, mutual trust and confidence will not be preserved in any meaningful form. Citizens of the developed world will not stand in a single-file line and receive their bitter dose of austerity in an orderly fashion. These things are almost 100% certain, and no amount of conscious planning or top-down decision-making will make them less likely to occur.

I realize that the points made above, taken to their logical extreme, could imply that human beings have no "control" over their collective future, and therefore effectively no "free will". This implication, among many other things, could render the relentless criticisms of commentators around the world, including me, acts of zero importance or influence. If the future is set to evolve from complex, oppositional forces of nature, then there is nothing left to do but wait and watch it all unfold. Indeed, the enigma of free will, and the nature of reality itself, have been painstakingly analyzed by both scientists and philosophers alike, with no firm conclusions ever reached.

Personally, I find it at least worth noting that people are always obsessing about the differences between what is and what could have been. Despite the fact that history continues to repeat itself at the most fundamental levels, humans never seem to learn from the past, change their collective behaviors and break the "vicious" cycle. It seems we always address our systemic problems with too little, too late, and are then left with intractable predicaments to face. European politicians and financial analysts may yap all day about what should be done to solve their sovereign debt problems, or what they plan to do, but I am only interested in what will happen, and that seems to be a process increasingly disconnected from even the most clever ideas or plans of human beings.

Our individual actions, however, are not unimportant or meaningless. Regardless of whether they result from freely-constructed decisions or a complex deterministic process, they are the constituents of our future. The theoretical underpinnings of reality may become largely irrelevant in terms of our practical ability to remain secure and healthy in the upcoming years. Furthermore, there are certainly many people out there with extremely flawed and/or dangerous ideas. On the off chance that our freely-chosen words and actions  actually do have influence, it would be unwise not to speak out against such ideas. So I remain critical of misguided policies and opinions and do not hesitate to express such views, but I will always try to temper my personal judgments with a broader understanding of historical evolution. For that process is truly a spectre that no person can tame.

Monday, December 13, 2010

The Debt-Dollar Discipline: Part III - Future Reorganization

"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.

Friday, December 10, 2010

The Debt-Dollar Discipline: Part II - Conservation & Release

      Part I in this series introduced Michel Foucault's theory of disciplinary society, laid out in his book Discipline and Punish, and the application of this analysis to the "debt-dollar discipline" formally imposed on global society by the Bretton Woods Agreement of 1945 (establishing the dollar as the global reserve currency). It should come as no surprise that this global financial discipline is currently in the process of being revoked.

     This revocation is not carried out by the political or financial leaders of the world, but by the system itself. Part II will explore both the technical and practical aspects of disciplinary collapse, primarily in the context of complexity theory. Part III, to be released shortly, will conclude with some general thoughts on the potential forms of organization that could emerge from the ashes of debt-dollar discipline.

The Adaptive Cycle

     Foucault did not say much about the future he envisioned for disciplinary society in his book, as it was geared towards promoting understanding rather than inspiring rebellion. He did, however, retain some hope that a better form of society could develop. [1]. Although he correctly identified the evolution of societal discipline with the evolution of economic structures, he was not in the business of predicting future economic developments.

     Foucault's disciplinary system was a complex set of interacting networks, in which each central hub (households, schools, factories, prisons, etc.) served a necessary function. Although he described individuals moving from institution to institution in a somewhat linear path, he recognized that each institution was highly analogous to and reinforced the others. A system of such organization follows a natural evolutionary path. The debt-dollar discipline represents the tail end of this path, and the implications for disciplinary society at every level are extreme.

     Most complex evolutionary systems, such as the global financial system, can be viewed in the framework of Buzz Holling's adaptive cycle, consisting of growth (exploitation), conservation, release and reorganization. An excellent primer on this topic and its relation to Robert Prechter's socionomics and Joseph Tainter's ideas on complex societies undergoing collapse can be found at The Automatic Earth [Fractal Adaptive Cycles in Natural and Human Systems].

    The debt-dollar disciplinary system has been in a phase of extraordinary growth for the last few decades, exploiting markets and resources to increase inter-dependencies, systemic diversity and overall wealth. However, the high levels of growth and specialization also led the system into a phase of conservation, in which opportunities for novel exploitation diminished and systemic structures became rigid.

      Increasing amounts of energy and resources were directed towards maintaining the existing system, rather than growth, and this maintenance was primarily achieved by core structures extracting large amounts of wealth from the periphery. The complex inter-dependencies, which previously functioned to generate wealth, became a major liability for the system, as it was less resilient to external or internal shocks. At this stage, Holling described the complex system as "an accident waiting to happen".

Financial Conservation

     Foucault focused on the modern penal system, in part, to make it clear how the disciplinary society was able to maintain its power structures over time. It did not seek to eliminate undisciplined behavior, but simply manage such behavior on its own terms. In the wake of the industrial revolution and increasing wealth inequality, it was the property crimes committed by peasants that were most threatening to the staus quo structures. These "popular illegalities" were ultimately what drove seemingly "humanitarian" goals of "prison reform".

     By identifying, labeling, detaining and controlling lower class "delinquents" in a confined space, the state could also control the general socioeconomic conflicts that were increasingly common within industrial capitalist society. The lower segments of this society, who were absolutely necessary for the state's economic functioning, were coerced to self-discipline and fear the potential that they, too, may become a part of the largely invisible, yet detested "delinquent class". To maintain a high level of discipline, then, societal elements of popular dissent must be carefully managed, which presents an inherent conundrum for a financial system under debt-dollar discipline.

     This system, unlike its strictly industrial predecessor, is endogenously prone to over-extension in the short-term. The large economic rents extracted by speculative financiers lead to severe debt deflations, which then leave significant segments of the underlying population in economic despair, including the industrial capitalists. The rapid growth enabled by financial discipline sparks a crisis of legitimacy, in which previously self-disciplined financial consumers begin to question the wisdom of their shackles. For the most part, this questioning is simply a result of there being no other option, as financial expectations and promises have evaporated as quickly as they were formed.

     Before the global financial crisis of 2008, debt-dollar discipline was maintained by re-directing credit growth whenever a debt-induced recession occurred. Essentially, financial consumers would be disciplined (by the system and themselves) to leverage their stagnant real wealth into various different assets for temporary returns. There are currently no asset classes or greater fools left to pick up credit growth where it left off, save for government leaders around the world, who will stop at no lengths to preserve the debt-dollar discipline keeping them in power.

     However, these governments are currently or will soon face sovereign debt crises, as a function of their own enslavement to the financial disciplinary system. They, too, must borrow money from private banks and pay interest on that debt, which becomes increasingly difficult as economic growth stagnates and tax revenues plummet. The "delinquent class" has now become too massive and visible for the existing power structures to effectively control, but that does not prevent the disciplinarians from trying.

     Many of their attempts to reinstate debt-dollar discipline are failing because of the financial system's rigid structures themselves. As a function of conservation, these structures have become extremely inflexible and a liability for those seeking to maintain the status quo. The U.S. Federal Reserve has created trillions of debt-dollars through discounted loans and quantitative easing, in the alleged hopes that this "liquidity" will find its way to financial consumers and inflate the prices of assets and goods.

     Their attempts are futile because economic actors worldwide had previously been disciplined to take on dollar-denominated debt, and as those massive liabilities come due, the demand for dollars will spike along with their value. It may seem counter-intuitive that a collapse in debt-dollar discipline will cause dollars to increase in value, but the disciplinary system has actually relied on a suppressed dollar to carry out its purpose. Without inflated asset prices relative to the dollar, debts cannot be repaid and financiers go broke.

     Other attempts involve governments incurring fiscal deficits to provide subsidies, backstops and general support for the financiers. The U.S. policies of TARP, ARRA and Fannie/Freddie housing intervention are great examples of such attempts. It is hoped that financial discipline can be restored by propping up the institutions most responsible for implementing and reinforcing it. Once again, the reason this plan will not succeed is due to the financial system's original disciplinary purpose.

     It had evolved to establish a global class of financial consumers who will continuously take on debt and repay most of those debts, in the form of debt-dollars or hard assets. The system has now limited its own ability to extract future wealth, as financial consumers have very limited capacity to repay existing debts, let alone incur new obligations. Much of the collateral secured by existing debts, or that could potentially be secured by future debt, has lost significant value, cannot be reached or is already encumbered.

     These fiscal deficits will eventually lead the U.S., the purveyor of debt-dollar discipline, into a sovereign debt crisis. Attempts to decrease the national debt have been rendered useless by the financial disciplinary system, as it requires private or public credit growth for economic health. Without the underlying private growth, cuts in public spending will most likely make deficits worse and debt servicing costs greater (the current Euro zone crisis is an ongoing example of this dynamic).

     President Obama's laughable plan to double U.S. exports in five years will not even come close to fruition, because debt-dollar discipline has come at the expense of the country's manufacturing sector, and the ability to suppress the dollar's value as explained earlier. The complex disciplinary system has also rendered the political apparatus inflexible, which is why many Democrats, claiming to be against tax cuts for the rich, and Republicans, claiming to be against public deficits, have both agreed to extend Bush's tax cuts (which will cost taxpayers $5T over ten years [2]). It is truly a predicament, an inherent contradiction of the system itself, and can only be resolved by a wholesale simplification of the structures within global disciplinary society.

Comprehensive Release

     For reasons stated above and others, the financial disciplinary system has entered a phase of irreversible release. The sub-prime housing crisis in the U.S. was the triggering event for this global release, in which the complex power structures supporting debt-dollar discipline will be rapidly and chaotically dismantled. Without pervasive access to affordable credit, the vast networks of discipline around the world cannot be coherently maintained (i.e. international trade heavily dependent on "letters of credit"). This credit had become the lubricant enabling Foucault's disciplinary machine to operate smoothly, and without it, the machine will grind to a screeching halt.
     In Part I of this series, the financial disciplinary system was referred to as a parasite, which attaches itself to all other disciplinary institutions of society and feeds off of their established functions. In turn, the disciplines legitimizing these institutions become hopelessly intertwined with the debt-dollar discipline, as the latter has come to define the relative "success" of a society. Systems of education, healthcare, industrial production (including agribusiness) and law enforcement have become mal-adapted to prolonged periods of economic deleveraging and contraction. These foundational systems will be unable to perform their disciplinary functions when they lack sufficient resources, price their customers out and are perceived as being irretrievably damaged.

      For example, 41 percent of American adults reported that they "had medical debt or trouble paying medical bills" in 2007 [3], and debt owed by American students graduating from a public college has increased more than 100% over the last decade. [4]. It was reported that the Illinois State Police was planning on laying off more than 460 troopers and closing five regional headquarters by Fall 2010 [5], which is an ongoing trend in many U.S. and European localities.

      The U.S. passed a $26 billion spending bill in August 2010 to prevent about 160,000 teacher layoffs [6], but teachers continue to lose their jobs and the ones saved will surely disappear as soon as the money runs out [7]. Disciplinary institutions are classically "caught between a rock and a hard place", leaving them with almost no options to preserve their current functions. Perhaps the institution most visibly affected by disciplinary collapse has been the political apparatus of the U.S., which has lost much of its legitimacy in recent years.

    The emergence of the "Tea Party" movement in America is an obvious example of the government's disciplinary policies being popularly rebuked. However, this movement has arguably been co-opted by the mainstream power structures (Republican Party) and, in the spirit of Foucauldian punishment, many elements of the movement are labeled as "extremist" or "racist" by politicians and the corporate media. Whether there is any truth to those claims is irrelevant, as long as they serve to marginalize the rebellious ideas lurking within. Nevertheless, the disciplinarians are having a difficult time containing the popularity of the subversive concepts represented by the Tea Party movement.

     Another recent, existential threat to disciplinary society is the WikiLeaks organization, co-founded by Julian Assange. For many years, the various disciplines (especially debt-dollar discipline) have greatly benefited from advances in electronic communications technology, and have evolved right alongside them. Now, this technology increasingly serves as a means of communicating outside the panoptic gaze of disciplinary society.

     WikiLeaks has released numerous electronic documents given to it by informants within the heart of the system, exposing some inconvenient truths about those directing foreign and domestic policies. [8]. These documents are especially threatening to disciplinarians because they are "raw dumps" of data and communications, at least before they are "vetted" and deceptively reported on by the mainstream corporate media. The leaks provide the disciplined public a rare glimpse into the "dark side" of the modern "democratic" state and its complex power structures.

     Governments and many parts of the corporate media have obviously responded by attempting to marginalize the effects of such leaks, primarily by labeling Assange a "child molester", cyber-attacking the WikiLeaks website, restricting its access to funding and threatening criminal prosecution. Perhaps more importantly, they have attempted to frame the narrative surrounding WikiLeaks as one involving unpatriotic acts of disclosure, which may actually harm the lives of American citizens. If the truth becomes known, then we will be more susceptible to external threats and less secure.

      This is a recurring narrative that has been heavily used by the disciplinarians to marginalize political threats (i.e. Daniel Ellsburg - released Pentagon Papers during Vietnam War) and reinforce discipline (i.e. Patriot Act), especially since the attacks on 9/11. However, the momentum of release, fueled by a break down in financial discipline, is currently overwhelming their suppressive efforts. International hacker groups have recently launched web attacks against PayPal, MasterCard and Visa in response to these companies cutting their payment services to WikiLeaks. [9], [10]. The WikiLeaks organization itself has released an "insurance file" into cyberspace containing many more revealing documents, which can be decrypted and exposed should it be deemed necessary, and rest assured it will be soon enough.

    A claim circulating in the blogosphere that deserves a quick mention is that WikiLeaks is actually a covert psychological operation by the U.S. government to further reinforce discipline, primarily with regards to the "war on terror". [11]. It is claimed that much of the leaked information does not really criticize the overall justifications and motives of U.S. foreign policy (or economic policy), and rather focuses more on the corruption and deceit of other "hostile" countries. For example, the leaked diplomatic cables simply present slightly embarrassing, but well-known facts about U.S. policies, while providing the disciplinarians even more justifications to engage in military operations against Iran (diplomats alleging it has nuclear weapons).

    I tend to disagree with this viewpoint and see much of the WikiLeaks activity as being more than "slightly embarrassing" to U.S. power structures (especially given their responses), but instead of sidetracking into that debate, I will simply quote an excellent article written by Andrew Gavin Marshall on the Global Research website:

"If Wikileaks is a psy-op, it is either the stupidest or most intelligent psychological operation ever undertaken. But one thing is for sure: systems and structures of power are in the process of being exposed to a much wider audience than ever before. The question for the alternative media and critical researchers, alike, is what will they do with this information and this opportunity?" [12]
     The financial structures of power are also under attack by some of the financial consumers themselves, who have decided not to buy into the fabled narratives espoused by their politicians and pundits. Europe had an obviously unofficial "bank run holiday" on December 7th, in which large numbers of people withdrew their deposits. This episode arguably led to a temporary crash in the ATM systems of the Bank of Ireland, the country's largest financial institution. [13].

     Max Keiser and Mike Krieger also recently launched an operation to decapitalize J.P. Morgan by encouraging consumers around the world to buy an ounce of physical silver, forcing the institution to cover massive losses on its silver short positions. November saw record sales of silver American Eagle coins from the U.S. Mint, and this surge could very well have been influenced by the operation. [14]. The immediate success or failure of these "attacks" is largely irrelevant at this point, because it is literally the thought that counts.

     The U.S. disciplinary order has also lost legitimacy in the eyes of many other nations, who previously were coerced to support the system. It was mentioned above that the value of the dollar will most likely increase in the short-term, precluding the disciplinarian's attempts at restarting credit inflation, but this process is by no means a vote of confidence in the dollar as a long-term store of wealth. It is a necessary function of global deleveraging, as the dollar still provides the best means of eliminating debts and transforming paper wealth into hard assets, but this window of opportunity is rapidly narrowing. Many countries have made clear that they are no longer willing or able to submit to debt-dollar hegemony in the near future.

     The Federal Reserve's latest round of quantitative easing was ubiquitously rebuked by officials in Europe, Asia and Latin America. Brazil's finance minister has blatantly stated that "it does no good at all to just throw [debt] dollars from a helicopter". [15]. These states are simply attempting to maintain their own disciplinary mechanisms by separating out from the overarching debt-dollar discipline. They sense that structures preserving the latter are naturally collapsing, and a pre-emptive break provides their best chance to maintain a degree of national or regional order.

     Russia and China recently announced that they would stop using the dollar to settle bilateral transactions, and instead use the yuan and ruble. [16]. Germany consistently expresses its disdain for the IMF and ECB's euro zone bailout facilities, which ultimately serve to prop up financial institutions operating in Europe. [17]. Numerous countries have also been engaged in ongoing discussions with the IMF about establishing a new reserve currency, and though this is unlikely to occur, it is symbolic of the debt-dollar discipline's demise.

     Foucault perceived the disciplinary society exerting its power primarily by fixing "docile bodies" within time and space. [18]. These bodies would spend much of their lives in a highly regimented and confined existence, disciplining themselves to become "normally" functioning members of society. Debt-dollar discipline has not strictly operated through such physical requirements, but rather a pervasive psychosocial drive of consumers to extract ever-greater amounts of wealth from their environment.

     As the complex structures supporting this financial discipline deteriorate, consumers will have to confront a profound new reality, one that they previously thought to be outside the realm of possibility. They must not only confront the fact that they have been deceptively enslaved, but simultaneously impoverished as well. Part III of this series will discuss the general ways in which financial power structures and disciplined consumers may react to the new realities faced by global society, introducing the insightful thoughts of Gilles Deleuze on what he ominously termed the "control society".

Friday, December 3, 2010

The Debt-Dollar Discipline: Part I - Financial Discipline & Punish

   *The following is Part I in a two part series of articles on the relatively rapid emergence and collapse of the "debt-dollar discipline" imposed on our global society. It is being done in two installments mainly due to my current time constraints, but also for the sake of shorter length and targeted focus. This part will introduce Michel Foucault's (renowned french philosopher, 1926-1984) analysis of "discipline" and "punish" in the modern state, and apply it to the global debt-dollar reserve system. The next part will focus entirely on the ongoing collapse of this disciplinary system, as it such an important and far-reaching topic.


      Michel Foucault's seminal work Discipline and Punish explored the extreme institutionalization of "discipline" in modern Western society, as best exemplified by the evolution of the modern penal system. He illustrated this transformation by contrasting medieval public executions with the wholly distinct system of punishment we have today. The former was a stage for the sovereign (usually a King) to exhibit physical punishment on a criminal for violating the laws of the land, which were seen as an extension of the sovereign's body, and was designed to explicitly make the public aware of the sovereign's absolute power.

      According to Foucault, this non-uniform system of public punishment eventually had the unintended consequence of creating public resentment for the sovereign, as the oppressed people would begin to identify with the suffering of the punished. This dynamic was evidenced by the violent riots that would erupt in support of prisoners during public executions. The powerful sovereign could no longer continue to maintain its domination while its political legitimacy was being undermined by such adverse reactions. These public displays may have revealed the extent of the sovereign's authority, but they were too disorderly for the modern state's purposes.

      It is no coincidence that the modern penal system evolved along with the emergence of industrial production as the dominant economic force in Western society. The latter was a system entirely focused on increasing efficiency, where students, workers and soldiers alike were trained to be more obedient, faster and stronger in every aspect of their designated functions. Modern states facilitated this process of immense wealth production by instituting high levels of order on their citizens, or what Foucault would term "discipline". It was not really a tool for the Kings and Monarchs of old, but rather was more useful for controlling the populations of emerging democratic states [emphasis mine]:

Historically, the process by which the bourgeoisie became in the course of the eighteenth century the politically dominant class was masked by the establishment of an explicit, coded and formally egalitarian juridical framework, made possible by the organization of a parliamentary, representative regime. But the development and generalization of disciplinary mechanisms constituted the other, dark side of these processes. The general juridical form that guaranteed a system of rights that were egalitarian in principle was supported by these tiny, everyday, physical mechanisms, by all those systems of micro-power that are essentially non-egalitarian and asymmetrical that we call the disciplines. [Foucault, Michel (1975). Discipline and Punish: the Birth of the Prison, New York: Random House (p.222)]
      Foucault pointed out the striking similarities of the prisons, schools, hospitals (especially "mental" institutions), military barracks, office buildings and factories that had been established in the modern state, as they were all designed around specialized functions, regimented schedules and high degrees of observation and control. These institutions even shared very similar physical architectures and were typically legitimized by an underlying "scientific" foundation, whether that be criminology, psychology, medicine or economics. It was their ultimate goal to internalize strict discipline within the individuals themselves, so they would automatically follow these societal "norms" without questioning any of their reasons or results. Anyone who strays too far from the expected behaviors are labeled as part of the "delinquent class", and are deemed to be in need of reform, rehabilitation, treatment or punishment.

      The quintessence of this institutional disciplinary structure for Foucault was Jeremy Bentham's "Panopticon", which is a prison design involving a central watchtower with heavily tinted or mirrored windows. The prison cells would be located around the periphery, and prisoners would never be able to tell whether they were being observed or not. Bentham himself described the design as allowing "a new mode of obtaining power of mind over mind, in a quantity hitherto without example." [1]. It fit in quite well with industrial society's ever-important goal of maximizing efficiency, as it allowed prisons to cut down on the number of staff needed to control the prison population.

      The Panopticon design principles have been implemented in several different prisons and even some hospitals after Bentham's time, but the general concepts can also be seen in other areas of modern life. For example, many U.S. highways have signs warning drivers that "speed limits are enforced by aircraft". It is highly unlikely that the state police department actually takes on the expense of using aircrafts for such a purpose, but that fact is largely irrelevant for the state. As long as drivers believe they are potentially being monitored from above, they will be more likely to obey the speed limits given to them. With such wide-ranging structural influence, Foucault's disciplinary society acts as an enormous, calculating machine which puts Hobbes' Leviathan to shame.

Global Financial Discipline

      Institutional discipline and order have not just been isolated practices used for limited goals, but are now a pervasive element of global society's very fabric. It may have started as a design principle of Western nations, but has quickly spread to all corners of the globe with the exponential rise in transportation and communications technology. Perhaps the most crucial element of this disciplinary expansion has been the process of "globalization", and specifically the focus on creating "free trade" between countries and establishing inter-connected markets.

      After all, the entire disciplinary transition in the Western world was arguably a response to the new economic realities of the industrial age. As the importance of financial transactions in economies around the world increased exponentially, a new form of discipline was needed for the human population. It would serve to solidify the power structures of a global financial society, usurping the previous role of the industrial class. This discipline was first imposed on the world through the Bretton Woods Agreement of 1945, in which the U.S. dollar was designated as the world's reserve currency.

      Under the original plan, the currencies of all participating countries were to be given a fixed exchange rate to the U.S. dollar and the dollar, in turn, was the sole currency that could be converted into gold by foreign governments and central banks at a fixed rate of $35/oz. Basically, the system was designed to encourage international commercial and financial transactions between countries by making the dollar a standard currency of exchange backed by gold. The "science" supporting this new monetary system was "neoliberal economics" supported by "free-market fundamentalism", and also partially influenced by Keynesian theory, and its institutional embodiment was the International Monetary Fund (IMF). 

      Participating countries and their citizens were convinced that everyone could economically benefit from dollar-denominated "free trade" and that a global IMF could manage the system's "liquidity", occasionally helping out states that encountered financial problems by issuing them "low cost" loans. Throughout the last 60 years, many countries in the developing world have been convinced to finance new "infrastructure" projects through IMF loans, and usually the debt servicing costs overwhelm their ability to repay the loans. It is this point at which these countries enter into "negotiations" with the IMF and other creditors, which typically result in the implementation of austerity measures and the auctioning off of public assets below market value.

      In 1971, the gold convertibility of the dollar was unilaterally revoked by the Nixon Administration, effectively making the dollar, as a piece of printed paper or its electronic equivalent, the sole basis for international exchange. Gold-backing of the dollar had been the one limiting factor for how much "liquidity" could be generated within the system, and so the new stand-alone reserve currency allowed for greatly increased international financial activity. It is key to understand that every U.S. dollar currently in circulation is backed by debt, meaning it was generated through the issuance of a loan and this loan created a corresponding liability. Therefore, the fact that more international corporations, governments and central banks were transacting in dollars essentially meant that they were accepting dollar-denominated debt for hard assets (most importantly oil), and all of the risks entailed by that debt.

     Of course, on the way up the debt-fueled ladder of global economic growth, there was very little risk to accepting dollar transactions. In the wake of WWII, U.S. manufacturing and exportation of goods to a world in ruins led the country into a period of great economic prosperity and established the largest economy by a significant margin. Subsequently, with the domination of the financial services market, outsourcing of production, expansion of militaristic hegemony and provision of numerous domestic entitlements, the U.S. transitioned into a powerhouse consumer economy. Americans had an insatiable appetite for the financed sales of products from other countries (especially China), which further encouraged these countries to transact in debt-dollars. A crucial instrument for managing and reinforcing the debt-dollar discipline on the world was the "letter of credit".

     For example, an issuing bank in Uzbekistan could grant a local importing business a letter of credit, which would serve as a conditional promise by the bank to pay a beneficiary in another country upon satisfaction of the letter's terms and conditions. The beneficiary may be a seller of equipment or materials in America, who must present the required documents to the issuing bank in order to draw on its payment rights. These secured transactions made it easier for international exporters/importers to do business without worrying about their legal rights in other countries, and also reduced their costs for financing transactions, since the issuing bank did not have to police the underlying sales contract.

     The global debt-dollar discipline was thoroughly institutionalized through instruments such as letters of credit and organizations such as the IMF. As the factory disciplines its workers to be more docile and efficient, the debt-dollar institutions discipline their global constituents to take on increasing amounts of debt and consume more goods and services. More importantly, they discipline the constituents to become intrinsically attached to their financed lifestyles and the overarching institutions which manage the system. It is the constant maintenance of this attachment that is the coercive goal of "punish" under Foucault's analysis.

The Role of Financial Punishment

     When Foucault wrote about modern society's need to "punish", he meant it in both the literal sense of how it is employed within penal systems and also the broad sense of how societal discipline is reinforced at every level. After all, the prison is merely an extension of the discipline continuously exerted on the individuals outside of its walls. While other critics saw the modern prison system as repeatedly failing in its goal to reform criminals, Foucault saw it as succeeding in continuously creating a state-controlled underclass of delinquents and normalizing the behaviors of those in the numerous "theatres of punishment". Although the codified laws of a society were important in maintaining order, the fundamental mechanism of ingraining discipline was ceaseless observation and "normalizing judgment" - a perpetual penalty.

      Students, workers, soldiers, patients and inmates alike must be constantly monitored to not only assess their performance, but make them aware that their behaviors are being monitored. Using these observations along with other factors, various standards of conduct can be established to define the "normal" and expected behaviors. Deviations from these standards can be quantifiably measured with grades, performance reviews, medical classifications, etc. The whole point is to methodically allow people to become self-disciplined, relying on their own self-perceptions in relation to others, without actually using any (or very little) force.

      A dual system of both rewards and penalties will coerce people to stay bounded within a range of "normal" behavior, and those who deviate will be marginalized in some manner. Penalties may take the form of negative marks, restricted activity, constraints on time or simply social stigmas, as long as they promote future discipline within the punished or among others who observe. Out of the societal group emerges an "individual unit" defined by his/her mechanistic functions and resulting hierarchical status in life, and consequently by how far he/she deviates from the "norm".

     The debt-dollar discipline imposes a degree of abstraction in modern disciplinary society, in so far as it cannot be readily identified with a specific physical institution. The IMF and other central banks are critical coordinating institutions for debt-dollar transactions, but the system's participants worldwide cannot be directly observed and trained by such institutions. It is more of a parasite which has attached itself to all of the other disciplinary institutions, which help observe and measure the behaviors of financial consumers. The standards of conduct were already deeply rooted in society through these capitalistic organizations, which primarily judged subjects according to their socioeconomic status.

      Financial consumers are pushed towards accumulating ever more material representations of their wealth, whether those be homes, cars, boats, consumer electronics, stock portfolios, etc. With modern computer technology, most of this financial activity can be easily monitored and recorded within centralized databases. The most prevalent mechanisms used to measure deviations from "normal" financial activity are credit scores for individuals and credit ratings for businesses. Although these measurements allegedly target a consumer's ability to repay debt, they typically end up reflecting the willingness of a consumer to take on debt. For individuals especially, a consumer's past level of questionable financial activity can help boost his/her scores above what they would be without any financial activity.

      These mechanisms effectively serve as carrots and sticks for the financial consumer. If you have participated adequately in debt-dollar transactions, then you may be able to participate further at a relatively low cost. With this comparative advantage over other financial consumers, you will be able to elevate your socioeconomic status and be a respected member of society. In stark contrast, those who do not participate adequately will be priced out of debt-dollar transactions and will have a very difficult time competing for a limited supply of material goods and services. They will be labeled financial "delinquents" and lose all respect from the business community or society at large. In this manner, financial consumers around the world are trapped by the panoptic gaze of governments, lending institutions, rating agencies, private corporations and their fellow consumers.

      The financial consumers in the debt-dollar disciplinary system also include sovereign states as well. These states have effectively become measured by their ability to issue debt and finance internal spending programs. Investment capital will flock to those states with the fastest growing economies and the highest-rated debt, which are typically those states carrying out the most financial activity. These states also rely on the fact that the IMF will help them out with debt-dollar "liquidity" if they run into financial difficulties on their quest to achieve relative economic superiority. Those states who do not adequately participate are treated unfavorably in all manner of other relations, including but not limited to trade negotiations, environmental agreements and diplomatic relations.

      Of course, the broader power structures involved in the debt-dollar disciplinary system have also managed systemic threats by explicit mechanisms of punishment. Since the end of WWII, the U.S. has engaged in many subversive military and political operations against "Communist" or "Socialist" groups, as they represent a potential system of organization outside of the debt-dollar discipline. Many disciplined Americans are aware of their government's wars against North Korea and North Vietnam, as these fit well  into the "fight for freedom" narrative, but not so much of their government's constant interventions in Latin America. The latter would frequently involve the subversion of democratically-elected leaders with financially protectionist tendencies, and therefore secrecy or misinformation was preferred over the traditional freedom narrative.

      Despite such exacting punishments carried out within the the debt-dollar system, some threats have continued to evade its pervasive discipline. A good example of such a threat would be insurgent groups in the Arab world who continuously resist Western domination. Their influence in Middle Eastern countries may have been negligible in the past, save for the ongoing Israeli-Palestine conflict, but it has rapidly spread to many different fronts. The current intractable military operations in Iraq, Afghanistan and Pakistan are symbolic of a disciplinary system which has over-stepped its ability to exert global control. More recently, the ongoing global financial crisis is an obvious break down in debt-dollar discipline unlike any other in the last 60 years. Part II in this series will explore the future prospects of debt-dollar discipline around the world, and more generally the entire disciplinary structure of Western society first articulated by Foucault.

*Descriptions of Foucault's analysis were largely sourced from this Spark Notes Summary and this Wikipedia article.