There Are Two Ways To Gain Cooperation

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An empire must
defend territory already secured and then extend control over those
who live beyond its borders, who chafe against the terms of exchange
between them and the empire. The underlying motive of empire builders
is the desire to control the terms of trade. The empire’s strategy
of controlling the terms of trade is always in some way geography-based.
This is the essence of empire.

There are two
ways for a State to gain cooperation: coercion or purchase. An empire
uses both techniques over its own citizens in order to gain their
cooperation in its extension of control over the terms of trade
outside its borders. The empire buys off special interest voting
blocs at home with money extracted from the broad mass of citizens
on threat of negative sanctions against those who resist paying
taxes.

Foreign aid
is a form of empire-building. So is war. If we look at the military
budget of the United States and compare this to the foreign aid
budget, there is no question which form of empire-expansion is dominant
today: war.

CONTROLLING
BATTLEFIELD ACCESS

The national
State in wartime seeks to control civilian access to the battlefield.
Reporters are in various ways restricted geographically. Their access
to communications media is also restricted. The domestic media outlets
are also restricted, either by law or by public opinion. “Giving
aid to the enemy” by reporting the truth is considered a criminal
offense. The public is more committed to victory than to the truth.
For as long as this preference lasts, the State can control reporting.

This voter
support must be purchased by the State. The costs of war must be
justified, the extent of these costs must be concealed, and the
benefits of victory exaggerated. This requires control over the
flow of information.

This is the
technical and sociological background of Karen
de Coster’s recent assessment
.

While
the media is at times “creative,” more accurately, the soldiers
of agitprop are sales agents for demagogy and herders of mice. The
mice that make up the masses oftentimes lack the traits of self-examination
and adequate literacy. Thus the catchpenny phrases, 15-second sound
bites, and 2-minute highlights are carefully crafted in order to
move the masses, at once, toward a chosen frame of reference. Accordingly,
dissonance emerges, and all the little mice accommodate popular
credo in order to reduce and mobilize conflict. It all seems so
darn easy.

Fortunately,
there are limits on this process. With the development of the World
Wide Web as a mass phenomenon since 1995, coupled with the extension
of cable and satellite TV since the late 1970s, the cost of restricting
access to unauthorized battlefield facts and domestic assessments
has risen inexorably for the State. The decentralization of the
information-delivery system is the central fact of our era
.

The great irony
here is that satellite data transmission technology has been controlled
by the State’s possession of the rocketry that launches the satellites.
But the State has wanted to sell this service to private information-delivery
enterprises in order to reduce the deficits involved in the launches.
Thus was born satellite telecommunications. More than one State
launches satellites, so any one State’s telecommunications monopoly
cannot be maintained. Electrons do not care who owns the pipelines.
Neither do those who sell electrons to the public. Price competition
wins. Again.

Even more ironic,
the Web is the unplanned child of DARPA, the military’s research
agency, which began building the Internet in the late 1960s. DARPA’s
goal was to construct a communications system that would survive
a nuclear war. Instead, the governments of the world now face something
more like the gnawing of mice: an alternative network for communications.
Tim Berners-Lee’s system of Internet addresses created the Web.
He receives no royalties, but he probably takes pleasure in knowing
that he has changed the world. The first Web site went on-line in
1991. Nothing was ever the same again.

The spontaneous
order of the free market inevitably trumps the plans of government
bureaucrats to extend the power of the State. The Web may be the
best example of this spontaneous order in human history. It has
made nearly impossible the statist gatekeepers’ control over the
flow of information. The gatekeepers still control numerous gates,
but the walls are so porous as to be sieves.

FROM
PRICE COMPETITION TO FEATURE COMPETITION

The history
of capitalist production ever since the twelfth century has been
the shift from the narrow market of the rich to the broader market
of the poor. The Industrial Revolution accelerated this process.
The key to gaining access to the broad market of the poor was price
competition. Low mark-up volume sales to the poor replaced high
mark-up sales to the rich as the way to wealth for producers.

If there is
one product that best illustrates this process, it is the book.
A few medieval monasteries produced hand-copied books, which were
very expensive. Gutenberg changed the production and sale of books,
thereby creating a mass market for literacy. The world was never
the same after this.

Gaining mass
market demand for the initial penetration of a new market requires
price competition: buyers who could not afford to buy previously.
Producers create initial demand by mass-producing simple items and
cutting prices. But members of the buying public learn quickly that
they can bid for better products which more closely match their
individual tastes. Producers soon find ways to harness mass-production
technology in order to create products that offer greater diversity,
i.e., differentiating features. Women’s fashions are the premier
example of this process. No woman wants to appear in public in the
same style of dress or shoes as her neighbor.

Henry Ford
proclaimed that you could buy a Model T in any color you wanted,
just so long as you wanted black. General Motors in the 1920s replaced
the Ford Motor Company’s market dominance because GM’s genius manager
Alfred Sloan found ways to segment car model production by income
levels, yet also retain the benefits of scale for producing common
parts. It took World War II to keep Ford solvent.

We see the
same inexorable process in the market for propaganda.

BROADCASTING
GIVETH

The first truly
mass media were the newspapers of the late nineteenth century. The
Hearst and Pulitzer organizations used price competition and advertising
revenues to gain readership. This took enormous capital. The economies
of scale were high, but the scale of operations was also high. Entry
was not closed, but it was not suitable for low-capital publishers.

The media were
one-way communications affairs. The term broadcasting applied accurately.
The publishers decided whom to hire as editors, and the editors
served as gatekeepers. The information was cast out by the editors
to the broad mass of citizens: broadcasting.

The same pattern
applied to radio, with this added twist: licensing of the airwaves
by the Federal government. Here, the central governments of the
world exercised the censorship function. Propaganda became a cost-effective
means of directing the thinking of the public.

Hitler was
a master of radio. The German invention of the tape recorder made
possible his simultaneous broadcasts across the country — a
feat that baffled the British, who monitored these radio broadcasts.
They could not figure out how he did it. Franklin Roosevelt’s Fireside
Chats were equally powerful as mass-market propaganda tools. So
were Churchill’s wartime radio speeches. Stalin was the exception.
Radios were not common in the Soviet Union in his era, which suited
him fine.

Television
did not change the economics of government propaganda. Federal licensing
still applied. There was even less bandwidth available for television
than for radio. Seven channels of VHF TV were the limit for large
cities. Small towns had even fewer.

I grew up in
the era of broadcasting. My career rested on the technology of narrowcasting:
the newsletter. The subscription price was high. The mark-up per
word was high. The market was narrow. Now the paper-based newsletter
is going the way of high-button shoes. Its market is gray heads.
I shut down production of my paper-based letter, Remnant Review,
in February, after 31 years. The handwriting was on the wall. It
was digital. So is Remnant Review.

The Federal
government is facing the same inexorable process.

NARROWCASTING
TAKETH AWAY

The technological
cost of entry gets ever lower. Marketing costs remain high for mass-marketing,
but not for narrowcasting. Anyone can set up a Web site or start
an e-letter.

There are many
cable TV channels. They cater to specific, narrowly defined audiences.
Like mice, cable networks are chewing away at the government’s broadcast-based
transmission belts of propaganda.

The information
competition today is for geography and time. The most valuable geography
on earth are a pair of screens: a computer screen and a TV screen.

The irreplaceable
resource is time. People allocate “spare” time on their terms. Discretionary
time is today concentrated on the two screens: TV and computer.
Computer screens are steadily replacing TV screens as the preferred
media. TV screens are increasingly becoming movie screens, both
in size and shape.

This spells
the doom of network television. Network TV is a broadcasting medium
in an era of narrowcasting. Its economic model is inappropriate.
This is why TV network news is losing its audience. Meanwhile, the
computer screen spells the doom of the paper-based newspaper. Thus,
the government’s twin transmission belts for propaganda are becoming
old technology, meaning old culture.

Narrowcasting
is the single greatest enemy of the nation State
. It has destroyed
the gatekeeper function. When Matt Drudge broke the weekend story
of the spiked Newsweek article of Clinton’s unnamed assistant,
he drove a public dagger into the heart of the mainstream media.
A guy living in a rented apartment who had a Web site got a President
impeached — only the second case in American history. The reporters’
guild was outraged. They railed against this rank amateur. They
railed against “unprofessional” journalism. And, one by one, they
are getting fired, as their newspapers fold.

COMPARATIVE
COSTS

The steady
erosion of President Bush’s popularity is the result of two primary
factors: price-competitive guerilla weaponry in Iraq and price-competitive
guerilla journalism in America. There is nothing he can do about
either.

This marks
the end of empire — not just the American empire, but empire as
a system of international coercion. The world has been unable to
eliminate empire as a form of political organization ever since
the days of Assyria. Now that system is doomed. It is ending in
the same geographical region where it began.

The central
factor of the demise of empire is cost. It costs too much to organize
an empire in comparison to the cost of undermining it. When costs
change, production changes. When costs rise, less is demanded. The
costs of empire have risen to a level where its organizational dynamics
are negative. When costs fall, more is demanded. The costs of resistance
continue to fall.

Fourth-generation
warfare is not merely guerilla warfare. Fourth-generation warfare
is a war against the legitimacy of the occupying forces. The costs
of maintaining legitimacy for an empire involve both force and propaganda.
Both factors are under siege by modern technology, which is not
only radically price competitive but is also feature competitive.
Empire is neither price competitive nor feature competitive.

The handwriting
for empire is on the wall. It has been weighed in the balance and
found wanting.

It’s about
time.

CONCLUSION

When
empire is at long last sent to the elephant burial grounds, it will
then be time to focus on the nation-State. This organizational structure
is also nearing its end, if we are to believe Jacques Barzun (From
Dawn to Decadence
) and Martin van Creveld (The
Rise and Decline of the State
). Both scholars focus on the
same factors in their concluding chapters: the astronomically rising
costs of the welfare State — looming bankruptcy — and
the increasing costs for the nation-State to provide security for
its citizens against growing crime, i.e., a looming loss of legitimacy.

It’s about
time.

March
9, 2006

Gary
North [send him mail] is the
author of Mises
on Money
. Visit http://www.garynorth.com.
He is also the author of a free 17-volume series, An
Economic Commentary on the Bible
.

Gary
North Archives

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