There Are Two Ways To Gain Cooperation

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.


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.


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.


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.


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.


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.


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 He is also the author of a free 17-volume series, An Economic Commentary on the Bible.

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