In the coming technocratic dystopia, life will be grim for most of us. For those who survive the preliminary depopulation, a technological control grid run by AI and robots will keep tabs on our every movement. You notice that your pantry cube is running a bit low on freeze-dried bug burgers, fake meat, and cockroach milk.
You time your break to fall outside of your three daily hours of wind-powered internet. Forbidden by the World Economic Forum from owning your own car, you flag down a quick ride share from your leased living quarters in a stacked shipping container on the near side of your 15-minute city. After dropping off the seven other people in your ride share, you arrive at the fake meat distribution point, where you wait in a long queue, hoping to trade in a few of your remaining carbon ration credits for more provisions.
You worry that your transaction might be rejected by the central bank digital currency network. After all, there was that one moment where your wrinkled brow showed slight unhappiness. You wonder if the facial recognition AI picked it up during one of your masked Zoom calls.
But for the elites, things will be better than ever. Private jets, cars, ultra wagyu beef tenderloin (for their dogs), and large estates. Life-extension drugs will make them nearly immortal. They will vacation at 5-star hotels, a short limo trip from the Louvre, but without the crowds.
The WEF – an infinite source of technocratic malapropisms – says that you will “own nothing” and be happy (the happiness perhaps will be a drug-induced state as Yuval Hariri suggests). Many independent researchers who have looked into the WEF’s plans have reported similar findings. For example – see James Corbett, Patrick Wood, Whitney Webb 2, Tessa Lena 2, Jay Dyer, and Catherine Austin Fitts.
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The researchers that I have cited have done a deep dive into the GI tract of the beast. While I don’t dispute the truth of their findings, my problem with much of the commentary on the Great Reset is that it takes the Grand Plan at face value. Indeed, a group of elites have a plan. They are open about some parts of it (and most likely, less open about others).
One can imagine something, plan for it, and even try to bring it into being. However, in order to succeed, the laws of reality must be observed. The laws of cause and effect apply to all things. Grand utopian visions always fail in the implementation – if they even get that far.
How It Works Or Does Not Work
The idea of a totalitarian control grid is familiar to science fiction fans, but imaginative fiction stretches boundaries for artistic purposes. Utopia (including dystopia) is a form of science fiction. There are crucial aspects in the plan for a technocratic dystopia that, as fearful as it is, cannot be realized.
Technocracy imagines a world where elites have all the good things in life for themselves, much as the middle class in the developed world does today. Internal combustion engines, reliable wall power, air travel, consumer electronics, beef, alcohol, dentistry, stable dry and well-insulated buildings, books, and video streaming services are all readily available. At the same time, a much reduced population of dispirited, drugged worker-slaves will own nothing. That is a vision but it is not a possible version of reality.
To be elite in this world means to be wealthy. Wealth is created through the production of goods and services. There are many forms of what could be called “second-order elites” – wealthy people who parasitize off privately created wealth. But their ability to do that depends on true wealth, which is created by production. Once you have enough goods for your own needs, additional wealth is held in the form of assets. Assets can be reduced to a few categories: land, equity, debt, commodities (below ground in the form of deposits and above ground such as inventories of metals). Without going through each asset class in detail, equities and debt derive their value from businesses, which exist only because they have customers. After they have impoverished everyone and confiscated all of our property, their assets will be worth nothing. You will be worth nothing, and you will wonder why.
I have seen dystopian predictions for how the rich will get richer by trading futures contracts on our biometrics. Futures contracts are a bet with a zero-sum outcome. The winning side makes a profit and the losing side takes an equal loss. Who will the losers be? And what good is the money unless there are goods and services for sale to spend it on?
Kheriaty cites some elite policy wonk who thinks that “funding to the public sector must increase.” By what? Who will pay the taxes? Even if the public sector had unlimited access to money, who will produce the goods and services that the public sector needs to buy, in order to build their control grid? With what will they pay the workers who operate it?
How will the elites get stuff for their personal use when it is not available to the masses? Modern goods depend on a vast base of accumulated capital. To take one example, consider airplanes and airports. Airports, including the runways, are complex capital goods requiring intensive maintenance by skilled labor. Air traffic control requires a combination of capital goods, skilled labor, and energy to run. This documentary tells of the 30,000 parts that an airport must have on hand to keep the planes from having downtime. At the same airport, the airline runs a separate facility where the jet engines are broken down by skilled mechanics, serviced and rebuilt.
Who Builds the Systems?
Is this all going to be done by AI and robots? Computer networks and servers depend on complex supply chains. CPU chips are made mostly in Taiwan, memory chips in South Korea, and hard drives at several places including North America. A single factory to produce semiconductors costs over $1 billion to construct and involves technical expertise from many different fields.
The robotic control grid rests on a base of energy and mining. Robots are made out of metal as are data centers and computers. Energy is extracted from underground deposits of coal, oil, natural gas, and uranium. Once mined metal must be extracted from the rock and formed into bars, pipes, wires or whatever the intended use. Even “green energy” requires enormous amounts of metals. Copper and iron are not so hard to find, but some of the minor metals required for batteries, such as cobalt and niobium are much harder. An operating mine is depleted, and then retired, as minerals are extracted. New deposits must be located and developed. Within the mining industry, there is a division of labor between prospecting for new deposits, building mines, operating mines, and financing them.
Who will operate the control grid? Technology requires skilled labor to operate. AI can only imitate skills that people have already demonstrated. AI models must be trained by operators vetted by humans. Data scientists decide when the training is complete, or, when the model requires retraining. Many decisions are made during this process and it can only be initiated with a goal in mind. Will robots do it all? Who will build them? Where will the metals come from to make them? The power to run them? Who will write the software to control them?
The control grid will require a massive amount of skilled labor. People obtain skills by working in the same field – or several different fields – over the course of a career. Most people enter the labor force in their early 20s and many remain for five decades or more. People learn how to do complex things, such as building a semiconductor factory or flying an airplane, by working under more experienced colleagues, and taking on increasingly difficult challenges as they gain experience. Most commercial airline pilots start out with flight training they receive in the military, and from there make the step to short-haul regional carriers with the aspiration of one day sitting in the cockpit of a major airline.
I could go on with my series of examples, but they only illustrate that there is a deeper principle at work here. The wealth that makes technology possible to run the control grid and provide the elites with the good things requires a market economy.
“The economy” – that thing which has an on//off switch, that we could flip for two weeks, and then flip back. Do you remember how, we all dug in, we wore our masks, we socially distanced, we sheltered in place? That curve didn’t know what hit it. We flattened that poor curve’s sorry backside. Then we turned the switch back to the “on” position. Once the economy finished rebooting, we picked up right where we left off. Actually it did not happen that way. In that hallucination, no one lost their business, their home, friends, family relationships, years of their childrens’ education, their careers, or anything else meaningful.
There Is No Switch
The production of goods and services is not a machine with a switch. “Economy” is a name for the process by which we all produce things and provide them to others. Not only does this process create cool stuff like mobile phones and air travel, it is what enables us all to stay warm, dry and alive. It is an interconnected network of billions of individual decision-makers, firms, goods in process, capital goods, energy generation, transportation systems, and people who operate them.
The most compelling explanation of the necessity of the market was discovered by the great economist of the Austrian School, Ludwig von Mises. Mises in his 1920 paper examined the problem of central planning. The ownership of all productive capital by the state – socialism – was a popular idea at the time. It was thought by the intellectuals to be inevitable. With ownership comes responsibility. A central planning board would take on the task of planning the entire economy. What should be produced? How much? By whom? To be distributed where?
The starting point is understanding that productive assets are “scarce.” In normal English, scarce means that a good is difficult to find. Economists use the word to mean there are more potential valued uses for the asset than the amount of that asset that currently exists. To use the asset in one way comes at a cost of less of it to use for some other purpose. Any decision that involves using more bricks to build houses means fewer bricks to build walls.
Mises observed that the number of possible uses of all existing capital goods to produce consumer goods and services is unimaginably large. Given the vast numbers of capital goods, skilled workers, known types of consumer goods, and different production processes to create them, the possibilities are almost infinite.
Not only must the choice be made between producing more capital goods and fewer consumer goods, or the opposite, but there is an incalculable variety of choices within each category.
On the capital goods side – do we need more power generation? Should the planner invest in nuclear, coal, natural gas, LNG, or pipelines? Factories? Of what type? Or transportation networks, ports, terminals, or logistics? Do we need more specialized capital goods such as machines that etch circuits into silicon chips, or more general purpose tools like trucks and computers? The planning must look years into the future. The extraction of minerals from the ground and the generation of energy takes years of planning and development so that, when the small business owner needs an iPad, it is available at the local Apple Store.
For consumers, which is better? More shoes and fewer mobile phones? More burgers and better furniture but fewer kitchen sinks and bicycle tires? The number of plans is infinite. There are always entrepreneurs with ideas for goods that do not yet exist, that they would like to bring to market. More production of well known goods means fewer new inventions. Even subsequent generations of the “same product” differ as subtle improvements (or in the case of Microsoft Windows, not-so-subtle retrogressions) are introduced.
Mises asked, how would the central planner decide between alternative uses of productive resources? He startled the economics field with his conclusion: production of goods and services as we know it would be impossible under central planning. In my opinion, Mises’ breakthrough is the greatest and least well known contribution to social sciences in the last century. It sparked a great deal of debate in professional economic circles at the time, but remains to a large extent unknown today outside of scholars.
If central planning is impossible, how is it that we have all the things that we have now? Who decides what to produce? In a market economy – with private ownership of the means of production and a sound monetary system – business firms decide what products they will offer. They are in competition with each other, and they compete with entrepreneurs who would like to enter their markets.
In order to choose between one thing and another, there must be a way to compare alternatives. This is accomplished by what Mises called “economic calculation.” Before starting, expected monetary costs are compared against expected monetary revenues. Profits consist of the differential between realized costs and revenues. Owners in the market economy are looking for profit opportunities. The more profitable opportunities are undertaken, the less profitable or loss-making options are not.
To compare alternatives, profits may be compared to costs using ratios. Financial ratios, such as internal rate of return, or return on equity are dimensionless: they contain monetary units in both the numerator and the denominator. These metrics attempt to capture the economic efficiency of any particular decision. Without a means of comparison, who could say whether society will benefit from more shoes and fewer shirts, or the opposite? Using dimensionless ratios, alternative uses of scarce resources can be compared against each other.
Costs and revenues are always estimated because the full costs of production cannot entirely be known until after production, nor can sales revenues be known until the goods are sold. It may be more (or less) expensive than expected to hire the workers needed, supply chain issues may crop up, a space may open up at a lower than expected rent, demand for the product may be stronger, or weaker. The ability to estimate future costs and prices is a key to success in earning profits.
Awareness, or imagination of what can be produced, how, and with what originates in the diversity of human knowledge, experience, and the way in which all of us are situated differently in the world. Within a business firm there resides an accumulation of knowledge about that industry. That firm may be well positioned to bring new products to market similar to their current product line. The company that makes motorcycles will have a good idea of customer preferences in that market. Someone else may have regional or local knowledge of market conditions. That person notices on his drive to work how far you have to go from his home to a dry cleaner. That local knowledge gives him insight into where a dry cleaner might fill an unmet need.
Prices Must Be Market Prices
Market prices are a key to the process. Mises was building on developments in price theory by the Austrian School in the decades prior. It had been discovered a few years before Mises that market prices of capital goods and labor come about because entrepreneurs and business firms are able to place a definite monetary value on each resource that they wish to use in production. Each worker hired, each space rented, each machine or office product purchased, every advertisement purchased, and each gallon of gas used in transport has a specific monetary value to each entrepreneur.
Each business, each entrepreneur must determine the amount they are willing to pay for the labor and assets they plan to use. Their buying prices are based on the way in which the asset contributes to the selling prices they expect. The process of competitive bidding ensures that scarce resources are used by those entrepreneurs and businesses who place the greatest monetary value on their use.
The value of the resource to the business originates in the value that the consumer at the very end of the supply chain places on the final product. Business firms must be able to sell into a consumer market (even if several layers downstream) in order to value their components in the supply chain. At the end, the consumer decides on the trade-offs between more of one thing and less of another through their willingness to buy at a given price.
The price system functions as a collaborative system to pool the knowledge, experience and ideas of everyone about how to put available resources to their best use. The price system gives the entrepreneur an idea of how the rest of society values specific economic resources in monetary terms, enabling economic calculation so that production decisions can be made.
Other than the free market economy, sound money, and private property, what alternatives are there for the use of existing finite resources in creating useful things? None. None at all. Mises emphasized that he was not saying that capitalism is a better economic system than socialism. Socialism is not an economic system at all because it does not offer a solution to the problem of how to economize the use of scarce resources. Economic calculation with money prices is the only way that has been discovered to do this.
The elites’ version of the world where Bill and Klaus have nice things with a high tech control grid crushing everyone cannot be built in the form which they imagine. Bill and Klaus cannot possibly make all the stuff they want on their own, even with robots. Their vision does not include economic calculation.
Stuff does not make itself. Making stuff must occur prior to having stuff. Making all the nice things takes a lot of people, and a lot of capital goods. The scale and division of labor required to fill the supply chain for even one complex product, such as a mobile phone, requires economic calculation, which would be abolished as part of their mad plan.
To build high tech systems there must be widespread ownership of private property. Private property must be under the control of competing business firms and their investors. Labor must be free to move around, to change jobs, and to acquire skills. And people must be paid competitively determined wages. Wages are prices, which demonstrate the contribution of the worker within the framework of economic calculation.
If the dystopian control grid is not possible, what will happen when they try to bring it about? As economist Joseph Salerno wrote, a dedicated attempt at central planning would result in a complete disintegration of human society. We saw the beginnings of this in the massive supply-chain shocks and labor market disruptions in the past two years. We have not seen a full recovery from that brush with disaster. There are pilot shortages, an oncoming food shortage, healthcare worker shortages, and frequent business closures due to staffing issues.
Utopian visions wipe the slate of the world clean so that it may be rebuilt perfectly. Grand utopias cannot be realized because, while imagination is unconstrained reality has limits. What is a dystopia other than the role of an NPC in someone else’s utopia? In this case, the utopia is the dream of psychotic elites who imagine that they can have the end products of mass cooperation without the open society that enables it. Much damage can be done in the attempt, but it is only a question of how far it can get before it cancels itself.
Robert Blumen is a software engineer and podcast host who writes occasionally about political and economic issues. This article was originally published on Brownstone Institute.