Freud's Bastards
While there is no doubt that democracy and capitalism have been the twin pillars of our exponential progress over the last one hundred years, little is known about the origins of the alchemy that gave them their historical momentum. At the dawn of the twentieth century, when the globe spanning western world was careening towards the war to end all wars, a quiet thinking was born amongst the right people, at the right place, and at the right time in history.
That thinking and the idea's it spawned, would serve to ignite an infant American economy, which would grow into an inferno that would engulf the planet. The world in which we live today is the modern synthesis of that quiet, turn of the century thinking, our excess a product of its insidious acceptance, our coming economic collapse the unintended consequence of its complete success.
Adam Smith laid the foundations for our modern world when he popularized the notion that man will seek to maximize his utility - that he will do the best he can for himself. There was an implicit understanding that man was a "rational" being, and that acting in ones best interest was an entirely rational behaviour. From this grew the philosophy that the best interests of man were served by a minimum of state interference in the market. Which of course is entirely logical - if one accepts the underlying premise. But, what if the underlying premise is flawed, and man does not always act in his best interest, cannot maximize his utility, and that the actions of man are no proof of rational behaviour?
What Adam Smith could not have known, born as he was in the early 18th century, was that the mind of man was the unknown variable of his argument, and changes in that variable were far upstream of any social philosophy. Smith could not have known that free will was malleable, or that technology could harness the wants and needs of disparate crowds of consumers. Smith and his contemporaries, as well as anybody who leans on them for socioeconomic theory, all accept a definition of free will and democracy penned a generation before any cerebral understanding of the subject ever came to light. The premise is flawed because of what we know now about the human brain, and we can fix the point in time where that knowledge - shared amongst a few - began to split theory, from practice.
In short, Freud changed everything.
Vienna, 1881, and an early researcher of Cerebral Palsy was making dramatic inroads into the disease with a unique, and revolutionary treatment. He postulated that rather than a lack of oxygen in birth causing the debilitating disease, perhaps the cause was buried deep in the recesses of the dark and mysterious mind. Sigmund Freud's theory of "psychoanalysis" treatment would bring forth the thoughts from the "subconscious", and allow the patient to experience them in their regular, "conscious" life.
Freud worked and practiced in academia, his life's work rarely travelling outside the confines of the educated and interested. Esoteric and detached
from the daily battle for survival which was the lot of most, Freud developed his theories of the unconscious mind and its effect on human behaviour amongst peers and family. By contrast, Adam Smith had been dead one hundred years, and his particular theories about rational behaviour had already entered the main stream of acceptance, if not universally. Freud was new, weird, and alone.
His peer group did however, take note, and a burgeoning new science was born that studied the mind and in particular, why it was we did what we did. It was no time before the new science of Psychology began to cross pollinate with other social sciences. In "The Crowd: A Study of the Popular Mind" of 1895 for instance, Frenchman Gustave LeBon catalogued the effects of the subconscious mind on crowds - crowd psychology. But it wasn't until the discipline crossed paths with economics, capitalism and free markets in particular, that Freud's work would gain the impact it needed to seriously displace Adam Smith's rational man.
It would be another generation of Freud, and the outbreak of the First World War to render free markets obsolete, and change the course of history.
While rational young men from across Europe were using their free will to run head long into machine guns across fields of exploding mud, in the United States, President Woodrow Wilson was designing to get American young men into the fun. Wilson's problem was that America was a staunchly isolationist nation, designed and built from the ground up to be independent and free of the kinds of killing entanglements that were scouring Europe at the time. The American people had to be convinced and their lawmakers decided, that war in Europe was the right thing to do.
As the world's purest democracy, this was a problem no nation had ever faced before - convincing a plurality of its citizens to supply its sons in a war so clearly distant and remote from them. A former journalist and reporter - George Creel - was appointed by President Wilson to the task of cracking this thoroughly modern problem. The Committee of Public Information was established in April of 1917 by presidential order to captain the project, and a truly bizarre set of skills were hired with which to carry out the task. The CPI was going to harness the emerging study of the subconscious mind, and put to its first field test the power to control crowd behaviour in the interest of the state, or "propaganda".
The idea of propaganda had emerged from Germany, where the pressing issue was to keep the recruitment lines full for the chance of certain death. The Germanic heartland was the focal point of the study of psychoanalysis, and Freud's early work was well known and respected. From this community had grown the earliest examples of state sponsored propaganda, its practitioners gleeful at the chance to test the theory.
In America, Freud had no such exposure, and the art form was small and still emerging. Still, Creel gathered the best of that group, as well as a host of people engaged in the newspaper and publicity field. To them was given the task of "selling" the war to America. The founding members of the CPI reads like a who's who of early media manipulation - Walter Lipmann, John Hill, Ivy Lee, Carl Byoir, and many more. At no time in history had a greater concentration of psychology practitioners been brought together for common cause in the service of the state, and no time was more receptive to the idea than at the very dawn of instant, mass communication.
It was also triply fortuitous that in their midst, the Committee of Public Information had as its spiritual leader none other than the nephew of Sigmund Freud himself, Edward Bernays. While he worked as a theatre press agent, Bernays had kept intellectual contact with his uncle throughout the early days of the war. While Freud himself was too distant and esoteric to be involved, his growing spawn actively participated in both Germany and England. Bernays was up on the state of the art of the craft. By the time Creel recruited him for the project, Bernays had built on a powerful upbringing in his uncles work to fashion an unparalleled understanding of what it was that made men tick.
Bernays and the CPI were so successful, that America entered the war just in time to catch the closing acts. The dozens of techniques used and
developed through this period by the CPI laid down the foundation of modern public relations. It is Bernays who is credited with the idea of taking the concepts of the CPI and applying them to free market economics. On the day it shut down in 1919, its work completed, the brain trust of the CPI was unleashed on the world of media and mass marketing and placed in private hands.
What Bernays learned through the live fire test of his uncles theories during the war, was that the human mind keeps its true wants, desires, and fears deep in the subconscious, and that by tapping into those hidden veins, human beings can be nudged towards conscious behaviours. The CPI had given him wide and unchecked range in not just testing the theory, but also in fine-tuning the techniques needed to extract the result.
Bernays shared his uncle's view of man, that he is dangerous and irrational by nature. The Great War was proof enough of that they felt. Deep inside each person are hidden, violent and destructive tendencies left over from an age where such tendencies meant death or survival. Bernays believed it was his duty, through the service of the state or the marketplace, to intervene in the minds of men to protect their ordered, democratic society from themselves. Bernays was a patriot. Bernays wrote;
"The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country" - Propaganda, 1928
"The engineering of consent" was the term he coined for the balance of his future work with private industry and government alike. Bernays prophesised, back in the early part of the twentieth century, that it was also the duty of commercial enterprise to manipulate the masses in order to subvert the violence and unrest in man. The economy of the democracy could be controlled and fuelled - both at the same time - by manipulating the public into expending the fruits of their labour to the highest limit possible on consumer goods and trifles' that would slake their inbred terrors.
Bernays and the alumni of the Committee of Public Information fanned out across the corporate world of America, preaching the message and techniques to eager beavers in boardrooms and executive suites. The potent mix of patriotic philosophy, psychology, marketing, advertising, public relations, and astonishing profits swept through business and government alike. During the great bull market of 1919-1928, the former journalists and press agents of the CPI became fabulously wealthy and increasingly powerful. Their clients couldn't stuff their astonishing earnings into the market fast enough. The new "Public Relations" men had changed the game completely.
"The uniform, constant and uninterrupted effort of every man to better his condition, the principle from which public and national, as well as private opulence is originally derived, is frequently powerful enough to maintain the natural progress of things toward improvement..."
- Adam Smith, The Wealth of Nations, Book II Chapter III
It is incredible to consider that we laid the foundation of our economic world over two centuries ago. Incredible in that it is yet so young, incredible too that we have maintained it for so long. Such has been the speed of our progress in the last century, that our exponential development has dramatically outpaced our philosophy. Freud, Bernays, and the PR firm for Paris Hilton have made the theory of rational man, and the viability of free markets, obsolete.
American democracy itself contradicts free markets, the American Dream nothing more than a consumer society now enslaved to its false economics. A world beating GDP is what keeps America strong and free, the national GDP nothing more than the annual accounting of consumption, and profits of same. The American consumer is the most voracious in the world, the American dream defined by conspicuous and decadent consumption. It is a business model crafted by Freud and Bernays. And, like Adam Smith before, a model now completely out of date.
The engineered consent of the planet - both the societies of the wealthy consumer west, and those enslaved to supply them - has in the end, destroyed itself by its success. The exponential growth of our plastic laden world of riches has been accompanied by the exponential exhaustion of the earth's resources in its service. Our food is killing us, our habits are killing us, our consumption is killing us, and our unfettered belief that we can keep the pace of progress going indefinitely is speeding the future towards us like a black train on a moonless night. Our civilization has become unsustainable.
War and terror have been released by democracy, the worst of men in full, digital display despite their deep, engineered consent. Freud was wrong. Far from sating the evil in men, engineered attitudes and behaviours are just as horrifying as they were in the Great War. Freud changed the way the world is governed, and all we got was a lousy t-shirt. Balance must be restored.
Free markets are not free, and democracy has been re-engineered to suit. Without a fundamental rethink of our entire way of life, and the courage to throw off the custom built dogmas, nationalism, and patriotism of the last age which keep us from intelligent discussion, we run a very real risk of progressing ourselves out of existence.
The Freud family were stunning practitioners of a craft that could not have existed a generation before, as it needed the technology of the age with which to spread. They completed the tri-fecta by being in both Europe and America as one age passed its economics to another. In this way, the Freud's had the opportunity to become the founders and principle architects of what we now call home.
Deep inside us all, despite our politics, our class, or our creed, we intuitively know that something is wrong with our world - that something is broken. We can't put our fingers on it even though we know the answer is out there, somewhere. We know it's wrong to smoke but we do. We know Big Macs are killing us, but we feed them to our children just the same. We know we have crime. We know we have heartbreak. We know we have torture and scandal and fraud, and abuses of all kinds. We know these things, know they are killing us...but we continue just the same.
We just don't know why we continue unabated, and that creepy, irrational feeling that we know we should change, but can't... is Freud, and we are his bastards.
Aetius Romulous
Historian, Economist, Accountant, Writer, and blood sucking CEO.
Born at the wrong end of the Baby Boom Generation - too late to enjoy the ride, too early to have missed it, and stuck in the middle with the mess.
Aetius writes and blogs from his frozen perch atop the earth in Canada, spending the useful capital of a life not finished making sandwiches and fomenting revolution.
It's a living.
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Is This What We Want? - Essays on the question of our world
Economic Democracy Demands One World Balance
There Is No Recession in Heaven
Stock Markets are Not Democratic
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