There have been a fair number of references to the
subject of "phyles" in this publication.
But it occurs to me that I've never discussed the topic myself in any detail.
Especially how phyles are likely to replace the
nation-state, one of mankind's worst inventions.
Now might be a good time to discuss the subject. We'll have an almost
unremitting stream of bad news, on multiple fronts, for years to come. So it
might be good to keep a hopeful prospect in mind – although I hate to
use the word "hope," as much as it's been degraded by OBAMA! and the kleptocrats,
incompetents, and sociopaths that surround him.
Let's start by looking at where we've been. I trust you'll excuse my skating
over all of human political history in a few paragraphs, but my object is to
provide a framework for where we're going, rather than an anthropological
Mankind has, so far, gone through three main stages of political organization
since Day One, say 200,000 years ago, when anatomically modern men started
appearing. We can call them Tribes, Kingdoms, and Nation-States.
Karl Marx had a lot of things wrong, especially his moral philosophy. But one
of the acute observations he made was that the means of production are
perhaps the most important determinant of how a society is structured. Based
on that, so far in history, only two really important things have happened:
the Agricultural Revolution and the Industrial Revolution. Everything else is
just a footnote.
Let's see how these things relate.
The Agricultural Revolution and the End of Tribes
In prehistoric times, the largest political/economic group was the tribe. In
that man is a social creature, it was natural enough to be loyal to the
tribe. It made sense. Almost everyone in the tribe was genetically related,
and the group was essential for mutual survival in the wilderness. That made
them the totality of people that counted in a person's life – except
for "others" from alien tribes, who were in competition for scarce
resources and might want to kill you for good measure.
Tribes tend to be natural meritocracies, with the smartest and the strongest
assuming leadership. But they're also natural democracies, small enough that
everyone can have a say on important issues. Tribes are small enough that
everybody knows everyone else, and knows what their weak and strong points
are. Everyone falls into a niche of marginal advantage, doing what they do
best, simply because that's necessary to survive. Bad actors are ostracized
or fail to wake up, in a pool of their own blood, some morning. Tribes are
socially constraining but, considering the many faults of human nature, a
natural and useful form of organization in a society with primitive
As people built their pool of capital and technology over many generations,
however, populations grew. At the end of the last Ice Age, around 12,000
years ago, all over the world, there was a population explosion. People
started living in towns and relying on agriculture as opposed to hunting and
gathering. Large groups of people living together formed hierarchies, with a
king of some description on top of the heap.
Those who adapted to the new agricultural technology and the new political
structure accumulated the excess resources necessary for waging extended
warfare against tribes still living at a subsistence level. The more evolved
societies had the numbers and the weapons to completely triumph over the
laggards. If you wanted to stay tribal, you'd better live in the middle of
nowhere, someplace devoid of the resources others might want. Otherwise it
was a sure thing that a nearby kingdom would enslave you and steal your
The Industrial Revolution and the End of Kingdoms
From around 12,000 B.C. to roughly the mid-1600s, the world's cultures were
organized under strong men, ranging from petty lords to kings, pharaohs, or
It's odd, to me at least, how much the human animal
seems to like the idea of monarchy. It's mythologized, especially in a
medieval context, as a system with noble kings, fair princesses, and brave
knights riding out of castles on a hill to right injustices. As my friend
Rick Maybury likes to point out, quite accurately,
the reality differs quite a bit from the myth. The king is rarely more than a
successful thug, a Tony Soprano at best, or perhaps a little Stalin. The
princess was an unbathed hag in a chastity belt,
the knight a hired killer, and the shining castle on the hill the
headquarters of a concentration camp, with plenty of dungeons for the
With kingdoms, loyalties weren't so much to the "country" – a
nebulous and arbitrary concept – but to the ruler. You were the
subject of a king, first and foremost. Your
linguistic, ethnic, religious, and other affiliations were secondary. It's strange how, when people think of the kingdom period
of history, they think only in terms of what the ruling classes did and had.
Even though, if you were born then, the chances were 98% you'd be a simple
peasant who owned nothing, knew nothing beyond what his betters told him, and
sent most of his surplus production to his rulers. But, again, the gradual
accumulation of capital and knowledge made the next step possible: the
The Industrial Revolution and the End of the Nation-State
As the means of production changed, with the substitution of machines for
muscle, the amount of wealth took a huge leap forward. The average man still
might not have had much, but the possibility to do something other than beat
the earth with a stick for his whole life opened up, largely as a result of
Then the game changed totally with the American and French Revolutions.
People no longer felt they were owned by some ruler; instead they now gave
their loyalty to a new institution, the nation-state. Some innate atavism,
probably dating back to before humans branched from the chimpanzees about 3
million years ago, seems to dictate the Naked Ape to give his loyalty to
something bigger than himself. Which has delivered us to
today's prevailing norm, the nation-state, a group of people who tend to
share language, religion, and ethnicity. The idea of the nation-state
is especially effective when it's organized as a "democracy," where
the average person is given the illusion he has some measure of control over
where the leviathan is headed.
On the plus side, by the end of the 18th century, the Industrial Revolution
had provided the common man with the personal freedom, as well as the capital
and technology, to improve things at a rapidly accelerating pace.
What caused the sea change?
I'll speculate it was largely due to an intellectual factor, the invention of
the printing press; and a physical factor, the widespread use of gunpowder.
The printing press destroyed the monopoly the elites had on knowledge; the
average man could now see that they were no smarter or "better"
than he was. If he was going to fight them (conflict is, after all, what
politics is all about), it didn't have to be just because he was told to, but
because he was motivated by an idea. And now, with gunpowder, he was on an
equal footing with the ruler's knights and professional soldiers.
Right now I believe we're at the cusp of another change, at least as
important as the ones that took place around 12,000 years ago and several
hundred years ago. Even though things are starting to look truly grim for the
individual, with collapsing economic structures and increasingly virulent
governments, I suspect help is on the way from historical evolution. Just as
the agricultural revolution put an end to tribalism and the industrial
revolution killed the kingdom, I think we're heading for another multipronged
revolution that's going to make the nation-state an anachronism. It won't
happen next month, or next year. But I'll bet the pattern will start becoming
clear within the lifetime of many now reading this.
What pattern am I talking about? Once again, a reference to the evil (I hate
to use that word too, in that it's been so corrupted by Bush and
religionists) genius Karl Marx, with his concept of the "withering away
of the State." By the end of this century, I suspect the U.S. and most
other nation-states will have, for all practical purposes, ceased to exist.
The Problem with the State – and Your Nation-State
Of course, while I suspect that many of you are sympathetic to that
sentiment, you also think the concept is too far out, and that I'm guilty of
wishful thinking. People believe the state is necessary and – generally
– good. They never even question whether the institution is permanent.
My view is that the institution of the state itself is a bad thing. It's not
a question of getting the right people into the government; the institution
itself is hopelessly flawed and necessarily corrupts the people that compose
it, as well as the people it rules. This statement invariably shocks people,
who believe that government is both a necessary and permanent part of the
The problem is that government is based on coercion, and it is, at a minimum,
suboptimal to base a social structure on institutionalized coercion. I'm not
going to go into the details here; I've covered this ground from a number of
directions in previous editions of this letter, as well as in Crisis
Investing (Chap.16), Strategic Investing (Chap. 32), and, most
particularly Crisis Investing for the Rest of the '90s (Chap. 34).
Again, let me urge you to read the Tannehills'
superb The Market for Liberty, which is available for download free here.
One of the huge changes brought by the printing press and advanced
exponentially by the Internet is that people are able to readily pursue
different interests and points of view. As a result, they have less and less
in common: living within the same political borders is no longer enough to
make them countrymen. That's a big change from pre-agricultural times when
members of the same tribe had quite a bit – almost everything –
in common. But this has been increasingly diluted in the times of the kingdom
and the nation-state. If you're honest, you may find you have very little in
common with most of your countrymen besides superficialities and
Ponder that point for a minute. What do you have in common with your fellow
countrymen? A mode of living, (perhaps) a common language, possibly some
shared experiences and myths, and a common ruler. But very little of any real
meaning or importance. To start with, they're more likely to be an active
danger to you than the citizens of a presumed "enemy" country, say,
like Iran. If you earn a good living, certainly if you own a business and
have assets, your fellow Americans are the ones who actually present the
clear and present danger. The average American (about 50% of them now) pays
no income tax. Even if he's not actually a direct or indirect employee of the
government, he's a net recipient of its largesse, which is to say your
wealth, through Social Security and other welfare programs.
Over the years, I've found I have much more in common with people of my own
social or economic station or occupation in France, Argentina, or Hong Kong,
than with an American union worker in Detroit or a resident of the LA
barrios. I suspect many of you would agree with that observation. What's actually important in relationships is shared
values, principles, interests, and philosophy. Geographical proximity, and a
common nationality, is meaningless – no more than an accident of birth.
I have much more loyalty to a friend in the Congo – although we're
different colors, have different cultures, different native languages, and
different life experiences – than I do to the Americans who live down
the highway in the trailer park. I see the world the same way my Congolese
friend does; he's an asset to my life. I'm necessarily at odds with many of
"my fellow Americans"; they're an active and growing liability.
Some might read this and find a disturbing lack of loyalty to the state. It
sounds seditious. Professional jingoists like Rush Limbaugh, Sean Hannity,
Bill O'Reilly, or almost anyone around the Washington Beltway go white with
rage when they hear talk like this. My kind-of friend Ann Coulter sent me a
copy of her last book, endorsed with the words "Stop promoting
treason." (I sent her back an email: "Well, maybe Obama will make
us cellmates in a few years.") But the fact is that loyalty to a state,
just because you happen to have been born in its bailiwick, is simply stupid.
As far as I can tell, there are only two federal crimes specified in the U.S.
Constitution: counterfeiting and treason. That's a far cry from today's
world, where almost every real and imagined crime has been federalized,
underscoring that the whole document is a meaningless dead letter, little
more than a historical artifact. Even so, that also confirms that the
Constitution was quite imperfect, even in its original form. Counterfeiting
is simple fraud. Why should it be singled out especially as a crime? (Okay,
that opens up a whole new can of worms… but not one I'll go into here.)
Treason is usually defined as an attempt to overthrow a government or
withdraw loyalty from a sovereign. A rather odd proviso to have when the
framers of the Constitution had done just that only a few years before, one
The way I see it, Thomas Paine had it right when he said: "My country is
wherever liberty lives."
But where does liberty live today? Actually, it no longer has a home. It's
become a true refugee since America, which was an excellent idea that grew
roots in a country of that name, degenerated into the United States. Which is just another unfortunate nation-state. And it's
on the slippery slope.
End of the Nation-State, May 2009 edition of The Casey Report
David again. Because I am running long, I am ending the excerpt there. The balance of
it, in which Doug discusses how phyles will replace
the nation-states, and the implications thereof, can be found in the archives
for The Casey Report found at www.caseyresearch.com.
You'll also find dozens of Doug's amazingly prescient
calls… including to back up the truck on precious metals well before
the current bull market started, or warning about the pending housing market
and stock market collapse starting in 2004 (and regularly thereafter). Then
there is the seminal work done by Casey Research Chief Economist, Bud Conrad,
and important analysis by Terry Coxon, one of the
nation's leading monetary authorities.
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