The End of the Memory Hole

One of the most puzzling aspects of current events is the contrast between the ever increasing size of government and its paradoxical helplessness. It gets bigger and more impotent at the same time. Charles Krauthammer has a long list of Obama administration failures. Never has the White House had such a free hand in foreign affairs. Yet Krauthammer notes that Russian bombers are now based out of Iran, American troops are  under serious threat of attack from an enemy air force (Syria!) Putin is threatening to annex the Crimea, which Obama promised never to allow and the administration has just admitted paying ransom to one of the chief terror nations on earth. The more power Obama is given, the less he seems to be able to do with it.

This is true of domestic policy as well. Margot Sanger Katz describes in the New York Times how the administration spent $1.2 trillion dollars spent on Obamacare only to collapse into Medicaid. "Think your Obamacare plan will be like employer coverage?" she asks. "Think again". Yet this was his signature plan, his legacy, his glory.

Six years into the health law, the reality is that a typical Obamacare plan looks more like Medicaid, only with a high deductible. ... that change in norms may not be all bad. It largely reflects the preferences of Obamacare’s consumers, who are shopping aggressively for the most affordable health insurance they can find." ...

When the first Obamacare plans were released for 2014, many experts and customers were surprised at how many featured very limited numbers of doctors and hospitals.

Three years later, and the trend has only intensified. Many of the companies providing employer-based coverage, like UnitedHealth Group, Aetna and Humana, which tended to offer broad networks, have been exiting the markets.

Surprisingly such debacles have less impact than before. Putin for example has outsmarted Obama repeatedly but failed to benefit from it. By now he should have been sailing the Baltic Fleet up the East Coast.  Yet "even if there had been no war in Ukraine, sanctions or low oil prices, Russia would be facing a systemic economic crisis. The existing model of state capitalism that lives off of commodities exports —redistributing revenues among the population and stimulating consumer spending to catalyze business activities —exhausted its potential for growth in 2013."

In the 20th century political victories and conquest actually resulted in real power, at least in perception. Today they are curiously decoupled. Great bureaucratic empires no longer translate to great power. Take the EU. Daniel Hannan observed that when the UK joined the Brussels 40 years ago, it comprised a quarter of the world economy. But the bigger it grew the less important in relative terms the EU became.

Empires Aren't What They Used To Be

The acquisition of permanent majorities, media dominance and even police power only makes one a bigger fish in a shrinking pond. It's a depressing time to be a political activist and National Public Radio captures the mood of leftist cohort that has repeatedly turned the corner expecting to find a Worker's Paradise only to find Student Debt.  In an article titled Should We Be Having Kids In The Age Of Climate Change?  NPR describes the following scene: "standing before several dozen students in a college classroom, Travis Rieder tries to convince them not to have children. ... 'Here's a provocative thought: Maybe we should protect our kids by not having them,' Rieder says." Imgine! Eight years spent creating a Hope and Change, Planned Parenthood world and it's not worth living in.

Just who will pay the Obamacare premiums when no next generation is born Rieder doesn't say.  Presumably government will pay for it and if there's no one to tax they'll just print the money, just like Krugman says. But maybe the Climate Changers are fixated on the wrong crisis.   The state power model itself may be failing in a way it never did before.  The Spectator  notes that even while much of the world falls apart "we’re living in a golden age."

Poverty, malnutrition, illiteracy, child labour and infant mortality are falling faster than at any other time in human history. The risk of being caught up in a war, subjected to a dictatorship or of dying in a natural disaster is smaller than ever. The golden age is now.

The question isn't whether the state is irrelevant but whether it is less important than formerly or whether it is significant in a different way. Certainly Lou Dobbs' question "why would anyone vote for a FBI certified liar who's refused to hold a press conference for 258 days?" can only be met by supposing an indifference or resignation over political outcomes. One possible explanation for this comes from a Reason Magazine  citing a Pew poll that "millennial support for the Libertarian Party nominee is damn near astonishing." It's not hard to see in this a suggestion that government become less important in the 21st century than it was in the 20th.

The idea of the state as the "locomotive of history" is relatively recent. George Orwell's 1984 saw state resting on the pillars of police power, a command economy and the ability to rewrite the Narrative.  The most important of these was the ability to rewrite the factual record.  In fact 1984's protagonist was employed full time to rewrite newspaper articles.  In Orwell's view the mutability of the past was the foundation of tyranny.  "Who controls the past controls the future; who controls the present controls the past."  To ensure this the Ministry of Truth was honeycombed with Memory Holes into which any inconvenient fact could be dropped and be disappeared.

But just to illustrate how things have changed for the State we now know that Orwell was wrong. The mathematically dominant method for recording transactions, whether they involve the transfer of financial assets, intellectual property, health records or any type of information is probably going to be the blockchain. It has three important properties. First, the entire record can be reproduced by anyone from a Genesis cryptographic starting point such that all records will have the same signature if and only if they are the same. Second, no part of the record can be altered without regenerating the entire block chain from the the branch. Third, it is impossible to rewrite the block chain without incurring enormous real costs in electricity and computing power, as guaranteed by the laws of thermodynamics.

The first property means that blockchain by nature is a public ledger. The second ensures the database can only be falsified in its entirety from the point of change. The third makes it prohibitively expensive to do so. Readers of Ray Bradbury's The Sound of Thunder will recognize these attributes.  From his story we learn you can't change the past without altering everything; that by crushing a butterfly in the Jurassic we alter not one item in the record but create a whole alternate history.

The possibility of an immutable record is revolutionary in itself.  History has always been a "fiction agreed upon" — until now. What happens when you can't lie boggles the mind. The elites are of course working to get on top of it as they did with the Internet and every other disruptive technology. Central bankers from 90 countries, including Janet Yellen, have met to discuss its impacts on the financial industry and they are considerable. It will make it possible for individuals to make universally verifiable ownership claims over their data. When the technique is applied to currency, as with Bitcoin, blockchain makes it impossible to print "free money" since each new block requires actual computing power to generate, giving blockchain currency something of the guaranteed scarcity of gold. In a world built on a public ledger, you can't change the past without invalidating the ledger. Drop something down the memory hole and the Ministry of Truth burns up with it.

Blockchain is offered only as an example of the disruptive technologies affecting the world. Other innovations are shaking things up and there is no reason to think that the forces which have taken jobs from workers in Detroit will not also take power from bureaucrats in Washington. The Pew result probably means that the millenials sense that something is changing in our political system, though they don't exactly understand the particulars.

The moving center of gravity may be one reason why government is growing without getting any stronger and why catastrophes do not always have the expected effects.  It explains why the election of 2016 is so weird without providing definite guidance about which candidate to choose. About the only sure thing is there is no safe harbor. Those who imagine that Hillary or Donald represent some return to safety will be cruelly disappointed. Each should be evaluated on their ability to understand change, not to stop it.

You can't return to the past and — this is important — you really can't change it either. Tennyson's adage still applies. "The old order changeth, yielding place to new, and God fulfills himself in many ways, lest one good custom should corrupt the world." But with one proviso that bureaucrats normally forget: The change is real. Nothing Ben Rhodes can do will matter in the long run. The ultimate blockchain was always in the mind of God, beyond the power of the Narrative to corrupt.

For those interested in the technicalities see Andreas M. Antonopoulos: "Consensus Algorithms, Blockchain Technology and Bitcoin"https://youtu.be/sE7998qfjgk.

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