Welcome back to the Keiser Report. I’m Max
Keiser. Time now to turn to David Graeber,
author of Debt: the First 5,000 Years and
this new book The Utopia of Rules:
On Technology, Stupidity and the Secret Joys
of Bureaucracy. David Graeber,
welcome back to the Keiser Report. -Thanks
for having me again. -It's great to have
you in the studio. Now of course you call
yourself an anthropologist.
I need to get that straight first because...
-Other people call me that, too. I even have a job...
Right, so you're not an economist.
People would assume that because you
write about debt and economies and
things like that, but as an
anthropologist you look at a wider scope
of the sociological implications and
some of the historical applications.
Is that a fair statement? -Yeah, I mean
anthropologists are basically, in a way,
they're the opposite of economists
because we start from empirical reality.
OK. That's a good way to put it because
economics is coming under fire now as
having no empirical basis whatsoever
It's purely theoretical.
Anthropology, however, is more of a
science, a hard science.
Yeah, I mean, well, I don't know about hard
science, but we start by actually talking
to people, going places, watching what
actually happens. We start with data and
then we build our models from what
people are doing and what they think
they're doing. -OK let's talk about this
new book The Utopia of Rules: On Technology,
Stupidity and the Secret Joys of Bureaucracy.
Tell us about it.
Well, OK, this book comes from my own
realization that we live in one of the...
probably the most bureaucratic society
that ever existed. Capitalism has created
this enormous system of bureaucracy, but
nobody talks about it. I went to
Google, you know, where you can
see how many times the word is used in
all books, and "bureaucracy" peaks about
1973 and then people just stop talking
about it. Then if you put in a word like
"paperwork" it [the increase] just goes BAM! You know, any
of those bureaucratic terms like... -"Red tape"
and "additional documentation required,"
you know, anything like that. -Terms and
conditions." -Yeah, exactly, all of those
words are used more, more, more
and more.
It's just become the water in which we
swim, you know, and
we don't talk about it
because it never occurs to us
that life could be any other way.
Now let's talk about healthcare in
America for a second because here in the
UK the cost of administering the
healthcare, the bureaucracy, is less than
5% of cost.
In America they want to go over to
Obamacare and in the
healthcare system the cost on the
admin side, the bureaucracy side, is
something like 25%.
Is that an example of how
bureaucracy eats into the free market?
I think at
this point the free market and
government, or what they call the free
market, are so completely fused
together that you can't even tell them
apart.
I mean, think of it this way:
You're on the phone to your bank.
There's something wrong. You
spend an hour going through
some bureaucratic runaround.
Well, you know, where does that come from?
The bank's a private
company, and on the other hand if we talk to
the bank they will say there’s all these
government regulations, but if
look at how they come up with those
regulations, well, the bank
lobbyists write most of that stuff.
They gave money to the politicians,
and they kind of worked it out together, so
it's not public and it's not private. It's
not market. It's not government. It's both.
It's just this evil synthesis. -OK. So it's
like cops in America who are making more
and more money writing parking tickets,
and JP Morgan, they're making a huge
amount of money in charging people
fees for overextending their
credit lines... That's their major
source of profits. I think the last time I
checked this it was back in 2008. 85%
of JP Morgan's profits came from
fees and penalties, so, basically, what JP
Morgan does is they make up rules they
know that you're not going to be able to
follow, and then they penalize
you for not following the rules.
It sounds like the Soviet Union back
in the day when people were saying, “Hey,
this is completely choked with this
bureaucracy, this communism, and there's no...
there's no entrepreneurialism.
There's no growth.” What you're
describing here is a situation
in the US. -I would call it the Sovietization
of capitalism. Yeah, on
a lot of different levels,
and in a lot of different ways. Think
about it this way: the critique of the
Soviet Union, of communist socialist
societies was they were utopian. They
wanted to fit people into this
model. They had this ideal, and they demanded
the people live up to this ideal which was
impossible to achieve. They made up all
these rules and if you didn't actually
act the way
you were supposed to, instead of saying
there's something wrong with our
standards of how people should act, they said no
there is something
wrong with you and they punished you.
Now that's exactly it, and JP Morgan Chase is
doing exactly that. They make up these
rules [that assume], of course, any normal person
can balance their checkbook. They
designed it in fact so that you can't, and
then instead of changing the rules,
they say there's something wrong with
you, and they penalize you.
In fact, I read a
story about Wells Fargo, which actually has an
algorithm that they use to sort through
customer accounts to pick out different
areas where they know people will be out
of town on certain days, and then they'll apply
these fees according to an algorithm
that they basically use to pirate funds
from folks. And let me just give some
more background and context here. So you
were one of the prime architects of the
Occupy Movement. -I was involved in helping
set it up. Yeah. -And so this global
insurrection against banker occupation,
as we call it, whether it's Occupy, and
now we see the Podemas movement
in Spain. We see Syriza in Greece
finally gaining some traction, and I put
that all together as this: people being
fed up. There is, together with
your hypothesis, if you will, that
bureaucracy is not a by-product, but the
actual point of these activities.
I want to roll into TTIP
because TTIP is such a global menace
and would you put it into this
context that it's nothing more than just
a massive bureaucratic feed trap and
does no economic good whatsoever? I would
totally agree with that. Well, I was involved
in global justice movement. That's where
I really became an activist and what
we figured out and, what the global
justice movement was about... It was called
the anti-globalization movement, which is
absurd because we weren't against globalization.
We were a form of globalization. What
we were against was the creation of this
global administrative
bureaucracy. There's all these
institutions like the IMF, the World Bank...
I would count NAFTA the EU, but I would also count
the private banks. Private and
public doesn't make much difference
anymore. The SNP, or Goldman Sachs, or
JP Morgan Chase. These guys together
constitute this kind of global
administrative bureaucracy which can
basically tell governments what to do,
so it really doesn't matter who you
elect anymore in most cases.
What's happening in Greece, right?
They elect one guy and the
international bureaucracy says,
"We don't care who you elect. These are your
policies." So that's what we were pointing
out at the time, and what they learned
from us is that the moment anybody finds
out what's actually in these trade
agreements, which are all about setting
up this planetary
capitalist bureaucracy to protect
creditors against debtors, to protect
rich people against poor ones,
the moment anybody finds out
what's in these deals they are immediately
voted out. They are utterly
anti-democratic. Everybody hates them, so
they've made them more, and more, and more
secret every time, so the big battle is
just getting out the word of what's in the
treaty because as soon as anybody finds
out... -It's amazing that here in the UK, for example, I don't
think people understand that it's about
loss of sovereignty. If a foreign oil or
fracker company comes into the UK and
the locals protest it and shut it down,
that foreign fracking company can sue
the UK, who is obliged under TTIP
to tax the British citizens to raise
money to pay punitive damages to the
foreign fracking company. -And things like
that actually happened in Mexico back in
1998-99 and that's why we
were protesting the WTO and groups like
that back in Seattle in 1999. It's the same
thing all over again. Every time they
think we forgot, they try it again, try it
again, and every time we have to mobilize, and
every time we expose to people what's
going on,
it gets shot down and then they just
wait five years and try again. -Just
talking to you, I think, is an interesting
exercise in fresh thinking because I
just had an insight. A light bulb
popped in my brain here: that when money
is created, because the
world is set up as a sticky bureaucracy,
when money is created, actually
that piece of paper is just a contract
with the central bank. You're actually
adding more paperwork. It's actually more
bureaucracy, and therefore
quantitative easing, which is the program
of putting more money into the economy,
is like putting another layer of
bureaucracy in these companies so they
say, “There's no inflation. There's no
growth. Let's print more money.”
Well, all they're doing is just printing more
paperwork… -Certificates, documents, that's all it is.
… that needs more
administrators. -You got it.
-What do you think of this idea?
I just had it. Is it in your book? It should be in your book.
I'll put it in the back myself.
Max's QE theory...
It's true because it's exactly
right because the basic idea
that they're trying to put in our heads
is that value comes from credentials,
from certificates, from bureaucratic
procedures. That goes all the way to the
bottom. If you're poor, every rich
country employs now armies of
thousands of people whose only job is to
make poor people feel bad about
themselves, to give them all this
paperwork, to prove that you're really
raising your kids correctly, prove that
you're really trying to get a job, prove
that you're really as disabled as you
say you are, and so forth and so on, and then
you know on every level you get the
same thing. More and more paperwork and
the idea of proving that you really have
this degree, proving that you really know
how to... All jobs need credentials
now, but finance is just the peak of the
iceberg. It's the highest
point. So the value itself comes
from paperwork. That's what finance is:
collateralized derivatives, all
these things are just really
fancy paperwork. So what they're trying
to tell us is that value ultimately
comes from paperwork.
OK, we've got about two minutes. I want to
get into this other part of this book
here: technology and stupidity.
So let's talk about technology
and stupidity, David Graeber. -Well, OK,
the stupidity part is very simple. It's that
being rich and powerful makes you blind,
and this is a phenomenon that people
don't like to talk about, but
a large part of wealth and power
isn't that you know more
about the world. You have all these spies.
Totalitarian countries have to have spies
because they don't know what's going on,
because nobody's going to tell them. In a
democratic country, they are deluged with
information, but it's like that on
every level. The more you have, the less
you know because nobody wants to tell
you, and so you go
around oblivious while everybody else...
Look at gender relations. It's like that
all the time. Women are
constantly doing the work so the men can
wander around in a daze. -Let me ask you this:
The central banks are printing all this money.
It just creates bureaucracy, but if
you're the first to get the money as it's
printed, you actually have a chance to
lord it over everybody else who is
downstream from that money, so if we look
anthropologically speaking, and we
go to ancient civilizations, the
guys, the warriors or whoever, at Machu
Picchu, you know, they took the
mountaintop and when the rain water fell they
got the fresh water... -and
everything flowed down.
Everybody else gets their leftovers
like in the Indian caste system--
who can eat whose leftovers.
To get to that point where you're getting the free
water or the QE, it's not about
intelligence, and it's not about adding
value to society.
It's mostly about leg-breaking,
profiteering, corruption and fraud, as we
see with HSBC and Barclays and The
Telegraph. You're not going to get an argument from me
on that. Look at quantitative
easing. This is an example. I don't know how
many trillion euros
they are printing, but someone figured out that
they're printing about enough to give
everybody, every individual in Europe,
763 euros a month for a year.
Well, why not just give everybody in
Europe 763 euros a month for a year?
It would cost exactly the same amount and
it would... How could that not be
a better stimulus for the economy?
You answered the question:
because they wouldn't get the fee,
and they live on the fees.
Exactly. -So it's a fee-ocracy.
It’s a fee-ocracy. The finance
and government are fused together. They've
become essentially the same thing.
It's fee-ism. -Fee-ism. There you go.
The third book, the next book! When's the next
book coming out? We've got 20 seconds.
The next book will be about
archaeological… I'm working
with an archaeologist named David Wengrow on
the origins of social inequality.
If you thought 5,000 years was a lot, just wait
for the next one.
Awesome. Alright. David Graeber, thanks so
much for being once again on the Keiser Report.
Thank you for having me. -And that's going
to do it for this edition of the Keiser
Report with me Max Keiser and Stacy
Herbert. I'd like to thank our guest
David Graeber, author of The Utopia of
Rules: On Technology, Stupidity and the
Secret Joys of Bureaucracy. If you'd like
to get in touch, tweet us @KeiserReport.
Until next time, bye y'all.
