Aside

With thanks to Adam Curtis © 2011.

ALL WATCHED OVER BY MACHINES OF LOVING GRACE

Introduction

This documentary takes its name from a 1967 poem of Richard Brautigan which called for a cybernetically-programmed ecological utopia consisting of a fusion of computers and mammals living in perfect harmony and stability. By contrast, the film implies that humans have been colonized by the machines they have built: although we don’t realize it, everything we see in the world today is through the eyes of the computers. Computers have failed to liberate us and instead have distorted and simplified our view of the world around us. Hugh Montgomery summarised the suggestions made by the film as follows: “By putting our faith in computers [or unfeeling bureaucracies more generally] to create a stable, democratic world order… we’ve become politically and economically naïve and dulled to the business of real social change.”

This three part series is one of the most impressive documentaries I’ve ever seen, not just because it oozes style but as so much of the substance was new to me. It is an artistic piece of cinema with a complex criss-crossing of ideas and of history. As such it is intended to be evocative rather than to provide a clear philosophical or chronological description. As with Robert Peston’s documentary was largely to do with a subject I am ignorant of -economics- so I have enriched the original material with opinions sourced from a range of reviews. (Part 2 explores the relationship between the overarching ideology of power as administered neutrally through self-regulating systems and the prevailing images by which we understand the environment in our culture; Part 3 does so likewise with our images of genetics and the place of human beings.)

Love and Power

The Californian Ideology

Part 1 dealt more specifically with the development of information technology facilitating the creation of a new corporate elite who’s actions are damaging to their countries but serve their individual interests. But Curtis begins his documentary, not with machines or politicians but with the Nietzschean cult ‘objectivism’, founded by the controversial Russian novelist Ayn Rand in 1950s New York. Its adherents (ironically dubbed ‘the collective’) aspired to free themselves from social and political control and live their lives guided only by self interest. Following Nietzsche, they viewed any feelings of altruism with disdain. Any form of self-sacrifice to benefit others was held to be irrational and therefore evil. This included feelings of affection for family and friends which were to be suppressed as a sign of weakness.

At times Rand advocated a solipsistic worldview whereby each individual should regard his or herself as the centre of reality, regarding other people as less real. Indeed, her collected essays were published under the title The Virtue of Selfishness.[1] Unsurprisingly, she died alone in with very few friends.

Rand denounced President John F. Kennedy as a fascist comparable to Hitler because of his support for welfare programmes. Rand also had pretensions of being a successful philosopher, proclaiming herself to be the greatest mind since Aristotle. Such delusions of grandeur can’t have been helped by the devotion she received from her clique. Unsurprisingly for a writer who took all her ideas from a philosopher who was actually a better writer than her, very few philosophy students today will have heard of her, and for those that have it’s only from the ranting of far-right trolls online. (The obvious retort that Objectivism isn’t taught as philosophy because it is too controversial is completely implausible- in my experience anything no matter how controversial can be taught in a philosophy class, as is perhaps the whole point in the discipline. This therefore implies that most philosophers don’t think that Rand is worthy of being taught.)

Following Nietzsche, the objectivists reckoned that if one pursued self interest totally one could make themselves into a heroic figure (an Übermensch or ‘over-man’); this would benefit mankind on the whole. But while Nietzsche thought that very few people would have the strength of will and native brilliance to achieve this state, the objectivists believed that a perfect society was possible in which it  was available for all. This was a libertarian utopia in which there was complete freedom for every individual to fulfil their self-interest without hindrance from a state or civil society. This ‘society’ of selfish heroes would not only be ‘moral’, but supremely ‘rational’.

Objectivism was just one (albeit particularly famous) form of libertarian utopianism popular in the neo-liberal days of the ’80s, and “in the ’90s, in Silicon Valley in California (hence the collective term ‘the Californian Ideology), a bunch of nerdy entrepreneurs began to adopt some of Rand’s ideas. Computers helped them create order, a self-stabilising utopia … . At the same time, Alan Greenspan, who used to be in Rand’s reading group [and had a long affair with her], … was becoming the most powerful man in the world”[2] as Chairman of the Federal Reserve of the United States from 1987 to 2006.

Cyber-Libertarianism

The “economists of the ’90s believed in a system of self-regulation, in this instance [more promising due to the technology for being] governed over by computers, which would minimise the chances of financial collapse by carefully monitoring investments and the rise and fall of global markets.”[3] The broader ideological tendency held that “through pursuing individual happiness, rather than concern for others, that society could achieve stability [needed for economic growth]. … It was a philosophy, Curtis tells us, that was quickly seized upon by the scientists and businessmen in America’s electronics and financial sectors.”[4] They were influenced by the utopian dreams of cyber-libertarianism for “self-stabilising, self-empowering digital networks”[5] Particular emphasis was put upon internet networks which they boasted would to bring about a democratic revolution by decentralising knowledge and power between all members of society.

Greenspan had already publicly broken with objectivism, and this was also clear in that the Federal Reserve operates through government controlled interest rates and the control of the money supply through of fiat currency.[6] Yet the influence of Rand’s ideology lingered in Greenspan’s utopian individualism, an idealism bolstered by the fetishisation of the emotionless rationality of machines.

Stock Taking

Curtis clearly isn’t trying to squash all of the elements thus far into one simplistic causal account. This is an artistic film and not an essay, and so we have to grant him artistic licence. A look at the series’ title is enough to see that he is describing ideologies and systems which are much broader and significant than objectivism. He simply used the latter as an intriguing starting point, given the scandalous relationship between Rand and Greenspan. Surprisingly Curtis leaves entirely implicit the apt comparison of the inhumanity of the objectivists with the machines that now exert so much influence over our lives.

Of course Curtis is being hyperbolic when he says that “the computers produced the financial models”.[7] The computers made it possible, but it was the teams of ‘rocket scientists’ who were behind the original models for trading in synthetic commodities such as the notorious ‘derivatives’. What Curtis is referring to is the models that were further developed and run by the computers, and that so much trust was put into the computers to make calculations in a very reliable way. It was this imprudent reliance upon computers that gave us the financial models that we had.

Finally, while it is lacking of Curtis not to mention the collapse of the USSR because of the massive impact that obviously had on global investments and markets, that does not imply he is trying to give a simplistic, one-sided view of the economy over this period. Since he never says that his description is exhaustive there is no reason to think that he was intending to exclude other salient influences.

The Mid-Nineties Boom

When Bill Clinton ascended to the Presidency “he wasn’t happy about this new world system where citizens –and computers– held the power. He liked the old way, where politicians were in charge.”[8] But the previous [Bush Snr.] administration had run up a huge deficit and there was no finance for Clinton to strengthen public services and welfare provision as he had promised in his campaign. He agreed to pursue a free market solution to tackling the deficit. “After demonising the state, the neo-liberal revolution set out to shift power from government to the market, which was said to be neutral and efficient. Except that anyone with half a brain knew the market expressed and entrenched deep inequalities of power, so the neo-liberal power shift was from the government to the rich. And the rich are always looking to manipulate the market to gain an edge.”[9] (As Papworth pointed out it was this self-interest that drove the revolution rather than a misplaced faith in machines. Rather, the faith of which Curtis speaks is an ideology that could mask the reality from those who did not stand to gain.)

Greenspan gave over the “Clinton administration’s control of the economy to the mirage of ‘risk-free’, computer-driven financial markets”.[10] The New Economy created used computer models to predict risks and hedge against them, in accordance with the Californian Ideology. “Government spending and interest rates were cut and this led to boom time again but a different kind of boom time from previous ones because this time computers”[11] were supposed to be managing the stability necessary for growth. But increasingly, while he was off ‘not having sex’ with that woman [Monica Lewinsky], elite financiers actually ran the world.

Yet the “markets were overvalued, it was over-exuberance rather than increased productivity that was causing the boom, the bubble burst, in America, in Asia, everywhere. … And perhaps machines, and the internet, weren’t the great democracy after all, but something altogether more complicated. … The promise of the new economy had been about giving the financial markets the power without the corruption of politics, but in reality power had gone to the bankers, and they had used it to rescue themselves. Now there was chaos.”[12] This “financial crisis came about because money and property were sold and resold in increasingly complex ways. When these became so mixed up and muddled what the bankers were selling didn’t really exist any more, yet their greed spurred them on. Companies hid away their debts”[13] as we were to discover with the Enron scandal. “The shifting of power from government to finance, it seemed, had created a new yet unstable system, in which a financial elite protected its own interests while those at the poorer end of society were left in economic ruin.”[14]

The Failure of Cyber-Libertarianism

Far from empowering a new age of democracy the internet and other electronic communications developments increasingly dehumanise the nature of interpersonal interaction.

We move steadily towards a Brave New World kind of society where human ideas, human culture, and human lives are dehumanised via commodification. “In 1994 Carmen Hermosillo published a widely influential essay online, ‘Pandora’s Vox: On Community in Cyberspace‘, and it began to be argued that the result of computer networks had led to, not a reduction in hierarchy, but… a complex transfer of power and information to companies.”[15] To quote Hermosillo at length:

I have seen many people spill their guts on-line, and I did so myself until, at last, I began to see that I had commodified myself. Commodification means that you turn something into a product which has a money-value. In the nineteenth century, commodities were made in factories, which Karl Marx called ‘the means of production.’ Capitalists were people who owned the means of production, and the commodities were made by workers who were mostly exploited. I created my interior thoughts as a means of production for the corporation that owned the board I was posting to, and that commodity was being sold to other commodity/consumer entities as entertainment. That means that I sold my soul like a tennis shoe and I derived no profit from the sale of my soul. …

As if this were not enough, all of my words were made immortal by means of tape backups. furthermore, I was paying two bucks an hour for the privilege of commodifying and exposing myself. Worse still, I was subjecting myself to the possibility of scrutiny by such friendly folks as the FBI: they can, and have, downloaded pretty much whatever they damn well please. The rhetoric in cyberspace is liberation-speak. The reality is that cyberspace is an increasingly efficient tool of surveillance with which people have a voluntary relationship.”

I suspect that cyberspace exists because it is the purest manifestation of the mass (masse) as Jean Baudrillard described it. It is a black hole; it absorbs energy and personality and then re-presents it as spectacle. People tend to express their vision of the mass as a kind of imaginary parade of blue-collar workers, their muscle-bound arms raised in defiant salute. Sometimes in this vision they are holding wrenches in their hands. Anyway, this image has its origins in Marx and it is as Romantic as a dozen long-stemmed red roses. The mass is more like one of those faceless dolls you find in nostalgia-craft shops: limp, cute, and silent. When I say ‘cute’ I am including its macabre and sinister aspects within my definition.”

Clive Hamilton commented that “we used to believe control of capital was the principal source of power, but now we are told information is power.”[16] Agreeing with Hermosillo, Curtis emphasised that the Californian Ideology “has not led to people being Randian heroes but in fact trapped them into a rigid system of control from which they are unable to escape.”[17]

Neo-Liberal Imperialism in East-Asia

The US had long been a global hegemon but now its imperialist activities moved up a level. An important part of the New Economy model was the attempt made by the government to manage the international economy as an interconnected network with trade restrictions completely relaxed. From the opening of all trade barriers in Thailand Western finance leaders began to experiment with these ideas in the Far East. The Council of Economic Advisers (headed by Joseph Stiglitz) had predicted that the Far Eastern countries would be harmed when the unsustainably high amount of funding pouring into them suddenly came to an end. Stiglitz maintained that it was not in the US’ interest for these countries to be decimated and that it was only in the interest of the small number of financiers who were making the short term speculative loans.

Yet Robert Rubin, the Secretary of the Treasury blocked the Council from informing the President of this because he feared it would damage the US economic interests. Rubin was the former head of Goldman Sachs which under his leadership had developed many of the computer models which were supporting the then boom. Curtis claims that Rubin shared the Californian ideology and that in the view of Stiglitz, he was able to keep the interests of the financial elite at the heart of government. This seems rather plausible when we consider first that Rubin not only came from the largest investment bank but after leaving government went on to manage the largest commerical bank, and second that this is not a isolated case but there is a strong trend of such a ‘revolving door’ between government and finance across many Western governments.

In 1997 the East Asian crisis began where its boom had done, in Thailand. When developers defaulted on their loans because no one wanted their buildings Western investors began to panic. The crisis soon spread to South Korea and to Indonesia. Distracted by the Lewinsky scandal, Clinton was and was powerless to stop this crisis and Rubin admits that he as Treasury Secretary had far too much power over foreign policy at this point.

In return for stabilising loans the IMF demanded that the countries liberalised their economies along Western lines. But it was a trick, the “loans provided to the crumbling economies of the Far East were really only given to repay the Western investors who had interests there”[18] that is, the countries had enough money so that investors could get their loans back before swiftly removing all of their money from the countries. This is no conspiracy theory, as Papworth, a libertarian,  agrees.

South Korea’s strong technological and enterprise base meant that it recovered over a reasonable amount of time but Indonesia’s economy was completely devastated with its currency’s value suddenly dropping by 80%, and Thailand was also hit very hard. It took a couple of years for the recovery to begin, and while it is possible to argue from a neo-liberal mindset that it the long run the countries have benefited from emulating the American economic system, that is not the point that Curtis is making: the US government simply had no right to interfere in with the fundamental structure of other sovereign nations and to force them into such hardship, even if for ‘only’ a few years.

Recent Events

Several years after to Eastern crash the ‘Dot-Com bubble’ burst in the West and George Bush Jnr. cheated his way into the Presidency. American imperialism had continued to dominate international affairs, but it was from the Middle East, rather than the Far East that the clearest retaliation came. “The attack on the World Trade Center was an assault by political Islamism on American power, and on what the Islamists believe is the force that drove that power: radical individualism. … Two weeks [after the markets reopened] the Enron scandal was revealed, and it became clear that it was only one example of a vast corporate fraud. Since the early ’90s many major corporations had faked profits and hid their debts, helped by some of the major accounting firms.”[19] With many of these criminals linked to George Bush and his financial tycoon-laden administration, his presidency had been shown to be doubly corrupt even before his inept handling of Afghanistan, Iraq and Hurricane Katrina.

Greenspan kept the markets rising by responding to every jolt in the financial markets with a flood of cheap money: every time a bubble burst, interest rates would be dropped to stimulate borrowing and investment. The Asian Financial Crisis; the Dot-Com bubble; and 9-11 are just the most prominent examples. This should have been massively inflationary –and thus the error should have been exposed relatively quickly– but as Curtis goes on to explain, the deflationary effect of hundreds of millions of Chinese and other labourers entering the global economy masked the inflationary effect of Greenspan’s monetary manipulations.”[20] “It seemed that the New Economy was working to stabilise the economy.”[21]

To “avoid a repeat of the earlier collapse, China’s Politburo had attempted to manage America’s economy via similar techniques previously used by America on the other Far Eastern countries.”[22]

The Chinese “deliberately held their currency’s exchange rate at a low level, this meant that their exports were cheap and Chinese goods flooded into America. And to pay for them American dollars flooded into China. But rather than spending this money on their population, the Chinese leaders immediately lent the money back to America by buying American bonds. It was a perfect system of cheap goods and cheap money flowing into America”[23] which created the stability that enabled commercial banks to make irresponsible loans to the public that would previously have been considered too risky. A similar model applied to other Western countries, such as Britain, all of which put too much faith in computers to balance the economy. “Just as in South East Asia ten years before, those running the financial sector mobilised political power to rescue themselves and protect their supremacy. They asked the politicians to bail them out and they agreed. And again just as in South East Asia the price is being paid by the ordinary people of the countries.”[24]

~~~~~~

Continue to notes on Parts 2 & 3 [to follow].

Notes

[1] It’s worth avoiding a common mistake: she never said that selfishness in itself was a virtue, but only that selfish behaviour was rational because it supposedly led to better consequences.

[2] Wollaston

[3] Lambie

[4] Lambie

[5] Montgomery

[6] Though as Brown clarifies, Greenspan himself “did not have masses of power over U.S. interest rates– the savings glut had already decoupled them from central bank control, as he notes in his memoirs.”

[7] Curtis, Pt.1

[8] Wollaston

[9] Hamilton

[10] Montgomery

[11] Wollaston

[12] Wollaston

[13] Gee

[14] Lambie

[15] Wikipedia

[16] Hamilton

[17] Wikipedia

[18] Gee

[19] Curtis, Pt.1

[20] Papworth

[21] Wikipedia

[22] Wikipedia

[23] Curtis, Pt.1

[24] Curtis, Pt.1

Bibliography

Brown, Michael R., Part 1 Review [29.05.2011]

Curtis, Adam, (2011), ‘All Watched Over By Machines of Loving Grace’, BBC Documentary. Original broadcasts, BBC 2, 9-10pm: 23 May, 30 May and 6 June

Gee, Catherine, Part 1 Review for The Telegraph [29.05.2011]

Hamilton, Clive, Review [23.03.2012]

Lambie, Ryan, Part 1 Review for ‘Den of Geek’ [29.05.2011]

Montgomery, Hugh, Part 1 Review for The Independent [29.05.2011]

Papworth, Tom, Part 1 Review for ‘Liberal Vision’ [29.05.2011]

Wollaston, Sam, Part 1 Review for The Guardian [29.05.2011]

Adam Curtis’ All Watched Over By Machines of Loving Grace, Part 1

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