The bitter fruit of the Internet Age… Why Americans will embrace the Surveillance Society… How the web is fracturing society… In the mailbag: “Everything is about political gain”…
Picking up where we left off yesterday, we sit back down with Legacy Research cofounder Bill Bonner.
In the first part of our conversation, Bill talked about why cash and gold will be great defensive assets to own this year… as the nearly 10-year bull market on Wall Street shows signs of defeat.
Today, Bill weighs in on one of the most important themes on our radar here at The Daily Cut – the growth of the digital Surveillance Society.
As you’ll learn below, he believes we’re only at the beginning of a very worrying trend… and it’s happening faster than you might think…
Chris Lowe: Bill, I wanted to talk to you about the growth of the Surveillance Society in the U.S. Your coauthor at The Bill Bonner Letter, Dan Denning, spilled a lot of ink in 2018 about the surge in digital surveillance and control. Where is this all headed?
Bill Bonner: It’s going to get worse. China has developed a Social Credit System. Everyone gets a “social credit” score that the feds either increase or decrease based on your behavior.
People with low scores – which they get for jaywalking, speeding, late payments, posting “bad” things on the internet, or whatever – can be refused travel on planes or trains, denied credit cards, blocked from dating sites, or they can be cut off from the internet. Their children may be banned from the best schools, and they may be blackballed for good jobs.
In severe cases – such as the billionaire who published our Family Fortunes book in China – a person can be completely scrubbed from society… disappeared… with no access to money, communications, or travel.
You may think the Chinese people would put up a fight and resist this sort of totalitarian control. But that’s not the case. Most Chinese like this system of surveillance and control – or at least that’s what they tell reporters. They say it makes them feel safe because the “bad guys” are being culled from social interaction.
Chris: Here at the Cut, we’ve been warning readers that today’s China could be tomorrow’s America. Could something like China’s Social Credit System become a reality in the U.S. and other Western nations?
Bill: We’re already moving in that direction. And we’re moving very fast.
Imagine you could get a lower mortgage rate by pleasing your masters in government. It wouldn’t be long before a lot of people were doing a lot of pleasing. The whole system is just too good for the government to resist.
As you reported recently, millions of Chinese have been barred from using trains and planes because their “social credit” score is too low. They can also get be barred from dating services. The Chinese “Tinder” will factor in your social credit score… and you will get bad placement in the app if you don’t have a good score.
Chris: What’s the big picture here? The internet promised to open up society by mass access to information. But as we’re seeing, it’s doing just the opposite. The more information there is about us online… the less free we become.
Bill: It’s the bitter fruit of the Internet Age. When the web was first introduced on a commercial basis in the 1990s, people thought it would be a huge boost to the economy. They believed that productivity would go up… and that we’d get higher GDP growth and higher incomes as a result. But the internet didn’t pay off as expected.
The internet – and all the data we share across it every day – has turned out to be a big boon to governments who want to keep track of you by using Big Data to monitor everything you do all the time.
Chris: You were skeptical of the internet when it started to become popular in the late 1990s. Is this something you worried about from the get-go?
Bill: Well, I didn’t anticipate that governments and corporations would use the internet to control people. But I should have spotted it. The internet fundamentally decreases the cost of control. And when you reduce the cost of control, you get a lot more of it.
What I did anticipate was all the time-wasting the internet would lead to. I saw it as just another nuisance… as you now had to answer your emails, look up websites, and this, that, and the other. And people are watching movies on the internet and reading their Facebook posts endlessly and so on.
It looked to me as though the internet was more like TV than like the internal combustion engine. The TV was a big, big, big success. Everybody has a TV. People spend hours watching TV. But I don’t know that human civilization has been advanced very much by the TV set.
Civilization – at least a material part of it – has been greatly advanced by the internal combustion engine. This powered automobiles and air travel… as well as mechanized agriculture. The productivity gains were enormous. The internet is nothing like that.
One study revealed that we check our smartphones on average 85 times a day. Another study showed that half of smartphone users – about 1 billion people – will spend at least five hours a day glued to their screen. Most of them are on social media or chat apps.
Productivity rates don’t go up. Salaries don’t go up. GDP rates fall. The web simply isn’t the big boon to the economy that people thought it would be.
Chris: I want to switch gears a bit and talk about what that means for the traditional press. There was a time when everyone read the same newspaper and watched the same TV news. They could argue over the interpretation of facts. But they typically agreed on the basics of what was going on.
The internet – and the age of free information – has all but blown that up. Is this a positive or a negative?
Bill: I don’t know what to make of it. When I was growing up in the 1950s and 1960s you had three major TV channels. You could get your news from any one of them. But they all tended to be pretty much the same.
Everybody was talking the same language about the same things. Now, you go on the web… or you just talk to your neighbors… and you may find they have a view of what’s going on that is completely different to yours.
Every detail is different. Often, the facts that they are using to justify their positions are facts you’ve never heard of. And you wonder where that came from.
With the internet, you have all these different “facts” and opinions floating around. This leads to a fractured society. Even worse, all the fake news makes it hard for people to see what really matters. There’s no unified platform of ideas and thoughts that are regarded as okay. You can say practically anything. The bottom line is that anything goes on the internet. So you are often completely unsure of what is and what isn’t.
Donald Trump was right. There’s so much fake news around. Most of it comes from the highest levels of government – places where you’re supposed to have confidence.
We saw that with the U.S.-led invasion of Iraq in 2003. That was arguably the biggest political event of the 21st century. It was based on fake news coming from the highest levels of our government and the intelligence community.
If you can’t believe Colin Powell speaking to the United Nations about the threat of Saddam’s weapons of mass destruction, what can you believe?
Chris: Thanks for your insights, Bill.
Bill: Any time.
The growth of fake news makes publishing firms like Legacy Research so important these days.
We’re not supported by advertisers. We’re not supported by government. And we’re not controlled by powerful elites such as Jeff Bezos, who owns The Washington Post.
In fact, we are the only channel for information and advice that’s directly supported by readers. Which is why every piece of research we publish is aimed squarely at sharing information that matters to you.
Tomorrow, more from the Legacy Research team on the threats and opportunities ahead in 2019.
We’ll be talking to master trader Jeff Clark about the bearish signs he sees for U.S. stocks… and why it’s actually good news for traders like him.
Turning back to a big profit trend we’ve been tracking for you – the autonomous electric vehicle (AEV) revolution – some of your fellow readers aren’t convinced…
While I concur with Doug on the megatrend regarding our movement toward EVs, I don’t think that it will happen to the extent he estimates in the next 10 years. I believe the limiting factor will be the energy infrastructure needed to support the EV revolution. Right now, capacity is already constrained on the electrical power grids as well as the natural gas pipelines that deliver feedstock to gas fired power plants. This will only be exacerbated as we move further away from coal.
Due to the NIMBY (Not In My Back Yard) attitudes and general environmental/social justice movements it has become extremely difficult to build sizable new power generation plants, pipelines and power lines to meet the current demand – let alone the significant growth that would be driven by EVs. And if you want to build infrastructure on either coast, where most of the population and cars are located, it becomes infinitely more difficult.
A new nuclear plant is a 10-year, $10 billion endeavor to complete, and transmission power lines and pipelines aren’t much faster or cheaper. That is a lot of capital, environmental and political risk to take on with no return on your capital investment for a decade… Just ask SCANA how they made out with their recent nuclear project.
– Brian P.
Sounds to me like vehicle occupants will have to wear helmets. Not to prevent injury from accidents, but to protect themselves from brain injury due to the constant bombardment of microwave energy. And according to numerous studies sounding the alarm this isn’t a joke.
– Larry L.
I’d really like to know how people feel nuclear is clean? Yes, it doesn’t put out emissions, but no one talks about nuclear waste. It’s just like our trash, they dump it in the ground. Explain to me how that is clean. Most people only look at one side of these issues. Most everything is about political gain. Everyone is so hyped on wind and solar power. People no longer use those power sources of the past; hanging laundry on a clothesline. But we’ll spend billions to build these ridiculous solar fields. It’s all driven by political correctness.
– Scott A.
Are you betting on the electric vehicle revolution as the next big tech trend, like Doug says? Or is Scott A. right that it’s just about political correctness? Tell us at [email protected].
Happy New Year to you and yours.
Until tomorrow…
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Chris Lowe
January 1, 2019
Dublin, Ireland