Blog Archives

The Taxonomy of Collapse

How great nations and empires arise, mature, decay and collapse has long been of interest for a self-evident reason: if we can discern a template or process, we can predict when the great nations and empires of today will slide into the dustbin of history.

One of the justly famous attempts to lay out the stages of expansion, zenith, decline and collapse is Sir John Glubb’s 1978 The Fate of Empires. Succinct and deeply informed, Glubb’s essay lists these stages:

The Age of Pioneers (outburst or Boost Phase)

The Age of Conquests

The Age of Commerce

The Age of Affluence

The Age of Intellect

The Age of Decadence

The slippery slope to collapse–decadence–is characterized by greed, corruption, irreconcilable internal political rifts, moral decay, frivolity, materialism–hmm, sound familiar?

All of this fits the S-Curve model which I’ve described here many times, for example:

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Political and Social Conflict Is Accelerating: Here’s Why

That economic, social and political conflict is accelerating is self-evident. What’s open to debate are the core drivers of conflict / disorder /unraveling.

Here’s the core self-reinforcing dynamic in my view:

1. The status quo elites can no longer mask soaring costs of essentials nor soaring wealth / income inequality between the top .01% (Oligarchs), the top 9.99% who enrich the Oligarchs with their discretionary spending and technocratic/managerial labor, and the bottom 90% who are rapidly losing ground on all fronts: economic, social and political.

2. The elites’ “fixes” to the social / political conflicts unleashed by the rigged financial system and winner take most economic order are politically expedient, meaning they don’t actually address the sources of conflict, they merely paper them over with PR as a means of preserving the elites’ wealth and power.

3. The elites’ fundamental financial “fix” is to create trillions in newly issued currency and distribute it to the banks, financiers, super-wealthy families and global corporations– the top .01% Oligarchs.

4. This “fix” accelerates the asymmetric distribution of wealth by enabling the already-wealthy to buy more productive assets, fund stock buybacks, etc., while forcing the bottom 90% to borrow money from the Oligarchs to make ends meet: the rich get richer, the poor get more indebted.

5. The only possible output of these inputs (political expediency to preserve the elites’ wealth and power, the creation and distribution to the Oligarch class of trillions in new currency) is the acceleration of the very erosion that fueled social / political conflicts in the first place. In effect, the elites’ “fixes” are accelerating the conflicts that will ultimately lead to their downfall.

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How States/Empires Collapse in Four Easy Steps

There is a grand, majestic tragedy in the inevitable collapse of once-thriving states and empires: it all seemed so permanent at its peak, so godlike in its power, and then slowly but surely, too many grandiose, unrealistic promises were made to too many elites and constituencies, and then as growth decays to stagnation, the only way to maintain the status quo is to appear to meet all the promises by creating money out of thin air, i.e. debauching the currency.

This political expediency works most wonderfully for a time: people don’t realize the silver content of their coinage is being cut to near-zero, or there’s nothing holding up the value of their currency but trickery and vague allusions to past glory.

Trust in the state/empire’s currency suddenly collapses in a phase shift: all seems well until the moment the avalanche sweeps it all away.

It’s a simple progression: during the permanent-growth-is-our-birthright phase of self-reinforcing virtuous cycles, when everything is expanding rapidly–credit, resources, jobs, capital, profits, state tax revenues, etc.–promises are made to elites and constituencies that look easy to meet as the economy is projected to expand rapidly essentially forever.

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What If Politics Can’t Fix What’s Broken?

The unspoken assumption of the modern era is that politics can fix whatever is broken: whatever is broken in society or the economy can be fixed by some political policy or political process– becoming more inclusionary, seeking non-partisan middle ground, etc.

What if this assumption is flat-out wrong? What is politics is incapable of fixing what’s broken? What if politics merely fosters an illusion of solutions, a paper-thin veneer of faux progress? What if politics isn’t a tool that’s capable of fixing what’s broken? What if all politics is able to do is generate delusions of grandeur and unresolvable conflicts? What if politics is ultimately little more than a fatal distraction?

This is of course heresy of the highest order, for a belief in the supremacy of politics is the secular religion of our era. The orthodoxy is: there is no problem that can’t be solved with a political policy: a tax cut, a new tax, a new incentive, a broader definition of criminality, and so on.

What if the status quo is failing for reasons that are beyond the reach of politics? 

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The Two Paths to Collapse

As a general rule, there are two paths to collapse: gradual erosion and sudden crash. The two are intertwined, of course; in most cases, the system slowly loses vigor, resources, efficiency, etc. (erosion) which leaves it so weakened that a crisis that would have easily been overcome in the past triggers a catastrophic decline of production and order.

My new book explores these system dynamics in the present: Pathfinding our Destiny: Preventing the Final Fall of Our Democratic Republic. As the title suggests, we’ve got a window to prevent the final descent, but it’s years, not decades.

There are two basic drivers of systemic erosion, drivers that have little to do with leadership or policy. Our current delusion is that changing leaders and tweaking policies are enough to stave off systemic erosion, decline and collapse, but the two dynamics cannot be so easily thwarted.

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When Does This Travesty of a Mockery of a Sham Finally End?

We all know the Status Quo’s response to the global financial meltdown of 2008 has been a travesty of a mockery of a sham–smoke and mirrors, flimsy facades of “recovery,” simulacrum “reforms,” serial bubble-blowing and politically expedient can-kicking, all based on borrowing and printing trillions of dollars, yen, euros and yuan, quatloos, etc.

So when will the travesty of a mockery of a sham finally come to an end? Probably around 2022-25, with a few global crises and “saves” along the way to break up the monotony of devolution. The foundation of this forecast is this chart I prepared back in 2008 (below).

This is of course only a selection of cycles; many more may be active but these four give us a flavor of the confluence of crises ahead.

Cycles are not laws of Nature, of course; they are only records of previous periods of growth/excess/depletion/collapse, not predictions per se. Nonetheless their repetition reflects the systemic dynamic of growth, crisis and collapse, and so the study of cycles is instructive even though we stipulate they are not predictive.

What is predictable is the way systems tend to follow an S-curve of rapid growth with then tops out in excess, stagnates in depletion and then devolves or implodes. We can see all sorts of things topping out and entering depletion/collapse: financialization, the Savior State, Chinese credit expansion, oil production, student loan debt and so on.

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How “Wealthy” Would We Be If We Stopped Borrowing Trillions Every Year?

The widespread presumption is the U.S. is wealthy beyond words, and will remain so as far as the eye can see: wealthy enough to fund trillion-dollar weapons systems, trillion-dollar endless wars, multi-trillion dollar Medicare for all, multi-trillion dollar Universal Basic Income, and so on, in an endless profusion of endless trillions.

Just as a thought experiment, let’s ask: how “wealthy” would we be if we stopped borrowing trillions of dollars every year? Or put another way, how “wealthy” would we be if the rest of the world stops buying our trillions in newly issued bonds, mortgages, auto loans, etc.?

The verboten reality is our “wealth” is nothing but a sand castle of debt. Take away more borrowing and the castle melts away. I’ve gathered a selection of charts that show just how dependent we are on massive debt expansion that continues essentially forever, as any pause in debt expansion will collapse the entire system.

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When Long-Brewing Instability Finally Reaches Crisis

The doom-and-gloomers among us who have been predicting the unraveling of an inherently unstable financial system appear to have been disproved by the reflation of yet another credit-asset bubble. But inherently unstable / imbalanced systems can stumble onward for years or even decades, making fools of all who warn of an eventual reset.

Destabilizing systems can cling on for decades, as the inevitable crisis doesn’t necessarily resolve the instability. History shows that when systems had enough inherent wealth to draw upon, they could survive for centuries, thinning their resources, adaptability and buffers until their reservoirs were finally drained. Until then, they simply did more of what’s failed to maintain the sclerotic, self-serving elites at the top of the Imperial food chain.

If we want to trace back the systemic instabilities and imbalances that culminated in China’s revolution in 1949, we can start in 1900 with the Boxer Rebellion, which was itself a reaction to the Opium Wars of the 1840s that established Western influence and control in China.

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The Gathering Storm

July 4th is an appropriate day to borrow Winston Churchill’s the gathering storm to describe the existential crisis that will envelope America within the next decade. There is no single cause of the gathering storm; in complex systems, dynamics feed back into one another, and the sum of destabilizing disorder is greater than a simple sum of its parts.

Causal factors can be roughly broken into two categories: systemic and social/economic. The central illusion of those who focus solely on social, political and economic issues as the sources of destabilization is that tweaking the parameters of the status quo is all that’s needed to right the ship: if only Trump were impeached, if only GDP hits 4% annual growth rate, if only the Federal Reserve started controlling the price of bat guano, etc., etc., etc.

The unwelcome reality is the systemic issues cannot be reversed with policy tweaks or shuffling those at the top of a crumbling centralized order. The systemic problems arise from the structures of centralization and monopoly capital, theinstitutionalization of perverse incentives and the depletion of natural capital: soil, water, fossil fuels, etc.

We can create “money” out of thin air but we can’t print fresh water, productive soil or affordable energy out of thin air.

Regardless of their ideological labels, centralized socio-economic systems follow an S-Curve of rapid expansion during a “boost phase,” a period of stable expansion (maturity) and then a period of stagnation and decline as the system’s participants do more of what’s failed, as they cannot accept that what worked so well in the past no longer works.

A successful model traps those within it; escape becomes impossible. That’s the lesson of the S-Curve:

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How Systems Collapse

I often discuss systems and systemic collapse, and I’ve drawn up a little diagram to illustrate a key dynamic in systemic collapse. The key concepts here are stability and buffers. Though complex systems are never static, but they can be stable: that is, they ebb and flow within relatively stable boundaries supported by reserves, i.e. buffers.

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In the Footsteps of Rome: Is Renewal Possible?

Is renewal / recovery from systemic decline possible? The history of the Roman Empire is a potentially insightful place to start looking for answers. As long-time readers know, I’ve been studying both the Western and Eastern (Byzantine) Roman Empires over the past few years.

Both Western and Eastern Roman Empires faced existential crises that very nearly dissolved the empires hundreds of years before their terminal declines.

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Now That the Presidential-Election Side Show Is Finally Ending…

Though it has been billed as the main event for months, the presidential election has always been a side show–or from one point of view, a freak show.

As I write this on Monday, I have no idea who will win the side show unpopularity contest (i.e. the presidential race)–and it doesn’t really matter as much as apoplectic partisans would have us believe.

The reason why it doesn’t matter much which unpopular candidate wins is the issues facing the nation are far larger than partisan politics or the corrupt Ruling Elite that is freaking out about the possibility of a Trump presidency disrupting its self-serving skims and scams.

As I described yesterday in America’s Ruling Elite Has Failed and Deserves to Be Fired,we are in the midst of a fast-moving Industrial-Digital Revolution that is upending the political, economic and social orders. The global economy’s current mode of production is in fits and starts being replaced with a new mode of production that bypasses the Ruling Elite’s centralized skims and scams.

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