Monday, December 09, 2019

The Taxonomy of Collapse

The higher up the wealth-power pyramid the observer is, the more prone they are to a magical-thinking belief that the empire is forever, even as it is crumbling around them.
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:
But what triggers the collapse of a weakening but still functioning empire? For that, I propose a taxonomy of collapse. A taxonomy is a system of classification that groups organisms or types that share characteristics and origins.
What taxonomy of collapse does history suggest? I would start with:
1. Bolt from the blue: a fast-moving, unexpected crisis that overwhelms the usual defenses and responses of the empire. An invasion by previously unknown forces with superior technology and/or organization fits the bill: the Mongols in Eurasia, the Spanish in the New World, etc.
Extremely contagious and previously unknown infectious diseases like plague and smallpox are also bolts from the blue, devastating populations with no immunity. It is estimated that 80% or more of the population of North America died from exposure to smallpox and other European diseases, in many cases long before the victims had ever seen a European, as the diseases spread much faster than the invaders themselves.
A drought that never ends is another unexpected catastrophe that quickly depletes food stores.
These bolts from the blue can strike at the same time: one reason why the small-in-number Spanish forces conquered vast empires in the New World was the empires had already been fatally weakened by diseases introduced by Columbus decades earlier.
2. Irreplaceable declines in essential resources. Food tops the list, as a decline in calories leads to weakened immune systems and heightened odds of pandemics spreading and a subsequent drop in the number of workers needed to support the empire's vast infrastructure.
The book The Fate of Rome: Climate, Disease, and the End of an Empire makes a compelling case that the Western Roman Empire centered around the Mediterranean suffered from a slow environmental transition from an unusually wet era that enabled grain to be grown in previously marginal areas to a drier era that no longer supported the immense grain harvests needed to feed the empire.
Other forms of depletion can also sap the empire of essentials: forests are cut down, silver mines are tapped out, nearby sources of slaves (labor) are no longer available, and so on.
The imperial machinery that is accustomed to there's always more somewhere refuses to trim its expenses, elites refuse to lessen their skim, and since the fat of elite excess is retained, eventually the muscle of military power and trade decay, leaving a hollowed out empire on the edge of a precipice awaiting one final kick into the abyss.
3. Reversal of fortune. Military misadventures top the list, as invasions of nearby competing powers are in effect last-ditch gambles to acquire desperately needed wealth and resources to prop up the status quo. When the imperial army is defeated and destroyed, there are no longer sufficient resources and recruits to rebuild the army.
4. Internal civil conflict: civil wars and political conflicts that break out into society and the economy end up consuming the last of the empire's seed corn, just like an invasion of a bordering empire that fails. Once the conflict is resolved, there are no longer enough resources left to support the imperial infrastructure.
Like Nature, History offers a near-infinite variety, but just as Nature fits into taxonomies of organisms, history can be shuffled into its own taxonomy, however messy and imperfect it might be.
These triggers of collapse can overlap, of course, accelerating the final decline. All complex hierarchical systems are intrinsically fragile and prone to disruption; we don't see the fragility or vulnerabilities until the decline has reached the terminal phase. The higher up the wealth-power pyramid the observer is, the more prone they are to a magical-thinking belief that the empire is forever, even as it is crumbling around them.



My recent books:
Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).


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Friday, December 06, 2019

Suppressing Dissent Guarantees Disorder and Collapse

The frantic efforts of am exploitive elite to eliminate dissent only accelerates the regime's path to collapse.
Regimes that are losing public support always make the same mistake: rather than fix the source of the loss of public trust--the few enriching themselves at the expense of the many-- the regime reckons the problem is dissent: if we suppress all dissent, then everyone will accept their diminishing lot in life and the elites can continue on their merry way.
What the regimes don't understand is dissent is the immune system of society: suppressing dissent doesn't just get rid of pesky political protesters and conspiracy theorists; it also gets rid of the innovations and solutions society needs to adapt to changing conditions. Suppressing dissent dooms the society to sclerosis, decline and collapse.
Dissent is the relief valve: shut it down and the pressure builds to the point that the system explodes. Regimes that no longer tolerate anything but the party line fall in one of two ways: 1) the pressure builds and the masses revolt, tearing the elite from power or 2) the masses opt-out and stop working to support the regime, so the regime slowly starves and then implodes.
Here in the U.S., the suppression of dissent is the work of the corporate media and the Big Tech monopolies: Facebook, Twitter and Google.  As Mark St.Cyr and I discuss in a new no-holds-barred podcast (1:08 hours, 4 segments), Big Tech is effectively suppressing dissent via shadow banning, de-platforming and de-monetization:
-- shadow banning: the audience who gets to see your content is throttled back to a fraction of your pre-shadow-banning audience. The mechanics are shrouded in secrecy, Stasi-style.
-- de-platforming: the Big Tech monopoly declares you persona non grata for a supposed violation of their Kafkaesque Terms of Service and bans your content from their platform, effectively silencing you.
-- de-monetization: your content is still officially on the platform in truncated form, but the flow of advertising revenue is turned off: you're welcome to post content but you will no longer be able to make any money from it. Enjoy!
When you crush dissent and spend a full year cracking the skulls of protesters, you end up with, well, France's general strikes. I covered the yellow vest protests in some depth a year ago: France in a Nutshell: "The Government Stopped Listening to the People 20 Years Ago" (December 12, 2018)
Here in the U.S., the crushing dissent gathered momentum when all dissent was lumped into the tarpits of "fake news" and "Russian propaganda." What better way to throw the baby out with the bathwater than declare any dissent from the approved party line "fake news" and/or "Russian propaganda." The catalyst was a completely fake "list of Russian agents" assembled by an unidentified source called PropOrNot in 2016.
The Washington Post and other corporate media outlets immediately published the baseless accusations without bothering to seek the identity of the accusers or establish any sort of objective standards to judge the validity of the accusation. It was pure Orwell, as I explained at the time: The Washington Post: Useful-Idiot Shills for a Failed, Frantic Status Quo That Has Lost Control of the Narrative (November 27, 2016)
In police-state fashion, Big Tech took the list of accused (including this site), declared all those named guilty and promptly shadow-banned, de-platformed or de-monetized us all without coming clean about how they engineered the crushing of dissent.
In classic Stasi fashion, the mechanics are all black box: the accused are never confronted with their accuser, never provided with the evidence of their "crime," and never given an opportunity to defend themselves against the false accusation.
Everyone on the PropOrNot list was declared guilty until proven innocent, but there was no way to prove our innocence. Kafka, meet Orwell: a completely opaque, privately owned Stasi (Facebook, Twitter, Google) does the elites' dirty work, concealed behind the impenetrable bureaucracy of algorithms, secret guidelines and Terms of Service which can be interpreted in whatever way serves the gatekeepers' interests.
Suppressing dissent guarantees disorder and collapse. Ironic, isn't it? The frantic efforts of an exploitive elite to eliminate dissent only accelerates the regime's path to collapse.
Mark St.Cyr and I discuss these topics as only those who've been suppressed can in our recent podcast. (1:08 hours, 4 segments)
I've addressed the critical role of dissent and the suppression of dissent many times; here's a selection of recent posts:



My recent books:
Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).


If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

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Wednesday, December 04, 2019

Costs Are Spiraling Out of Control

And how do we pay for these spiraling out of control costs? By borrowing more, of course.
If we had to choose one "big picture" reason why the vast majority of households are losing ground, it would be: the costs of essentials are spiraling out of control. I've often covered the dynamics of stagnating income for the bottom 90%, and real-world inflation, i.e. a decline in purchasing power.
But neither of these dynamics fully describes the relentless upward spiral of the cost basis of our economy, that is, the cost of big-ticket essentials: housing, education and healthcare.
The costs of education are spiraling out of control, stripping households of income as an entire generation is transformed into debt-serfs by student loan debt. The soaring costs of healthcare are a core driver of higher costs in the education complex (and government in general), and to cover these higher costs, counties raise property taxes, which add additional cost burdens to households and enterprises as rents rise.
Rising rents push the cost structure of almost every enterprise and agency higher.
Then there's the asset inflation created by central bank ZIRP (zero interest rate policy) which has inflated a second echo-bubble in housing that has pushed home ownership out of reach of many, adding demand for rental housing that has pushed rents into the stratosphere in Left and Right Coast cities.
The increasing dominance of monopolies and cartels has eliminated competition in sector after sector. Monopolies and cartels skim immense profits even as the value, quality and quantity of their products and services decline: The U.S. Only Pretends to Have Free Markets From plane tickets to cellphone bills, monopoly power costs American consumers billions of dollars a year.
Thanks to their political influence, monopolies and cartels have legalized looting, raising prices and evading anti-trust regulations because they can pay whatever it takes in our pay-to-play political system.
Let's look at a few charts that illustrate the relentless rise in costs:
Do you reckon these two charts are connected--soaring costs and ballooning administrative payrolls?
Student loan debt is soaring above $1.5 trillion, guaranteeing profits to lenders and debt-serfdom to the students exiting with degrees that are in over-supply, i.e. possessing little scarcity value in an over-credentialed economy:
The echo housing bubbles in many locales exceed the nosebleed valuations of the previous bubble:
And how do we pay for these spiraling out of control costs? By borrowing more, of course:
Even at low rates of interest, the cost of servicing skyrocketing debt increases, leaving less net income to support additional borrowing.
What will it take to radically reduce the cost basis of our economy? A fundamental re-ordering that breaks up all the cartels and monopolies that push prices higher even as they deliver lower quality goods and services would be a good start.


My recent books:
Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).


If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.
 
Thank you, Robert C. ($5/month), for your splendidly generous pledge to this site-- I am greatly honored by your support and readership.
 

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Tuesday, December 03, 2019

Crunchtime: When Events Outrun Plan B

Not only will events outrun Plan B, they'll also outrun Plans C and D.
We all know what Plan B is: our pre-planned response to the emergence of risk. Plan B is for risks that can be anticipated, regular but unpredictable events such tornadoes, earthquakes, hurricanes, etc. In the human sphere, risks that can be anticipated include temporary loss of a job, stock market down turns, recession, disruption of energy supplies, etc.
Hidden in most Plan B's are a host of assumptions that all the systems running in the background pf the economy will remain stable. Even if electrical and cell-phone service go down, for example, we assume the outage will be temporary. We assume delivery of energy and food will resume shortly, we assume medical care will be available somewhere nearby, roadways will soon be cleared and so on.
In other words, we assume emergencies will be short-lived and that these non-linear events will leave the rest of our social and economic orders as fully intact linear systems, that is, predictable because the outputs (results) will continue to be proportional to the inputs.
If one road crew can clear five roads of debris, then if ten roads are blocked, we reckon adding another crew will generate a proportional result: two crews will clear all ten blocked roads. This is a linear system and response.
But if for some reason the second crew can't clear even a single road, and adding a third crew also fails to make progress, the situation becomes non-linear: increasing inputs doesn't generate proportional outputs.
If the situation goes non-linear, events can quickly outrun Plan B. Consider a restaurant with high fixed costs and high operational costs, i.e. the typical restaurant: fixed costs like rent and liability insurance don't change as the customer count rises or falls; they stay the same. Operational costs--utilities, wait and kitchen staff hours, etc.--go up and down depending on how many customers come through the door.
Let's say the owner's Plan B addresses the risk of a temporary slowdown in business: staff hours and orders for ingredients are trimmed, advertising offers deeper discounts, etc. Plan B is designed to deal with a temporary 10% decline in sales because that's the worst the owner has seen in ten years.
So what happens when sales decline 30% and continue dropping? Customers don't respond to discounts as they did in the past, and the business starts hemorrhaging cash as changing the inputs isn't changing the output (declining sales).
Staffers whose hours have been slashed can't make a living, so they quit, creating turnover problems. Staff morale plummets. Events have outrun Plan B and the owner has no pre-planned response as the financial situation deteriorates with alarmingly ferocious velocity.
If Plan B assumes modest, temporary, linear disruptions, it will fail if events start following a non-linear dynamic. Recency bias--the natural assumption that the recent past is a reliable guide to the future--leads us to underestimate the risk of non-linear financial-economic dynamics.
Central banks and governments have gone to extreme lengths to maintain the illusion of linearity, the illusion that all is well and the economy will remain firmly expansive because central bank inputs (QE, purchases of assets, lowering interest rates) will reliably yield proportional outputs (low inflation, steady growth, etc.).
Despite the happy PR issued by central bankers and government authorities, these extreme measures have generated emergent properties beyond their control, specifically, soaring wealth and income inequality, fragile financial systems and zombie corporations which only continue operations by borrowing more every year.
The contrived linearity of the past decade is about to give way to non-linear dynamics accelerated by the financial repression of central banks and the corrupt state / cartel-monopoly excesses of Big Pharma (opioid crisis), Big Tech (we're only evil when it's profitable, which is all the time), Big Banks (legalized looting is our game) and pay-to-play politics, where the greediest private-sector sociopaths rent the power of the greediest public-sector sociopaths.
Not only will events outrun Plan B, they'll also outrun Plans C and D at which point the runaway system no longer responds to any controls.



My recent books:
Money and Work Unchained $6.95 (Kindle), $15 (print) Read the first section for free (PDF).


If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency.
 
Thank you, Steve W. ($10/month), for your outrageously generous pledge to this site-- I am greatly honored by your support and readership.
 

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