Thursday, September 29, 2016

Not with a bang, but with a whimper

I’ve been engaged recently in a number of discussions with people that wanted to know how likely and imminent did I really think it was a catastrophic collapse of social order in some (or all) of Western societies. I’ve also been discussing what weaponry would make more sense to have stockpiled for such scenario, and where to have such weapons (along with ammo, enough non-perishable food to sustain you and your loved ones until the second or third successful harvest and some other very basic necessities -abundant beer, fine bourbon and lots and lots of books first among them, of course), but it is only with the first part of such discussions with which I intend to entertain my readership in this post.

Let us start defining, then, what form such societal collapse may take, and concern ourselves with timeframe and probabilities afterwards. I’ll distinguish between “sudden”, or “catastrophic” dissolution of social structures and “gradual” or “incremental” decline. The first case unfolds in a few weeks, one or two months maximum, and requires the disappearance of the monopoly of violence by the state, and with it the lack of a legitimate, universally recognized police force and army as actors in front of which any other agent yields. With no ultimate guarantor for the compliance with laws, such laws stop being valid, so property rights become “fluid” and can be enforced only if backed by a private force overwhelming enough to overcome any disputation. Lack of enforceable property rights disrupts the economy to the point of causing major discontinuities in the production and distribution of basic necessities (mainly food, but also running water, electricity, gas and oil, many of which reinforce the other in a vicious circle of growing scarcity) so frequent riots break out to scramble for the stocks that are stored in the most densely populated areas (but which can sustain the population’s needs for just a handful of days). Historical examples like the French revolution (s), Russian Revolution and Chinese Revolution (as recounted by Theda Scokpol in her magisterial book on the subject) may serve as a guide on the conditions needed for such developments to take place (we’ll recap them in a moment) and, specially, on how they typically end (hint: after a lot of bloodshed an authoritarian regime reasserts control, and normally things go downhill from there).

The second case (gradual decline) is indeed unfolding in front of our eyes: lack of population growth (followed, a few decades afterwards, by accelerating population shrinkage) and lack of technological innovation cause the total output of society (measured in the material goods and services priced and exchanged in the market, as captured by each country’s GDP figures) to stop expanding and soon start contracting. Notice that such contraction, accompanied by a diminution of the total number of people between which such output has to be distributed is compatible with a (modest) increase in per capita income and wealth, as long as there are still some productivity gains to reap (as there will undoubtedly be, I’m not maintaining that technical progress has completely ended, only that it has significantly slowed). Unfortunately, that is not how things work. Being endowed with different capabilities, human beings rarely (if ever) tend to favor an equitable distribution of available riches (not necessarily “fair” or “just”, and surely not according to some definitions of justice having to do with merit and desert). The most capable between them have an almost insurmountable tendency to accumulate and hoard the fruit of their labor, and if possible, while they are at it, to appropriate the fruit of other people’s labor as well. When the collective pie is growing they may only take 90% of such growth and leave the remaining 10% for the majority, but when the total pie starts shrinking my prediction is they will ruthlessly increase the percentage of the total social output, to the detriment of such hapless majority, which will see how they average income, global standard of living and accumulated wealth all diminish in a slow but steady way.

Of course, such path will sooner or later reach a tipping point where the whole system in its current inception becomes unsustainable (well, it can be argued that ecologically it is pretty unsustainable already, but socially we have been successfully sustaining it for some decades) and it has to shed some features that today seem to us nonnegotiable (like capitalism and/ or democracy, as I argued in my last post). When that shedding comes is when we can truly talk of collapse, as the society likely to emerge is definitely discontinuous with our own (and will likely have to craft a different dominant reason, but we’ll get to that in a moment) and experience teaches us that some major trauma is required for any group to change their overarching values. Let’s discuss both scenarios (the gradual and the sudden) to better understand their implications and warning signals

The frog in the (slowly) heating water. Gradual decline

You don’t need a turbo charged imagination or be steeped in sophisticated hard-boiled Sci-Fi to grasp how gradual decline would look like. It’s the world we’ve been living in since the “Great Recession” of 2008, where some of the tendencies that started manifesting themselves in the 1970’s came to fruition. Technological stagnation (minus mobile telephony and the internet, and thankfully with the elimination of ultra-wide lapels and shirt necks from the world of masculine fashion and disco music not ruling the airwaves any more) had already settled in back then, and the population bomb with its sense of impending doom and imminent overpopulation was in the beginning of its defusing (and now, in the West, it’s fully defused, unloaded although not entirely put to rest: Liberals love their doom predictions as long as it's other people's fault ).

What does technological stagnation looks like? Very low growth of total factor productivity, and thus of per capita GDP. But it can be pretty worse than that. Because as TFP has had a brief spurt around the 90’s and until the Great Recession of 2008 GDP was still growing above 2% annually a case could be made that Western economies were still in pretty good health, and a “secular stagnation” was nowhere to be seen:

That’s the evolution of per capita GDP in the USA according to the World Bank: from the equivalent of roughly 7,000 2001 USD in 1975 to 55,000 in 2015, that’s almost an 800% increase in 40 years, which requires an average annual growth a tad above 11,2%. Something China has been pulling off for three decades now, but not surely the good ‘ol US of A. What gives? Basically, we are presenting the per capita GDP of different years in their nominal value, but of course 7,000 USD in 1975 could not buy the same than 7,000 USD in 2015, as there has been substantial inflation between both dates. Actually, once you apply the inflation correction those 7,000 USD turn out to be the equivalent of 34,452 USD of 2015, so the total growth of per capita GDP has been a still respectable 62% in 40 years, which requires (thanks to the magic of compound interest) an average annual growth rate of only 1,2%, not that far from the one actually recorded by the World Bank:

So all that stupendous growth you see the techno-optimists expounding ceaselessly? Yup, it all happened… in China. There is not a single developed economy that can show a sustained growth (four decades) well above 2% per year, which is nothing to brag about. OK, you may still argue that a 60% growth in 40 years is still not that bad. May be it doesn’t double the standard of living of each generation (that would require a 100% improvement every 40 years, as happened between 1920 and 1970, and had happened before between 1870 and 1920), but living with 60% of goods and services more than your parents is still pretty good, isn’t it?  Only the situation gets much, much worse when you consider how that growth has been distributed. To get a better grasp of how things feel for the populace we shouldn’t look at the average (for reasons we shall explain in a minute) but to the median, and this is how the median income of US households has been changing since the 70’s:

So for the majority of the population (I’m looking just at the “All races” line), and even after a significant uptick last year, the total improvement has been an even more modest 12% (from about 50 K USD per year to about 56 K USD per year), still below what they were making in 1996 (which is 20 years ago, how does time fly!).

To illustrate what that means, let’s imagine in 1975 we had a couple fried chickens between you and me. I had a full chicken and a wing, and you had one chicken without a wing. Our average wealth was one chicken per person, and our median wealth was also one chicken (as that’s the wealth level at which 50% of the population has less and 50% has more). Now fast forward 40 years and it happens that I have twenty chickens plus a wing and you still have one chicken (minus the wing, of course). Our median wealth is still one chicken (half of us -you- have less than one, and the other half -me- have more). But you should be bursting with happiness, truly ecstatic about the fact that our “shared” average wealth has skyrocketed to a whooping ten chickens per person. A full 1,000% improvement. What? What’s that grumpiness and discontent? What do you mean you still only have your lousy chicken, and that the comparison with my twenty chickens (that I flaunt endlessly in front of your envious eyes) makes it look even lousier? Now, that is really rude and impolite from you! That is engaging in class war, and unneeded animosity! It is also exactly how things have played out in the West.

You may have no class consciousness, but you are still a prole

I’m breaking no new ground here, as it is well known and accepted by everybody with a functioning brain that most of the economic improvement since the 70’s has been appropriated by a tiny sliver of the population (the infamous 1%, and according to some accounts by a 1% of that 1%). We can thank Thomas Picketty and Emmanuel Saez for putting such hard facts front and center of the public sphere (although you still occasionally find some second rate economist or economic journalist in the WSJ trying to dispute such facts), but the core of the debate is settled, and once you look under the hood of such contrarian argumentations you find that they are disputing a few percentage points here and there (so may be it was not just the 1% who benefitted, but the wealthiest 5%, and may be not 95% of the total GDP gains were hijacked by them, but a more modest 90%...) that doesn’t much impact the main conclusions that can be extracted from such state of affairs.

What conclusions are those? Not to put too fine a point about it, it means that Toynbee analysis in his Study of History in which he concluded that the West was the first society of history that could be exempt of the cycle of growth, maturity and decline (a conclusion he came to seriously doubt after the publication of the work) is as applicable as ever, but points to exactly the opposite outcome: the West is indeed a textbook example of how societies decline once they exhaust they capacity to offer a brighter future to its members, and we are witnessing the final stages of its fall. To understand such dynamic we have to resort to Toynbee’s concept of proletarian, a concept that to be fruitful has first to be liberated by the confusion and obfuscation that Marx had heaped upon it (in what I’ve always thought was one of the weakest point of a sociological outlook chock full of weaknesses… so there is a “class” that embodies the dialectic of history, the virtues of progressivism, the truth of the relations of production and whatnot? How convenient! And if such vaguely defined class doesn’t behave as historical materialism dictates it should you can always blame false consciousness and the evils of capitalism that can only aspire to thwart the march of reason with its cunning and devious stratagems for short periods… only the periods end up not being so short, but tell that to the remaining fossils, sorry, “Marxist academics”, that still heap such rubbish on their unsuspecting and innocent pupils).

But back to Toynbee, for him societies (any society in history) ends up stratifying itself in a ruling minority that starts being “crative” in the answers it can provide to face external challenges in a foundational stage. Such minority rules over a majority of people that, although not engaged in ruling, enjoy some level of legal protection and, most pointedly, become engaged in the common enterprise of keeping the society afloat and reproducing it by transmitting its values to their descendants. However, with time that creative minority loses its creativity, stops adapting to changing conditions, becomes too insular and isolated and enamored of itself and its traditions and mutates into a “dominant” minority, trying to impose a “universal state” over the majority (and over other neighboring societies), that in turns mutates into a proletariat, which start seeing themselves as the excluded ones, and stop identifying themselves with the dominant values, feeling they have no stakes in their survival. That proletariat could be internal to the society (like ancient time slaves) or entirely outside it (the “barbarians” which are proverbially always at the gates). The latter may have given it the coup de grace in many instances, but for Toynbee barbarian invasions were never the ultimate factor in the downfall of a social group, as for that invasion to happen the group needed to have been weakened from within by the (active or passive) disengagement of its internal proletarians. Of course, Toynbee’s vision was mainly influenced by the history of the Roman empire (more precisely, by Gibbon magisterial narration of it in his Rise and Fall), and his understanding of the proletariat reflects more directly the fate of the Roman plebeians and slaves, growingly separated from the ruling elites after the Republic and more and more impoverished in an ever more autocratic imperial structure that did not need them to feed the legions and the remaining patriciate. He could find, however, enough parallels of such growing disengagement in vast swathes of the population in Egypt, the Aztec (Mexican), Inca (Andean), Sumerian, Hittite, Mayan and Sinic civilizations as to validate its universal applicability.

When Toynbee published the last volume of his Study  (in 1961) he could still dream that Western society could for the first time in history form not a “universal state” but a “political and economical world-order” that would eventually encompass all the remaining civilizations (Western, Far Eastern, Hindu and Islamic) and could keep on successfully meeting any new challenge that may arise thanks to the discovery and interiorization of the scientific method, so it would finally free itself from the cycle of growth and decay that had been the common fate of all previous ones. Some prediction, huh? Not surprisingly, Toynbee is not that much quoted today, and his style of writing History (with a capital H) is decidedly out of fashion (very few hard numbers and graphs and tables and painstakingly collecting hard data to drive his points home), although you can see a lot of his ideas in Huntington’s Clash of Civilizations. Except for the part about the possible immortality of our own civilization (see how well the scientific method is serving us to deal with climate change, loss of biodiversity or the refugee crisis caused by the internal civil war of the Islamic group…) I think his insights have aged remarkably well, and provide a solid and useful framework to analyze our current predicament.

Can anybody doubt that Western ruling minorities have lost all its creativity (heck, even the “creative classes”, musicians, fiction writers, philosophers, moviemakers… seem utterly unable to come up with new ideas and all they seem to do is recycle once and again every genre and period piece they can put their hands on) and are becoming a “dominant” class, more interested in perpetuating their rule (less and less based on merit, and more and more on being born of the right parents) than in finding new solutions to our society’s ever more pressing problems? That what until recently could still be legitimately called “the citizenry” is more and more formed by disenfranchised, disenchanted and disinterested “proletarians” that really couldn’t bother to do much beyond voting every four years (or not even that) and that in pursuit of their individual, potentially selfish, and certainly hedonistic self-interest have managed to leave aside the most basic litmus test of the commitment with the group (leaving behind some descendant to perpetuate it)? Only the deluded could doubt it.

Seen in that light, the evolution of Western societies since the 70’s makes perfect sense. Of course the dominant majority is selfishly extracting as many resources as it can from the hapless masses. Of course it refuses to share even a tiny sliver of those extracted resources with them. Of course it has created an ideology of “universal state” (known alternatively as neoliberalism or the “Washington consensus”) that it tries to impose by force when “soft power” is not enough. Of course in turn those masses, proletarized without even knowing, are opting in growing numbers to “drop out” more or less explicitly (Otakus, Hikikomoris, DINKs, “herbivores”, Russian alcoholics, American meth and opioid addicts, videogames enthusiasts according to Eric Hurst with no interest in studying or working…). The only element still missing are the external proletarians (the barbarians, and no, a ragtag bunch of Islamic fanatics with half a dozen Kalashnikovs do not count as a true threat capable of causing a societal collapse) and the creation of a “universal church” by the internal proletarians as an alternative value system to the one the elites are trying to foist down their throats. But just watch out, because a decomposing society like ours is more than ripe for such an alternative to emerge, and start coalescing the unfulfilled dreams and aspirations of a permanently dissatisfied majority which the existing dominant reason can’t fool for much longer. And when such universal church arrives, it will probably horrify and scandalize us with its alternative set of values (I dare to forecast non-individualist, non-consumerist, less materialistic and less determinist, but the exact shape is yet to be decided), and we, having been bred in the old set, will most likely be at the forefront of its denunciation, excommunication and (God forbids) prosecution...

Dude, I’m Chinese, what has all of this to do with me?

You have surely noted that all this description applies to Western, “developed” societies (articulated around the venerable structure of the Nation State): North America (USA and Canada), all of Europe, Australia, Japan, New Zealand, South Korea and to a certain extent to Latin America too (both Toynbee and Huntington had their doubts about to what extent was it correct to classify them with the rest of the West). What about Africa and Asia? For the former, they a) haven’t fully embraced yet the dominant reason that allowed the West to grow rich (but are in different stages of doing so, and it seems unlikely it is there where an alternative to the value set of desiderative reason may be formulated) and b) haven’t seen the pattern of joint wealth creation and distribution that ensured the buy-in of the system by the masses, followed by its subsequent appropriation by the elites, as the elites appropriated the wealth from the very beginning of post-colonial state creation before having to “bribe” the population or establish their legitimacy. There are a number of explanations of why they are in such a dire situation and how they are more likely to climb for it, but I think it is fair to say for the majority of African countries societal collapse is not high in the list of fates to avoid, but rather is a current condition to escape from. Their present is our future if we are not careful, and our present is their future if they are lucky (before they can concern themselves with how to avoid our future becoming their future, see how confusing this can get?).

Now for the latter (Asia), their predicament is quite different from ours. They are the poster boys for development policies, as one between them (China) concentrates practically all the world’s growth in the last two decades (almost three, come to think about it, since they curbed the worst excesses of Maoism after the death of Mao himself in 1976 but still took some years to rid themselves of some of the constraints he bequeathed the country). As I’ve mentioned in other posts, their ability to keep on growing and creating wealth led some Western analysts (like Giovanni Arrighi: Is China the focus of the next accumulation cycle? ) to prognosticate that Western dominance was a historical blip, and that soon we would see the return to the historical norm of China being technologically and economically ahead. According to such interpretations, the XXIst century belonged to China (while India was waiting at the wings), as the XXth (and the XIX, and the XVIII, and the XVII…) had belonged to Europe and the USA (an European outpost culturally). No talk then of cultural decline or potential societal collapse (gradual or sudden) due to the exhaustion of a dominant elite that has lost its ability to engage the ruled majority, huh?

Not so fast, I say. The reason China is growing (as Japan and South Korea did before her) is NOT because they have found an alternative to the West’s set of values (that’s desiderative reason for you boys and girls) that somehow avoids the pitfalls and limitations of the latter. Rather the opposite, they are growing precisely by enthusiastically embracing that exact same set of values while they are at a moment of their economic evolution in which there is still a lot of extra effort to be extracted from their populations, as they still produce with little per capita amounts of capital (why would they aggressively invest in additional capital goods while labor is still dirt cheap?) and with obsolete methods. Our exhausted system is still not so exhausted for them or, in other words, our socioeconomic model (directed by desiderative reason and embodied in a market economy that ultimately leads to crony capitalism, in which obviously you can get rid of the capitalist part but not of the cronyism) is passably good to take your median household income from 35,000 USD (of 2015) to 45,000 USD (of the same year), and positively great to take you from less than 1,000 USD (where the Chinese were only fifteen years ago) to 35,000 USD (so they still have some way to go, as they are currently somewhere around 10,000 USD).

So if you are Chinese, or Indian, or Bangladeshi, or Vietnamese you still have some mileage to go before you realize how proletarian you are, how the dominant minority is reaping most of the benefits of the collective growth and how the promises of a better life than your parents in exchange for submission, hard work and not rocking the boat or questioning the wisdom of your rulers are an empty shell, and not to be honored. I suspect that probably that mileage will run out of fuel well before those vaunted 35,000 USD per household per year are reached, as the next generation of cheap workers will need to compete with even cheaper ones: robots (yes, automation is a real threat to the workers all over the world: as cheap Asian labor was the tool used by Western elites to break the resistance of their own local labor movements and finally disentangle themselves from their dismal prospects, robots will be used by the Asian elites to decouple their fate from that of their less educated and cognitively skilled countrymen… tough luck, guys). But sooner or later you will find the same fate of the Western masses: a ruling minority too self-satisfied and enamored of their own image (and too isolated in their world-view to tolerate any alternative viewpoint) to take into account what the majority has to tell them, hell bent on  extracting as much surplus as possible form them (as consumers rather than as producers) and less and less able to woo them with creative solutions to ever more pressing problem (like the planet turning into a dystopian pressure cooker, from which they will be insulated enough to realize or to care).

This is the moment when I realize I’m already above 4,000 words and still have not discussed much how the societal decay (even in the West, where it should be more imminent) will look like in the gradual scenario, let alone in the sudden one. I’m afraid that discussion will have to wait for another post in the matter, as my two or three readers are probably bored to death alrady… 

1 comment:

  1. Please continue this topic as it was just getting into gear!