Friday, October 14, 2016

Oooops, may be with a bang, after all!!!!

Forecasting the future course of events is famously and notoriously hard. Some clever people (Keynes) failed at it. Some slightly less clever failed at it spectacularly (Marx, regardless of the fawning article about his prescience recently penned by Louis Menand in the New Yorker: Salvaging Marx; regarding which I can not avoid pointing out that a) no, Marx was empathetically NOT a philosopher, as much as he would have liked to… too many descriptions of contingent reality and too few considerations of necessary truths in his works; b) no, Marx was empathetically NOT a subtle & deep chronicler of early capitalism, as he could only describe, in a most disfigured way, only a portion of what happened around him whilst missing a lot of the underlying currents of why society was choosing and coalescing precisely the set of values it did by mid XIX century; and c) no, Marx was empathetically NOT an exemplar thinker and human being, as he didn’t love Jenny enough to stay true to her, he didn’t love his children enough to abandon his daydreaming and idle theorizing and investigating in his office and get a real job, however deadening and boring, to adequately provide for them and he didn’t love workers all the world over enough to leave aside his petty squabbles with other socialist “leaders” and forge a truly universal , viable, not cult-of-personality oriented movement to actually improve their lives). I’m pretty sure I’m failing at it right now and making a lot of predictions which will never come to pass. Such is the lot of the self-anointed prophet, and the only way of never being wrong is never saying anything empirically testable at all.

All this was my as usual convoluted way of stating that I don’t make predictions about Western civilization imminent downfall because I see it as my duty (the first and foremost explanation of any behavior for a Kantian like me) or because I think it will somehow hasten the occurrence of events already foreordained and thus it will facilitate the advance of the world-spirit, or of reason knowing itself, or of human conscience realizing more of its potential and thus liberating itself faster. Probably I just do it for fun, and because it helps me make sense of the apparently chaotic reality we live in, and because guessing what may be in store for us creates an illusion of meaning and purpose about the everyday events that, without such illusion, would make of history just the unintelligible succession of “one damn thing after the other” in which from any set of facts anything could follow. I once talked about Collingwood’s understanding of history as the systematic effort to put ourselves in the head of the main characters of past deeds, and to think and feel as they thought and felt back then. Similarly, a good prognosticator is he (or she) who can foresee how the future actors may think and feel, and how the decisions they will make will look like from their very particular and idiosyncratic point of view, a point of view made by a dominant reason (a set of accepted desires, an understanding of what a life well lived consists in and a  criteria for bestowing social recognition) and by a shared cornucopia of ideas, common places, narratives and cultural artifacts (songs, movies, fiction books and even iconic clothes). All of which points to the fact that you shouldn’t take my predictions of doom too seriously, as a new golden age may be just around the corner as well.

However, in my last couple of posts I wasn’t exactly betting on a sustained improvement of the world’s economic conditions (except for some developing or already half-developed countries like China and India, which could still expect to see significant rates of productivity and total output growth just by implementing social technologies that the advanced West developed a good four or five decades ago). My hunch still points strongly towards a long period of stagnation in that same West, as the source of its original creativity (a dominant reason extraordinarily suited to elicit the maximum production of material goods and services from every single individual, not so much for making them happy or helping them live fulfilling lives) had already exhausted its historical cycle and had become inimical to that very same goal, so now all it could produce was rent-seeking (that will be sold as protection of innovation, albeit an innovation less and less capable of improving the average guy’s living standard), political polarization, repression along racial and class lines, a tighter grip on the total social product by a self-perpetuating elite and  increasingly suboptimal arrangements to deal with the increasing pressure of a changing landscape. I have already explored the most benign scenario of how such exhaustion may play off (think Japan, in which a population ages into oblivion without much fuss, and the decreasing total output translates into less per capita wealth so slowly that nobody really much cares), and in this post I want to explore the much more unpleasant alternative of how things may be sped up by a major disruption of the relations that underlie the functioning of our society.

There are so many alternatives from which to choose one such disruption that I’ll just list a few to give my readers a taste of what I’m talking about:

·         A nuclear device is detonated on a major Western city, after which martial law is indefinitely imposed for the first time in an advanced democracy since WWII, and there goes your democracy, rule of law and the like (if you think Government power over its citizens grew inordinately after Sep/11th after a bit over 3,000 deaths think about the same dynamic on steroids after 3 million). Once a “reference state” (most likely the USA, because honestly, what would you bet was the most likely target of most of today’s terrorist attempting such a coup, be they extremist Islamists, North Koreans, narcotic smugglers, crazy environmentalists or white supremacists?) suspends statutory guarantees (habeas corpus, the right to challenge one’s imprisonment in court, the right to be publicly judged and the like), free press and likely elections (who thinks about voting in a state of total war and with such level of carnage so recent) my prediction is that the rest will quietly and discreetly go down the same route without the need of such a heinous act in their own motherlands. We’ll expand on the effect of the lack of democracy later on, as it will turn out to be a common thread of most catastrophic changes.

·         All-out war breaks between two major powers. As only the USA and China qualify as such for the near future, basically that means a new Sino-American war, most likely around the annexation of Taiwan (that China will attempt as soon as it economic growth seriously stalls and it stops being able to buy its excess population with additional make-believe jobs, thus resorting to aggressive nationalism to bolster the legitimacy of the CCP). Of course for the USA to take the bait and retaliate seriously after such China movement it needs to have previously excited the anti-China feelings of its own excess population to a frenzied pitch, which doesn’t require really a great leap of the imagination seeing how easily they did it against Japan in WWII. There are a number of horrific wars that may happen apart from that one (between Russia and the EU, between China and Japan, China and Russia, Saudi Arabia and Iran, India and Pakistan, etc.) but none of them have the potential to destabilize the global system and send markets crashing down everywhere, catapulting all of us in a new Dark Age (maybe the first one would be the closer to achieving it, which makes it even less likely than it already is).

·         Social revolution and breakdown of any semblance of law and order in a major Western power, devolving into civil war and major economic disruption. There are only two major powers in risk of breakdown (or rather, there are two powers were such breakdown seems more imminent, as if it happens and global economic conditions deteriorate in all the rest, sooner or later they will also become ripe for major upheaval): USA (see my post on potential outcomes after Trump loses the current election: the coming NAWNSP) and China once it stops growing above 5-6%, which is dangerously close to its current rate (that is the widely assumed rate needed to keep adding enough jobs to the labor force to absorb the masses pouring into the coastal cities escaping rural misery and underdevelopment). You may object to such analysis that the USA, albeit apparently riven by party and racial animus is a stable, well stablished democracy with more than two and a half centuries of pacific coexistence, that has weathered previous storms (like the protests against the Vietnam war and the racial riots in the seventies) and came out unscathed. I’m sceptic, as not all those centuries have been so peaceful (remember the bloodiest conflict they’ve experienced was their very own civil war in the second half of the nineteenth century) and there are two important differences between the present and any previous period of their history: the insane amount of firearms in the hands of a significant portion of the population (over 300 million guns, almost one per citizen, regardless of legal status) and the continued period of self-segregation and isolation in ever more self-contained “information bubbles” enabled by the rise of social media and the Internet. We will see the destabilizing effects of such tendencies after the loss of the election by Trump is confirmed and some of his followers accept as valid his delirious narrative of the cause being the illegitimate manipulation by a “rigged system” that has stolen what is rightfully theirs.

In any of those scenarios we would see an abrupt stop of life as we have come to know it, and a collapse of the rule of law, free trade and democratic rule. It has to be noted that in all three I see democracy being thrown under the bus to maintain the appearance of normalcy and basically to keep the shelves of supermarkets stoked and the economic engine purring. That is, what they show us is that the greater risks to our current social compact do not derive from the difficulty of aggregating the preferences of the many (something that has been difficult since the system was invented in Athens a bunch of centuries ago), but from the attempts of the few to keep its economic rules, even if that can only be achieved by sacrificing the political participation of the masses.

Not that surprising, as Dave Graeber has been maintaining for years that every time that capitalism has been presented with the choice between evolving towards a greater inclusiveness (relaxing the rules of competition or increasing redistribution for the sake of greater efficiency, say) or become more exclusionary and unequal in order to maintain the status quo it has chosen the second alternative. Indeed, the common thread that runs through much of the neoreactionary thought is that democracy has failed and should be rolled back, and what such rolling back intends to achieve is the continued functioning of the markets as we know them (nicely illustrating the validity of Graeber’s dictum).

I don’t know you, but if I had to choose between capitalism and democracy (as I see we will collectively have to do sooner rather than later: Sophie's Choice) I would probably give it a lot of thought, rather than blindly decide for the continuation of the first even if that meant renouncing to the second.

However, it may well be a false choice, as capitalism in its current (cybernetic, post-industrial, information-technology dependent) form requires a façade of democracy to draw legitimacy from, and to ensure the consent of the many that are not deriving any material benefit from it (that’s what a dominant reason is for: ensuring the acquiescence of the masses to a global system that is not specially favorable to them). I have few doubts that in the coming years we will witness a global weakening of democratic institutions, and an overall degradation of the until now widely accepted standards of what constitutes “common rule”. Such evolution will be greatly accelerated in case any of the disruptive events I described in the beginning of this post comes to pass, which would push the affected society even faster into openly totalitarian terrain. But such change is unlikely to revive the fading fortunes of our economic system, as an oppressed populace is no more likely (and may very well be even less) to participate in the currently imposed way of life as a free one. You may impose on them martial law, suspend elections, erect barriers to trade and to people’s movement, even convert current countries into homogeneous ethno-states, under permanent surveillance and strict censorship, but it won’t make them want to a) work more and b) reproduce again above maintenance level.

The reason they won’t work more is because our current system has already maximized the output that could be extracted from a given set of the population, a set whose optimal size may have very well been reached in the 70’s, and is already going down a blind alley of virtualization and immediate gratification for a minority that absorbs their attention and efforts during the most productive part of their lives and then discards them like empty shells when there is not much they can do about it. The reason they won’t reproduce is because under the current value system their life, although potentially rich in material possessions (although even that can not be taken for granted, being replaced by “virtual” possessions that is still unclear that can effectively play the same role) is ultimately poor in what makes human lives worthy of being lived, and a neo-fascistic, neo-nationalistic dystopia (doesn’t matter how racially homogeneous) is not going to get their juices flowing again and change the direction of their gonadal vote. Dominant reasons come only once, and that type of value package (it’s called romantic reason for all of you boys and girls not stepped enough in my terminology) was tried once, and found wanting.

A more interesting question than “can authoritarianism pull it off”? (whose answer is “obviously not”) would be “what changes in the set of values (in the dominant reason) would need to happen for the society adopting them becoming viable enough?” or “what should we change in the whole package to revitalize and re-energize the social system?”. I’ve attempted at various kinds of answers, from a (more or less) comprehensive manifesto (Anarcho Traditionalist Manifesto I and II and III and IV and finally V) to an idyllic vision of what an utopian future would look like, regardless of how we got there (Our sunny future I and second installment and third and last), so it’s not like I haven’t devoted much time to thinking about it. However, I also humbly recognize none of my ideas have the tiniest sliver of a chance to ever become even remotely real. What revolutions bring is misery for all and a global degradation of the material conditions of living of most. And revolutions is what we have coming our way, so better be prepared…

Thursday, October 6, 2016

Not with a bang, but with a whimper II

Blogging is a peculiar activity. Being something quite personal, and undertaken by a variety of reasons I guess there are as many ways to go about it as there are bloggers. The way I personally “go about it” is choosing a topic I want to clarify, mulling about it for a few days (I tend to concentrate on issues when I go for a walk at lunchtime, something I’ve taken a liking for of late) and then forcing myself to put it down on paper (although there is no physical paper involved, as I normally write directly on the computer) and see how it evolves when words have actually to be chosen, and sentences crafted to express the ideas I have vaguely shaped previously. Once I’m done (or, frequently, when the word count has reached an inordinate amount) I typically find that many ideas have been left out, that some sentences that I had already thought almost word for word never made it to the page and that a lot of verbiage and sometimes of unnecessary chaff ended up there instead (but it is damn difficult to separate the chaff from the wheat in what one has written, as even the more unrelated circumlocutions may have a certain tone, a whiff or heartfelt expressiveness, of oratorical persuasiveness that makes it awfully difficult to just erase them in order to clean up the argument…) Sigh, it is my hope that by practicing, and then practicing some more I end up being better at it, but my regular readers may legitimately wonder if there has been some noticeable progress, or my prose keeps as mangled and baroque and circuitous as ever.

The reason of such tortured reflection is that when re-reading the post I published yesterday, that was originally to be about how the social structures we take for granted (from the well-stocked supermarket to the commitment of the police to the rule of law and judiciary review) may dissolve and disappear, and how to plan for it, ended up being a rant about the failures of current capitalism to maintain a rate of growth comparable to the one prevalent in the last two hundred years, and how in the West we have mainly squandered four decades already. As that argument is one I’ve already made a number of times, and am sufficiently convinced of it as to not need further proof and clarification, I’d like to come back to the original argument and explore the different possible paths of societal decay we can expect to unfold in the next decades, be it gradual or sudden.

Back to the slowly boiling frog

OK, so in my previous post I (in so many words) settled that gradual decline looks like our everyday life, because it has been happening since the 70’s, even when we went through a stupendous (apparent) period of unparalleled growth in the 90’s that was then mostly erased by the dot com bust in the early aughts and then by the Great Recession that settled in after 2008. That’s how long decline periods look like: there are temporary bumps and upward turns, which are relentlessly followed by deeper troughs and reversions to the overarching downward trajectory. I’m not saying that the world will never, ever see an economic expansion again (we may be seeing one right now, feeble as it looks like for the majority of the squeezed middle class), only that they will be, on average, briefer than the recessions they will be sandwiched in between, and that their benefits will be, as has been the case so far, enjoyed only by the dominant minority. Because that was the other half of my screed: the little growth that could be showed has been very unequally distributed, so for the majority it amounts to nothing.

I also hinted at the fact that we may have reached a tipping point, as people is widely beginning to realize that the promise of ever increasing riches in exchange for ever increasing toil will not be honored. Both salaried workers and independent professionals (unless they belong to the best paid 1%) in their mid-forties and fifties should have realized by now that their standard of living is pretty much similar to that of their parents, minus the kids. That is, after reaching an age in which there is not much more dazzling professional advancement to be expected, they have to accept that they are making give or take very much like what their parents made. Nominally it is surely sounds like much more, but once you start setting apart a retirement fund -a must, given how shaky Social Security looks all the world over-, you factor in the increased cost of health care and the diminishing support to be expected from the state and take into account inflation (much above the measured CPI in some significant sectors like the aforementioned health care and in most countries’ real state: it is not uncommon to find successful professionals wondering how their parents could afford to buy and hold on to several houses while they can barely afford one, typically smaller) they should realize they are by no means wealthier than their pops were, and as they expected to be (a rational expectation, given that their parents did become significantly wealthier than their own parents, and that they grew up hearing stories of how their future would be even brighter, surrounded by nanny robots and flying cars). But the real situation is even direr, as not only they have not been able to amass more wealth than their parents, but they should see that their parents managed to produce the same amount of wealth while at the same time leaving more descendants (that could personally take care of them in their old age and impersonally pay for their needs with taxes to fund Social Security). In the West’s dwindling populations, most people have more siblings than sons and daughters, so they should realize that the generation that came before not only managed to produce in their lifetime almost as much wealth as themselves, but could do so while also successfully replenishing the work force in a way they have not been able to emulate (they can think “geez, I only recently finished paying the mortgage of our house -either smaller or farther from the city center and requiring a longer commute than my parents’-, and still have much of the college expenses and skyrocketing tuition of my single kid in front of me, can’t even start to fathom how I would make ends meet if I had three or four of ‘em as mom and pop had!!!”).

Funnily enough, it is not the middle aged, well-adjusted people in high-paying jobs the ones who are realizing to what extent they have been swindled (but swindled by who? As a swindle needs a willing swindler, and the nefarious deed has been in this case performed by an impersonal dominant reason, by society being organized in a way that nobody consciously designed but in whose design everybody unwillingly acquiesced). It is the kids. The ones we burden with derisive labels (“Gen X’ers”, “Millennials”), and which we scold if they are not career-driven enough, if they don’t seem eager enough to jump in the rat race, to pursue the highest grades, to constantly improve their SAT scores, to strive to get in the best (and most expensive!) universities; if they choose to stay in their parents’ basement playing videogames until they are thirty and find out they are unemployable and “unmarriable” (but seem to be happy enough just hangin’ out with their buddies -physical or virtual). And their “dropping out” (a tragically outdated expression if there ever was one, that got worn out before its heyday came) suits the minority in power just fine, as they were going to be replaced by robots and AI all the same, so better if it can be done while they stay busy and contented lest they start questioning the dominant order and the justice and fairness of a social arrangement that has no use for them (not as producers, and, soon, not even as consumers) and no interest in giving them a public voice or responsibilities of any kind.

But it is between them where the first cracks will appear. The weakest link of any civilizational level transmission mechanism is its reliance on enlisting the newer cohorts in the implicit project of keeping the system alive, which has to be aimed precisely to the the young. If a social order fails at instilling its value hierarchy, its conception of what a good life consists in and its definition of socially sanctioned desires (that is, its whole dominant reason) in the newer generations it will fade away and disappear, as ours is exactly doing. How can we notice if that is the case, and the whole society is indeed failing in this critical task of transmitting the dominant reason on which it relies? Well, if it were indeed the case we could expect to see a growing number of kids a) not working b) not reproducing and at some point c) not acquiescing to the minority between them that insist in keeping the whole charade going. I think that b) is uncontroversial, and is what originally called to my attention that may be our super system/ best of all possible worlds/ we never had it so good so shut up and carry on may not be all that it was cranked up to be (if our social compact, value set and life circumstances were so wonderful, so efficient, so conducing to the maximum happiness to the maximum number, why would so many people vote with their gonads against its continuation?). What about a)? not long ago Tyler Cowen pointed in his excellent “Marginal Revolution” blog to a very interesting article by Justin Fox in Bloomberg (out of prison, out of work) that presented the following graph:

What we see is that instead of the declining participation rate of men in the workforce being a uniquely North American phenomenon, it is a widely extended one, affecting all advanced economies. The only “exceptional” thing about the American case is how they made it extra hard (and much less voluntary) to an unusually large number by the implementation of a demented prison policy that condemned almost three million citizens, a figure in which minorities were heavily overrepresented, to a status of permanent underclass with no job prospects (but as it also robbed them of the franchise they had no way to express and seek redress to their grievances through the normal political process, being perpetually “out of sight & out of mind”). We will extract a few interesting consequences of the American experience in a moment, but first I’d like to dwell for a minute in the implications of such trend. I think it can only be understood as another defining sign of the exhaustion of our civilizational model and the growing chasm between the dominant elites (who still preach the gospel of desiderative reason: “produce as much as you can, because the more you produce the more you will be able to consume, your position in the social hierarchy will be dictated exclusively by how much you can consume, and the improvement of such position is the only desire you are allowed to harbor”) and the masses that have stopped believing in it, for different reasons (they see the system as rigged, they see it doesn’t matter how hard they work, they never seem to enjoy the same status as the undeserving heirs of the elites, the expectation of perpetual struggle and perpetual reinvention seems just too much effort for such a meager reward…)

I can still remember reading with horror a report from my old employer about “the future of work” which blankly stated that the stable structure of the job market was leading towards the following stratification:

·         A third of the workforce would be permanently unemployed

·         A third of the workforce would be occasionally employed, without any security, for short periods and no stability whatsoever

·         A third of the workforce would be stably employed, with full protections and benefits

Not so off-the-mark, huh? And that was published in the roaring 90’s of the past century, in the middle of the longest economic expansion in USA history and with the labor market offering something as close to full employment as in any other moment of the Republic’s life! I hesitated to believe it back then, but now have to confess that we are almost there (the USA has more NILFs and less unemployment, the more welfarist European states have less NILFs and more unemployment… in both we have similar total numbers of prime working age people not working, be it by choice or not). And an interesting point is that automation and technological advance have nothing to do with it. Apple developing a pair of wireless earbuds or Google’s self-driving cars reaching 2 million miles (or rather, repeating the same trajectory of twenty miles one hundred thousand times, which is quite different) are responsible for exactly zero of that 30% of the potential labor force that is out of work, regardless of them being counted on the official unemployment statistics or not. As I’ve already noted a gazillion times, there is not much technological innovation truly going on (as opposed to “going on in the press releases of the tech companies that expect to benefit from gullible people, including clever analysts with high stakes in the game, believing the opposite”), so it is not innovation or creative destruction or excess regulation causing the dwindling fortunes of the salaried employees, but the sheer forces of demography and social model exhaustion.

The other interesting point is how the people who still manage to work, be it in a high-powered job or doing menial tasks occasionally, deal with the stark contrast between their life and that of the growing number that is apparently not working and not much the worse for it (thanks to a family support structure -the traditional moving back to their parents’ basement- that although fraying at the edges still manages to insulate many youngsters from the worst consequences of a social order that has no need for them). Their reaction is similar to what we have seen in civilizational crises during most of history’s “times of troubles”: tribalism and homogenization of the ingroup values by contrasting them with a demonized “other”. When you identify with a value set (or with a dominant reason, which is but another way of saying the same thing, as the former is part of the latter), a set from whose dominance you derive important benefits in terms of social prestige and appropriation of an outsized fraction of the total social product, and you see that set decomposing and being questioned from within, your first impulse is to “circle your wagons” and try to defend it accusing “people from outside” from its weakening. Brexit, anyone? Ascendant white nationalism (aka Trumpism) in the USA? Increasing popular support for right-wing extremist parties in France and Germany? Rejection of the peace deal between the Colombian government and the FARC? All of them are manifestations of a threatened elite pulling the strings to extend its own survival by stoking nationalist (to the point of chauvinism), classist and reactionary sentiments between the unenlightened masses.

And this is why the USA case is doubly exemplary. What we saw there in the 70s was how the ruling (white) majority imposed almost martial law on the more easily identifiable part of their internal proletariat (blacks and, increasingly, latinos) by disproportionally prosecuting their less socially oriented behavior (so the possession and consumption of drugs seen as mainly used by blacks, like crack, were much more heavily penalized than that of those associated with the white population, like cocaine and cannabis), reducing the “social safety net” seen as disproportionately favoring that internal proletariat (through Clinton’s welfare reform, aimed at what was seen by whites as mostly black beneficiaries: “welfare queens” and the like) and at the same time favoring their more consumption-oriented behavior by easing their access to credit (a preliminary step towards the reinstitution of debt peonage), although that last step was probably taken too far, as the increased risk of that additional credit, redistributed between all classes, almost brings the whole system (elites included) to their knees in the subprime crisis of 2008 (which, however, most elites escaped unscathed while the average -proletarian- taxpayer ended up paying the final bill).

So this is what we can expect in the rest of the world: more inequality, a growing fraction of the media devoting more time to the construction of an imagined common identity that only admits of a segment of the population (the one that monopolizes Toynbee’s “dominant minority”: whites in Europe, Canada, New Zealand & Australia, ethnic Japanese in Japan, Han in China, etc.) and the demonization of all the rest (ethnic minorities, immigrants, or anybody claiming to propose an “alternative” to Dominant Reason). Such demonization is an absolute requirement for the formation of a widely accepted narrative of endangerment and threat that will serve to keep on extracting every ounce of effort and commitment from those who buy it. You thought that politics were becoming polarized and demagogic? You ain’t seen nuthin’ yet…

Of course, such polarization and demagoguery will in the end fail to revitalize a moribund social system. It has never worked and it will not work now. It may stem the “tide of history” for a while, but only for a while. In the end a dying, exhausted system, incapable of any creative response to its external challenges (and man, do we have external challenges we do not seem able to rationally address: from Climate Change and antibiotic resistance to cheap fossil fuel exhaustion and loss of biodiversity), may choose the pace and speed of its demise, but not the fact that in the end it will be displaced by suppler, more successful competitors. A growingly repressive, growingly intransigent, growingly exclusionary majority may slow the speed at which its value system is consigned to the proverbial dustbin of history, but such efforts will not suddenly make it creative and attractive again. It will pointedly not make its kids want to reproduce happily again, as if the last forty years were just a bad dream. It will not call back to the labor force the excluded 30% (which are from the mostly excluded, demonized groups), or motivate the 30% in the “gig economy” (the new name of the “precariat”) to suddenly go back to college, obtain an advanced degree in a STEM discipline and start contributing to the “knowledge economy” and earning a six figure salary.

Unfortunately, a dying system in which a majority clings to power by increasingly oppressing one or many excluded minorities is by nature pretty unstable. Even more so in an international scenario where multiple sovereign polities face the same dilemmas, trying to benefit from a zero sum game, in which the oppressed minority of one nation is the dominant (and oppressing) majority of its neighbor. So beyond a certain point the “slow decline” scenario becomes more and more difficult to maintain, and we move in a “sudden crisis” scenario where some player (with or without a state power structure backing him) does something incredibly stupid (but unfortunately such stupidity is only apparent in retrospect) that sends the whole edifice tumbling down, typically causing unimaginable amounts of pain and suffering in the process. But that is already an alternative perspective that will need to be explored in a subsequent post. 

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… 

Friday, September 16, 2016

Aren’t Democracy and Capitalism cute? Now choose which one you would sacrifice! (and do it fast!)

I hope after my latest cheerful posts about the looming end of the world as we know it (at least I’m not buying property in “the American Redoubt” with some safe storage for a few years’ worth of life necessities, even though I probably see the possibility of societal collapse as way more likely than many of the kindred spirits depicted in this article from the WaPo: Where survivalism meets normcore ) have not disheartened my loyal readers. To put in a better perspective my thoughts on the issue I want to devote today’s post to the analysis of which of the two features that more markedly distinguish our current socioeconomic system from the vast majority of what the human species has known in its roughly 100,000 years of history is likely to give way first and disappear from the landscape.

Those two features are, obviously, the ones I mentioned in the catchy title, democracy and capitalism, so we should first agree on what we mean when we say we (still!) live in a democratic, capitalist society:

·         One dupe, one vote: for a regime to be called democratic, we would expect the government to be elected by popular vote on a regularly scheduled basis, but furthermore, for such an election to be consequential we would also expect a free press (with multiple groups of different political leanings, least we end in a Berlusconi-style single party show where all the media with sizeable audiences ended up being property of the same guy which coincidentally won all the elections), an independent judiciary, and unimpeded access to the voting booth regardless of ethnicity, gender or class so every single citizen (I’m not going into the thorny debate of how much time should pass before legal residents are included in the citizenry and allowed to participate in the shaping of the collective destiny) has an equal say in the decisions that will shape their common future. Come to think about it, that leaves as truly democratic just about a bunch of countries in Northern Europe, and may be New Zealand, as almost any other country has either a judiciary grossly aligned with the main parties in power, or a press subdued to the extent of not having much independence, or places significant barriers to its poorer/ ethnically disadvantaged citizens.

Be it as it may, let’s assume democracy exists in a continuum, one extreme being so close to pure autocracy as to be almost indistinguishable (Putin’s Russia or Maduro’s Venezuela serve as examples of democracies so imperfect and corrupted that can barely be called so, even if they have periodic elections with multiple parties vying for the popular vote) and another one being the “most perfect” democracy where a well-educated, well-informed populace can truly choose between competing options after civilly debating and duly considering them, as exemplified by Denmark, Norway or Sweden.

I’ll just note that, as I expanded in another post (collectively deciding sucks ), It’s not like democracy has been winning many accolades of late. Democratic countries have been slower getting out of the economic abyss in which they were thrown by the Great Recession, and some of them are showing signs of a growing chasm (if not of outright divorce) between the ruling elites tasked with aggregating and translating into policy the preferences of the masses and the said masses, that in a number of instances seem to cantankerously and stubbornly refuse to follow the lead of their betters (see USA election circus, Spanish inability to form a government after two elections, likely going to a third one and Britain’s decision to leave the EU).

  -       One dupe, one sale: if Democracy comes in multiple forms and flavors, Capitalism nowadays is surprisingly monolithic: there is only one form it takes (I’ve variously called it “cybernetic” -stressing its reliance on the latest technology, although the term is somewhat out of fashion-, “postindustrial” -as it relies less in the production of large series of commodities and more in the generation of symbolic goods- and “desiderative” -according to the most salient feature of its dominant reason). Regardless of how we want to call that form, what distinguishes it from any other way of organizing the society (who produces what, and how the fruit of such production is distributed) is the following fact: everything everybody does is understood as a commodity. What is a commodity, you may ask? A product or service that can be and HAS to be exchanged in a market transaction. What, then is a market transaction? An exchange done with the purpose of acquiring the means to produce additional quantities of the product or service one gives away. So in our wonderful current system every single minute of our life is oriented towards the production of thingies that we can sell, and then apply the proceeds of such sale to produce even more similar thingies, in a never ending spiral of increasing production to support similarly increasing consumption, none of which can ever be done for the sake of its own enjoyment.

Of course, such imperative (producing for the market for the sake of being able to produce even more) is perfectly irrational. Not just not conductive to, but actively incompatible with, any minimal opportunity of human happiness and flourishing. But the system is not oriented towards ensuring the maximum happiness of those living under it (that nice sentence at the beginning of the Declaration of Independence about self-evident truths? Unashamed window dressing, if you ask my opinion, never meant seriously or truthfully), but towards having them produce as many material things as possible, their happiness, contentment or self-fulfillment be damned. Remember how it came to be (more details here: How desiderative reason came to dominate ): a bunch of warring societies got caught in an evolutionary arms race, where the ability to produce material goods ended up being the sole trait that got selected, as it alone ensured the societies manifesting it to a greater degree could obliterate their opponents and occupy all their ecological niche. Stephen Jay Gould famously said that “natural selection mills grind very slowly, but they grind exceedingly small”. Well, cultural evolution is much faster, and it grinds similarly small, producing societies so wondrously adapted to their purpose that the conscious design of an evil genius wouldn’t be able to outcompete them.

So before anyone tries to argue that things are not so bad, and we live times of miracle and wonder and freedom and plenty, even when nobody actually designed our societies to extract the absolute maximum productino capacity from every one of its members, that’s what they do to an unparalleled extent: We are expected to produce 24 hours a day, 7 day a week, 365 days a year. When people go on vacation, they are told in a million ways the ultimate end of such pause is to “recharge” so they come back to work with renewed energy. When they break for the weekend they are expected to rest the minimum necessary to perform even more ruthlessly and unsparingly the other five days. They may withdraw to their homely retreats to enjoy the company of their family, but more and more the family is seen as the support structure to help them recover better to be more productive at work. Leisure for leisure’s sake is something less and less understood, less and less promoted and less and less presented as desirable (as is the whole concept of a private sphere entirely alien to economic thinking, as explained by the whole hideous work of Gary Becker and recently revisited in a very civil exchange of opinions between Branko Milanovic and Diane Coyle: House work for sale? just great!, thanks to Pedro for the pointer). And again, no cunning cabal or secret council needed to explain the development of such dire state of affairs, just the blind evolution of social groups competing for limited resources and evolving and adapting to better do so, until they reach the ultimate level of adaptation, in which they exhibit the most advantageous trait to such an extent that it is not physically possible to go beyond it (you would need to truly transform human nature to have us collectively working our assess off more than we currently do, but just leave us a bit more time).

All well and good, you may say, but not overtly different to what has been going on in the planet for the last three hundred years (when our current dominant reason started taking shape, one element falling in place after another, until in WWII every piece adopted its current configuration). And both the political system (Democracy) and the economic organization (Capitalism) have been getting along just fine, each seemingly reinforcing the other to the extent that they were considered a single package (during the Cold War the CIA supposedly promoted both, but it’s difficult to determine which was in the driver’s seat and which was an adjunct). Has anything changed for them to become not just somewhat awkward partners, but may be even downright inimical? Yes indeed, and that’s what I’m about to explain.

Certainly, since our current compact started taking shape, the vast majority, when asked, has unambiguously supported it. People of any condition have actively voted for material enrichment, even when in a truly Faustian bargain it supposed surrendering more and more of their time and freedom to pursue an apparently irrational course (producing for production’s sake, for no other reason than they would then be able to produce even more) if by following such course they and their children would be materially better off. Both in the WSJ and in the NYT Deirdre McCloskey has been lately waxing rhapsodic about the “Great Enrichment” spearheaded by the West in the last two centuries, which she attributes to the liberation of their peoples to pursue their private interests (and we counter-attribute to their enslavement to pursue the production of more and more exchangeable commodities with the exclusion of any other possible life plan, conveniently shaping their desires so they thought they were being free when they actually weren't), and although pretty off the mark for an economic historian (such liberation happened in England not because of her laissez faire politics, but because she intervened much more actively in economic matters and regulated more heavily to benefit its budding industrialist class), she captures nicely the essentials of the bargain: people (the majority of people, enough of them to sway the government in a self-reinforcing cycle of ever more dominating desiderative reason) are happy to surrender their freedom and to submit to a punishing regime that condemns them to ever increasing amounts of toil in exchange for more private wealth.

What happens, then, when the system proves itself incapable of granting such increasing wealth? This week the USA Census Bureau released its yearly report on income, poverty and health insurance in the USA, and many economists (like Paul Krugman here: Progressive economics works! (keep on dreaming)) were ecstatic because the median income was finally rising, after untold years of barely budging. During all those years (that well antedate the Great Recession) all the fruits of economic growth and then some had been monopolized by a tiny minority (the infamous 1% in most advanced countries) thanks to the hollowing of the middle classes (and the unending sinking of the lower ones) catalyzed and accelerated by the advance of Globalization (that brought uncountable millions of cheap workers to directly compete with their Western counterparts in less and less regulated labor markets), and this much awaited rise in median incomes (by now confined just to the USA) is being celebrated as a harbinger of a more egalitarian, more enlightened era when, thanks to active government intervention the economy will finally lift all boats, and everybody’s fortune will at last improve.

May be. May be not (the interesting thing about the future, as Yogi Berra would have it, is that it has not yet come to pass, so anything could happen), but I’m not optimistic. That most recent uptick has not yet been enough to erase all the losses of the last years, so that median income is still below its highest point in the 90’s of last century. So that’s two decades not seeing any growth at all for most families. Probably much more than that for the lower half (I’d say that after the “great convergence” that saw wealth differentials shrink until the end of the 70’s, things have been either flat or downhill for at least half of us). That’s a whole generation that has been hearing, for all their adult life, that the future belonged to the committed. That they needed to continuously reinvent themselves to stay relevant in the “new economy”. That a safe, stable employment was a thing of the past (along with a collective “safety net” to prevent those with bad health or bad luck to utterly fall) but, in exchange, many more opportunities would abound for those willing to put the hours and make the effort.

Some opportunity. I dare to say that for almost 80% of the working age population, those have been empty promises, and they are approaching a moment in their life where they have to accept there is not much economic improvement in store for them (the most dynamic job market somehow is not so dynamic for those above 45 years old) and they may end up being less materially well-off than their parents (not to speak of “intellectually well-off”, as a life of almost exclusive focus on social betterment at work leaves one poorly prepared to do anything outside such work), with prospects than in many cases are truly dismal (better not check too frequently how your K401 or equivalent nest egg has been performing in a market with zero-bounded interest rates and essentially flat stock markets for as long as the eye can see). No surprise drug use is rampant in some sections of the American “precariat”, and that life expectancy is actually regressing between middle aged men with no college degree (things are even worse in Russia, and I dare say for similar reasons).

So there is a reason “this time is different”. Up until now capitalism has been able to successfully bribe the majority of the population with an ever increasing consumption level. It pushed for productivity gains that were more or less equitably distributed, but which always reached(some percentage of them, at least) most layers of the economic ladder (which incidentally allowed for enormous loads of crap iced with generous doses of intellectual dishonesty to pass as respectable wisdom, see “supply side economics”, “trickle-down economics” and the like). But a number of circumstances conspired to put an end to such productivity gains (whose denunciation has been a kind of mini-obsession for me, judging from the amount of posts I’ve devoted to it: No more progress, and No more civilization, and Progress? nope, just delusional, and State spending? it will take us nowhere, and Bill Gates? dead wrong, no progress, I tell you to point just to a few of them), and it is such failure of “the system” to withhold its side of the bargain which is leading, unsurprisingly, to increasing numbers of its citizens to start doing what in the 60’s was called “dropping out” (see the disheartening tendency of the labor force participation rate to stay flat and high regardless of the situation of “full employment” that should be drawing multitudes back in search of a job in the USA).

Not only are increasing numbers opting for a life entirely outside of the formal economy (see also the work of Erik Hurst, on how some perfectly fit young men just find more appealing to keep on playing videogames than to spend countless hours flipping burgers with zero real chances of ever advancing to a more rewarding occupation in a super-credentialized corporate world, who would know?), but for those that remain the “traditional”, “establishment” alternatives seem more and more like a bad joke. So the Brits vote themselves out of Europe, and 55 million Americans will vote in eight week for Donald Trump, an utterly shambolic candidate (but is he really that more shambolic than Hillary Clinton? Than Jill Stein? Than Gary Johnson? Are they not all of them peddling worn fantasies detached from any sliver of reality or even plausibility?) adored, beyond any semblance of rationality or plain ol’ respect for the law of non-contradiction, by Nazis and avowed racist (not “statistical”, “I end up unconsciously interacting more with whites” racists, but dyed-in-the-wool “send them back to Africa by force” racists, just to be clear).

Now any sober observer of our political and economic reality may object that this is just a transition phase. Healthy rates of growth will surely come back, and with them the faith in the ability of unfettered capitalism to “withhold its side of the bargain”, to fulfill its promise of ever increasing material wealth for the masses. And with such resumption of the normal course of economic development we will see those specters of old melt away, and people become reasonable again, respect their leaders, vote their establishment candidates and exile the peddlers of hate and exclusion to the fringe of the system, the realm of conspiracy theorists and Holocaust deniers and Moon landing doubters. Again, may be, but I’m sceptic myself (in many domains beyond economic optimism, which I see as utterly unwarranted). I’d rather prepare myself (and my loved ones) for an immediate future of growing crises, growing political disenchantment and extremism, growing conflict between classes that feel betrayed, that seek refuge and solace in the ones more similar to them, to the exclusion of anyone markedly different. The monopoly of violence by the state will be more and more difficult to maintain, and I see some enormous polities (starting with the very own USofA) as much more fragile than anybody realizes. Whoever wins this election there will have to preside over a polarized, rancorous and uncompromising half of the electorate that will question his (or her) legitimacy and in a growing number of cases will resort to their own private use of violence to settle the scores and the grievances they don’t recognize the state as being able to arbiter.

So again, practice with your guns, store ammo and learn to box…