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Musings Report 2019-27 7-6-19 Will Everything Change in 2020-2025 or Will Nothing Change?
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For those who are new to the Musings reports: they are basically a glimpse into my notebook, the unfiltered swamp where I organize future themes, sort through the dozens of stories and links submitted by readers, refine my own research and start connecting dots which appear later in the blog or in my books. As always, I hope the Musings spark new appraisals and insights. Thank you for supporting the site and for inviting me into your circle of correspondents.
Welcome to July's MUS (Margins of the Unfiltered Swamp)
The first Musings of the month is a free-form exploration of the reaches of the fecund swamp that is the source of the blog, Musings and my books.
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Thank you, Clyde D., Pamela F. and Daniel E. for renewing your generous support of my work, and welcome new subscribers-patrons David S., Thomas S. and Steve.
Will Everything Change in 2020-2025 or Will Nothing Change?
Longtime readers know I've often referenced The Fourth Turning, the book that makes the case for an 80-year cycle of existential crisis in U.S. history.
The first crisis was the Constitution (1781), whether the states could agree on a federal structure; the 2nd crisis was the Civil War (1861) and the 3rd crisis was global war--World War II (1941).
According to this 80-year cycle, we're fast approaching an existential crisis (2021) that could upend the status quo in a fundamental fashion.
While there is a great deal of historical evidence for cycles, predicting a major transition based on previous cycles is obviously a guess rather than a certainty.
So will everything change in 2020-25, or will the present simply extend another six years?
We have to start by defining what qualifies as fundamental change. In my view, if the distribution of income, power and ownership of capital remains unchanged, nothing of import has changed.
There might be dramas playing out in the political theater, but if the increasingly asymmetrical distribution of income, power and wealth don't change, then the dramas are merely another form of distraction / entertainment.
The other type of change that qualifies as fundamental is the breakdown of the structures of everyday life: the distribution, cost and availability of food, fresh water, energy, healthcare and basic security.
One way to measure the vulnerability of any society to breakdown or a fundamental reshuffling of income, wealth and power is to examine its buffers--the resiliency and reserves of the core systems.
I often reference buffers, as these are largely invisible to everyone who isn't intimately familiar with the workings of each system: the reserves that can be drawn upon in crisis, the redundancies, the staff and management training to handle crises, and so on.
Two examples are the supplies of gasoline in service stations and the food on supermarket shelves and coolers. Each commodity--food and fuel--are largely distributed "just in time," meaning that the supply and distribution system is a long, complex chain with very little redundancy or backup.
Any disruption in any link of the supply chain will break the entire chain.
The ultimate buffer for any nation-state is its currency, a.k.a. "money." If its currency still acts as a store of value globally, the nation in crisis can issue more money to buy whatever is needed to alleviate the crisis. (Alternatively, if it owns gold, it can spend that.)
If trust in the value of the currency has been lost by over-issuing new currency, this buffer will fail.
Social and cultural buffers are more difficult to assess. Deeply corrupt societies may find that the public's patience with the abuses of power that manifest as endemic corruption has thinned to the point that mustering the police and army no longer protects the status quo.
Natural systems also have buffers, and the industrial civilization we inhabit takes a variety of natural resources--fuels, fresh water and food--for granted, assuming that brute force (more chemical fertilizers, more dams, more fracking, etc.) will guarantee ample supplies of these essentials.
Financial systems have multiple points of resilience or fragility. If we take the 2008 Global Financial Meltdown as an example, the Federal Reserve created or backstopped / guaranteed an astonishing $27 trillion out of thin air to restore trust.
It worked a decade ago, but saving the banks does not necessarily restore the "animal spirits" of borrowing more money to chase assets higher, especially if borrowers are already heavily indebted and their incomes have stagnated.
Bailing out the banks doesn't create more income for heavily indebted borrowers, and with interest rates globally at or near zero (or even lower), there is very little room to lower the cost of existing debt.
It certainly feels as if financial "fixes"--making it cheaper to borrow or refinance existing debt--have run their course, and have started the long decline of diminishing returns: every additional dollar of debt adds less and less real growth to the economy.
I've also referenced institutional sclerosis and the rising wedge model of breakdown, in which costs and complexity continue edging higher while the output of the higher costs and complexity stagnates.
One example of how finance, politics and institutional fragility are interconnected is public pensions, many of which are based on unrealistic financial projections of endlessly rising profits, wages and taxes.
We are now in the longest expansion in modern history, yet it doesn't feel as robust as the expansions of the 1950s to early 1970s (les trente glorieuses, the "glorious 30" years of magical expansion 1945-1975) or the financialization/cheap oil boom of the 1980s or the Internet boom of the 1990s.
History informs us that crises that could have been handled with relative ease in the past, when buffers were thick and core systems were resilient, end up triggering a domino-like collapse of entire empires.
These phase shifts often follow periods of financial depression, drought or pandemic (the three often go together as people who get less to eat have compromised immune systems that are then vulnerable to epidemics) that erode the economy and core institutions.
If we put all this together, it seems we are facing a much different type of crisis this time, one in which the core systems of the economy and society have eroded and are thus more vulnerable to disruption--not a single issue crisis but a systemic crisis of the entire status quo.
The crisis of 1781 was essentially a struggle to balance the forces of state and federal power, a balance that already included the divisive issue of slavery.
By 1860, the political compromises that had duct-taped the Union without actually resolving the great divide between slave and free states collapsed, and the issue was resolved by war.
In 1941, a U.S. possessive of its relative isolation and safety was forced to choose between an increasingly dangerous isolation and a battle to the death with the Nazi Reich and the Japanese Empire.
What might change in 2020-2025? Perhaps nothing, if all the duct-taped "fixes" for the increasing asymmetries of income, wealth and power hold, and food, fresh water and energy remain cheap and abundant.
But it feels as if the resiliency of society, governance and the economy has thinned to the point that any one domino falling might knock down many others, leading not to a specific crisis such as war or a political struggle, but a generalized failure of the entire status quo: a collapse of indebtedness, a collapse of overly complex and unaffordable institutions, a sharp drop in the purchasing power of currencies, a loss of faith in political processes, a collapse of trust in technocratic expertise and experts, and possibly shortages of essentials that could drive prices much higher.
History suggests these systems are all interconnected and interdependent, so the collapse of one system soon delivers crisis to all the systems it is connected to.
The possibility of such a cascading crisis of the entire status quo isn't even on the radars of the government, media, academia, corporations, etc. There are indications that the Pentagon has contingency plans that recognize the fragility of global systems, but at this point any domino-like expanding crisis will unfold in a status quo lacking any coherent response or even understanding of the status quo's increasing fragility.
Highlights of the Blog This Past Week
What's Left to Monetize? 7/5/19
Vested Interests in Charge = Guaranteed Failure 7/3/19
America's Concealed Crisis: Fifty Years of Economic Decline, 1969 to 2019 7/1/19
From Left Field
Liberalism Isn’t What It Used to Be: The values that made me a supporter of RFK in 1968 put me at odds with today’s progressives.
How Capitalism’s Productivity Failure Is Driving Debt and Speculation -- few pundits understand these dynamics....
Globalization’s Wrong Turn--And How It Hurt America -- never thought I'd see this kind of takedown of globalization in the MSM....
Libra, a Cyberpunk Nightmare in the Midst of Crypto Spring -- well worth a read to understand Facebook's reach for global domination...
The Birth, Death, and Rebirth of Postmodernism: No other idea from the humanities had so massive, if murky, an influence. -- postmodernism = denial of the primacy of the individual....
How to Destroy a Civilization -- Rome, everyone's favorite model of decline and collapse...
Leisure Unsought, Neural Networks, and Other Dramas -- a look at Universal Basic Income...
Confessions Of A Climate Activist: Don’t Blame Yourself, Go After The Criminals Who Sold Out Humanity For Profit
Facebook’s Libra Must Be Stopped-- yes....
Digital Socialism? The Calculation Debate in the Age of Big Data
Who Owns Tomorrow? -- a personal essay....
How & Why Big Oil Conquered The World (via Simon H.) -- the long read....
The Power of One Push-Up: Several simple ways of measuring a person’s health might matter more than body weight. (via John F.)
"Life isn't about finding yourself. Life is about creating yourself." George Bernard Shaw
Thanks for reading--
charles |
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