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Musings Report 2025-52 12-27-25 The Trajectory of History 2026-2033
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The Trajectory of History 2026-2033
Although the progression of events over the next eight years cannot be predicted, we have enough in hand to project The Trajectory of History 2026-2033. Even if you disagree with my reasoning and conclusions, the exercise of critiquing my projection will be valuable.
Longtime readers know I have discussed cycles and historical waves over the past 20 years. We can dismiss the timing of previous crises as coincidence, but it would be unwise to dismiss the dynamics that generate cycles and waves of crisis and collapse.
Cycles are not magic; they reflect cycles of human behavior. In The Crises Yet to Come (2/6/25), Correspondent Bruce H. offered this succinct summary of one dynamic in long-wave cyclical crises: the incentives for the elites to lock the system down to preserve or increase their power:
"We are in the midst of a wider historical pattern, I think.
During the expansive, formative stage of an empire, there is a dynamic approach to each new problem, finding solutions, overcoming obstacles, and building on success. Genius comes from every level of society and frequently climbs from the lowest group to the top. Society is in flux, with people moving up and down the social strata. The poorest experience increased wealth, but there is not too much disparity between them and the very top.
At a certain point, the elites solidify into a relatively fixed group, the flux of people between strata begins to slow. The dynamic creative approaches to new problems begins to wane. Those at the top in the final stages of any empire develop a mental sclerosis wherein they cannot conceive of any new ways of doing anything. They only collectively remember what brought them to the top, and instead of finding novel solutions to new problems, prefer to redefine the problems in such a way that the old solutions become the way to address them. Of course this does not actually solve the underlying real issues, which then metastasize into intractable crises.
The proletariat loses faith in the system and begins to abandon it.
Usually, a charismatic figure arises, promising to reform the system and return to a glorious past time, but who suffers a crisis which finally splinters the whole polity.
Does this pattern sound at all familiar?"
I added this note: the system first abandons the working class, who then abandon the system. This abandonment has a great many variations.
Another human cycle is generational: the generation that experienced scarcity and crisis passes away and the generations that only experienced prosperity and stability are unprepared for scarcity and crisis.
I discuss two additional overlooked dynamics in my new book Investing In Revolution: 1) the economy and society become fatally imbalanced, and 2) institutions lose the capacity to adapt and respond to crisis, as these "muscles" atrophy over time due to disuse.
The status quo's core hierarchy isn't political, as most imagine: the economy rules all, and finance and technology rule the economy. While finance and technology attract the best and brightest, the forgotten fabric of the status quo--the social order--is unraveling.
In broad brush, society and the economy interact in two ways: the Pareto Distribution (the 80-20 rule, which breaks down into the 64-4 rule) and the relative porousness of social mobility.
If the top 4% have moated their position at the top and the bottom 64% have little opportunity to rise into the top 20%, the social order will fray and unravel even as "the economy" generates vast profits for the few.
In other words, the economy can appear robust while beneath the surface the asymmetries built into the economy are dismantling society.
in The Economy--and its Future in Four Charts (6/27/25) I break out four asymmetric dynamics that are powering crisis and rebalancing: stagnating wages, soaring debt, rising wealth inequality and housing unaffordability.
David Hackett Fischer describes two other key dynamics in his book The Great Wave: Price Revolutions and the Rhythm of History.
The first is the cycle of civilizations expanding their consumption of available resources until scarcities arise, which push prices higher and reduce wages as the population expands. As risks rise, interest rates rise accordingly. When the bottom 80% can no longer afford the basics of life (as defined by the current zeitgeist), the result is revolt / revolution.
Secondly, Fischer describes the difference between cycles and waves:
"Cyclical rhythms are fixed and regular. Their periods are highly predictable. Great waves are more variable and less predictable. They differ in duration, magnitude, velocity, and momentum. One great price wave lasted less than ninety years; another continued more than 180 years. The irregularities in individual price movements make them no more (or less) predictable than individual waves in the sea.
Even so, all great waves had important qualities in common. They all shared the same wave-structure. They tended to have the same sequence of development, the same pattern of price relatives, similar movements of wages, rent, interest rates; and the same dangerous volatility in later stages. All major price revolutions in modern history began in periods of prosperity. Each ended in shattering world crises and was followed by periods of recovery and comparative equilibrium.”
In other words, the cycles described by historians such as Peter Turchin (50 year cycles that can generate 100-year, 150-year and 200-year cycles), along with many other cycles--the business cycle, the Kondratieff credit cycle, the Debt Super-Cycle, etc.--are defined by time but waves are defined solely by their internal dynamics and measurable qualities. Cycles and waves share many of the same dynamics and are easily confused.
As Fischer intimates, waves of human history share characteristics with ocean waves, which can accrete energy and become giant rogue waves that cannot be predicted even as they can be foreseen as recurring phenomena.
I have posted several comprehensive lists of the dynamics currently accreting in self-reinforcing feedback:
Catch-20: The 20 Dynamics That Will Shape the Next Decade (1/15/25) and The Forces Already in Motion: The place to start is to differentiate market forecasts from forces that are already in motion.
In What Are Islands of Coherence?, I discuss the conceptual sclerosis which leads to doing more of what's failed, and Prigogine's concept that in a sea of non-linear semi-chaos, even small Islands of Coherence can exert widespread influence.
I then discussed Prigogine's idea that problem-solving arises from understanding the problem in a new way.
The problem is we're only willing to consider a new approach if there is no other choice, when everything is collapsing around us, at which point it's too late to save the status quo. We must survive the firestorm and then apply a new understanding of the problem amidst the cooling ashes.
As I have often observed, the "problem" to the status quo is to ensure "growth" of consumption and asset valuations (i.e. "wealth") continue expand essentially forever, as the world-system can only sustain itself if "growth" is permanent.
That this is an arbitrary arrangement rather than a Law of Nature is unrecognized. I describe a similar dynamic in which technology-driven "Progress" is deemed as permanent as gravity as the Mythology of Progress, as technology doesn't automatically generate Progress, it also generates Anti-Progress which manifests as environmental degradation, depletion of resources that we don't even measure (soil fertility, fresh-water aquifers, etc.) and what I call Ultra-Processed Life, a synthetic, artificial world of products and services designed to maximize profits regardless of consequences.
The "problem" of ensuring "growth" has generated the Anti-Progress of the Waste Is Growth Landfill Economy, in which planned obsolescence and addictive products and services are providing "growth" but in unsustainable, counter-productive ways, a disconnect from the real world that characterizes Model Collapse, in which the system that "trains" its future responses on its previous output veers ever farther from authentic understanding of the real world.
In effect, the system is hallucinating, which I described in Model Collapse: The Entire Bubble Economy Is a Hallucination.
Just as AI chatbots are unaware that their responses are now hallucinations, the world-system of Progress and "growth" is unaware that its understanding of the "problem" and how the world works is now a hallucination.
If we assemble all these dynamics, we discern The Trajectory of History: the status quo world-system is generating a hallucination that "growth" and "Progress" are not just sustainable but are humanity's destiny, even as self-reinforcing waves generated by real-world forces are piling up in a confluence of overlapping cycles and potentially a rogue wave of unknown timing and scale.
The conceptual models we're using ("growth"), the institutions we've constructed, and our belief structures (The Mythology of Progress) all lack self-awareness of their own limits and their drift from authentic understanding. Those piloting the system are focused on instrument readings that indicate all is in their control even as the aircraft is on a glide path into a box canyon.
The consensus holds that any potential disturbance is decades away and the likelihood of a "long-tail" event is so low that only "doom-and-gloomers" bother considering such outliers. Recent history--the 16 years since the Global Financial meltdown of 2008-09--support this belief.
But from the perspective laid out here, this is akin to looking at normal waves in the sea and discounting the physics of rogue waves--in effect, declaring rogue waves so rare that we don't have to consider them at all.
It seems self-evident that the institutions the system relies on to solve problems are failing to do so, relying instead on the expediencies of borrowing / creating more money and grandiose policy announcements that don't resolve any of the systemic problems laid out here, as the intention isn't to change the system but to preserve the system's current configuration.
It also seems self-evident that the public's attempts to change the system via existing institutions have failed, and that public frustration with rising costs of living are dry kindling awaiting a spark.
The status quo is investing capital in AI, not people, and if AI fails to deliver Utopia as promised daily, then this failure--mal-investment on a grand scale, the dashing of absurdly exaggerated promises of Utopia--could provide the spark which transforms discontent into a firestorm.
The other dynamic that could ignite discontent is the failure of status quo "solutions": if printing / borrowing more money becomes the problem rather than the solution, if core systems such as healthcare start breaking down--these kinds of institutional failure tend to snowball, as they are the result of "doing more of what's failed."
I have often described the dynamics of credit-driven asset bubbles, and the collapse of the current global "Everything Bubble" is akin to a rogue wave: unpredictable in timing but foreseeable. There are many measurable extremes in play that strongly suggest the Everything Bubble will pop in the 2026-28 time frame, much like the 2000-02 deflation of the dot-com bubble.
Since the world-system now relies on credit-asset bubbles for its "growth" and "wealth," the deflation of the Everything Bubble will generate devastating shockwaves throughout the global economy and every socio-political system.
This suggests a political reckoning in 2028, and the potential for one final push of "doing more of what's failed" that generates a final burst of hope that the institutions processing hallucinations will magically succeed in restoring the status quo.
This spasm of doing more of what's failed will break what's left of public trust in the models and institutions of "growth" and "Progress," and the stage will be set for adaptative churn as various new models and arrangements are adopted and modified in the 2030-2033 time frame.
That a rogue wave arises that washes away much of the status quo remains a possibility, as the world-system is teetering on the edge of instability where non-linear dynamics generate phase shifts, much like a mountainside appears stable until an avalanche reveals hidden instability.
It's certainly possible that the system retains coherence for another eight years, but given the weight of evidence, it would be unwise to count on this as guaranteed or even the likeliest outcome.
For more on these lines of evidence, consider The Revolution Trilogy and my 2025 Essays on AI.
Highlights of the Blog
The Good News Is People Are Realizing We're On Our Own 12/26/25
My Christmas Letter 12/23/25
Best Things That Happened To Me This Week
Holiday food-fest: Portuguese sweetbread:
homemade pizza:
homemade dinner rolls:
pumpkin pie, made from homegrown kabocha pumpkin:
What's on the Book Shelf
The Upside of Down: Catastrophe, Creativity and the Renewal of Civilization (Thomas Homer-Dixon)
War and Peace and War: The Rise and Fall of Empires (Peter Turchin)
From Left Field
NOTE TO NEW READERS: This list is not comprised of articles I agree with or that I judge to be correct or of the highest quality. It is representative of the content I find interesting as reflections of the current zeitgeist. The list is intended to be perused with an open, critical, occasionally amused mind.
Many links are behind paywalls. Most paywalled sites allow a few free articles per month if you register. It's the New Normal. At a reader's suggestion, I'm identifying links that are free/not paywalled.
We Let AI Run a Vending Machine. It Stocked a Live Fish and a PlayStation.
Anthropic's Claude AI ran a vending machine at WSJ headquarters for several weeks. It lost hundreds of dollars, bought some crazy stuff and taught us a lot about the future of AI agents. (wsj.com, free version)
65-year-old retirees in France now have higher incomes than working-age adults--meanwhile, American boomers can’t even afford to retire. (free)
The Two-Speed Economy Is Back as Low-Income Americans Give Up Gains: High-earners and older Americans are faring better than ever, while fortunes are sliding again for low-wage and young workers.(wsj.com, free version)
Potemkin Sustainability: The green village was never there. (free)
From Paint to Personal Data: Lowe’s Data Broker Secrets (7:13 min)(via John F.)(free)
'Total and complete lie': Longtime Hawaii hotel practice still irks many. (free)--hidden resort fees...
Over 2 Million People Tuned In When This Therapist Revealed The Troubling Behaviors He's Noticing In His Gen Z Clients. (free)
The Law of Reversal (free)
Collapse Wasn’t Inevitable: We Locked Ourselves Out of Evolution (free)
#315: Madmen and economists (free)
No, World War II Did Not Help the Economy (video, free)(via Patrick S.)
The Hidden Risks of America’s Most Popular Prescription Painkiller: Gabapentin has soared in popularity as an alternative. (wsj.com, paywalled)
The Economic Divide Between Big and Small Companies Is Growing: Economic fortunes of low- and high-income Americans are diverging--same pattern happening with companies. (wsj.com, paywalled)
"You only have power over people as long as you don’t take everything away from them. But when you’ve robbed a man of everything, he’s no longer in your power — he’s free again." Alexander Solzhenitsyn
Thanks for reading--
charles |
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