Olduvaiblog: Musings on the coming collapse

Home » Posts tagged 'Feedback'

Tag Archives: Feedback

Hell in a Hand Basket and Why We’re Going There, Guaranteed (sort of)

Tulum, Mexico. 1986.

Tulum, Mexico. 1986.

[My love of music has me suggesting that a song be played in the background while you’re reading this. There are a couple I’d like to suggest: Talking Heads-Nothing but Flowers; Blue Rodeo-Lost Together (must have some Canadian content); or, given the Ukraine/Syria/Iran/North Korea/Venezuela/Congo African Republic/Senkaku-Daiyou Islands/etc. situations, Frankie Goes to Hollywood-Two Tribes. Enjoy:)]

The ebb and flow of societies is well documented by historians and archaeologists. It seems every society rises in complexity to a zenith of some kind and then falls. There are an increasing number of people who contend that this sociopolitical transformation is fast-approaching for our globalised, industrial civilization, and of those some believe that this shift will be a long drawn out affair of slow decline[i], while others suggest it may be more of a sudden shift[ii], or collapse[iii].

Whether this change takes generations or is much more sudden and dramatic matters not (unless you’re living through the latter one, I suppose); one’s perception of this depends upon the temporal perspective taken. For example, let’s assume, for the sake of argument, that the oil-dependent, industrialized society of humans lasts 400 years, 200 years up and 200 years down (I think I’m being overly generous here on the demise side).

A 200-year decline may, given normalcy bias, not be perceived as a significant shift at all by those experiencing it. However, if we can step back and view this rise and fall in larger historical terms, say on a 10,000-year basis, this ascent/descent scenario may be perceived as quick and calamitous. I think perspective is everything here. (Note that I’ll continue to refer to the impending change as ‘collapse’ because I tend to believe the change will come quickly, especially once the power grid fails.)

That being said, the antecedents of such collapse are varied and complex. They range from declining marginal returns[iv] to environmental collapse[v] to psychological shifts[vi] to overshooting local carrying capacity[vii] to Peak Oil[viii] to population growth[ix]. Humans don’t require artificial intelligence that perceives us as a threat, a viral pandemic leading to a zombie apocalypse, or an alien invasion for our resources to push us over the cliff; we don’t even need a nuclear war. We have our own non-military, sociocultural peculiarities to accomplish it.

As with any complex, dynamical system, the variables that lead to collapse interact in ways both knowable and surprising (such are the emergent phenomenon that arise from complex systems). Feedback that might provide clues to the coming demise tends to be ignored, delayed, or misinterpreted, resulting in dismissal of clear signals. In fact, oftentimes, the actions taken by players can expedite the process of collapse. To this end, I believe that our economic system, with globalisation efforts and its underlying foundation of infinite growth, may be the catalyst that pushes our industrial civilisation over the impending cliff of collapse. But, who really knows? My guess is about as good as anybody else’s[x].

What are some of the components contributing to this collapse endgame? I offer a few: exponential growth of population; dependency on fossil fuels; human hubris; economic credit/debt obligations; climate change; peak resources (especially oil and water); delayed feedback; corrupt political/economic systems; misperceptions; accumulation of toxins/pollutants; misleading information; and just plain, old ignorance (some purposeful I believe). And, don’t forget the black swans.

To me, population growth seems to be the factor that we have pushed in the wrong direction but the underlying variable to this is energy. Populations do not grow if there is not enough energy to support such growth. This energy may take the form of domesticated animal and plant life, or long-stored, concentrated energy (i.e. fossil fuels), but at its base is solar energy and how it is exploited. For tens of thousands of years human population was held in check by limited energy exploitation. The ‘Agricultural Revolution’ certainly gave a boost to human population, especially within new villages, towns, and cities erupting all over the globe. However, once fossil fuels began to be exploited our population took off in a global, exponential explosion. It is this exponential growth of human population that has put us in this bind we are in.

To better understand what is happening, I believe one of the fundamental pieces of information to get a grip on is, in fact, exponential growth. Exponential growth is a concept well-known (think compound interest) but whose consequence has been lost on many. The late Dr. Albert Bartlett was perhaps one of the leading authorities on the implications of such growth and spent much of his professional career attempting to educate people about it. In a presentation he gave thousands of times and was viewed many more times on youtube (viewed more than 1/4 million times; not bad for an old guy lecturing about mathemtics) he outlines the importance of it and its consequences.

Entitled ‘Arithmetic, Population, and Energy’[xi], Bartlett argues, among other things, that zero population growth will happen whether we wish it to or not, it is a mathematical certainty. In the words of others, if something cannot grow forever, it won’t. However, as Bartlett points out, we hold near and dear to our hearts many things that are contributing to overpopulation: education, healthcare, immigration, sanitation, law and order. On the other side of the ledger, however, are forces that counter these: war, famine, disease, accidents, murder, abortion, and infanticide. His point is that we can either deal with the issue of overpopulation by changing our behaviours (and attitudes) or nature will do it for us; the choice is ours (or is it?).

_______________________

…here we can see the human dilemma—everything we regard as good makes the population problem worse, everything we regard as bad helps solve the problem. There is a dilemma if ever there was one.
Dr. Albert Bartlett

_______________________

A burgeoning population and its implications for human sustainability on a finite planet has been around for some time. Thomas Malthus’s treatise on the subject in 1798 being perhaps one of the most well known. Had Malthus known of the incredible boost to global carrying capacity that was about to be unleashed by the exploitation of a one-time windfall of concentrated and easily-transportable energy, petroleum, he may not have been so adamant in his conclusion that the end of growth was near-at-hand. But such are the chances when one attempts to foretell the future.

My own biases, prejudices, predilections, observations, and experiences, suggest this human experiment we are a part of will not end well[xii]. I believe that there is too much momentum, too many people with a sense of entitlement, too many sociocultural myths, too many elite protecting the status quo, and far too much ignorance for us to avoid a global collapse. Unless, of course, Zemphram Cochrane’s trans-warp engine test on April 4, 2063 at 11:15 am, after the Third World War (aka Eugenics Wars), is seen by a Vulcan survey expedition and makes First Contact, saving us from ourselves[xiii].

What typically follows social, political, economic collapse is a ‘dark age’ of some kind and is perhaps best known (at least within Western history) by the years that followed the collapse of the Roman Empire. But more on this in another post.

Despite all of the above, there are a variety of other variables that could push a teetering globe into a collapse scenario, particularly geopolitics or a natural disaster. No one knows. Prediction of the future is for meteorologists and economists, neither of which is very good beyond a couple of days for the former, and much less for the latter. I must admit, however, that Marion King Hubbert’s prediction of the coming demise of industrial civilization[xiv], along with the seminal text, The Limits to Growth[xv], are pretty good guesses in my books.

The one thing I am sure of, the more I learn, the more I am finding that I am ignorant of. Although I spent a career as an educator[xvi], I continue to be a student…and perhaps this diatribe is all just an elongated justification of my belief system, “a tale told by an idiot, full of sound and fury, signifying nothing”[xvii]

Olduvai (aka Steve Bull)


[i] Greer, J.M.. The Long Descent: A User’s Guide to the End of the Industrial Age. New Society Publishers, 2008. (ISBN 978-0-86571-609-4)
Kunstler, J. H.. The Long Emergency: Surviving the End of Oil, Climate Change, and Other Converging Catastrophes of the Twenty-First Century. Grove Press, 2009/2006/2005. (ISBN 978-0-8021-4249-8)
[ii] Diamond, J.. Collapse: How Societies Choose to Fail or Succeed. Penguin Books, 2005/2011. (ISBN 978-0-14-311700-1)
Orlov, D.. The Five Stages of Collapse: Survivor’s Toolkit. New Society Publishers, 2013. (ISBN 978-0-86571-736-7)
Ruppert, M.. Confronting Collapse: The Crisis of Energy and Money in a Post Oil World. Chelsea Green Publishing, 2009.  (ISBN 978-1-60358-164-3)
[iii] I use the following definition of collapse, as proposed by Joseph Tainter (see footnote below): “[It] is fundamentally a matter of the sociopolitical sphere. A society has collapsed when it displays a rapid, significant loss of an established level of sociopolitical complexity….To qualify as an instance of collapse a society must  have been at, or developing toward, a level of complexity for more than one or two generations…The collapse in turn must be rapid—taking no more than a few decades—and must entail a substantial loss of sociopolitical structure. Losses that are less severe, or take longer to occur, are to be considered cases of weakness and decline.” (p. 4)
[iv] Tainter, J.A.. The Collapse of Complex Societies. Cambridge University Press, 1988. (ISBN 978-0-521-38673-9)
[v] Diamond, J.. Ibid.
[vi] Orlov, D.. Ibid.
[vii] Catton, Jr., W.R.. Overshoot: The Ecological Basis of Revolutionary Change. University of Illinois Press, 1982. (ISBN 978-0-252-09988-4)
[viii] Ruppert, M.. Ibid.
[ix] Malthus, T.. An Essay on the Principle of Population as it Affects the Future Improvement of Society. J. Johnson, 1798.
[x] Take a good, long critical look at the world and its leaders. Do you have faith, enough faith that you would risk your own life and that of your family, in the leaders of this world to be capable of circumnavigating successfully the various crises that are erupting with greater magnitude and frequency, from climate change to geopolitical stresses to resource depletion to economic collapse? If you have that much faith in them, well good luck to you. Quite simply, I don’t. I believe they are incapable of managing these dilemmas and cascading failures of the various systems of industrialised civilisation will occur some time in our future. NO, I have no idea when.
[xi] Bartlett, A.. Arithmetic, Energy, and Population. (Transcript: http://www.albartlett.org/presentations/arithmetic_population_energy_transcript_english.html).
[xii] I must admit that my particular pessimistic perspective makes for an interesting dynamic between my spouse and I, for she is the eternal optimist who, as a practising educator, believes in the successful implementation of social engineering to prevent many of the negative consequences (I’ve just retired from the profession but have always been a ‘little’ critical of it, and authority; the latter, in no small part, likely the result of being the child of a police officer).
[xiii] Star Trek, First Contact. See http://en.wikipedia.org/wiki/Star_Trek:_First_Contact
[xiv] Hubbert, M.K.. Energy from fossil fuels. Science, Feburary 4, 1949. v.109, pp. 103-109.
[xv] Meadows, D., J. Randers, & D. Meadows. Limits to Growth: The 30-Year Update. Chelsea Green Publishing Company, 2004. (ISBN 978-1-931498-58-6)
[xvi] 9 years as a classroom teacher (grades 6-8), 13 as an administrator (K-8 school).
[xvii] Shakespeare. Macbeth (Act 5, Scene 5, lines 26-28)

 

Hell in a Hand Basket and Why We're Going There, Guaranteed (sort of)

Tulum, Mexico. 1986.

Tulum, Mexico. 1986.

[My love of music has me suggesting that a song be played in the background while you’re reading this. There are a couple I’d like to suggest: Talking Heads-Nothing but Flowers; Blue Rodeo-Lost Together (must have some Canadian content); or, given the Ukraine/Syria/Iran/North Korea/Venezuela/Congo African Republic/Senkaku-Daiyou Islands/etc. situations, Frankie Goes to Hollywood-Two Tribes. Enjoy:)]

The ebb and flow of societies is well documented by historians and archaeologists. It seems every society rises in complexity to a zenith of some kind and then falls. There are an increasing number of people who contend that this sociopolitical transformation is fast-approaching for our globalised, industrial civilization, and of those some believe that this shift will be a long drawn out affair of slow decline[i], while others suggest it may be more of a sudden shift[ii], or collapse[iii].

Whether this change takes generations or is much more sudden and dramatic matters not (unless you’re living through the latter one, I suppose); one’s perception of this depends upon the temporal perspective taken. For example, let’s assume, for the sake of argument, that the oil-dependent, industrialized society of humans lasts 400 years, 200 years up and 200 years down (I think I’m being overly generous here on the demise side).

A 200-year decline may, given normalcy bias, not be perceived as a significant shift at all by those experiencing it. However, if we can step back and view this rise and fall in larger historical terms, say on a 10,000-year basis, this ascent/descent scenario may be perceived as quick and calamitous. I think perspective is everything here. (Note that I’ll continue to refer to the impending change as ‘collapse’ because I tend to believe the change will come quickly, especially once the power grid fails.)

That being said, the antecedents of such collapse are varied and complex. They range from declining marginal returns[iv] to environmental collapse[v] to psychological shifts[vi] to overshooting local carrying capacity[vii] to Peak Oil[viii] to population growth[ix]. Humans don’t require artificial intelligence that perceives us as a threat, a viral pandemic leading to a zombie apocalypse, or an alien invasion for our resources to push us over the cliff; we don’t even need a nuclear war. We have our own non-military, sociocultural peculiarities to accomplish it.

As with any complex, dynamical system, the variables that lead to collapse interact in ways both knowable and surprising (such are the emergent phenomenon that arise from complex systems). Feedback that might provide clues to the coming demise tends to be ignored, delayed, or misinterpreted, resulting in dismissal of clear signals. In fact, oftentimes, the actions taken by players can expedite the process of collapse. To this end, I believe that our economic system, with globalisation efforts and its underlying foundation of infinite growth, may be the catalyst that pushes our industrial civilisation over the impending cliff of collapse. But, who really knows? My guess is about as good as anybody else’s[x].

What are some of the components contributing to this collapse endgame? I offer a few: exponential growth of population; dependency on fossil fuels; human hubris; economic credit/debt obligations; climate change; peak resources (especially oil and water); delayed feedback; corrupt political/economic systems; misperceptions; accumulation of toxins/pollutants; misleading information; and just plain, old ignorance (some purposeful I believe). And, don’t forget the black swans.

To me, population growth seems to be the factor that we have pushed in the wrong direction but the underlying variable to this is energy. Populations do not grow if there is not enough energy to support such growth. This energy may take the form of domesticated animal and plant life, or long-stored, concentrated energy (i.e. fossil fuels), but at its base is solar energy and how it is exploited. For tens of thousands of years human population was held in check by limited energy exploitation. The ‘Agricultural Revolution’ certainly gave a boost to human population, especially within new villages, towns, and cities erupting all over the globe. However, once fossil fuels began to be exploited our population took off in a global, exponential explosion. It is this exponential growth of human population that has put us in this bind we are in.

To better understand what is happening, I believe one of the fundamental pieces of information to get a grip on is, in fact, exponential growth. Exponential growth is a concept well-known (think compound interest) but whose consequence has been lost on many. The late Dr. Albert Bartlett was perhaps one of the leading authorities on the implications of such growth and spent much of his professional career attempting to educate people about it. In a presentation he gave thousands of times and was viewed many more times on youtube (viewed more than 1/4 million times; not bad for an old guy lecturing about mathemtics) he outlines the importance of it and its consequences.

Entitled ‘Arithmetic, Population, and Energy’[xi], Bartlett argues, among other things, that zero population growth will happen whether we wish it to or not, it is a mathematical certainty. In the words of others, if something cannot grow forever, it won’t. However, as Bartlett points out, we hold near and dear to our hearts many things that are contributing to overpopulation: education, healthcare, immigration, sanitation, law and order. On the other side of the ledger, however, are forces that counter these: war, famine, disease, accidents, murder, abortion, and infanticide. His point is that we can either deal with the issue of overpopulation by changing our behaviours (and attitudes) or nature will do it for us; the choice is ours (or is it?).

_______________________

…here we can see the human dilemma—everything we regard as good makes the population problem worse, everything we regard as bad helps solve the problem. There is a dilemma if ever there was one.
Dr. Albert Bartlett

_______________________

A burgeoning population and its implications for human sustainability on a finite planet has been around for some time. Thomas Malthus’s treatise on the subject in 1798 being perhaps one of the most well known. Had Malthus known of the incredible boost to global carrying capacity that was about to be unleashed by the exploitation of a one-time windfall of concentrated and easily-transportable energy, petroleum, he may not have been so adamant in his conclusion that the end of growth was near-at-hand. But such are the chances when one attempts to foretell the future.

My own biases, prejudices, predilections, observations, and experiences, suggest this human experiment we are a part of will not end well[xii]. I believe that there is too much momentum, too many people with a sense of entitlement, too many sociocultural myths, too many elite protecting the status quo, and far too much ignorance for us to avoid a global collapse. Unless, of course, Zemphram Cochrane’s trans-warp engine test on April 4, 2063 at 11:15 am, after the Third World War (aka Eugenics Wars), is seen by a Vulcan survey expedition and makes First Contact, saving us from ourselves[xiii].

What typically follows social, political, economic collapse is a ‘dark age’ of some kind and is perhaps best known (at least within Western history) by the years that followed the collapse of the Roman Empire. But more on this in another post.

Despite all of the above, there are a variety of other variables that could push a teetering globe into a collapse scenario, particularly geopolitics or a natural disaster. No one knows. Prediction of the future is for meteorologists and economists, neither of which is very good beyond a couple of days for the former, and much less for the latter. I must admit, however, that Marion King Hubbert’s prediction of the coming demise of industrial civilization[xiv], along with the seminal text, The Limits to Growth[xv], are pretty good guesses in my books.

The one thing I am sure of, the more I learn, the more I am finding that I am ignorant of. Although I spent a career as an educator[xvi], I continue to be a student…and perhaps this diatribe is all just an elongated justification of my belief system, “a tale told by an idiot, full of sound and fury, signifying nothing”[xvii]

Olduvai (aka Steve Bull)


[i] Greer, J.M.. The Long Descent: A User’s Guide to the End of the Industrial Age. New Society Publishers, 2008. (ISBN 978-0-86571-609-4)
Kunstler, J. H.. The Long Emergency: Surviving the End of Oil, Climate Change, and Other Converging Catastrophes of the Twenty-First Century. Grove Press, 2009/2006/2005. (ISBN 978-0-8021-4249-8)
[ii] Diamond, J.. Collapse: How Societies Choose to Fail or Succeed. Penguin Books, 2005/2011. (ISBN 978-0-14-311700-1)
Orlov, D.. The Five Stages of Collapse: Survivor’s Toolkit. New Society Publishers, 2013. (ISBN 978-0-86571-736-7)
Ruppert, M.. Confronting Collapse: The Crisis of Energy and Money in a Post Oil World. Chelsea Green Publishing, 2009.  (ISBN 978-1-60358-164-3)
[iii] I use the following definition of collapse, as proposed by Joseph Tainter (see footnote below): “[It] is fundamentally a matter of the sociopolitical sphere. A society has collapsed when it displays a rapid, significant loss of an established level of sociopolitical complexity….To qualify as an instance of collapse a society must  have been at, or developing toward, a level of complexity for more than one or two generations…The collapse in turn must be rapid—taking no more than a few decades—and must entail a substantial loss of sociopolitical structure. Losses that are less severe, or take longer to occur, are to be considered cases of weakness and decline.” (p. 4)
[iv] Tainter, J.A.. The Collapse of Complex Societies. Cambridge University Press, 1988. (ISBN 978-0-521-38673-9)
[v] Diamond, J.. Ibid.
[vi] Orlov, D.. Ibid.
[vii] Catton, Jr., W.R.. Overshoot: The Ecological Basis of Revolutionary Change. University of Illinois Press, 1982. (ISBN 978-0-252-09988-4)
[viii] Ruppert, M.. Ibid.
[ix] Malthus, T.. An Essay on the Principle of Population as it Affects the Future Improvement of Society. J. Johnson, 1798.
[x] Take a good, long critical look at the world and its leaders. Do you have faith, enough faith that you would risk your own life and that of your family, in the leaders of this world to be capable of circumnavigating successfully the various crises that are erupting with greater magnitude and frequency, from climate change to geopolitical stresses to resource depletion to economic collapse? If you have that much faith in them, well good luck to you. Quite simply, I don’t. I believe they are incapable of managing these dilemmas and cascading failures of the various systems of industrialised civilisation will occur some time in our future. NO, I have no idea when.
[xi] Bartlett, A.. Arithmetic, Energy, and Population. (Transcript: http://www.albartlett.org/presentations/arithmetic_population_energy_transcript_english.html).
[xii] I must admit that my particular pessimistic perspective makes for an interesting dynamic between my spouse and I, for she is the eternal optimist who, as a practising educator, believes in the successful implementation of social engineering to prevent many of the negative consequences (I’ve just retired from the profession but have always been a ‘little’ critical of it, and authority; the latter, in no small part, likely the result of being the child of a police officer).
[xiii] Star Trek, First Contact. See http://en.wikipedia.org/wiki/Star_Trek:_First_Contact
[xiv] Hubbert, M.K.. Energy from fossil fuels. Science, Feburary 4, 1949. v.109, pp. 103-109.
[xv] Meadows, D., J. Randers, & D. Meadows. Limits to Growth: The 30-Year Update. Chelsea Green Publishing Company, 2004. (ISBN 978-1-931498-58-6)
[xvi] 9 years as a classroom teacher (grades 6-8), 13 as an administrator (K-8 school).
[xvii] Shakespeare. Macbeth (Act 5, Scene 5, lines 26-28)

 

The World Complex: A system doomed to fail

The World Complex: A system doomed to fail.

A system doomed to fail

In the broadest sense, there are three types of systems in the world.The first are simple systems which are characterized by only a few variables or agents, and which can be described by perhaps a handful of equations (or even one).

The second are systems which are characterized by disorganized complexity. These may consist of huge numbers of agents or variables, and their interactions cannot be described by simple equations; yet the overall system is well-described statistically through averages and can be described as being stochastic. Such systems are typically characterized by a stable equilibrium, provided there are no external shocks to the system. They are incapable of generating internal shocks or surprises. For example, you might consider the distribution of air molecules in a room. You may not be able to predict the motion of any particular air molecule, but you can be reasonable certain that the global population won’t do anything unexpected (like all move into one side of the room leaving a vacuum on the other side).

The third type of system is characterized by organized complexity. As the systems above, one may consist of many variables or agents, each of which is simple, but the system’s behaviour does not lend itself to statistical description because instead of the activities of each component dissolving into a background equilibrium, large-scale (even global scale) structure “emerges” instead of seething chaos. Along with these “emergent properties”, common features of such a system include multiple equilibria, adaptive behaviour, and feedbacks. There is no simple way to describe its behaviour, as much of the system’s history is bound up in its behaviour (what economists call “long memory”).

Complex systems, for all their unpredictability are remarkably resilient. The resilience arises from the way in which this type of system interacts with its environment–through the individual actions of its simple components, the system is able to gather information about its environment and modify its operations to adapt. Yet this adaptation and evolution all occur in the absence of central control.

The above descriptions–and characterizations of three types of systems–go back to 1948. Unfortunately it appears that Dr. Weaver was too optimistic when he recommended science develop an understanding of the third type of system “over the next 50 years”. Here we are 65 years later and we have made only basic improvements in our understanding of such systems.

What has gone wrong? I think it is partly due to the limitations of the Newtonian paradigm on which science has rested over the past few hundred years.

Back to Weaver. He asks,

How can currency be wisely and effectively stabilized? To what extent is it safe to depend on the free interplay of such forces as supply and demand? To what extent must systems of economic control be employed to prevent the wide swings from prosperity to depression? These are also obviously complex problems, and they too involve analyzing systems which are organic wholes, with their parts in close interrelation.

The Fed has answered.

Sixty-five years ago, economics was known to be a complex, organized system. Yet today, the Fed continues to set policy as if the economy were a stochastic system that could be sledgehammered into whatever equilibrium state is deemed politically expedient. I would further argue that the Fed has not managed to succeed even in hammering the economy into a desirable equilibrium, but rather has mastered the ability to create artificial statistics to “justify” its actions.

The system is doomed to fail, because the resilience of natural complex systems requires freedom of action for its individual components. We do not observe resilient complex systems with central control. Yet central control is the dominant ideology of our present political and economic systems. Total control, with a vanishingly thin veneer of democracy, ephemeral as the morning dew.

Guest Post: The Gathering Storm | Zero Hedge

Guest Post: The Gathering Storm | Zero Hedge. (source)

Doing more of what failed spectacularly will not save the day a second time, as the scale required to create yet more phantom collateral and more asset bubbles will collapse the system.

The financial storm clouds are gathering, ominously darkening the horizon. Though the financial media and the organs of state propaganda continue forecasting blue skies of recovery and rising corporate profits, the factual evidence belies this rosy forecast: internal measures of financial and economic activity are weakening across the globe as the state-central bank solutions to all ills–massive increases in credit creation, leverage and deficit spending–have failed to address any of the structural causes of the 2008 Global Financial Meltdown.

This failure to address the causes of 2008 Global Financial Meltdown is disastrous in and of itself–but the status quo has magnified the coming disaster by scaling up the very causes of the 2008 Global Financial Meltdown: excessive credit expansion, misallocation of capital on a grand scale, an opaque shadow banking system constructed of excessive leverage and a dependence on phantom collateral, i.e. risks and assets that are systemically mispriced to skim stupendous profits for financiers, bankers and their political enablers.

This is what I have called doing more of what has failed spectacularly.

Extremes inevitably lead to collapse, but even the most distorted system has some feedback mechanisms that attempt to counter the momentum toward disaster. Just as the body will try to mitigate the negative consequences of a diet of greasy fast food, our grossly distorted financial and political systems still retain some modest feedback loops that attempt to mitigate rising risks.

These interactive forces make it impossible to predict the moment of collapse, even as systemic failure remains inevitable. Precisely when the heart of an obese, unfit person who eats nothing but fast food will give out cannot be predicted, but what can be predicted is the odds of systemic failure rise with every passing day.

Doing more of what has failed spectacularly–inflating new asset bubbles in housing, stocks and bonds via quantitative easing, obfuscating financial skimming operations with thousands of pages of new regulations, and so on–is the equivalent of pushing an obese, unfit person to run uphill. Rather than repair the system, doing more of what has failed further stresses the system.

But even if the financial system were cleansed of bad debt and phantom collateral, the status quo would remain only partially repaired. For it’s not just the financial system that has reached the point of negative return: the entire economic foundation of the developed world–credit-dependent consumerism–is as bankrupt and broken as the financial system that fuels it.

The state’s response to this economic endgame is depersonalized welfare, both corporate and individual. When favored sectors can’t succeed in the open market, the state enforces cartel-capitalism that enriches the corporations at the expense of the citizenry. When the cartel-state economy no longer creates paying work for the citizenry, the state issues social welfare benefits, in effect paying people to stay home and amuse themselves.

This destroys both free enterprise on the corporate level and the source of individual and social meaning, i.e. the opportunity to contribute in a meaningful way to one’s community, family and trade/skill.

The status quo is thus not just financially bankrupt–it is morally bankrupt as well.

The status quo is as intellectually bankrupt as it is financially bankrupt. Our leadership cannot conceive of any course of action other than central bank credit creation and expanding state control of the economy and social benefits, paid for with money borrowed from future generations.

Let’s take a wild guess that the obese, unfit person won’t make it up the second hill, never mind the third or fourth one. The status quo responded to the financial heart attack of 2008 by doing more of what had failed spectacularly. That injection of trillions of dollars, euros, yen, renminbi, quatloos, etc. revived the global financial system in the same way a shot of nitroglycerin resolves a life-threatening crisis: it doesn’t fix the causes of the crisis, it simply gives the system some additional time.

The next global financial storm is already gathering on the horizon. Doing more of what failed spectacularly will not save the day a second time, as the scale required to create yet more phantom collateral and more asset bubbles will collapse the system.

Intellectual, moral and financial bankruptcy all go hand in hand. There isn’t just one storm gathering on the horizon–there are three, each adding force and fury to the other two.

 

 

charles hugh smith-Why Centralization Leads to Collapse

charles hugh smith-Why Centralization Leads to Collapse.

 

%d bloggers like this: