It’s a beautiful world we live in, a sweet romantic place. Beautiful people everywhere, the way they show they care, makes me want to say, It’s a beautiful world. It’s a beautiful world. It’s a beautiful world for you. For you. For you. It’s not for me. These lyrics were written by Gerald Casale and Mark Mothersbaugh, founders of the band Devo, and appeared on their 1981 album New Traditionalists. Devo’s songs tend to be dark, as this one turns out to be. Casale and Mothersbaugh were both at Kent State University when four unarmed students were shot to death by the US National Guard. This was where they developed the idea that humans were devolving rather than evolving, a dark concept from which the band gets its name.
Jared Dillian penned an interesting commentary the other day (https://www.mauldineconomics.com/the-10th-man/world-war-iii). If you add the current Administration’s new $3 trillion spending proposal with the $1.9 trillion in spending that was authorized a few weeks ago you get $4.9 trillion borrowed by the Federal Government in just three months. This is, of course, above and beyond the normal trillion dollars that the government borrows in a “normal” year. Dillian compared this to all of the Federal spending during the Second World War, which he calculated to be about $4 trillion in today’s dollars. In other word’s the Administration plans to dump the entire amount of money that it took to defeat the Axis into the economy in just a few short weeks.
At the same time, the Federal Reserve is monetizing this debt, meaning that rather than being based on production, roughly 25 percent of the nation’s entire GDP in 2021 will be based on money borrowed by the Federal government and spent on – well, nobody really knows do they?
There is simply nothing in economic history that can compare to this. Even economies like Argentina are not this fiscally irresponsible. This makes economic forecasts and models go loopy. All modeling, be it financial modeling, economic modeling, opinion modeling, are based on past data. No matter how hard we try, we predict the future based on what happened in the past. Since nothing like this has ever occurred, it is difficult to really determine what the country’s future will look like, even in the short term. Most economists believe that there will be a big spike in inflation, something that is showing up in the statistics already, and the forecasts suggest that that the economy will grow very slowly after the highs brought on by the injection of all of the borrowing. But in reality, nobody knows. This is an experiment with the future that is based simply on politics.
Unfortunately, even if politicians were not experimenting with the economy, there is no guarantee that western civilization will continue for the next 400 years, or for that matter even come out of the COVID-19 scare. Complex societies like ours are not predetermined to last forever, and the collapse of societieshas happened since humanity first crawled out of the primeval forests.
According to Luke Kemp, at the Centre for the Study of Existential Risk at the University of Cambridge, humanity’s past is marked by recurring failure, and collapse may be a normal phenomenon for civilizations. Kemp identified four major causes of collapse. These were:
· Climatic Change: Not the run of the mill hysteria over global warming, but abrupt changes, generally drought.
· Environmental Degradation: Including excessive deforestation, water pollution, soil degradation and the loss of biodiversity.
· Inequality and Oligarchy: Which cause social distress and handicaps a society’s ability to respond to problems.
· Complexity: The returns from complexity eventually reach a point of diminishing returns. After this point, collapse will eventually ensue.
· External Shocks: What Kemp describes as the “four horsemen” of war, natural disasters, famine and plagues.
· Random Bad Luck: Statistical analysis on empires suggests that collapse can be random and independent of age.
In college I took an economics class that examined the work of the historian Arnold Toynbee, and his 12-volume A Study of History. Toynbee’s treatise examined the rise and fall of 28 civilizations and concluded that they collapse from the inside. He theorized that every civilization passes through 5 phases that eventually lead to disintegration when the elite class forms what he called a universal state that stifles debate and political creativity. Sound familiar?
In his The Evolution of Civilizations, Historian Carroll Quigley expanded upon Toynbee, arguing that disintegration occurs when social structures that were devleoped to meet actual needs, morph into institutions, which serve their own interest at the expense of society. Again, sound familiar?
Add to this the research of Peter Turchin that we have discussed in the past. Turchin identified two cycles of unrest in societies throughout history. The long cycle last about 200 or 300 years and is tied to economic inequality and its relation to political stability. The shorter cycle is about 50 years long and consists of two generations. According to Turchin, in 2020, the U.S. would witness a period of general unrest because the first cycle coincides with the turbulent part of the second in around 2020.
There are other models of societal cycles, including something called the Energy Return on Investment (EROI). This refers to the ratio between the amount of energy produced relative to the energy needed to obtain it. The EROI appears to have a point of diminishing returns. Charles A. S. Hall at the State University of New York, found that the EROI needs to be above 3:1 to sustain a modern society. Today, the EROI of petroleum, the most efficient form of energy is about 10:1, down from 100:1 a century ago. Modern society has been able to grow and develop to its complexity and size because of cheap petroleum energy, however it now faces the challenge of declining EROI for its most useful energy source, and low EROI for alternatives like solar and wind energy that often consume more resources than they produce.
The research of societal collapse does not bode well for western civilization in the 21st century. Nearly all the perceived causes of collapse seem to be raising their head at the same time. This is a chilling prospect. Casale and Mothersbaugh may have been prophetic in their development of the idea of devolution. Hopefully not. Hopefully it will be a beautiful world we live in.
