Nothing
is as permanent as we imagine--especially super-complex, super-costly,
super-asymmetric and super-debt-dependent systems.
Check
which signs of Imperial decline you see around you: The
hubris of an increasingly incestuous and out-of-touch leadership; dismaying
extremes of wealth inequality; self-serving, avaricious Elites; rising
dependency of the lower classes on free Bread and Circuses provided by a
government careening toward insolvency due to stagnating tax revenues and vast
over-reach--let's stop there to catch our breath. Check, check, check and
check.
Sir
John Glubb listed a few others in his seminal essay on the end of empiresThe Fate of
Empires, what might be called the dynamics
of decadence:
(a) A growing love of money as an end in itself: Check.
(b) A lengthy period of wealth and ease, which makes people
complacent. They lose their edge; they forget the traits (confidence, energy,
hard work) that built their civilization: Check.
(c) Selfishness and self-absorption: Check.
(d) Loss of any sense of duty to the common good: Check.
Glubb included the following in his list of the characteristics
of decadence:
-- an increase in frivolity, hedonism, materialism and the
worship of unproductive celebrity (paging any Kardashians in the venue...)
-- a loss of social cohesion
-- willingness of an increasing number to live at the expense of
a bloated bureaucratic state
Historian
Peter Turchin, whom I have often excerpted here, listed three disintegrative
forces that gnaw away the fibers of an Imperial economy and social order:
1. Stagnating real wages due to oversupply of labor
2. overproduction of parasitic Elites
3. Deterioration of central state finances
To
these lists I would add a few more that are especially visible in the current
Global Empire of Debt that encircles the globe and encompasses nations of all
sizes and political/cultural persuasions:
1.
An absurdly heightened sense of refinement as the wealth of
the top 5% has risen so mightily as a direct result of financialization and
globalization that the top .1% has been forced to seek ever more extreme
refinements to differentiate the Elite class (financial-political royalty) from
financial nobility (top .5% or so), the technocrat class (top 5%), the aspirant
class (next 15%) and everyone below (the bottom 80%).
Now that just about any technocrat/ member of the lower reaches
of the financial nobility can afford a low-interest loan on a luxury auto,
wealthy aspirants must own super-cars costing $250,000 and up.
A mere yacht no longer differentiates financial royalty from
lower-caste financial Nobles, so super-yachts are de riguer, along with
extremes such as private islands, private jets in the $80 million-each range,
and so on.
Even mere technocrat aspirants routinely spend $150 per plate
for refined dining out and take extreme vacations to ever more remote locales
to advance their social status.
Examples abound of this hyper-inflation of refinement as the
wealth of the top 5% has skyrocketed.
2.
The belief in the permanence of the status quo has reached quasi-religious
levels of faith. The possibility that the entire financialized, politicized
circus of extremes might actually be nothing more than a sand castle that's
dissolving in the rising tides of history is not just heresy--it doesn't enter
the minds of those reveling in refinement or those demanding more Bread and
Circuses (Universal Basic Income, etc.)
3.
Luxury, not service, defines the financial-political Elites. As
Turchin pointed out in his book on the decline of empires, in the expansionist,
integrative eras of empires, Elites based their status on service to the Common
Good and the defense (or expansion) of the Empire.
While there are still a few shreds of noblesse
oblige in the tattered banners of the financial elites, the vast
majority of the Elites classes are focused on scooping up as much wealth and
power as they can in the shortest possible time, with the goal being not to
serve society or the Common Good but to enter the status competition game with
enough wealth to afford the refined dining, luxury travel to remote locales,
second and third homes in exotic but safe hideaways, and so on.
4.
An unquestioned faith in the unlimited power of the state and central bank.The
idea that the mightiest governments and central banks might not be able
to print their way of our harm's way,
that is, create as much money and credit as is needed to paper over any spot of
bother, is unthinkable for the vast majority of the populace, Elites and
debt-serfs alike.
That
all this newly issued currency and credit is nothing but claims on
future production of goods and services and rising productivity never
enters the minds of the believers in unlimited state/bank powers. We have been
inculcated with the financial equivalent of the Divine Powers of the Emperor:
the government and central bank possess essentially divine powers to overcome
any problem, any crisis and any conflict simply by creating more money,
in whatever quantities are deemed necessary.
If $1 trillion in fresh currency will do the trick--no problem!
$10 trillion? No problem! $100 trillion? No problem! there is no upper limit on
how much new currency/credit the government and central bank can create.
That
there might be limits on the efficacy of this money-creation never enters the
minds of the faithful. That pushing currency-credit
creation above the limits of efficacy might actually trigger the unraveling of
the state-central bank's vaunted powers never occurs to believers in the unlimited
reach of central states/banks.
The possibility that the central state/bank's powers are
actually quite limited is blasphemy in an era in which the majority of the
Elites and commoners alike depend on the "free money" machinery of
the central state/bank for their wealth and livelihoods.
It
is instructive to ponder the excesses of private wealth and political
dysfunction of the late Roman Empire with the present-day excesses of private
wealth and political dysfunction. As Turchin and others
have documented, where the average wealth of a Roman patrician in the Republic
(the empire's expansionist, integrative phase) was perhaps 10-20 times the
free-citizen commoner's wealth, by the disintegrative, decadent phase of
imperial decay, the Elites held wealth on the scale of 10,000 times the wealth
of the typical commoner. Elite villas were more like small villages centered
around the excesses of luxury than mere homes for the wealthy and their
household servants. Here is a commentary drawn from Turchin's work:
"An
average Roman noble of senatorial class had property valued in the neighborhood
of 20,000 Roman pounds of gold. There was no 'middle class' comparable to the
small landholders of the third century B.C.; the huge majority of the
population was made up of landless peasants working land that belonged to
nobles. These peasants had hardly any property at all, but if we estimate it
(very generously) at one tenth of a pound of gold, the wealth differential
would be 200,000! Inequality grew both as a result of the rich getting richer
(late imperial senators were 100 times wealthier than their Republican
predecessors) and those of the middling wealth becoming poor."
Following in Ancient Rome's Footsteps: Moral Decay, Rising Wealth
Inequality(September 30, 2015)
We
can be quite confident that these powerful elites reckoned the Empire was
permanent and its power to secure their wealth and power was effectively
unlimited. But alas, their fantastic wealth vanished along with the
rest of the centralized, over-extended, complex and costly Imperial structures.
There is a peculiarly widespread belief that Elites are so smart
and powerful that they always manage to evade the collapse of the empires that
created and protected their wealth. But there is essentially no evidence for
this belief when eras truly change.
Yes, Elites have proven to be adept at shifting with the
political winds; thus the guestbooks of French chateaux were filled with the
names of Nazi dignitaries during the German occupation of France, and with the
names of Allied bigwigs after the war ended the 1,000-year Reich.
But
the complete collapse of the financial system and centralized power is not a
war or financial crisis--these are storm waters which the Elites
have the wherewithal to survive. But when a tsunami disintegrates the entire
structure and carries it out to a nameless sea as flotsam and jetsam, there is
no transfer of wealth from the Old to the New.
The Roman Elites did not become Barbarian elites who just so
happened to own the same villas and vast estates they did when they wore togas
and dined on super-refined delicacies. They were pushed aside along with
everything that supported their wealth and power.
Nothing
is quite as permanent as we imagine--especially super-complex,
super-costly, super-asymmetric and super-debt-dependent state/financial
systems.
My new book Money and Work Unchained is now $6.95 for the Kindle ebook and $15 for the print edition.