The Era of Breakdown

The fourth of the stages in the sequence of collapse we’ve been discussing is the era of breakdown. (For those who haven’t been keeping track, the first three phases are the eras of pretense, impact, and response; the final phase, which we’ll be discussing next week, is the era of dissolution.) The era of breakdown is the phase that gets most of the press, and thus inevitably no other stage has attracted anything like the crop of misperceptions, misunderstandings, and flat-out hokum as this one.

The era of breakdown is the point along the curve of collapse at which business as usual finally comes to an end. That’s where the confusion comes in. It’s one of the central articles of faith in pretty much every human society that business as usual functions as a bulwark against chaos, a defense against whatever problems the society might face. That’s exactly where the difficulty slips in, because in pretty much every human society, what counts as business as usual—the established institutions and familiar activities on which everyone relies day by day—is the most important cause of the problems the society faces, and the primary cause of collapse is thus quite simply that societies inevitably attempt to solve their problems by doing all the things that make their problems worse.

The phase of breakdown is the point at which this exercise in futility finally grinds to a halt. The three previous phases are all attempts to avoid breakdown: in the phase of pretense, by making believe that the problems don’t exist; in the phase of impact, by making believe that the problems will go away if only everyone doubles down on whatever’s causing them; and in the phase of response, by making believe that changing something other than the things that are causing the problems will fix the problems. Finally, after everything else has been tried, the institutions and activities that define business as usual either fall apart or are forcibly torn down, and then—and only then—it becomes possible for a society to do something about its problems.

It’s important not to mistake the possibility of constructive action for the inevitability of a solution. The collapse of business as usual in the breakdown phase doesn’t solve a society’s problems; it doesn’t even prevent those problems from being made worse by bad choices. It merely removes the primary obstacle to a solution, which is the wholly fictitious aura of inevitability that surrounds the core institutions and activities that are responsible for the problems. Once people in a society realize that no law of God or nature requires them to maintain a failed status quo, they can then choose to dismantle whatever fragments of business as usual haven’t yet fallen down of their own weight.

That’s a more important action than it might seem at first glance. It doesn’t just put an end to the principal cause of the society’s problems. It also frees up resources that have been locked up in the struggle to keep business as usual going at all costs, and those newly freed resources very often make it possible for a society in crisis to transform itself drastically in a remarkably short period of time. Whether those transformations are for good or ill, or as usually happens, a mixture of the two, is another matter, and one I’ll address a little further on.

Stories in the media, some recent, some recently reprinted, happen to have brought up a couple of first-rate examples of the way that resources get locked up in unproductive activities during the twilight years of a failing society. A California newspaper, for example, recently mentioned that Elon Musk’s large and much-ballyhooed fortune is almost entirely a product of government subsidies. Musk is a smart guy; he obviously realized a good long time ago that federal and state subsidies for technology was where the money was at, and he’s constructed an industrial empire funded by US taxpayers to the tune of many billions of dollars. None of his publicly traded firms has ever made a profit, and as long as the subsidies keep flowing, none of them ever has to; between an overflowing feed trough of government largesse and the longstanding eagerness of fools to be parted from their money by way of the stock market, he’s pretty much set for life.

This is business as usual in today’s America. An article from 2013 pointed out, along the same lines, that the profits made by the five largest US banks were almost exactly equal to the amount of taxpayer money those same five banks got from the government. Like Elon Musk, the banks in question have figured out where the money is, and have gone after it with their usual verve; the revolving door that allows men in suits to shuttle back and forth between those same banks and the financial end of the US government doesn’t exactly hinder that process. It’s lucrative, it’s legal, and the mere fact that it’s bankrupting the real economy of goods and services in order to further enrich an already glutted minority of kleptocrats is nothing anyone in the citadels of power worries about.

A useful light on a different side of the same process comes from an editorial (in PDF) which claims that something like half of all current scientific papers are unreliable junk. Is this the utterance of an archdruid, or some other wild-eyed critic of science? No, it comes from the editor of Lancet, one of the two or three most reputable medical journals on the planet. The managing editor of  The New England Journal of Medicine, which has a comparable ranking to Lancet, expressed much the same opinion of the shoddy experimental design, dubious analysis, and blatant conflicts of interest that pervade contemporary scientific research.

Notice that what’s happening here affects the flow of information in the same way that misplaced government subsidies affect the flow of investment. The functioning of the scientific process, like that of the market, depends on the presupposition that everyone who takes part abides by certain rules. When those rules are flouted, individual actors profit, but they do so at the expense of the whole system: the results of scientific research are distorted so that (for example) pharmaceutical firms can profit from drugs that don’t actually have the benefits claimed for them, just as the behavior of the market is distorted so that (for example) banks that would otherwise struggle for survival, and would certainly not be able to pay their CEOs gargantuan bonuses, can continue on their merry way.

The costs imposed by these actions are real, and they fall on all other participants in science and the economy respectively. Scientists these days, especially but not only in such blatantly corrupt fields as pharmaceutical research, face a lose-lose choice between basing their own investigations on invalid studies, on the one hand, or having to distrust any experimental results they don’t replicate themselves, on the other. Meanwhile the consumers of the products of scientific research—yes, that would be all of us—have to contend with the fact that we have no way of knowing whether any given claim about the result of research is the product of valid science or not. Similarly, the federal subsidies that direct investment toward politically savvy entrepreneurs like Elon Musk, and politically well-connected banks such as Goldman Sachs, and away from less parasitic and more productive options distort the entire economic system by preventing the normal workings of the market from weeding out nonviable projects and firms, and rewarding the more viable ones.

Turn to the  historical examples we’ve been following for the last three weeks, and distortions of the same kind are impossible to miss. In the US economy before and during the stock market crash of 1929 and its long and brutal aftermath, a legal and financial system dominated by a handful of very rich men saw to it that the bulk of the nation’s wealth flowed uphill, out of productive economic activities and into speculative ventures increasingly detached from the productive economy. When the markets imploded, in turn, the same people did their level best to see to it that their lifestyles weren’t affected even though everyone else’s was. The resulting collapse in consumer expenditures played a huge role in driving the cascading collapse of the US economy that, by the spring of 1933, had shuttered every consumer bank in the nation and driven joblessness and impoverishment to record highs.

That’s what Franklin Roosevelt fixed. It’s always amused me that the people who criticize FDR—and of course there’s plenty to criticize in a figure who, aside from his far greater success as a wartime head of state, can best be characterized as America’s answer to Mussolini—always talk about the very mixed record of the economic policies of his second term. They rarely bother to mention the Hundred Days, in which FDR stopped a massive credit collapse in its tracks. The Hundred Days and their aftermath are the part of FDR’s presidency that mattered most; it was in that brief period that he slapped shock paddles on an economy in cardiac arrest and got a pulse going, by violating most of the rules that had guided the economy up to that time. That casual attitude toward economic dogma is one of the two things his critics have never been able to forgive; the other is that it worked.

In the same way, France before, during, and immediately after the Revolution was for all practical purposes a medieval state that had somehow staggered its way to the brink of the nineteenth century. The various revolutionary governments that succeeded one another in quick succession after 1789 made some badly needed changes, but it was left to Napoléon Bonaparte to drag France by the scruff of its collective neck out of the late Middle Ages. Napoléon has plenty of critics—and of course there’s plenty to criticize in a figure who was basically what Mussolini wanted to be when he grew up—but the man’s domestic policies were by and large inspired. To name only two of his most important changes, he replaced the sprawling provinces of medieval France with a system of smaller and geographically meaningful départements, and abolished the entire body of existing French law in favor of a newly created legal system, the Code Napoléon. When he was overthrown, those stayed; in fact, a great many other countries in Europe and elsewhere proceeded to adopt the Code Napoléon in place of their existing legal systems.  There were several reasons for this, but one of the most important was that the new Code simply made that much more sense.

Both men were able to accomplish what they did, in turn, because abolishing the political, economic, and cultural distortions imposed on their respective countries by a fossilized status quo freed up all the resources that had bene locked up in maintaining those distortions. Slapping a range of legal barriers and taxes on the more egregious forms of speculative excess—another of the major achievements of the Roosevelt era—drove enough wealth back into the productive economy to lay the foundations of America’s postwar boom; in the same way, tipping a galaxy of feudal customs into history’s compost bin transformed France from the economic basket case it was in 1789 to the conqueror of Europe twenty years later, and the succesful and innovative economic and cultural powerhouse it became during most of the nineteenth century thereafter.

That’s one of the advantages of revolutionary change.  By breaking down existing institutions and the encrusted layers of economic parasitism that inevitably build up around them over time, it reliably breaks loose an abundance of resources that were not available in the prerevolutionary period. Here again, it’s crucial to remember that the availability of resources doesn’t guarantee that they’ll be used wisely; they may be thrown away on absurdities of one kind or another. Nor, even more critically, does it mean that the same abundance of resources will be available indefinitely. The surge of additional resources made available by catabolizing old and corrupt systems is a temporary jackpot, not a permanent state of affairs. That said, when you combine the collapse of fossilized institutions that stand in the way of change, and a sudden rush of previously unavailable resources of various kinds, quite a range of possibilities previously closed to a society suddenly come open.

Applying this same pattern to the crisis of modern industrial civilization, though, requires attention to certain inescapable but highly unwelcome realities. In 1789, the problem faced by France was the need to get rid of a thousand years of fossilized political, economic, and social institutions at a time when the coming of the industrial age had made them hopelessly dysfunctional. In 1929, the problem faced by the United States was the need to pry the dead hand of an equally dysfunctional economic orthodoxy off the throat of the nation so that its economy would actually function again. In both cases, the era of breakdown was catalyzed by a talented despot, and was followed, after an interval of chaos and war, by a period of relative prosperity.

We may well get the despot this time around, too, not to mention the chaos and war, but the period of prosperity is probably quite another matter. The problem we face today, in the United States and more broadly throughout the world’s industrial societies, is that all the institutions of industrial civilization presuppose limitless economic growth, but the conditions that provided the basis for continued economic growth simply aren’t there any more. The 300-year joyride of industrialism was made possible by vast and cheaply extractable reserves of highly concentrated fossil fuels and other natural resources, on the one hand, and a biosphere sufficiently undamaged that it could soak up the wastes of human industry without imposing burdens on the economy, on the other. We no longer have either of those requirements. 

With every passing year, more and more of the world’s total economic output has to be diverted from other activities to keep fossil fuels and other resources flowing into the industrial world’s power plants, factories, and fuel tanks; with every passing year, in turn, more and more of the world’s total economic output has to be diverted from other activities to deal with the rising costs of climate change and other ecological disruptions. These are the two jaws of the trap sketched out more than forty years ago in the pages of The Limits to Growth, still the most accurate (and thus inevitably the most savagely denounced) map of the predicament we face. The consequences of that trap can be summed up neatly: on a finite planet, after a certain point—the point of diminishing returns, which we’ve already passed—the costs of growth rise faster than the benefits, and finally force the global economy to its knees.

The task ahead of us is thus in some ways the opposite of the one that France faced in the aftermath of 1789. Instead of replacing a sclerotic and failing medieval economy with one better suited to a new era of industrial expansion, we need to replace a sclerotic and failing industrial economy with one better suited to a new era of deindustrial contraction. That’s a tall order, no question, and it’s not something that can be achieved easily, or in a single leap. In all probability, the industrial world will have to pass through the whole sequence of phases we’ve been discussing several times before things finally bottom out in the deindustrial dark ages to come.

Still, I’m going to shock my fans and critics alike here by pointing out that there’s actually some reason to think that positive change on more than an individual level will be possible as the industrial world slams facefirst into the limits to growth. Two things give me that measured sense of hope. The first is the sheer scale of the resources locked up in today’s spectacularly dysfunctional political, economic, and social institutions, which will become available for other uses when those institutions come apart. The $83 billion a year currently being poured down the oversized rathole of the five biggest US banks, just for starters, could pay for a lot of solar water heaters, training programs for organic farmers, and other things that could actually do some good.

Throw in the resources currently being chucked into all of the other attempts currently under way to prop up a failing system, and you’ve got quite the jackpot that could, in an era of breakdown, be put to work doing things worth while. It’s by no means certain, as already noted, that these resources will go to the best possible use, but it’s all but certain that they’ll go to something less stunningly pointless than, say, handing Elon Musk his next billion dollars.

The second thing that gives me a measured sense of hope is at once subtler and far more profound. These days, despite a practically endless barrage of rhetoric to the contrary, the great majority of Americans are getting fewer and fewer benefits from the industrial system, and are being forced  to pay more and more of its costs, so that a relatively small fraction of the population can monopolize an ever-increasing fraction of the national wealth and contribute less and less in exchange. What’s more, a growing number of Americans are aware of this fact. The traditional schism of a collapsing society into a dominant minority and an internal proletariat, to use Arnold Toynbee’s terms, is a massive and accelerating social reality in the United States today.

As that schism widens, and more and more Americans are forced into the Third World poverty that’s among the unmentionable realities of public life in today’s United States, several changes of great importance are taking place. The first, of course, is precisely that a great many Americans are perforce learning to live with less—not in the playacting style popular just now on the faux-green end of the privileged classes, but really, seriously living with much less, because that’s all there is. That’s a huge shift and a necessary one, since the absurd extravagance many Americans consider to be a normal lifestyle is among the most important things that will be landing in history’s compost heap in the not too distant future.

At the same time, the collective consensus that keeps the hopelessly dysfunctional institutions of today’s status quo glued in place is already coming apart, and can be expected to dissolve completely in the years ahead. What sort of consensus will replace it, after the inevitable interval of chaos and struggle, is anybody’s guess at this point—though it’s vanishingly unlikely to have anything to do with the current political fantasies of left and right. It’s just possible, given luck and a great deal of hard work, that whatever new system gets cobbled together during the breakdown phase of our present crisis will embody at least some of the values that will be needed to get our species back into some kind of balance with the biosphere on which our lives depend. A future post will discuss how that might be accomplished—after, that is, we explore the last phase of the collapse process: the era of dissolution, which will be the theme of next week’s post.

Photo credit: "Elon Musk, Tesla Factory, Fremont (CA, USA) (8765031426)" by Maurizio Pesce from Milan, Italia – Elon Musk, Tesla Factory, Fremont (CA, USA). Licensed under CC BY 2.0 via Wikimedia Commons.