As the world economy crashes against debt and resource limits, more and more countries are responding by attempting to salvage what are actually their most expendable features—corrupt, insolvent banks and bloated militaries—while leaving the majority of their people to languish in “austerity.” The result, predictably, is a global uprising. This current set of conditions and responses will lead, sooner or later, to social as well as economic upheaval—and a collapse of the support infrastructure on which billions depend for their very survival.
Nations could, in principle, forestall social collapse by providing the basics of existence (food, water, housing, medical care, family planning, education, employment for those able to work, and public safety) universally and in a way that could be sustained for some time, while paying for this by deliberately shrinking other features of society—starting with military and financial sectors—and by taxing the wealthy. The cost of covering the basics for everyone is within the means of most nations. Providing human necessities would not remove all fundamental problems now converging (climate change, resource depletion, and the need for fundamental economic reforms), but it would provide a platform of social stability and equity to give the world time to grapple with deeper, existential challenges.
Unfortunately, many governments are averse to this course of action. In fact, they will most likely continue to do what they are doing now—cannibalizing the resources of society at large in order to prop up megabanks and military establishments.
Even if they do provide universal safety nets, ongoing economic contraction may still likely result in conflict, though in this instance it would arise from groups opposed to the perceived failures of “big government.”
In either instance, it will increasingly be up to households and communities to provide the basics for themselves while reducing their dependence upon, and vulnerability to, centralized systems of financial and governmental power. This is a strategy that will require sustained effort and one that will in many cases be discouraged and even criminalized by national authorities.
The decentralization of food, finance, education, and other basic societal support systems has been advocated for decades by theorists on the far left and far right of the political spectrum. Some efforts toward decentralization (such as the local food movement) have resulted in the development of niche markets. However, here we are describing not just the incremental growth of social movements or marginal industries, but what may become the signal economic and social trend for the remainder of the 21st century—a trend that is currently ignored and resisted by governmental, economic, and media elites who can’t imagine an alternative beyond the dichotomies of free enterprise versus planned economy, or Keynesian stimulus versus austerity.
The decentralized provision of basic necessities is not likely to flow from a utopian vision of a perfect or even improved society (as have some social movements of the past). It will emerge instead from iterative human responses to a daunting and worsening set of environmental and economic problems, and it will in many instances be impeded and opposed by politicians, bankers, and industrialists. It is this contest between traditional power elites on one hand, and growing masses of disenfranchised poor and formerly middle-class people attempting to provide the necessities of life for themselves in the context of a shrinking economy, that is shaping up to be the fight of the century.
2. When civilizations decline
In his benchmark 1988 book The Collapse of Complex Societies, archaeologist Joseph Tainter explained the rise and demise of civilizations in terms of complexity. He used the word complexity to refer to “the size of a society, the number and distinctiveness of its parts, the variety of specialized social roles that it incorporates, the number of distinct social personalities present, and the variety of mechanisms for organizing these into a coherent, functioning whole.”1
Civilizations are complex societies organized around cities; they obtain their food from agriculture (field crops), use writing and mathematics, and maintain full-time division of labor. They are centralized, with people and resources constantly flowing from the hinterlands toward urban hubs. Thousands of human cultures have flourished throughout the human past, but there have been only about 24 civilizations. And all (except our current global industrial civilization—so far) have collapsed.
Tainter describes the growth of civilization as a process of investing societal resources in the development of ever-greater complexity in order to solve problems. For example, in village-based tribal societies an arms race between tribes can erupt, requiring each village to become more centralized and complexly organized in order to fend off attacks. But complexity costs energy. As Tainter puts it, “More complex societies are costlier to maintain than simpler ones and require higher support levels per capita.” Since available energy and resources are limited, a point therefore comes when increasing investments become too costly and yield declining marginal returns. Even the maintenance of existing levels of complexity costs too much (citizens may experience this as onerous levels of taxation), and a general simplification and decentralization of society ensues—a process colloquially referred to as collapse.
During such times societies typically see sharply declining population levels, and the survivors experience severe hardship. Elites lose their grip on power. Domestic revolutions and foreign wars erupt. People flee cities and establish new, smaller communities in the hinterlands. Governments fall and new sets of power relations emerge.
It is frightening to think about what collapse would mean for our current global civilization. Nevertheless, as we are about to see, there are good reasons for concluding that it is reaching limits of centralization and complexity, that marginal returns on investments in complexity are declining, and that simplification and decentralization are inevitable.
Thinking in terms of simplification, contraction, and decentralization is more accurate and helpful, and probably less scary, than contemplating collapse. It also opens avenues for foreseeing, reshaping, and even harnessing inevitable social processes as to minimize hardship and maximize possible benefits.
3. The premise—why contraction, simplification, and decentralization are inevitable
The premise that a simplification of global industrial civilization is soon inevitable is the summarized conclusion of a robust discourse developed in scores of books and hundreds of scientific papers during the past four decades, drawing upon developments in the studies of ecology, the history of civilizations, the economics of energy, and systems theory. This premise can be stated as follows:
- The dramatic increase in societal complexity seen during the past two centuries (measured, for example, in a relentless trend toward urbanization and soaring volumes of trade) resulted primarily from increasing rates of energy flow for manufacturing and transport. Fossil fuels provided by far the biggest energy subsidy in human history, and were responsible for industrialization, urbanization, and massive population growth.
- Today, as conventional fossil fuels rapidly deplete, world energy flows appear set to decline. While there are enormous amounts of unconventional fossil fuels yet to be exploited, these will be so costly to extract—in monetary, energy, and environmental terms—that continued growth in available fossil energy supplies is unlikely; meanwhile alternative energy sources remain largely undeveloped and will require extraordinary levels of investment if they are to make up for declines in fossil energy.
- Declining rates of energy flow and declining energy quality will have predictable direct effects—higher energy prices, the need for increased energy efficiency in all sectors of society, and the need for the direction of an ever-greater proportion of increasingly scarce investment capital toward the energy sector.
- Some of the effects of declining energy will be non-linear and unpredictable, and could lead to a general collapse of civilization. Economic contraction will not be as gradual and orderly as economic expansion has been. The indirect and non-linear effects of declining energy may include an uncontrollable and catastrophic unwinding of the global system of credit, finance, and trade, or the dramatic expansion of warfare as a result of heightened competition for energy resources or the protection of trade privileges.
- Large-scale trade requires money, and so economic growth has required an ongoing expansion of currency, credit, and debt. It is possible, however, for credit and debt to expand faster than the energy-fed “real” economy of manufacturing and trade; when this happens, the result is a credit/debt bubble, which must eventually deflate—usually resulting in massive destruction of capital and extreme economic distress. During the past few decades, the industrialized world has inflated the largest credit/debt bubble in human history.
- As resource consumption has burgeoned during the past century, so have environmental impacts. Droughts and floods are increasing in frequency and worsening in intensity, straining food systems while also imposing direct monetary costs (many of which are ultimately borne by the insurance industry). These impacts—primarily arising from global climate change—now threaten to undermine not only economic growth, but also the ecological basis of civilization.
To summarize this already brief summary—Due to energy limits, overwhelming debt burdens, and accumulating environmental impacts, the world has reached a point where continued economic growth may be unachievable. Instead of increasing its complexity, therefore, society will—for the foreseeable future, and probably in fits and starts—be shedding complexity.
General economic contraction has arguably already begun in Europe and the US. The signs are everywhere. High unemployment levels, declining energy consumption, and jittery markets herald what some bearish financial analysts describe as a “greater depression” perhaps lasting until mid-century (see, for example, George Soros’s comments in a recentNewsweek interview). But even that stark assessment misses the true dimensions of the crisis because it focuses only on its financial and social manifestations while ignoring its energy and ecological basis.
Whether or not the root causes of worldwide economic turmoil are generally understood, that turmoil is already impacting political systems as well as the daily lives of hundreds of millions of people. Banks that innovated their way into insolvency in the years leading up to 2008 have been bailed out by governments and central banks fearful to avert a contagious deflationary destruction of global capital. Meanwhile, governments that borrowed heavily during the last decade or two with the expectation that further economic growth would swell tax revenues and make it easy to repay debts now find themselves with declining revenues and rising borrowing costs—a sure formula for default.
In a few instances, the very financial institutions that some governments temporarily saved from insolvency are now undermining the economies of other governments by forcing a downgrade of their credit ratings, making debt rollovers more difficult. Those latter governments are being given an ultimatum—reduce domestic spending or face exclusion from the system of global capital. But in many cases domestic spending is all that’s keeping the national economy functioning. Increasingly, even in countries recently considered good credit risks, the costs of preventing a collapse of the financial sector are being shifted to the general populace by way of austerity measures that result in economic contraction and general misery.
A global popular uprising is the predictable result of governments’ cuts in social services, their efforts to shield wealthy investors from consequences of their own greed, and rising food and fuel prices. Throughout the past year, recurring protests have erupted in Africa, the Middle East, Asia, Europe, and North America. The long-range aims of protesters are in many cases yet to be articulated, but the immediate reasons for the protests are not hard to discern. As food and fuel prices squeeze, poor people naturally feel the pinch first. When the poor are still able to get by, they are often reluctant to risk assembling in the street to oppose corrupt, entrenched regimes. When they can no longer make ends meet, the risks of protest seem less significant—there is nothing to lose; life is intolerable anyway. Widespread protest opens the opportunity for needed political and economic reforms, but it also leads to the prospect of bloody crackdowns and reduced social and political stability.
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