The Fourteenth Banker Blog

May 7, 2010

Why Societies Collapse

Filed under: Uncategorized — thefourteenthbanker @ 12:11 AM

This is about a 20 minute video of a TED Talk by UCLA Prof Jared Diamond.    He discusses common threads of societies that collapse. There are several very instructive themes in this talk that apply to Simon’s post today and to the general inability of our system to adapt to what has become blindingly obvious is a ticking time bomb, the fragility of our financial markets, on display today.  These themes apply to collapsing society’s and are not financial in nature, but do manifest themselves economically.   By the way, this talk is from 2003, a time we can now describe as mid-crisis.

The factors of collapse he identifies are:

1)  The society inadvertently destroys its environment.  (Self Destructiveness)

2)  The climate changes in a way that alters the food supply.  (Changes from outside the system)

3)  Relations with friendly societies may prop up a society.  But if relations are strained, the society may be more likely to collapse.  (Parochialism)

4)  Relations with hostile societies.

5)  The political, economic, cultural and social factors may make it difficult to solve their problems.

In multiple instances, such as Easter Island and the Greenland Norse, the society de-forested itself, somehow oblivious to the consequences.  How can this be? What might they have been thinking when they cut down their last tree?   So the question can be broken down into why society failed to perceive the problem, why it failed to tackle the problem, or why it’s attempt to tackle the problem was not effective.

A couple generalizations consistently popped out.  One is that there is a Conflict of Interest between the short term interest of the decision making elites and the long term interest of the society as a whole, especially where the elites are able to insulate themselves from the consequences of their actions (we can solve this one).  A second generalization is that the society has strongly held beliefs that may have been good in many circumstances but are poor in other circumstances. These may make it very hard to change.  An example of such a strongly held belief today is that unfettered markets are better and safer than collective decisions regarding markets.

He concludes that our present course in an unsustainable course.  We either resolve unsustainable conflicts intentionally or they will be resolved in ways beyond our control.  Today the markets are teetering again.

A final conclusion is that we can not decide that there is one solution to our problems.  We need to seek many solutions to our problems.

Please view the video if you have time.  I think you will draw more parallels than I have the chance to draw out here.

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9 Comments »

  1. If you find this sort of thing interesting you’ll probably enjoy:

    http://www.amazon.com/gp/product/0660193302/ref=oss_product

    Comment by MKV — May 7, 2010 @ 12:15 AM | Reply

  2. You are posting about the potential for collapse due to failure of the financial system. I’d like to tie in another collapse driver, which is the end of the era of cheap and abundant energy.

    I’m a former aerospace engineer who now works in energy and green building because I’ve come to believe that the way that we gather and use energy is a major threat to global technological civilization. This is in part due to the environmental costs associated with our energy gathering activities (climate change, aquifer depletion, etc). But it’s also (and perhaps more immediately) due to the fact that our economic system assumes and requires that energy be abundant and cheap, and we’re running up against the physical limits of our historical energy sources. Because energy is so central to everything we do, and everything we produce, rising energy costs will ripple through the economy, often in a multiplicative fashion. E.g. A manufacturer’s operating costs go up because energy costs more, but they go up more because all of his suppliers costs have gone up, all the way up and down the fabricatory tree.

    As was the case with many of my cohorts, I saw energy, its future availability, and the long-term consequences of short-term thinking as the major threat to our civilization. I also anticipated the housing bubble and its collapse (though not the timing) but also like many I was totally blindsided by the scope and scale of the underlying fraud, and the entire CDO/CDS phenomena was a surprise. Even now, many energy-minded people see the collapse as being driven by the high cost of oil (IMO, a factor, but not the main driver) and don’t seem to incorporate in their thinking the impact of the hollowing-out of our financial infrastructure.

    Since the crisis, I’ve been reading and learning more about finance and banking, though I am very much an amateur in those areas. But one thing I have noticed, even among those who readily announce that the economic emperor is naked (e.g. Johnson, Kwak, Yves Smith), is that they don’t seem to have incorporated energy decline into their thinking. The overarching assumption in many (most) of their prescribed solutions is that, if we fix the various ways in which the financial system is broken, then the engine of growth will restart and eventually (after we’ve paid for past sins) things will be good again.

    While I certainly agree that fixing the broken aspects of the financial system is important and worth doing, I can’t buy the implicit assumption that doing so will restore economic growth. Modern economic growth is driven by and has been correlated to energy consumption since the start of the Industrial Revolution. If we want to maintain economic health — even aside from financial industry issues — we must break that correlation. Doing so is, in my professional opinion, possible. But it’s hard, and it requires capital and long-term investments, which are now in short supply.

    I would very much like to build bridges between the communities of energy people and finance people, so that they can start incorporating the others’ thinking into their models and plans for the future. I was wondering if you had any thoughts along those lines.

    Comment by GreenEngineer — May 7, 2010 @ 12:44 AM | Reply

    • I agree completely. While Finance is the topic of the day, particularly today, it is only one part of a system that is quite sick. That is one reason Finance has to be fixed. If we have other major disasters, and we will, they will be magnified by the financial system. Instead, we need a financial system that is robust, resilient, and supports the needs of society. One of the greatest needs is innovation. Finance is not allocating resources properly and therefore innovation in many areas, including the critical area of energy is stifled. If Warren Buffett did not have the option of buying preferential shares in Goldman, with a high dividend, warrants, etc., perhaps he might have invested in something that creates value. Big banks have some real flaws. They have dumbed down the credit process such that it will not support certain entrepreneurial activities. They have pushed funds into assets that are easily recycled with risk pushed off on others. If these things were not supported by the system, there would be more effort put around credit. If talent were not siphoned off into creating financial product for trading, talent would be available for basic industries, science, innovation. If Finance shrunk by 4% of our economy, that share could go to energy, education, or other “factors of production”. I do believe we can afford to spend more for energy if we spend less on finance, health care, inefficiencies in government, moronic subsidies, etc. Great comment and I would be interested in more dialog on the topic.

      Comment by thefourteenthbanker — May 7, 2010 @ 1:31 AM | Reply

  3. Thanks very much for the link. I have long wanted to listen to Jared Diamond as a lecturer. The area of sustainable social conditions first requires a sustainable politics to cure social problems. My own thinking is to try and identify ways for a political rapproachment in the US to take place.

    I first got into this area around the age of eleven trying to absorb Toynbee after reading Will and Ariel Durant. That was over 60 years ago. We have the bulk of the pieces that need drawing together identified. The impossible task is political amalgamation of the pieces with sufficient compromise that will allow a commowealth of mutual action to evolve. Without commonwealth nothing will happen. The process is local up not global downward. That should be obvious but the focus is nearly universal on global action. A great book about globalism, among many, is ” The Collapse of Globalism” by John Ralston Saul.

    By the way, after tackling Jared Diamond, the next really big step up to unification discussion is to take on Joseph Tainter’s ” Collapse of Complex Societies”.

    A major stumbling block in the US is polarization from activist positions about ideologies. Ideologies must be burned out as dominant aspects of US culture for any meaningful commonwealth might evolve. That is a a very tall order and will only be achieved from collapse of the ideology itself. The main unification possibiliies will not be top down as I see it but fresh views generated from the bottom up by the experiences of ideological collapse if they occur at all.

    Another source of ideas about inducing commonwealth are those of the Indian thinker P R Sarkar which is largely presented in the US by the economist Ravi Batra. Sarkar is a social determinist and his thoughts are really a rehash of many Hindu ideas. India has survived a very long time as an advanced culture only to be laid low by western incursions three centuries ago. It absorbed conquerors instead of being absorbed itself. India understands adaptation to change where it is possible and living with what cannot be changed. It adapts while staying the same. It might be said to make haste slowly because India is still India. Three decades ago, I owned a bookstore and bought literally tons of open ended remainders ( left overs from left overs) from some library remainder sources. One book simply fell out of the box around 1979 called ” The Downfall of Communism and Capitalism” By Ravi Batra. This is a stunning book when tied into thinkers like Diamond and Tainter.

    After a sixty year interest in the subject of political adaptation the answer is that everything depends on ability of the culture to change views based on experience. Change or die is a powerful motive when forced on a society. One eventually comes to the conclusion that if change does not force adaptation by the society it deserves extinction. Too stupid to live.

    Synthesis of ideas win survival. For example, if a detailed study of North American energy assets is made, the US could readily have enough energy internally to evolve a balanced fossil and renewable energy usage system to power a decent survival. North America , not the world. I really put in some time on this logistical issue over the last few years. Naturally, energy usage will require forced changes generated from the bottom up. The ignorance in this area is more astounding than even crank ideas about money and banking. The vast majority of SUV haters and cut gasoline use types have never heard of the old crude fractioning saying of 321. The key element in the US is that 2 is the key critical fractioning product required to keep the country functioning and to heat the northeast and commercial usages. For every 2 gallons of required middle distillate needs , the by product is 3 gallons of light distillate products. That gasoline was once simply burned off or used to distill crude in Kerosene days. There are at least several hundred billion bbl of recoverable unconventional and conventional oil in North America excluding tar sands and discounting deep offshore oils. Major work here is very much covered on the DOE website. Then there are the three major types of unconventional gas. Achieving usage of the bulk of that 300 bn bbl of unconventional oil , including residual oil zone deposits, will require sequestration of most of the present CO2 now being sent into the atmosphere. Fortunately, extant sources of CO2 are generally relatively near enough to unconventional oil pools to be useful. Amazingly so. My point here is to illustrate a situation where CO2 is removed to produce CO2, a near zero trade off .
    Now cut middle distillate needs, also quite achievable, and CO2 is radically decreased. We use less crude oil. Enough to avoid imported oil if a way can be found to supply hope. Unity here requires realistic hope.

    Sorry for being a bit long winded.

    Comment by Jerry J — May 7, 2010 @ 2:00 AM | Reply

  4. To be most effective in being able to rebuild a commonwealth of interests, all present ideologies need to burn out or burn way down. Right now polarization based on ideological belief is all but total. I include proselytizing religion as an ideology. The problem is most complex because we seem to have as many personal ideologies as we have people.

    Take myself. I am personally , on a general basis, of the the ” deep ecology” ideology. One can draw a number of very unpleasant conclusions from a personal righteousness belief in Deep Ecology as an ideology. The obvious first conclusion is that overpopulation is an unintended consequence of compassion. One easily makes the case that policies of increasing infant survival set loose hordes of breeders over several generations. This was perpetuated by the Green Revolution. Both conclusions would require strict state interdiction of births before the fact applied in nations where the birth rate so dramatically increased local and global populations to the point they are a cancer on Gaia. Really, politically the radical Deep Ecology movement will not stand a chance of contributing to a planned political interdiction of the problems Deep Ecologists see. The movement only obstructs political solutions out of it’s frustration. They cannot compromise. In fact, all actions are seen as battles to achieve their ideological nirvana. One does not compromise in battles. The metaphor is near universal here.

    Another ideology is the belief in ” End Times”. End Timers see no need to do anything because the end is nigh and it is the will of their deities. Again, there is no real way this group can contribute to the creation of a political commonwealth because they cannot compromise. Here we have extreme determinism . One may wait for end times to burn away as it has done in the past. But time probably does not allow the luxury of waiting.

    Another ideology is that of Free Market Capitalism. It has repeatedly been shown to not work just as it’s opposite has been a demonstrated failure too. I doubt anythjing but total collapse of a free market system so ardently desired by extreme right wingers would end this fantasy. It should be obvious that no amount of opposition will end this fantasy. State capitalism expunged itself far more quickly than Free Market Capitalism will as I see it . Here compromise is not really possible. I once heard a lecture by Richard Hofstader, the author of ” The Paranoid Style in American Politics” as a student. His early work here is unsurpassed. No compromise possible here either as we can see by following US politics daily.

    The same can be said of extreme left wing American Liberalism if it really held much political weight in the nation. It does not , in my view.

    Americans are some fightin assholes in following their personal righteousnesses as they sally forth from their own ideological true and only heavens.

    The political answer is thus the middle way in the Buddhist sense. Beliefs must burn out to enable middle way compromise so that long term decisions that stick may be made. High tech society requires very long term investment to survive. We die as a nation if one faction does on achieving power and the other faction undoes on achieving power. We have that kind of luxury on a very low tech basis but not on a high tech basis.

    So survival is fight , win and destroy your enemy or compromise and survive together.

    It is time to settle the issues or collapse.

    Comment by Jerry J — May 7, 2010 @ 4:49 PM | Reply

  5. I would like to add the observation that the expectations of the Russian geopolitical military analyst Igor Panarin about break up of the United States might be far more on target than we would all like to admit. Not precisely, of course. His computer software strongly suggested break up. Panarin has done very extensive work in Russia on this subject. A year or so ago, Valadimir Putin was quoted in an article in Foreign Policy that he expected a US collapse . The context was clearly along the lines of those of Panarin. Panarin is a high ranking officer as well as professor.

    The inability to lead a state is among the indicia of collapse in both Diamond’s and Tainter’s work. My view is that the US is on the same trajectory as the French Third Republic. Literally torn apart by warring factions.

    The proof is really glaring in that it can be demonstrated that state policy is deliberately weakened. About 30 years ago, Michael Grant the dean of ancient history studies published a short book . ” The Fall of the Roman Empire, A reappraisal. He identified 13 Roman problem areas and compared them to the the present . All thirteen are now heavily evident in the United States. The book scared me in 1979 and scare’s again every time I read it. It came out a few years after Shirer’s book on the collapse of the Third Republic.

    But an open minded observation of US society is the scariest of all.

    Comment by Jerry J — May 7, 2010 @ 6:21 PM | Reply

  6. greatpost

    Comment by kulinjangmalauwe — May 11, 2010 @ 5:29 AM | Reply

  7. Why societies at all? Dr. Matt Ridley has a new theory as to why Homos sapiens became the dominant species – in a word – trade.
    http://www.nytimes.com/2010/05/18/science/18tier.html?src=me&ref=general

    The evidence for this trick is in perforated seashells from more than 80,000 years ago that ended up far from the nearest coast, an indication that inlanders were bartering to get ornamental seashells from coastal dwellers. Unlike the contemporary Neanderthals, who apparently relied just on local resources, those modern humans could shop for imports.

    “The extraordinary promise of this event was that Adam potentially now had access to objects he did not know how to make or find; and so did Oz,” Dr. Ridley writes. People traded goods, services and, most important, knowledge, creating a collective intelligence: “Ten individuals could know between them ten things, while each understanding one.”

    As they specialized and exchanged, humans learned how to domesticate crops and animals and sell food to passing merchants. Traders congregated in the first cities and built ships that spread goods and ideas around the world.

    So, maybe Goldman Sachs IS doing God’s work. Nahhhhhhhhh

    Comment by Sandi — May 19, 2010 @ 10:34 AM | Reply


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