Wilder On "Catabolic Collapse"

 Back in 2014 I posted a 6-part series summarizing the main ideas from Joseph Tainter's book, The Collapse of Complex Societies. (Here are the links to Part 1, Part 2, Part 3, Part 4, Part 5, Part 6). 

    One of his key points is that as a society grows and deals with problems and challenges, it will add additional layers of complexity. Complexity could be from a myriad of sources: more numerous or complex trade routes or relationships (read, e.g., Leonard E. Read's famous essay, "I, Pencil"), increased compliance costs with regulations and laws, introduction of a greater number of middle-men, etc. For instance, a rather primitive society might be comprised of a mixture of hunters and gatherers, but as they settle into agriculture and herding, it becomes necessary to create laws concerning property rights and land ownership, especially as people cluster together. Then comes irrigation works, protective walls, and professional armies with their concomitant taxes, bureaucrats, courts, etc., etc. And and the cost just goes up as the society becomes more complex. As an example, the Competitive Enterprises Institute relates: "In 1960, the [Code of Federal Regulations] contained 22,877 pages. Since 1975 until the end of 2019, its total page count had grown from 71,224 to 185,984, including the index—a 161 percent increase." The CATO Institute noted in 2012 that "[t]he Office of Information and Regulatory Affairs (OIRA) calculates that the federal government currently imposes more than 10.3 billion hours of paperwork compliance annually." And think of all the taxes, fees, and charges that you have to pay--not just to government but to businesses--just to live in today's societies. 

    Up to a certain point, the added complexity is tolerable because it brings a benefit in excess of its costs. Laws provide rules which make life predictable and provide recourse when wronged, boosting the willingness to trade and invest. Similarly, city walls keep out bandits and enemy armies. Soldiers can chase off bandits or raiders. Nice roads make it easier to travel. Sewers cut down on disease. And so on.

    But at some point, each additional layer of complexity brings with it a greater cost than benefit. For instance, the HOA rules that allow you to use Cinnamon but not Hickory paint trim; the city that won't allow a vegetable garden; standing in long lines in order to remove shoes and belts to go through an x-ray just to board a plane; using a $2,000,000 missile to destroy a $2,000 drone; spending $28 billion to develop and build littoral combat ships that have to be scraped within a few years; wasting trillions of dollars to win the "hearts and minds" of a barbaric culture in Central Asia for no discernable purpose. 

    While it is certainly possible that some great war or calamity might overwhelm a less complex culture, once a culture reaches a point of negative return on investment, that society is burning through the surplus that allows it to afford new complexity to deal with new problems or crises, until a crises comes along where that society no longer has the necessary excess to pay for the solution. That society will then collapse.   

    A second key point from Tainter's work is that collapse does not necessarily mean a return to the primitive. The Mayan collapse was an outlier. Rather, Tainter uses collapse to mean "a return to the normal human condition of lower complexity." This is generally accompanied by governments and trade networks becoming more local. The empire breaks down into individual states or city-states, for instance, as what generally happened after the Bronze Age collapse or the fall of the Western Roman Empire. Unfortunately, such collapses generally aren't peaceful and they can result in significant declines in population when they occur. 

    John Wilder recently published a piece entitled "Catabolic Collapse – Coming Soon To A Place Near You." In it, he argues that this devolution to a lower state of complexity is already occurring. 

    First he describes what he means by "catabolic collapse":

    Economic growth is anabolic.  Building a house takes a complex logistics chain of materials and manpower and creates a yet more complex outcome, assembled only with effort and time.  A house fire is therefore catabolic – it torches and burns the whole thing down, much faster than it took to build.  But allowing a house’s roof to fail and the house to rot is also catabolic – it just takes a lot longer.

    Just as it applies to houses and body shape, catabolic can also apply to economies.  Essentially every day after the paving of a road is complete, the road is rotting.  At first this happens slowly.  However, then, as water gets a chance to penetrate it and freeze and thaw, the decay happens much more quickly.

    What happens when we can’t afford to fix stuff?  It slowly rots.  Buildings slowly decay.  Street signs fade.  Water pipes burst.  Kardashians move in.

And while the last bit about the Kardashians moving in is meant as a bit of humor, there is a darker truth behind it: the collapse of borders means that the barbarians move in--the government either can't prevent it or doesn't care. 

    In one of his recent Weekend Knowledge Dumps, Greg Ellifritz linked to an article by Bendigo Strange called "Managing Expectations". While the article was ostensibly about how the author, armed with only a 5-shot snubby revolver, dealt with multiple armed men while investigating an illegal gambling joint in the Ozarks, one fact that caught my eye was that the men operating the place were Pakistani. In the backwoods of the Ozarks. Strange, himself, pondered the question: "How they ever ended up in this tiny town in the heart of the Ozark mountains running an illegal gambling saloon one could only wonder." The answer is that it is part of the rot. Foreign populations and the crime networks that accompany them are so widespread through the United States that you can literally run into them anywhere.

    But back to Wilder's article, he continues:

    Just like keeping a body from starving requires continual food, keeping a complex system operating and running requires continual wealth and effort.  Every bridge, unless maintained, will collapse.  A comment last week talked about a pullback of restaurants in their area, more in keeping with what was in place decades ago.

* * *

    It was mentioned that area was going back the earlier “norm” of restaurants, but the reason is because the middle class has been squeezed.  This squeezing of the middle class is catabolic and will destroy demand.  This is why, right now, the economy shrinking while stocks continue upwards.  A recession is occurring in the middle class even as profits are up.  This is the collapse, but as discussed last week, it’s not sudden, until it is. 

And that takes me to Wilder's article that elicited the comment about restaurants: "France, Spain, And The Fate Of The United States." There, Wilder comments about the retail apocalypse we are seeing as chain stores and restaurants are closing locations or, in some cases, completely shutting down. He notes that "our first world wealth is rapidly slipping away." And, he concludes:

The next twenty years will be, generally, poorer in the United States and in the West.  The good news, however, is poorer equals poorer, not necessarily unhappier.  Who knows, we might even be happier if we lose the Internet and can’t access TikTok© anymore.

This does not mean that there might not be opportunities. As Wilder notes in his conclusion to his Catabolic Collapse article, "we’re standing on the edge of a new land ready to be born, that will be far different from what we’ve seen in the past.  The things we’ve taken for granted will no longer be there in many cases." "What matters is the rebuilding.  There will be choices to be made – some that will lead to freedom, some to serfdom.  As we’ve seen that paths leading away from the True, Beautiful, and Good always end in failure, most often spectacular failure, I’m optimistic."

    And this is a point that comes up in Eric Cline's book, After 1177 B.C., describing the world after the Bronze Age Collapse. Some cultures, such as the Hittites, collapsed never to be seen again; some (like Egypt) declined and never fully recovered; some states broke apart and slowly reformed in new shapes and names over the next two hundred to three hundred years; and some societies, such as the Phoenicians, not only weathered the stormed but prospered in the bad times. They were what Cline termed "anti-fragile".