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ininterestingtimes · 9 years ago

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The Archdruid Report, the five phases in the decline and fall of a civilization: the eras of pretense, impact, response, breakdown, and dissolution

The Era of Pretense

Eras of pretense are by no means limited to the decline and fall of civilizations. They occur whenever political, economic, or social arrangements no longer work, but the immediate costs of admitting that those arrangements don’t work loom considerably larger in the collective imagination than the future costs of leaving those arrangements in place. It’s a curious but consistent wrinkle of human psychology that this happens even if those future costs soar right off the scale of frightfulness and lethality; if the people who would have to pay the immediate costs don’t want to do so, in fact, they will reliably and cheerfully pursue policies that lead straight to their own total bankruptcy or violent extermination, and never let themselves notice where they’re headed.

Speculative bubbles are a great setting in which to watch eras of pretense in full flower. In the late phases of a bubble, when it’s clear to anyone who has two spare neurons to rub together that the boom du jour is cobbled together of equal parts delusion and chicanery, the people who are most likely to lose their shirts in the crash are the first to insist at the top of their lungs that the bubble isn’t a bubble and their investments are guaranteed to keep on increasing in value forever. Those of my readers who got the chance to watch some of their acquaintances go broke in the real estate bust of 2008-9, as I did, will have heard this sort of self-deception at full roar; those who missed the opportunity can make up for the omission by checking out the ongoing torrent of claims that the soon-to-be-late fracking bubble is really a massive energy revolution that will make America wealthy and strong again.

The history of revolutions offers another helpful glimpse at eras of pretense. France in the decades before 1789, to cite a conveniently well-documented example, was full of people who had every reason to realize that the current state of affairs was hopelessly unsustainable and would have to change. The things about French politics and economics that had to change, though, were precisely those things that the French monarchy and aristocracy were unwilling to change, because any such reforms would have cost them privileges they’d had since time out of mind and were unwilling to relinquish. Louis XIV, who finished up his long and troubled reign a supreme realist, is said to have muttered “Après moi, le déluge”—“Once I’m gone, this sucker’s going down” may not be a literal translation, but it catches the flavor of the utterance—but that degree of clarity was rare in his generation, and all but absent in those of his increasingly feckless successors.

The Era of Impact

The era of impact is the point at which it becomes clear to most people that something has gone wrong with the most basic narratives of a society—not just a little bit wrong, in the sort of way that requires a little tinkering here and there, but really, massively, spectacularly wrong. It arrives when an asset class that was supposed to keep rising in price forever stops rising, does its Wile E. Coyote moment of hang time, and then drops like a stone. It shows up when an apparently entrenched political system, bristling with soldiers and secret police, implodes in a matter of days or weeks and is replaced by a provisional government whose leaders look just as stunned as everyone else. It comes whenever a state of affairs that was assumed to be permanent runs into serious trouble—but somehow it never seems to succeed in getting people to notice just how temporary that state of affairs always was.

The stock market bubble of the 1920s makes a good case study on a relatively small scale. In the years leading up to the crash of 1929, stock values in the US stock market quietly disconnected themselves from the economic fundamentals and began what was, for the time, an epic climb into la-la land. There were important if unmentionable reasons for that airy detachment from reality; the most significant was the increasingly distorted distribution of income in 1920s America, which put more and more of the national wealth in the hands of fewer and fewer people and thus gutted the national economy.

Tuesday, October 29, 1929 can reasonably be taken as the point at which the era of pretense gave way once and for all to the era of impact. That’s not because it was the first day of the crash—there had been ghastly slumps on the previous Thursday and Monday, on the heels of two months of less drastic but still seriously ugly declines—but because, after that day, the pundits and the media pretty much stopped pretending that nothing was wrong. Mind you, next to nobody was willing to talk about what exactly had gone wrong, or why it had gone wrong, but the pretense that the good fairy of capitalism had promised Americans happy days forever was out the window once and for all.

It’s crucial to note, though, that what followed this realization was the immediate and all but universal insistence that happy days would soon be back if only everyone did the right thing. It’s even more crucial to note that what nearly everyone identified as “the right thing”—running right out and buying lots of stocks—was a really bad idea that bankrupted many of those who did it, and didn’t help the imploding US economy at all.

The French monarchy and aristocracy blinded themselves to the convulsive social and economic changes that were pushing France closer and closer to a collective explosion on the grand scale, and pursued business as usual long past the point at which business as usual was anything but a recipe for disaster. Even when the struggle between the Crown and the aristocracy forced Louis XVI to convene the États-Généraux—the rarely-held national parliament of France, which had powers more or less equivalent to a constitutional convention in the US—next to nobody expected anything but long rounds of political horse-trading from which some modest shifts in the balance of power might result.

That was before the summer of 1789. On June 17, the deputies of the Third Estate—the representatives of the commoners—declared themselves a National Assembly and staged what amounted to a coup d’etat; on July 14, faced with the threat of a military response from the monarchy, the Parisian mob seized the Bastille, kickstarting a wave of revolt across the country that put government and military facilities in the hands of the revolutionary National Guard and broke the back of the feudal system; on August 4, the National Assembly abolished all feudal rights and legal distinctions between the classes. Over less than two months, a political and social system that had been welded firmly in place for a thousand years all came crashing to the ground.

Those two months marked the end of the era of pretense and the arrival of the era of impact. The immediate response, with a modest number of exceptions among the aristocracy and the inner circles of the monarchy’s supporters, was frantic cheering and an insistence that everything would soon settle into a wonderful new age of peace, prosperity, and liberty. All the overblown dreams of the philosophes about a future age governed by reason were trotted out and treated as self-evident fact. Of course that’s not what happened; once it was firmly in power, the National Assembly used its unchecked authority as abusively as the monarchy had once done; factional struggles spun out of control, and before long mob rule and the guillotine were among the basic facts of life in Revolutionary France.

The Era of Response

It’s easy to misunderstand what the era of response involves, because both of the previous eras have their own kinds of response to whatever is driving the collapse; it’s just that those kinds of response are more precisely nonresponses, attempts to make the crisis go away without addressing any of the things that are making it happen.

This doesn’t mean that everyone comes to grips with the real issues, and buckles down to the hard work that will be needed to rebuild society on a sounder footing. Winston Churchill once noted with his customary wry humor that the American people can be counted on to do the right thing, once they have exhausted every other possibility. He was of course quite correct, but the same rule can be applied with equal validity to every other nation this side of Utopia, too. The era of response, in practice, generally consists of a desperate attempt to find something that will solve the crisis du jour, other than the one thing that everyone knows will solve the crisis du jour but nobody wants to do.

That task occupied the best minds in the US elite from the summer of 1930 straight through until April of 1933, and the mere fact that their attempts to accomplish this impossibility proved to be a wretched failure shouldn’t blind anyone to the Herculean efforts that were involved in the attempt.

The first of the two things that had to be tackled in order to restore prosperity was to do something about the drastic imbalance in the distribution of income in the United States. The second thing that had to be changed in order to restore prosperity was even more explosive. The United States in 1929 had a precious metal-backed currency in the most literal sense of the term. Paper bills in those days were quite literally receipts for a certain quantity of gold—1.5 grams, for much of the time the US spent on the gold standard. That sort of arrangement was standard in most of the world’s industrial nations; it was backed by a dogmatic orthodoxy all but universal among respectable economists; and it was strangling the US economy.

The period of the French revolution from the fall of the Bastille in 1789 to the election of the National Convention in 1792 was a period of the same kind, though driven by different forces. Here the great problem was how to replace the Old Regime—not just the French monarchy, but the entire lumbering mass of political, economic, and social laws, customs, forms, and institutions that France had inherited from the Middle Ages and never quite gotten around to adapting to drastically changed conditions—with something that would actually work. It’s among the more interesting features of the resulting era of response that nearly every detail differed from the American example just outlined, and yet the results were remarkably similar.

Thus the leaders of the National Assembly who suddenly became the new rulers of France in the summer of 1789 had no desire whatsoever to retain the traditional economic arrangements that gave France’s former elites their stranglehold on an oversized share of the nation’s wealth. The abolition of manorial rights that summer, together with the explosive rural uprisingsagainst feudal landlords and their chateaux in the wake of the Bastille’s fall, gutted the feudal system and left most of its former beneficiaries the choice between fleeing into exile and trying to find some way to make ends meet in a society that had no particular market for used aristocrats. The problem faced by the National Assembly wasn’t that of prying the dead fingers of a failed system off the nation’s throat; it was that of trying to find some other basis for national unity and effective government.

An attempt was made to establish a copy of whatever system was most fashionable among liberals at the time. The National Assembly moved to establish a constitutional monarchy along British lines, bring in British economic institutions, and the like. Those who recall the outcome of the attempt to turn Iraq into a nice pseudo-American democracy in the wake of the US invasion will have a tolerably good sense of how the project unraveled.

when liberal intellectuals try to impose democracy on a nation that hasn’t evolved the necessary foundations for it, the results are pretty much always a disaster. That latter was the situation in France at the time of the Revolution. What happened thereafter is what almost always happens to a failed democratic experiment: a period of chaos, followed by the rise of a talented despot who’s smart and ruthless enough to impose order on a chaotic situation and allow new, pragmatic institutions to emerge to replace those destroyed by clueless democratic idealists. In many cases, though by no means all, those pragmatic institutions have ended up providing a bridge to a future democracy, but that’s another matter.

Charismatic strongmen are a standard endpoint for the era of response, but they properly belong to the era that follows, the era of breakdown.

The Era of Breakdown

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.

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 been locked up in maintaining those distortions.

The Era of Dissolution

The first lesson to learn from the history of collapse, is that the breakdown phase doesn’t necessarily solve all the problems that brought it about. It doesn’t even necessarily take away every dysfunctional feature of the status quo. What it does with fair reliability is eliminate enough of the existing order of things that the problems being caused by that order decline to a manageable level. The more deeply rooted the problematic features of the status quo are in the structure of society and daily life, the harder it will be to change them, and the more likely other features are to be changed

Roosevelt’s policies didn’t get rid of the broader economic dysfunction the 1929 crash had kickstarted. That was inherent in the industrial system itself, and remains a massive issue today, though its effects were papered over for a while by a series of temporary military, political, and economic factors that briefly enabled the United States to prosper at the expense of the rest of the world. The basic issue is simply that replacing human labor with machines powered by fossil fuel results in unemployment, and no law of nature or economics requires that new jobs can be found or created to replace the ones that are eliminated by mechanization. The history of the industrial age has been powerfully shaped by a whole series of attempts to ignore, evade, or paper over that relentless arithmetic.

After Napoleon’s final defeat in 1815, the Allied powers found an heir to the French throne and plopped him into the throne of the Bourbons as Louis XVIII to well-coached shouts of “Vive le Roi!” On paper, nothing had changed. In reality, everything had changed, and the monarchy of post-Napoleonic France had roots about as deep and sturdy as the democracy of post-Saddam Iraq. Louis XVIII was clever enough to recognize this, and so managed to end his reign in the traditional fashion, feet first from natural causes. His heir Charles X was nothing like so clever, and got chucked off the throne after six years on it by another revolution in 1830. King Louis-Philippe went the same way in 1848—the French people were getting very good at revolution by that point. There followed a Republic, an Empire headed by Napoleon’s nephew, and finally another Republic which lasted out the century. All in all, French politics in the 19th century was the sort of thing you’d expect to see in an unusually excitable banana republic.

The lesson to learn from this example is that it’s very easy, and very common, for a society in the dissolution phase of collapse to insist that nothing has changed and pretend to turn back the clock. Depending on just how traumatic the collapse has been, everybody involved may play along with the charade, the way everyone in Rome nodded and smiled when Augustus Caesar pretended to uphold the legal forms of the defunct Roman Republic, and their descendants did exactly the same thing centuries later when Theodoric the Ostrogoth pretended to uphold the legal forms of the defunct Roman Empire.

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