Before Societal Implosion Comes...
On hypernormalisation and elite failure
We are in the accelerating phase of civilizational collapse. I know it’s not one of those hopeful messages out there, but expecting a miraculous change driven by the “democratic process” or working with “elites” on “solutions” will only get us more business-as-usual... At least until business-as-usual itself becomes impossible to continue with, and the whole governance system comes down faster than you could say “perestroika”. This doesn’t mean that there is nothing to be done. On the contrary: we must actively look for and nurture alternative forms of governance, for when the current system crumbles under the weight of its many inherent contradictions, there will be a massive demand for self-organization and new ideas.
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Although there are many reasons behind the fall of great civilizations (ecological, economical, climate, resource and many more), allow me to focus on one particular area: the role of leadership. One could not find a better example in recent history, then the dissolution of the Soviet Union thirty-three years ago. In his book Everything Was Forever, Until It Was No More: The Last Soviet Generation (2006), author Alexei Yurchak wrote about the paradoxes of Soviet life during the 1970s and 1980s. According to his account of Russian history, everyone in the Soviet Union knew the system was failing, but no one could imagine any (true) alternative to the status quo. Instead, politicians and citizens alike were resigned to maintaining the pretense of a functioning society. Over time, the mass delusion became a self-fulfilling prophecy, with everyone accepting it as the new norm rather than what it was, a pretence — an effect Yurchak named hypernormalisation.
Although there were attempts to reform the soviet system, it was way too little, way too late. ‘Perestroika’ — literally meaning ‘restructuring’ — was a last ditch attempt to reform the unreformable. Instead of putting an end to the planned economy, it aimed to make socialism work more efficiently by adopting elements of liberal economics. The process of implementing these reforms — contrary to its original goal of meeting the needs of Soviet citizens better — added to existing shortages instead, and created political, social, and economic tensions.
Today we are witnessing the same phenomenon in western democracies with ever weirder and weirder things happening, only to be (hyper-)normalized in a few days time. ‘Oh, look how the economy is growing…!’— together with the number of people losing their homes and with a yawning gap between the haves and have nots. But this is fine, since ‘Nothing is collapsing…!’ — at least not for the elites. So the pretence continues, with some superficial tweaks here and there. Thus we see a doubling then tripling down on failed strategies, instead of implementing badly needed structural reforms — reflecting the tectonic shifts in world affairs and the reality of hitting planetary limits to growth. If this is not a sign of a coming breakdown, nothing is… The cautionary tale of the Soviet Union should not have been left unheeded.
The state of democracy
Most people in the West believe they live in a democracy, while the rest of the world has to suffer unbearable oppression under terrible autocrats and omnipotent dictators. In fact, nothing could be further from the truth. Simply put, neither part of the story is true: the West is not a democracy, and the rest is not an autocracy. Both worlds are somewhere in-between the two systems, and not just politically speaking.
Let me present you with a simple thought experiment first proposed by the brilliant economics professor Richard D. Wolff. Take a look at your everyday life, wherever you live on the planet. You most probably work for an organization — be it a corporation, a small business, civil service or an administrative office. You spend most of your life there, and yet you experience absolutely no democracy. Zero. Nada. On the contrary: you are subject to the whims of a boss, unless you own the business yourself. Why? When was the last time you as an employee could vote on which project to take on, what products to sell, where to source the raw materials from, or what to spend the profits on? Similarly, if you are a boss, when did you allow your subordinates to vote on these matters?
Your superiors, or you as a head of business, are expected to have complete authority, with a right to tell others what to do, what not to do, what values to believe in, and with a right to decide how much to pay for their work and when to fire them. Sorry to be this blunt, but politically speaking you spend most of your time working for — or acting like — a dictator in a completely autocratic system. It’s not that it couldn’t be otherwise — there are plenty of examples from worker co-ops to start ups experimenting with new structures. However, these new forms of corporate ownership are not the rule, only sporadic exceptions to the widely accepted social norm of being told what to do, what to think and what to believe in.
The same goes, writ large, to entire nations. Just think about it: when did you had a say in which sector of the economy should pay higher taxes? Or what should be the tax rate in your state? Or how many nuclear weapons should your country possess and how much to spend on their maintenance? I guess you know the answer. You, we, everyone around the world live in some sort of ‘quasi-democracy’. Yes, even dictatorships organize elections — with predictable results, of course — but that’s not the point here. Nothing of importance gets decided on elections. Sorry, but when you have to choose between two preselected, thoroughly vetted candidates, who will say and do exactly what their sponsors think they should say and do, that is not a democracy. Especially not when none of the great promises they made on campaign tours get fulfilled later on. What you get, instead, is more of the same.
Such a system cannot even be called a republic, let alone a representative democracy. It’s — by definition — an oligarchy, the rule of the wealthy. (Watch the video linked above, it’s highly educational and beautifully narrated.) Since it’s considered perfectly normal and legal to buy (ahem, support) politicians via campaign donations, or by offering them cushy seats in management boardrooms (with a compensation package to match), one cannot be surprised that liberal democracies have eventually all degenerated into oligarchies. A coercive power structure, relying on public obedience (or outright oppression), and in which power rests with a small circle of the rich and powerful. Elections are just used to obtain the ‘consensus of the governed’ — thereby achieving quiet obedience — while nothing substantial ever has the slightest chance to change. And it’s not just me saying this, but also academics publishing studies in the Cambridge University Press:
“The central point that emerges from our research is that economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while mass-based interest groups and average citizens have little or no independent influence.”
We accept — and give our full consent — to be governed by the same owner-class who gives us jobs, owns corporations or wealth funds and sponsor think tanks to write policy papers on their behalf. They euphemistically call this system “multistakeholder capitalism”, but this is nothing but a fig leaf “giving corporations even more power over society, the economy and the environment, at the expense of national democratic institutions.” As a result western nations, and many other countries around the world, are effectively run by what Aurelien calls a ‘professional managerial class’, a select group of technocrats in full service of economic growth, with only one goal in mind: to achieve a relentless rise in profits for their sponsors and more power for themselves. That is why every economic activity is measured in terms of money and GDP — and not based on how much it contributes to the well being of people — with our consent being bought with wages, salaries and bonuses... All of which we are “free” to spend on products and services offered by the same companies and ultimately enriching the same people at the top.
This is why tariffs and sanctions are such a hot topic nowadays: the competition for your wages (the source of profit) must be reduced to a competition between companies owned by the ruling class. This is why all popular platforms are banned or bought up by billionaires, why food and drug companies merge into multi-billion dollar businesses owned by Western oligarchs, or why wars are waged thousands of miles away in the ‘defense of freedom and democracy’.
“I spent 33 years and four months in active military service and during that period I spent most of my time as a high class muscle man for Big Business, for Wall Street and the bankers. In short, I was a racketeer, a gangster for capitalism. I helped make Mexico and especially Tampico safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefit of Wall Street. I helped purify Nicaragua for the International Banking House of Brown Brothers in 1902–1912. I brought light to the Dominican Republic for the American sugar interests in 1916. I helped make Honduras right for the American fruit companies in 1903. In China in 1927 I helped see to it that Standard Oil went on its way unmolested. Looking back on it, I might have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents.”
― Smedley D. Butler, War Is a Racket
As you can see from the excerpt above, all this was in the making for more than a century. And what a century it was! Two world wars, an economic depression, the rise and fall of communism and national socialism, dictators coming and going, and so much more. The process of corporate takeover, on the other hand, did not stop for a minute, and we are just starting to see now where the process has lead us… And no, not to a promise land of more ‘freedom, democracy and prosperity’. What we have at hand is the logical endpoint of a complete PMC takeover, turbocharged by ‘neoliberal economics’ appearing first in the U.K. and the U.S., then spread across most of the world. As Tim Morgan explains:
In any case, neoliberalism has long ceased to be a matter of party contention in British politics. Since 1995, when Labour symbolically abandoned its historic Clause Four commitment to the “common ownership of the means of production, distribution and exchange”, both main parties have been signed up to the same neoliberal agenda.
This is an ideology with an unedifying and divisive past and, if adhered to, a short and unpleasant future.
Back in the 1970s, most Western countries experienced economic crises characterized by runaway inflation and labour disruption. The clear and obvious cause of these crises was the rapid quadrupling of oil prices following the petroleum export embargo imposed by OPEC in October 1973.
In Britain, a group of opportunists sought to craft a wholly different narrative, effectively re-writing history even as it was still being made. Their assertion was that the travails of the 1970s weren’t caused by the 1973–74 and 1978–79 oil crises, but by left-wing government and over-powerful organized labour. The solutions were to roll back the state, and destroy the power of the unions.
They embarked on an orgy of privatization, selling off to private investors everything from the supply of water, gas and electricity to telecommunications, railways, steel-making and car manufacturing. Various “watchdogs” were set up to try to limit abuse of the many natural monopolies included in this programme.
And what’s the logical endpoint?
“the destruction of manufacturing industry, the loss of control over many nationally important assets, and the conversion of much of the former ‘working class’ into a precariat with scant resources and very limited protections.”
The relentless search for higher profits, together with rent seeking, has turned the economy into a wealth pump: with ever costlier to maintain institutions, endless wars waged for the enrichment of the few, and companies hardly doing useful products or services anymore. Outsourcing manufacturing to places where material, energy and labor inputs were still cheap was just one (important) step in the process. Now, that there is nowhere left for production to be outsourced to (and when in fact we would need to bring industries back home), we are left with an economy wholly dependent on financialization and imports based on global supply chains spanning across the globe. The West has ended up producing nothing it needs, except more inequality — with billionaires vying for power and more “elite wannabes” with student loans to pay. And when Ivy League graduates shoot healthcare corporate execs on the street in a city filled with homeless people, you know that the brick wall at the end of this one-way street is not that far away anymore.
Where has growth gone?
The ruling elite’s short term focus on profits and shareholder value prevented them from understanding that there is no infinite growth on a finite planet, and the immiseration of people has its own limits, too.
‘Limits? What limits?! I want higher profit margins to earn my year end bonus — and I hope there is no upper limit on that!’
Zooming out a little helps us to understand how all this came to be. Behind the social tensions and raging inequality is the fact that the natural resources all corporations vying for have become increasingly limited over time. Remember the time, in the 1950’s and 1960’s when oil was so cheap and easy-to-get that its consumption could grow literally exponentially? Was it any wonder that the economy — powered, moved, mined, fed and built by diesel and gas guzzling machines — could grow in a similarly exponential fashion? After U.S. oil production first peaked in the 1970’s, though, coinciding with an OPEC oil embargo and the Iranian Revolution, world petroleum output could never return to its prodigious growth rates.
The rate of annual growth in world oil output was at a whopping 7% on average between 1900 and 1973, but after a ten-year period of crisis, it could only resume to a mere 1.4%. That is exactly a fifth of the annual growth rate before the peak in US oil output, making it impossible to grow the economy as fast as it did during the post-war boom. The energy cost of drilling, however, has more than quadrupled since then, and has started to act like an ever increasing tax rate on the energy left available for the rest of the economy, chipping away more and more from that meager 1.4% annual growth rate in energy output.
What’s worse world oil production is basically flat since 2015. We have left behind even that meager era of 1.4% growth a decade now, and thus we have arrived at a high plateau with an output fluctuating at a rate of +/- 1.6% (except for the two dismal years of 2020, and 2021). And we cannot expect to see much higher oil production figures next year either… In fact, most likely we will remain on this petroleum highland for a few more years, then as the energy cost of production keeps increasing and more and more oil fields will go out of business, a slow but accelerating decline will most likely take place.
Sure, strictly monetarily speaking, there are still no limits to growth. Governments can still print (or conjure into existence) as much money and as many paper assets as they wish. Their wee problem is, that the physical output of the extractive economy (still powered entirely by oil) can no longer keep up with their desired pace of money creation. You see, all these papers and banknotes, Bitcoins and stocks are just ones and zeros on a computer. Claims on an increasingly limited amount of resource and energy flows, coming at an ever increasing amount of energy invested. The question poses itself: what good is all that money for if large masses of people cannot buy a higher level of consumption with it? If the annual amount of oil, minerals, wood and grain coming out of the system cannot grow as fast as the amount of monetary claims made on it, then what becomes of the value of money, stocks and bonds?
Once you understand that all economic activity is underpinned by energy, and that the most indispensable form of energy comes from oil, a divorce between the growth of monetary claims and that of the oil powered economy can mean only one thing. Inflation. Inflation of prices, together with an inflation of debt and stock market bubbles. And when the physical limits of extraction is finally reached then production begins to decline, the problem turns into a predicament. I wager it won’t take too long for traders to realize that a shrinking economic output does not correlate well with rising stock prices… And when that happens… Well, I leave the rest up to your fantasy.
Pedal to the metal
Yet, nothing of the sort transpires through corporate and government communications. Instead we hear louder than ever calls for more speed, more effectiveness, more of everything. The sad reality is, that we have reached the technical limits of our existing inventions decades ago already. All engine types (be them internal combustion, jet or electric), even solar panels and wind turbines are already operating close to their practical efficiency limit. (That is, you can no longer squeeze out more efficiency gains from them at a reasonable price.) And while it should have become obvious by now that innovation is long dead, the mantra remains the same. The more innovation (no matter how useless it is), the better! Ever wondered how cars, for example, got bigger, heavier and more complex over the past few decades? Look no further for an answer.
All such innovations come with an increase in complexity, energy and resource use; which in a world of approaching extraction limits is not the best of news. All of the much touted new technologies from solar powered battery electric vehicles, to “smart” refrigerators are built from an ever wider array of metals, plastics and composite materials. All this increasing material demand ought to come from the same finite number of easy to access mineral deposits — mined, refined and delivered on the back of the same fossil fuels. Which, in return, are also found in a finite number of easy to access deposits — mined, refined and delivered on the back of yet another batch of fossil fuels. If that reminds you a snake biting its own tail, then you are not entirely mistaken.
The inconvenient truth is, that our predicament has no technological solution, only an outcome. Thus anyone offering remedies to any of its symptoms (such as climate change) without admitting that the root causes are systemic, is selling snake oil. Not willing to face the gravity of the overconsumption crisis and the ecological destruction it brought about, is thus maladaptive and will result in an even bigger crash than what otherwise awaits. Building increasingly complex, and consequently ever more energy and material intensive technologies solve nothing, only accelerates the depletion of the rich but very much finite base of easy-to-get resources. The corporate and government executives all fail to understand that they are racing against themselves: the faster we burn through Earth’s mineral reserves, the faster and steeper the fall will be later on. Ultimately, it really will not matter if we destroyed the planet in search for battery metals or for oil. The end result will be the same: resources down, pollution and ecocide up. Instead of acceleration, civilization needs to slow down to have at least a slim chance at moderating the massive disruption awaiting it in the coming decades.
Complacency. Then panic.
It’s not that none of this transpires through to the ruling elites. There is a growing sense on the fringes of power that things can no longer continue the way it did. The crises of the 21st century has shown us that the time for elite complacency is over. And while some treat this as good news — ‘Hey, look at the Paris accords, finally we got our act together!’ — I urge them to wait and see how it ends. And how the era of complacency ends when it comes to our entrenched, resource blind and short sighted ruling elite, is anything but pretty or desirable.
The usual outcome is either a totalitarian dystopia or outright chaos. Just take a look at what our governments do when the turd hits the fan. First, they watch in complete complacency, and when the crisis fails to resolve itself… Panic. They either overreact and do something flamboyantly stupid, or use the crisis to strengthen their position — and that of their sponsors. Then they declare that the crisis is over, and turn their attention to the next “opportunity” — without solving anything. Our ruling elite thus stumbles from crisis to crisis, until the pace of change completely overwhelms them. (Looking at the steadily decreasing quality of people at the helm though, that point of ‘being overwhelmed’ does not seem that far away.) In the meantime the hypernormalisation of absurdities and stupid decisions continue, even as remaining democratic institutions get demolished and get replaced with centralized power feeding an ever growing war machine.
Meanwhile both the public and the elite failed to register that we in the West have slowly become the late stage Soviet Union. Of course, the term ‘perestroika’ was replaced with a myth of a ‘green revolution’, but just like in the case of the late USSR, it was done without addressing the heart of the problem: a complete corporate takeover, resulting in the plundering of this planet and its peoples. Now, it’s too late to avoid collapse. The pretence went on too long, deep seated problems were left to be “resolved” for a later day, and chances for course correction were duly missed. As Richard Murphy writes:
„Financialisation, rentierism, exploitation and greed can co-exist for a while. And then they can’t. There is always a tipping point. The next financial, crisis might be much bigger than the last two because of this, though. Asset price collapses – which seem likely – create banking collapses. I hope the Treasury has a plan for that happening. The likelihood is it is going to need it.”
We need much more than a better plan or a simple switch between political parties, though. We need an entirely new system, based on something entirely different than a search for profits and shareholder value. We need to put industrial civilization to where it belongs: into hospice care. Will it be done? Well, as long as our societies, both in the West and in the East, are run by oligarchs and managed by a professional managerial caste, most certainly not. But if we survive the coming existential crisis of the oligarchic system without a nuclear war, the coming collapse of stock markets and asset prices could leave us with a power vacuum. You see we live in a house of cards with tightly interconnected financial institutions, where a single glitch can result in a cascade of unwanted events. Make no mistake: the end to financialization won’t be a pleasant or smooth ride, and surviving extreme hardship will be the name of the game. What ideas will fill that vacuum left behind by oligarchic capitalism, however, will depend on how well informed we are about our predicament, and how we plan to adapt to its many outcomes.
Until next time,
B
Note: After I finished writing this article, Dave Pollard published his own excellent account of the story. Be sure to read that to!
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Every kind of resource is being over-used, including the renewable kind...Fresh water aquifers are declining rapidly all over the worldd, with the cost of drilling wells to depths of more than 500 feet exploding...When a friend asked me about what to do, I replied that the problem would be entirely fixed by the next 100,000 year glacial period....
Your link-fu is excellent. Thank you for weaving these threads together. I encourage you to persist with this useful work.
You made many interesting comments, but I'll focus here on the idea of money. Money is a promise of future value, a debt. We live in a system which continually borrows from the future, which only makes sense in a situation of exponentially increasing value. For the situation we are facing, energy reduction and shrinking production, we will need to create a way of life which does not steal from the future but rather invests in it. That is to say, we need to put aside some substantial portion of our energy, while we are still on the plateau, to create value for future generations in a form which will be useful to them in the reality in which they'll be living. As you point out, the oligarchs are certainly not going to decide to do this. I think the future culture will need to be built from the ground up, from local seeds.
Let me give a practical example. If I build a chicken coop, buy chickens and invest the time and effort to learn how to keep them alive and productive, then (factoring in the value of my labour) I will probably end up spending far more for a dozen eggs than I would pay at the supermarket. But when eggs are ten times their current price, my children will thank me. And when the supermarket shelves are all empty, my grandchildren will thank me.
I feel no desire to "make money". I just want to begin the building of a better culture than the one I was born into. This will not be easy, and I may well fail, but I will still try.