Guest Post: July 4, 2011: The Cycle Of Dependency And The Atrophy Of Self-Reliance

Tyler Durden's picture

Submitted by Charles Hugh Smith from Of Two Minds

July 4, 2011: The Cycle of Dependency and the Atrophy of Self-Reliance

The 4th of July marks the birth of the nation, and as such is a good time to distinguish between the nation and its Central government, the Savior State.

The 4th of July is a fitting day to ponder the reality that we are at Peak Government, and the Savior State is unsustainable. This is a matter of accounting: no nation can spend more than it generates in surplus real output forever. What goes unremarked is the intrinsically destructive nature of our rising dependence on a Savior State.

In his book Collapse of Complex Societies, anthropologist Joseph Tainter identified two causes of economic collapse: investments in social complexity yield diminishing marginal returns, and energy subsidies, i.e. cheap, abundant energy, decline. In my terminology, the dynamic he describes is one in which the cost structure of a society continues rising due to “the ratchet effect” but the gains from the added expenses are increasingly marginal.

At some point the additional costs, usually justified as the “solution” to the marginal returns problem, become counterproductive and actually drain the system of resilience as dissent and adaptability (“variation is information”) are suppressed. This feeds systemic instability: on the surface, all seems stable, but beneath the surface, the potential for a stick/slip destabilization grows unnoticed.

Cheap, abundant energy offers a surplus of value that can be invested in social complexity and consumption. Once the cost and availability of energy declines, then that surplus shrinks and can no longer be used to support the high cost structure.

The U.S. economy has clearly been driven to the cliff edge of instability by both dynamics: the cheap, abundant energy which enabled fast growth of consumption and high cost social complexity is vanishing, and the cost structure of the economy has ballooned far beyond sustainability.

To recount two previously mentioned examples: the “best of the best” fighter aircraft that cost $56 million per plane only a few years ago is being replaced by a new aircraft that costs $300 million each. Medicare/Medicaid and other healthcare costs are growing at two to three times faster than the underlying economy, and now consume twice as much per capita as any other developed nation. The "solution" offered by the Status Quo is a horrendously costly layer of additional complexity which doesn't even address the key issue that we spend twice as much as other developed nations for arguably poorer care.

Put another way, the institutions that were intended to solve society’s big problems slip into self-preservation, and thus end up adding to costs and problems alike.

Jared Diamond’s book Collapse: How Societies Choose to Fail or Succeed argues persuasively that environmental mismanagement plays a key role in social instability and collapse. Some of the key factors include the relative fragility of the ecosystem, the human population’s demands on the carrying capacity of the environment, and the ability of social institutions to effectively problem-solve ecological overshoot.

In my analysis, there is a third dynamic that causes societies to cycle through growth, stasis and decline: an unremarked cycle of rising dependency on the Central State for direction, distraction and the essentials of life.

One example of this is the Roman Empire, which experienced an atrophying of enterprise and innovation as the Empire increased taxation on its remaining productive enterprises to fund the Empire’s high cost structure. To quell dissent, the Empire pursued a dual strategy of increased political oppression and placating the increasingly dependent lower classes with "bread and circuses," literally distributing free bread and free entertainment to roughly 40% of the population of Rome. Both of these strategies required additional expenditures of treasure, even as they suppressed the dissent and adaptation (i.e. the information in variation) that might have led to a successful “ratchet down” transition to a much less costly and sustainable decentralized structure.

This "Savior State" also creates a third pernicious dynamic: as dependence on the Central State rises, self-confidence and self-reliance both decline, sapping the populace of the confidence and drive needed to meet the challenges of diminishing returns and higher energy costs.

We can visualize rising dependence on the Savior State and declining self-reliance on a see-saw: as dependence rises, self-confidence and self-reliance must fall.

What ensues is a classic destructive dynamic of co-dependence in which the supplicants demand ever more “bread and circuses” even as their resentment over their dependent status rises unabated. The Central State eventually taxes the productive citizenry into penury, as the poor are now completely dependent on the Savior State and the wealthy escape taxation via bribes and favoritism.

It seems clear to me that the U.S. is in the final stages of just such a dependency cycle that will end in the implosion of the Central Savior State as its obligations far exceed the economy's ability to generate surpluses on that gigantic scale. Though the Central State can always print money, this artifice doesn’t “fool Mother Nature” for long; it doesn’t matter how many zeros are printed on the paper, the product will still cost the same in terms of energy consumed and hours of labor.

The end result of money-printing that is unsupported by actual surplus generated by the economy is the government sends out checks for $1,000 every month in accordance with its obligations but that sum only buys a single loaf of bread. You cannot fool Mother Nature by printing bits of paper and claiming they are a future claim on real goods and services unless the extra money is based on additional surplus being added to the system.

This dynamic leads to an environment in which citizens expect jobs, healthcare, housing, education, etc. from a Central State whose cost has already exceeded the carrying capacity of the economy. As cheap, abundant energy disappears, then the Central State loses a key subsidy of its bloated complexity. As the State’s fiefdoms devote their remaining energy to self-preservation at the expense of taxpayers or other government fiefdoms, the problem-solving potential of these institutions drops below zero: not only can they not solve any pressing problems, their “ratchet effect” efforts at self-preservation actively create new layers of problems and costs which push the State closer to insolvency.

Rather than wait for the Savior State to renege on its impossible promises, this site suggests pushing the see-saw in the other direction: boost self-reliance and self-confidence and lower dependence on a Savior State doomed by unfavorable demographics, high cost structure, failed institutions and rising energy costs.

Rome offers us a plausible model for the devolution of the Savior State.
While a sudden collapse similar to the Soviet Union is always possible, I suspect the U.S. Central State will devolve in parallel with the ancient Roman Empire: as the Empire's costs exceeded the surplus generated by its remaining taxpayers, it issued flurries of edicts to the far-flung provinces, demanding more treasure and imposing ever more regulations.

The edicts from Rome were simply ignored. In Yeats' phrase, the falcon no longer heard the falconer. Enforcement is expensive, and if the gains reaped by costly enforcement are marginal or negative, then soon the issuers of the edicts ignore them, too.

On this 4th of July, the idea that the Savior State could slip into irrelevancy is far-fetched indeed, as the Central State is currently at Peak Government: intrusive, invasive, all-controlling, even as it plays the role of benign Sugar Daddy issuing trillion-dollar bailouts to banks, trillion-dollar props to the stock market, food stamps and Section 8 to the poor, Medicare and Medicaid to the sickcare cartels, Social Security to tens of millions of retirees, unlimited funding to the National Security State and its Global Empire, and all the other programs funded with its $4 trillion budget ($3.8 trillion officially, but don't forget the hundreds of billions in off-budget "supplemental appropriations") and its $1.6 trillion annual deficit, fully 11% of the nation's GDP.

Perhaps it is time to think of the government not as our Savior but as the guarantor of the Constitution. Peak Government is like Peak Oil: most will deny it is even possible until it's happening. We are probably a few years away from a true scarcity of oil and also a few years away from the realization that the Savior State's $100 trillion in promises cannot be met by "fooling Mother Nature" with paper and promises. But that day is coming, and perhaps we will be more cognizant of this reality on July 4, 2015.

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AnAnonymous's picture

The west is at peak state, this is very likely. It does not mean that other places in the world have met the peak state. These places will be able to benefit from the state more than it is detrimental to them.

This explains in the West all the propaganda about how wrong the State.

Now it has peaked here, it is all about preventing others from benefiting from the State.

BigDuke6's picture

You're talking shit... as normal.

But i think what you want to say is that democracy falls apart when the plebs realise they can vote themselves more and more benefits.

eg the socialist leaning governments of europe who borrow from china to pay for their pet project nonsense of the day.

there you go - another layer in the onion of problems.

AnAnonymous's picture

You're talking shit... as normal.

But i think what you want to say is that democracy falls apart when the plebs realise they can vote themselves more and more benefits.

 

No, useless to put words in my mouth. I meant what I meant.

State efficiency is peaking in the West, as any process, it has found its limits.

For the tale on democracy to be valuable, one has to checked validity of it.

In the US for example, 25~30 pc of the total electorate is enough to secure a position in politics.

If indeed, this is the plebs voting themselves more and more benefits in the US strained logics...

The reality is that the US world order has imposed a consumption game and that benefits are a great way to increase the volume of consumption  and deprive other competitors from opportunities of consumption. This policy, suitable in this framework, has been adopted by US governments from day one.

 

Propagandists should also cut down their own drivel, attrition is nice but hey, they are going to meet attrition like the others.

The US success was a state success as shown through examples like the homestead act, an hand out given to US citizens during the 19th, when the US was already socialist or something (according to shallow propaganda by uninspired propagandists)

gwiss's picture

The flaw in your logic here is that your statement that the homestead act was a handout is predicated on the state automatically owning all the land, yes?  Thus inherent to your statement is the automatic presumption that the state should rightfully own all land, and will only let private individuals own land when it suits the state's purpose, and thus if it "gives" land to private owners, this must be a handout.

 

What if, instead, the state takes a minimist viewpoint, and decides that its only responsibility is to make sure that there are no clashes over who owns what, and thus its job is merely to keep a central record of who owns what in order to facilitate orderly interactions between citizens?

Wouldn't that fit with the original ethic of America?  Better than your interpretation, which is ignorant of both history as well as the philosophy behind it?

Don't spout drivel -- it makes you look stupid.

AnAnonymous's picture

What is that about?

Casting an hypothetical against reality? And I am the one who looks stupid?

 

The statement that the Homestead Act was a hand out is not based on supposed distorted view on the State (that should be predicated on the State automatically owning all the land).

It is based on what happened. Not on hypothetical function, priviledge the State supposedly has, but on what happened.

Wouldn't that fit with the original ethic of America?  Better than your interpretation, which is ignorant of both history as well as the philosophy behind it?

 

There is no interpretation from me. Projection is definitively a nasty thing for US citizens. You are the one making interpretations. I simply stated things as they are, no interpretation. I did not care to know whether or not it would fit better the US 'original ethic', whether or not the state has this or that priviledge.

The US government took land from the Indians and distributed to its citizenry. It is a hand out. Clear and simple.

gwiss's picture

Look, I'm not necessarily arguing that the entirety of your statements are flawed.  Some of your reasoning makes sense.  But, to argue that the entire American enterprise was based on projection of state power is nonsense.  The attrition rate for settlers was very high because they were out in FRONT of state power.  There was no one there except them and the Indians -- they thrived because they existed in a power vacuum, not because they were sucking at government tit.  Sure, every once in a while the cavalry would ride through, but on a day to day basis, the settlers are the ones who displaced the Indians.  They took the land -- not the government.

 

So, if your contention is that the American experiment is an example of state power, then you are dead wrong, and in fact your view of the world will be precisely backwards.  The American experiment took a turn for the worse with the Civil War, because it was at that point that the back of state power was broken, and also at that point that balance of power was lost.  Prior to that, Federal power was weak, and growth was organic, which is the only way growth should be.  The Civil War destroyed the balance of power, and it still took 50 years for the other components of Federal power (income tax and central bank) necessary for the unrestricted growth of central government to take off.  Since then our lifestyle has been built on debt, and that process is only now finally coming to an end.

 

The Homestead act was not an example of government largess, but instead government trying to encourage people to settle a new region with a minimum of interference.

AnAnonymous's picture

The Homestead act was not an example of government largess, but instead government trying to encourage people to settle a new region with a minimum of interference.

 

Sure, sure. It wasnt. It could not be.

Could propagandists prepare better propaganda? It is like hiding genetalia behind thin air.

The US state has always been as big as it was possible to be.

 

Sure, every once in a while the cavalry would ride through, but on a day to day basis, the settlers are the ones who displaced the Indians.  They took the land -- not the government.

No. The cavalry was indeed late for one reason: the US played a two level authority game.

The US has had this song called the rule of law and the US signed treaties with the Indians.

So the Indians were caught into playing the rule of law. When settlers illegally settled on their land, the Indians reported to the state authority that kicked the ball away. It was supposedly a federal issue. Indians filing to the federal govermnent: it was supposed to be a state issue. At this point, the Indians took the matter in their hand and the cavalry was called in. But for settlers who settled illegally, it was very late compared to the time they first settled.

Your version could have charm because it would show the total disrespect US citizens had for private property rights, taking the matter in the hands.

But facts are facts: theft was done through a proxy and that proxy was the US government.

gwiss's picture

The only way your version works is if you imagine the federal troops clearing a section of wilderness of indigini and then posting "open for business" signs followed by settlers pouring in like ants to sugar.  This ignores the process of settlers encroaching on Indian lands and lands owned by foreign governments, slowly building up a presence, and then applying increasing pressure on government to support them.  It also ignores the process of regions becoming territories and then states, which involved civilian population proaction.

 

You are conflating a persistent pattern of Federal governmental duplicity and promise breaking regarding native American treaties, which certainly existed, with central control and direction of settlement, which barely existed.  Your assertion that US governmental power has always been as strong as could possibly exist is an a priori assumption that colors your entire perspective of American history and blinds you to seeing the difference between the American government that used to exist and the American government that currently exists, which are two completely different beasts.  And, if you can't see the difference, you have no hope in hell of understanding what will inevitably happen when the whole process starts over.

AnAnonymous's picture

slowly building up a presence, and then applying increasing pressure on government to support them.

 

Once again, it does not correspond with reality.

One cause of the US war on the King is that the King did not support the settlers' efforts. The King was committed in protecting the Indians' property rights against the efforts of his own subjects.

The government direction is not a given. It can be supportive or can be not.

The US state was supportive.

Your assertion that US governmental power has always been as strong as could possibly exist is an a priori assumption that colors your entire perspective of American history and blinds you to seeing the difference between the American government that used to exist and the American government that currently exists, which are two completely different beasts. 

No, it is an observation based on collection of facts.

The US government is the same beast that has simply been growing over the years.

Sean7k's picture

The US government did not exist in 1763 at the time of the King's order. You have an interesting way of twisting reality. Further, your convenient misuse of time and action attaches the policies of one time (1763) to the actions of government in the early 1800's when the focus was on the Louisiana purchase. This is the timeframe the writer is referring to. 

The US, which had used land sales as a primary means of revenue, gave up this policy to settle an area it did not own or control- and were afraid would be purchased by the British or Spanish from the indians that owned it. The purchase had merely transferred New Orleans and St. Louis and the "right" to travels riverways and treaty with the indians for land. 

chumbawamba's picture

Instead of these uselessly misdirected threads and the usual hand-wringing, let's now turn our attention towards a more productive pursuit:

HOW DO WE CONVINCE THE AVERAGE JOE AND MARY THAT, NO, THINGS ARE NOT GETTING BETTER AND, YES, YOU ARE FUCKED?

We need critical mass.  Casting aspersions and despising those who need help to break through is counter-productive.  We should be doing all we can at any cost to begin raising the level of awareness of the Truth amongst the "masses".  The time is now ripe; a suspicious air pervades the country.  People want to know what the fuck is going on, and they want to know now.

We need to be there to give it to them, before some charlatan like a talking head on teevee fills in for us.  The revolution is being fought here and now in the minds of people all over America and the Western world in general.  The ammunition is logic and reason.  The other side doesn't have a chance, but YOU must actively take on the fight because victory won't happen by default.

REVOLUTION IS NOT A SPECTATOR SPORT.

Lead, Follow, or GTFO!

I am Chumbawamba.

AnAnonymous's picture

REVOLUTION IS NOT A SPECTATOR SPORT.

 

What revolution?

People on this site do not want revolution. They want their position in the US secured or back. They are not against the system, they are against losing their position in the system.

It is very different. And recalling that fact is not casting aspersions.

BigDuke6's picture

On this day more than others we should remember the constitution of the usa which really was written with the evil banksters in europe in mind.

To me a governments main duties are - 

to protect its people.

to protect property rights.

no need to go on as those as under threat everywhere.

i guess from your comment you don't hold others (not just here - anywhere) in high regard.  that will hold you back.... we never stop learning.

i've seen you talk good stuff in the past - whats going on in the last month? 

chumbawamba's picture

Don't project onto others what you want for yourself.

Yours is option #3: GET THE FUCK OUT OF THE WAY.

I am Chumbawamba.

JW n FL's picture
by AnAnonymous
on Mon, 07/04/2011 - 16:19
#1425022

 

REVOLUTION IS NOT A SPECTATOR SPORT.

 

What revolution?

People on this site do not want revolution. They want their position in the US secured or back. They are not against the system, they are against losing their position in the system.

It is very different. And recalling that fact is not casting aspersions.

 

**************************************************************

 

NEVER! have truer words been spoken and or typed! God Love You!!

 

I have missed you so very much.

BigDuke6's picture

You 2 boyz - our regular cop-killing che guevara's.

Yeah, we're all here working for the man... while you get pumped and post stuff... which i mostly agree with... but as the sarge says in platoon.

'Death.. what yall know about death?'

ok , i'm a bit smashed now...

JW n FL's picture

Duke.. I do NOT! want my fellow Brothers or Sisters Dead.. Not now! Not Later!!

But.. and there always is.. if the Police will really equates to Federal Law Enforcement not really Local.. stands in the way of "We the People" Prosecuting the Treasonous Systemic Behaviors.. then they are making themselves Modern Day Pinkerton's. I really have a very Roman view of my Fellow Americans, which is to say that I would go to War over anyone of them, over a Foreign Power causing them harm.

 

But I am getting away from the issues.. at some point "We the People" are going to wake up and look around and say "what the fuck?" have these Lobby Whores and AAA Rated Corporations done to our Country?? and that day will NOT be Pretty! but I make no, NO! Excuses or Apologies for standing with the People who are truly victims of the largest theft in History, NONE! I will not feel bad for those who stand with that kind of outright Evil.

 

So I will say this of "The Fog", "Kill'em All and Let God Sort'em out!"

 

I have to say that in all reality that the sheep are to, too stupid and far to plugged into CNBC ? CNN / and / or add other name here ___________ to Really Give A Flying Fuck About Who Robbed The WORLD BLIND! ya just cant fix stupid, no matter how hard ya try!

BigDuke6's picture

I see where you are clearer now... and i respect that.

i swing between fury and abject dismay when i think of the above subject matter, which is totally correct.

Tonight of all nights i'm going to think of the good things.

CH1's picture

Ah, but the minions of the state are here to keep us wasting our time arguing Red v. Blue, or Israel v. Arab, or whatever else they can.

Don't blow time on them.

Urban Redneck's picture

It not just the western world.  Non-means-tested fuel subsidies don't even exist in the US or Europe, but they will die too as the price of energy increases.

The rise of the savior State is a product of the industrial revolution, the maximum impact of the decline savior State correlates directly to the level of development reached in an economy.

However, without low savings and current or future operating deficits, or net wealth export, there is actually no reason for the savior State to die.  The issue is that that most developed States run continuous operating deficits and are net wealth exporters, who have become functionally dependent on luxurious infrastructures not financed through their own production.

AnAnonymous's picture

The issue is that that most developed States run continuous operating deficits and are net wealth exporters, who have become functionally dependent on luxurious infrastructures not financed through their own production.

 

In Smithian economics, infrastructres are seldom financed by their own production. They are often paid by others who have to accept big losses.

Urban Redneck's picture

The financing source of the infrastructure is irrelevant to a society's practical dependence on it.  "Others" also has quiet different meanings when viewed in the context of GDP vs GNP, and Public vs Private financing.  Since classical economics pre-dates chronic daily dependence upon all but the most basic of the infrastructure upon which most societies currently depend- it does not provide an insightful perspective on the current conundrums.   

AnAnonymous's picture

It is relevant. Infrastructures in a Smithian economics context can seldom pay for themselves. Therefore it induces a dependency on something that could not have been induced through self reliance.

 

Public vs private, GDP vs GNP are irrelevant in the matter.

Urban Redneck's picture

 

Perhaps, since the article is about the US (4th of July and all) you should define exactly what infrastructure you are talking about and who the "others" are who pay for that infrastructure, or go home.

 

AnAnonymous's picture

In Smithian economics, infrastructure in general is known to cause problem. While it is straightforward that the exploitation of the infrastructure in such economical context can lead to profit, it is another story when it comes to amortization of the building costs.

The whole 19th century was riddled by events like that:

-calling for capital to build infrastructures

-companies involved in the process are pushed to bankrupcy

-infrastructure is here to stay

Eg: rail road construction.

 

And the trend has kept going everywhere Smithian economics is involved going to stuff like stadiums (financed by cities), high ways, tunnels like the Euro tunnel, the housing inventory in the US increased the very same way as infrastructures are financed in Smithian economics...

Urban Redneck's picture

I am perhaps not the most objective when it comes to the Chunnel since I know the American who bitch slapped both the surrender monkeys and wankers into line and actually got the thing built.  To the UK & French investors who took a bath in the bath in the following decade- they got they what they deserved- they privately financed infrastructure run (operated) by the State.  That is similar the the US fools who bought the Government Motors snake oil on IPO day.  In neither case is the underlying venture inherently unprofitable, but both cases demonstrate the potential cost to investors of POOR OPERATING MANAGEMENT.

Returning to the subject of US infrastructure- stadiums simply aren't infrastructure.  They are, however, cash cows for politicians and kleptocrats looking to pilfer the public's pockets. 

As to the US railroads - they were built by the original Robber Barons- whose names now adorn US Banks, Universities, and Fortune 500 companies- so I'd say they profited rather handsomely.

The single largest US infrastructure project was the US Interstate System, which was publicly financed, and despite sloppy maintenance standards in the US, has facilitated massive GDP growth over the past half century despite the high cost of trafficing goods by truck (as opposed to by rail).

In regards to other US infrastructure- ports are cash cows, public utilities (water, power, sewer) only go bankrupt because of State price controls, and the local authorities usually cave on the controls long before it gets to that point.  The fixed telcos took a bath on high speed network expansion, but are have either recovered or merged since then (however, that whole era of expansion was driven by the irrational exuberance of the original dot com bubble).  Network expansion in the wireless space has done a better job of correlating outlays to growth and amortization (which is inherently easier given the smaller footprint).  The moles and beavers works in the US are almost always profitable (except when you hire an incompetent mole for the tunnel or beaver for the dam, or more critically- allow or demand cut-rate performance during E&D).     

Regardless of what economic dogma you subscribe to INFRASTUCTURE FACILITATES ECONOMIC ACTIVITY.  Any given project is either profitable or it isn't.  When costs and profits belong to distinct parties that is a financing or political issue, not an economic issue.  For the person putting up the money it is definitely an investment issue and possibly and economic one- but they are different and unique perspectives into the same project.

I finance, supply, and build infrastructure in various capacities in a number of developing and undeveloped economies- I always know going into a project whether the venture will or won't be profitable and for whom, baring extraordinary events.  Anyone who is experienced and competent in the business knows this.  It comes down to identifying what you know, and more importantly what you don't know, what you can control, and more importantly what you can't control, and planning accordingly.  I take more of a BSD than quantitative approach to risk management, but either can work with experience- it isn't rocket science, the engineers do that.  The developed economies are even easier to profit in. 

AnAnonymous's picture

As to the US railroads - they were built by the original Robber Barons- whose names now adorn US Banks, Universities, and Fortune 500 companies- so I'd say they profited rather handsomely.

 

Are US citizens in love with battling wind mills?

I stated earlier in previous posts that in Smithian economics infractures exploitation is profitable and the question was to see if they could pay themselves.

Why come with an example showing that exploitation of infrastructures is profitable, once one had not to foot the bill of the construction cost?

Stuck on Zero's picture

Dozens of economic studies have shown that infrastructure investments are revenue neutral for a state - but wealth building for the public.  This goes for dams, railroads, highways, ports, pipelines, aqueducts, pure R&D etc.  We're in a situation now where the national wealth is not going to infrastructure but to follies: F35s, bankers, wars, handouts, and special interests. For the price of our MidEast follies we could have abundant cheap energy today. 

AnAnonymous's picture

Dozens of economic studies have shown that infrastructure investments are revenue neutral for a state - but wealth building for the public.  This goes for dams, railroads, highways, ports, pipelines, aqueducts, pure R&D etc. 

 

You dont need dozens of studies for something that was stated as part of the general framework as it was done by Smith.

The question is not whether or not the infrastructure exploitation is going to be profitable (it is on a short term) but to know if the infrastructure pays for itself.

It usually does not. And building infrastructures has been performed with some entity footing the cost of building.

Same story from the rail road construction in the US to the Eurotunnel stuff in Europe.

Stuck on Zero's picture

In 1933 construction commenced on the Golden gate bridge.  By 1971 it was paid off and the bond holders did well.  Now it is paid off many times over.  The only time that infrastructure investments don't pay off is when they are pork, ill-conceived, or created in an era when financial shenanigans earns more money than solid investments.  Right now there are thousands of infrastructure projects begging for funding.  All would be covered by our war costs.  The history of successful nations is a history of infrastructure building, China, Japan, Korea, U.S., Great Britain, France, and Germany are examples.   When a nation stops investing in infrastructure it inevitably collapses (no pun intended). 

AnAnonymous's picture

The history of successful nations is a history of infrastructure building, China, Japan, Korea, U.S., Great Britain, France, and Germany are examples.

 

All these nations are known to apply the recipe told earlier. Like getting the high ways network construction costs absorbed by the public and let private parties pocket the profits due to exploitation.

Euro tunnel, rings a bell?

And no, infrastructure building construction costs is a known issue in Smithian economics.

i-dog's picture

"Now it has peaked here, it is all about preventing others from benefiting from the State."

Arrant gibberish. Troll.

AnAnonymous's picture

No gibberish.

US world order is dominated by gang mentality. Gangs do not oppose something on principles, they oppose others benefiting from something.

Gangs do not oppose drugs trafficking. They oppose others making money from drug trafficking.

Similarly, US citizens do not oppose the State for itself (the State has been highly benefitial to US citizens and they were lining up to be recipients in events like the Homestead Act) They oppose the State because it has met its maximal efficiency for them, that the drawbacks associated to the State start to outweight dramatically the advantages and because others are in a much better position to benefit from the State.

The list is long: the US do not oppose nuclear weaponry and the use of. The US oppose others having nuclear weaponry and using it etc

Old saying: the last in closes the door. Suits the US world order.

Oh regional Indian's picture

Not sure why you are getting so much pushback. It's true.

In every country, you can see the trend is similar. Dynastic governments (Thailand anyone???) that relentlessly work to push more and more of their citizenry into the bottom of the pyramid with a waterproof control layer of police/judiciary/military to keep them there.

All leading to top-heaviness strangely enough and thus the coming crash.

ORI

http://aadivaahan.wordpress.com/2011/06/28/thoughts-and-a-heads-up/

Urban Redneck's picture

Thaksin was scraping the bottom of the options barrel before he resorted to the dynastic approach- but he has always relied on pushing more and more of their citizenry into the bottom of the pyramid, or at least making sure the wealth pyramid was an ever-increasing inversion of the social pyramid, but since it is sold with a pitch of more handouts, it works when the opposition can't deliver.  The sixty-four billion baht question though is can he pull off a pardon and survive an extended return to Thailand to collect... since the entire public side of politics is Thailand is never anything more than the Junta members rearranging pawns on the chess board.  Paranoid Americans, overconfident in their in ability to identify the members of the TPTB, would have a psychedelic experience with the inner-workings of that set of Powers.

three chord sloth's picture

The West is not "at peak state"... it passed that point decades ago. We have been hemorrhaging both money and moral authority since at least the late-'60s, when nearly the entirety of the West overshot The Sustainable State.

CH1's picture

The state was a scam from its beginnings. It is merely rigid-mindedness that keeps people believing in it.

Imagine: They take your money, order you around, kill you or lock you in cages if you disobey... and they expect you to call them sacred.

Yeah, it really is that nuts.

I am Jobe's picture

Lets not forget who set the standard that is adopted in the USA.

Long Live Joseph Goebbels

Oh regional Indian's picture

In the current scenario, I'd call him Gobbles.

Somehow the US and gobbling seem to go together. 

ORI

http://aadivaahan.wordpress.com/2011/06/30/desiderata/

ArkansasAngie's picture

And it is our duty to stop this insanity.

You do this by unelecting Washington ... the system's protectors.

 

B9K9's picture

LOL. Rightttt.

Charles, nice analysis; however, I believe you should consider yet one more dynamic. Or, to quote Ovid:

“Treason doth never prosper, what is the reason? For if it doth prosper, none dare call it treason. ”

IOW, there's money to be made in treason. Remember that classic line from 'The Graduate'?

Mr. McGuire: I just want to say one word to you. Just one word.
Benjamin: Yes, sir.
Mr. McGuire: Are you listening?
Benjamin: Yes, I am.
Mr. McGuire: Plastics.
Benjamin: Exactly how do you mean?

The point I'm trying to make is there are always opportunities, whether it was Hollywood in the 20s, aerospace in the 50s, or high-tech in the 90s. Guess what the opportunity is today?

I learned early in my career that whenever I had what I thought was a good idea, 20 others had thought of it as well, while 5 had already launched companies. In reference to your insights, while thoughtful, we can assume a host of others share them. But more importantly, we should expect there those way ahead of the curve who not only recognize what is happening, but realize that gunning this system into the ground is the biggest opportunity of the 10s & 20s.

Once you understand the peak oil issue is not shortages, but rather flat production, that spells doom to the perpetual growth ponzi, then you have a couple of options: think about it, complain about it (ZH provides an excellent platform), or do something about it.

The best & brighest, who have the levers of our government & economy in their hands, have decided to do something about it. If you know the sucker is going down, wouldn't it behoove you to grab as much loot as possible?

That's what we're up against - it's not just a passive, 'how come no one will provide solutions'; rather, these are active, open acts of treason.

yabyum's picture

Cheap energy via petrochemicals are gone. We are now fighting for the scraps, time3 to rent the road warrior flicks again.

trav7777's picture

I would counsel ANYONE who is talking about the irrelevance of "paper claims against nature," as CHS just did, to never, ever put the adjective "cheap" in front of energy.

His mind is caught in the same paper box as everyone else's.  Perhaps he's too scared of what PO means, so he must unconsciously self-affirm with this caveat of "cheap," as if there will still be plenty of surplus energy, growing supplies, just at higher "prices."

There won't be.  The barrels don't care how much we charge for them.  Nature gives not a shit about our value systems.

There is no such thing as cheap oil.

Poor Grogman's picture

The collapse will be more rapid this time, more leverage more dependence, faster transmission times and less of an organic economy. With any luck we can get the whole collapse thingo done and dusted, over the Christmas holidays and start a new economic system after the turmoil in the new year....

trav7777's picture

it won't make a difference when you wilfully ignore the cause of the collapse.

BlackVoid's picture

Tainter's book is a must read for anyone who is interested in the big picture.

You will understand then, that collapse is INEVITABLE, unless a new energy source is discovered that is at least as good as oil.

The issue is not just Peak Oil, it is a broad spectrum problem: diminishing returns in everything.

Bicycle Repairman's picture

"that collapse is INEVITABLE"

No doubt, but a slow collapse over several generations will hardly seem like a collapse.

knowless's picture

we've been in a slow collapse for nearly 40 years..