When A Society Has Reached Its Limits, Reforms No Longer Fix What's Broken

Authored by Charles Hugh Smith via OfTwoMinds blog,

The most difficult part of my framework to grasp is the keystone: our system has reached its limits. The difficulty is that this is impossible to understand if one is embedded in the system's beliefs of how the world works and wedded to the system's sclerosis via self-interest.

Once self-interest dominates, it locks the system into its current configuration because attempting to change anything rouses resistance from whatever interests depend on that part of the status quo for their piece of the pie.

The sustainability of the entire system is of no concern because the only thing that matters is keeping our piece of the pie intact as-is. Nothing can change because that threatens somebody's share of the pie, i.e. how the system distributes income, gains, power and risk.

Everyone from the super-wealthy to low-income households fears any change that might reduce their security. Beneath our everyday awareness, a balance has been struck: if we just keep this exact arrangement as-is, everyone accepts the status quo.

This rigidity leads to sclerosis: the system has lost the flexibility and nimbleness needed to adapt. Any proposal that actually changes the socio-economic system is immediately struck off by those whose interests are threatened.

This leads to the substitution of artifice for authenticity - the other core concept that is impossible to understand if one is wedded to the status quo by self-interest and the fear of losing what we have.

Once a system has reached the point where authentic change becomes impossible because it disrupts the delicate balance of self-interest, it has reached its limits, and is set on run to failure, for a system that has lost its adaptive flexibility is doomed once conditions change.

Rather than face this disruptive reality, everyone wedded to the existing balance becomes dependent on expediencies that keep the system glued together, but at the cost of system stability. As self-interest and sclerosis dominate, the focus narrows to doing whatever it takes to maintain the increasingly unsustainable balance of interests.

This is how we've reached the point where the federal government borrows $2 trillion a year - 27% of its entire outlays - to maintain the precarious balance of every interest group. That this is unsustainable is obvious, but since real change is impossible because of the system's limits, everyone approves of expediencies that only add to the destabilizing momentum of run to failure.

The system no longer considers truly new ideas, as these threaten the delicate balance of self-interests. Just as expediencies are artifice, so too are the cover stories masking the unsustainability of expediencies. To avoid facing the impossibility of the status quo continuing unchanged, all public dialog is reduced to cliches, delusions and fantasies.

These artifices create an illusion of stability and sustainability that I call The Big Con, a mindset in which everything is fake but this is all that's acceptable. So the tired cliches of capitalism and socialism are deployed as rallying cries or cudgels, with no actual understanding of what they mean because that would get in the way of the "message:" what's needed are fake facades and fantasies, not understanding.

This dependence on parodies, cliches, delusions and fantasies to maintain the illusion of sustainability is also called hyper-normalization: we accept the unsustainable as permanent because this is what the system incentivizes and rewards.

The system has reached its limits on every level: institutional, conceptual and structural. The incentives to maintain the facades that everything is working just fine and policy tweaks / technology wil fix whatever's broken and the disincentives to tell the truth are kept firmly in place by self-interest, even though these lock the system as a whole in run to failure.

This leads to extremes that destabilize the system from inside: extremes of wealth-power inequality, extremes of fantasy (technology and finance can fix all problems) and artifice that lead to where we are today, with absurdly transparent parodies and self-parodies being presented as serious solutions proposed by serious people.

Scholar / author Ray Huang (no relation to Jensen) summed this up in his book 1587, A Year of No Significance: The Ming Dynasty in Decline that traced how the Ming Dynasty reaching its internal limits led to its inevitable collapse:

"The year 1587 may seem to be insignificant; nevertheless, it is evident by that time the limit for the Ming dynasty had already been reached. It no longer mattered whether the ruler was conscientious or irresponsible, whether his chief counselor was enterprising or conformist, whether the generals were resourceful or incompetent, whether the civil officials were honest or corrupt, or whether the leading thinkers were radicals or conservatives - in the end they all failed to reach fulfillment."

But why can't the system regain control of these runaway forces? The answer is that any reform that will be acceptable to the system's precariously balanced dependents will leave its structure and incentives untouched.

"Innovations" and "solutions" will necessarily be superficial and for show because that preserves a system that has reached its limits, a system defined by choiceless choices that create an illusion of autonomy: Democrat / Republican, Apple / Android, a choiceless healthcare system, a choiceless higher education system, and so on.

Given its limits, the entire system has only one option: decline to the point that a seemingly modest crisis disrupts the last shreds of coherence in a system that is now dependent on the destabilizing expediencies of ever-expanding borrowing and credit-asset bubbles, and the parodies, PR, delusions and fantasies of The Big Con. The inevitable result is the system collapses under its own weight of self-serving sclerosis and artifice.

The incentives are to repeat what everyone wants to hear, which is the system is working fine and is sustainable because technology and finance will fix everything without changing anything. This describes a system that has reached its limits.