Saturday, August 18, 2018

Peter Turchin - The Ginkgo Model of Societal Crisis



Peter Turchin studies why civilisations collapse and he says it's when the gap between the rich and poor get's too big the rich can then use their power and influence to avoid paying taxes while at the same time use their monopoly position to force down the wages of the general population and so in the end the average citizen is unable pay enough tax to keep the system going either. Then societies begin to collapse and this can sometimes trigger a civil war, he says.


What I found remarkable as we have lived through the past two years (indeed, the past eight years since I made my prediction of the impending crisis), is how precisely we today are following the trajectory into crisis that my colleagues and I saw in the historical societies we have studied. The explanation, probably, is that the three major mechanisms driving up social pressure for crisis in the SDT work in a mutually reinforcing way. The fundamental drive (a kind of a “pump” that drives up social pressure) is the oversupply of labor, which developed after the 1970s as a result of multiple interacting factors, and more recently was made acute by technological change driving automation and robotization. Oversupply of labor is the root cause for both popular immiseration and elite over-production/intra-elite competition. Both of those factors, then, contribute to the fiscal crisis of the state, because immiserated population can’t pay taxes, while the elites work to reduce the taxes on themselves.

Peter Turchin - The Ginkgo Model of Societal Crisis

4 comments:

Andrew Anderson said...

Oversupply of labor is the root cause for both popular immiseration and elite over-production/intra-elite competition.

Hence the folly of using what is in essence, because of government privileges for private credit creation, the public's credit to disemploy the public but for private gain.

And Warren Mosler's proposals for banking would do nothing to halt that process but rather make it more fool-proof by eliminating what little remains of the banks' liabilities toward the non-bank private sector.

Tom Hickey said...

Good one.

Interesting how it hangs on taxation.

It is also interesting to witness elites doing their best to de-tax capital and tax work instead, with top management getting a cut of capital, e.g. through stock options.

Matt Franko said...

“the past eight years since I made my prediction of the impending crisis),”

So I guess “impending” is defined as greater than 8 years at least....

Michael Lotus said...

Regarding elite overproduction:
https://chicagoboyz.net/archives/57903.html