More America the Delusional

The question I asked myself in the last post, and which I had to reconsider the answer, was why is all the debt in the U.S. necessary. I did not ask why do we have it. I asked why is it necessary? A fair response might be: Is it really necessary at all? And I'd say no, not much beyond eating, breathing, and procreating could truly be called necessary. But, if one is an empire looking to continue it's life as one, then eventually debt becomes necessary to meet that end.

As I was writing the original post on Sunday, I found myself falling into the same political argument that the rest of the nation is having. One reason I started writing this blog was to offer a way out of the political gridlock the country is currently experiencing. So rather than dive into the Free-market Austrian school vs. the centralized Keynesian death match, the fruitless freedom vs. socialism clusterfuck, I want to move to a different, more insightful, and critical discussion of what has faced any dominant power in world history and what faces Americans today.

Debt has been the burden that breaks the back of empire throughout history. (I use empire, though you could insert "superpower" or "dominant power" in it's place and it would mean the same thing. I choose to use empire because it has a simpler, classic dimension that puts current events into a broader historical framework.) Inflation is a natural response for debt ladened empires as they seek to cover the increasing costs of their imperial obligations. Typically, as empires are in their expansionary phases, these costs of administering, garrisoning, and legitimizing their rule can be paid for through further expansion. So it has been that the empire puts forth tremendous effort to conquer it's neighbors and the conquered are the ones made to pay for the privilege. However, once the expansionary phase has ended, then the empire has only it's inerior resources to rely on to balance the books. Over time, this becomes harder and harder to do.

A survey of some past empires provides us with examples. Rome, the Spanish Hapsburgs, and the English all underwent clear diminishment of the benefits they received from their imperial holdings as the costs of maintaining empires rose. Mainly, the costs were military, as rebellious subjects had to be suppressed or greedy rivals looked to snatch a land or two away. Military spending is especially inflationary because the money for wars is often borrowed and goes to no economically productive purpose. The debts start to build as it becomes harder to keep all the different parts of the empire in order. There are two basic strategies for dealing with imperial debt. One is to inflate the currency and the other is to tax your citizens. Usually both are employed. So the Roman peasant of 400 CE becomes the disaffected Roman subject unable to meet his own needs and the needs of the imperium. A glance at the Spanish and English colonial empires and the same trend is revealed. Eventually, the system becomes brittle and unable to withstand shocks to it, either from within or without, and collapse occurs.

This is a simple way of introducing complexity. I wrote about this in a previous post so you can refer to that for details on how this happens. I would also recommend Joseph Tainter's "The Collapse of Complex Societies" to get a fuller appreciation of how this operates. Now it's time to apply this to contemporary America in the throes of a debt deflation and ongoing recession/depression as well as in the midst of war and occupation of far away lands.

First, though, a definition of what I mean by collapse. Tainter calls collapse a reduction of a society from a higher to a lower order of complexity. You can look at it as layers of a pyramid, or ovals in a flow chart, and see that the more parts to a system the more complext it is. Simple enough, but each layer added to the pyramid requires an investment of energy by that society in order to solve problems that are unique to it's experience and requires special attention. So a collpase occurs when the highest orders of complexity cannot be maintained anymore and have to be abandoned. Centralized structures decentralize as the gains from the structures are no longer available. This all sounds innocent enough until you look at the population decline of Europe after the fall of Rome, or of Russia after the collapse of the Soviet Union. These are not good times. People die in large numbers.

Now a look at the U.S. situation. What does any of this have to do with the here and now? Isn't America special that way? I will respond in this way: Show me a man living in these above mentioned empires who raised the warning flag about impending collapse and I'll show you a man who was not listened to. If anyone did take note of the diminished fortunes of his empire it was probably quite late in the game. Having said that, I think it would not be controversial to say that 21st century America, the globalized economy it sits at the center of, the administration of it's affairs overseen by countless governmental, non-governmental, or extra-governmental, the size of modern day corporations, the trade arrangements that are the heart of a globalized economy, the technology used in everything from entertainment, medicine, and the military, is the most complex society ever in the entire history of humankind. We have to ask ourselves "how does it all run?" and "how can we ever pay for it?" It seems likely to me that we cannot pay for it. It is why we borrow money from everyone from China to ourselves and from the future. I would pose this question then: Where are we at in the stages of empire? If all empires resort to borrowing at the end of there lives, what are we doing now? What should we be doing?

To finish, I'll say this: The U.S. has been accruing debt for several decades now. It is not doing so because of corruption, though that occurs. It is not doing so because of welfare for poor people. It is not doing so because of bad economic policies, though these have certainly been implemented. It is doing so not because the logic it follows is economic. It does so because it follows the logic of power.

Reality Report interview on the Maximum Power Principle.

http://www.globalpublicmedia.com/nate_hagens_and_the_maximum_power_principle