We live in an age of uncertainty, complexity, and paranoia. Uncertainty because, for the past few centuries, there has simply been far too much knowledge out there for any one human being to get their brains around; we are all ignorant, if you dig far enough. Complexity multiplies because our areas of ignorance and our blind spots intersect in unpredictable ways—the most benign projects have unforseen side effects. And paranoia is the emergent spawn of those side effects; the world is not as it seems, and indeed we may never be able to comprehend the world-as-it-is, without the comforting filter lenses of our preconceptions and our mass media.
-- Charles Stross (Afterword: Inside the Fear Factory)
“Society is composed of persons who cannot design, build, repair, or even operate most of the devices upon which their lives depend... In the complexity of this world people are confronted with extraordinary events and functions that are literally unintelligible to them. They are unable to give an adequate explanation of man-made phenomena in their immediate experience. They are unable to form a coherent, rational picture of the whole.
Under the circumstances, all persons do, and indeed must, accept a great number of things on faith... Their way of understanding is basically religious, rather than scientific; only a small portion of one’s everyday experience in the technological society can be made scientific... The plight of members of the technological society can be compared to that of a newborn child. Much of the data that enters its sense does not form coherent wholes. There are many things the child cannot understand or, after it has learned to speak, cannot successfully explain to anyone... Citizens of the modern age in this respect are less fortunate than children. They never escape a fundamental bewilderment in the face of the complex world that their senses report. They are not able to organize all or even very much of this into sensible wholes....”
Quoting myself, but since this is a reply maybe I can get away with it. I left this as a comment several months ago about a danger in the current recession that most commentators seem to miss:
You can see the same kinds of problems with people being unable to do basic home repair, like fixing a faucet or a porch railing. I remember in the late 1970s there were a lot of people doing their own remodeling and stuff, partially because of the sucky economy at the time.
If the economy doesn’t really start to improve, we could be looking at a situation worse than the Great Depression, even if none of the financial indicators get as bad, simply because people are much more dependent on buying services through the economy and less able to do for themselves than any previous “hard times”.
1) Magic: the Gathering strategy was developed and refined almost entirely through the Internet. If you want to be a competitive Magic player, you need the Internet.
2) If you need narrow advice—“how to fix a broken faucet” is pretty narrow—than the Internet works pretty well. If you want to learn to be a plumber, yeah, the Internet kinda sucks, but if you have relatively limited needs, it works.
Yes, it’s an interesting topic. I find interesting the general phenomenon that economic development seems to make economies ever more fragile and liable to collapse; http://globalguerrillas.typepad.com/ is the best source I know of for this kind of thinking.
In 1988, Joseph Tainter wrote a chilling book called The Collapse of Complex Societies. Tainter looked at several societies that gradually arrived at a level of remarkable sophistication then suddenly collapsed: the Romans, the Lowlands Maya, the inhabitants of Chaco canyon. Every one of those groups had rich traditions, complex social structures, advanced technology, but despite their sophistication, they collapsed, impoverishing and scattering their citizens and leaving little but future archeological sites as evidence of previous greatness. Tainter asked himself whether there was some explanation common to these sudden dissolutions.
The answer he arrived at was that they hadn’t collapsed despite their cultural sophistication, they’d collapsed because of it. Subject to violent compression, Tainter’s story goes like this: a group of people, through a combination of social organization and environmental luck, finds itself with a surplus of resources. Managing this surplus makes society more complex—agriculture rewards mathematical skill, granaries require new forms of construction, and so on.
Early on, the marginal value of this complexity is positive—each additional bit of complexity more than pays for itself in improved output—but over time, the law of diminishing returns reduces the marginal value, until it disappears completely. At this point, any additional complexity is pure cost.
Tainter’s thesis is that when society’s elite members add one layer of bureaucracy or demand one tribute too many, they end up extracting all the value from their environment it is possible to extract and then some.
The ‘and them some’ is what causes the trouble. Complex societies collapse because, when some stress comes, those societies have become too inflexible to respond. In retrospect, this can seem mystifying. Why didn’t these societies just re-tool in less complex ways? The answer Tainter gives is the simplest one: When societies fail to respond to reduced circumstances through orderly downsizing, it isn’t because they don’t want to, it’s because they can’t.
In such systems, there is no way to make things a little bit simpler – the whole edifice becomes a huge, interlocking system not readily amenable to change. Tainter doesn’t regard the sudden decoherence of these societies as either a tragedy or a mistake—”[U]nder a situation of declining marginal returns collapse may be the most appropriate response”, to use his pitiless phrase. Furthermore, even when moderate adjustments could be made, they tend to be resisted, because any simplification discomfits elites.
When the value of complexity turns negative, a society plagued by an inability to react remains as complex as ever, right up to the moment where it becomes suddenly and dramatically simpler, which is to say right up to the moment of collapse. Collapse is simply the last remaining method of simplification.
This is not at all accurate description of what happened to Romans, and I find it rather dubious that he knew enough about Mayas or Chaco inhabitants to make such claims as opposed to pulling it out of his ass.
I’m not sure if economic development actually makes economies more fragile and prone to collapse—if a very undeveloped economy collapses, do we not notice it because we label it something else, e.g. famine or civil unrest?
The theory goes that less developed economies almost by definition have wasteful redundancies and lack of hyper-specialization.
As we’ve seen with the Green Revolution and the last few centuries, the freeholding small farmer is highly inefficient—they produce far less food with far more human input than our farming system. But! The small farmers are highly resilient: if a bomb takes out one Afghani village, the others are unaffected. On the other hand, if a bomb takes out a country’s only refinery or port, all its farms are soon going to grind to a halt because they’re mechanized and need gas.
So it’s a trade-off: efficiency versus resiliency/redundancy. Market economies seem to be biased towards efficiency and against redundancy—efficiency pays off now, resiliency much later if ever. (If I really wanted to be trendy, here’s where I’d bring up black swans.)
Modern systems are highly resilient and redundant in places where this is likely to pay off. Look at the power system. Look at the Internet. They are capable of working in spite of big localized failures.
The Internet is sometimes capable of working. It can go down and has; the Morris worm wasn’t even malicious (according to Morris). Designs for ‘Warhol worms’ which do the same thing in just a few minutes have been floating around since the mid-nineties—it’s just that botnets are more profitable. And even inadvertent mistakes can cripple lots of functionality.
“It has been proved that the scale-free network is robust to random failures but vulnerable to malicious attacks.”
In the real world, malicious attacks are just as valid a source of failure as randomness. (It doesn’t matter why the patient dies if he dies.)
Actually, I think modern economies have more redundancy and are less prone to a catastrophic collapse than more primitive ones. My point was that people seem to have become lazier, especially intellectually, over the last few decades, which could cost them dearly in a prolonged economic contraction.
Actually, I think modern economies have more redundancy and are less prone to a catastrophic collapse than more primitive ones
More redundancy? I don’t see that at all.
Where’s the redundancy in your water supply? ‘Bottled water at my local Walmart’ doesn’t count. Where’s the redundancy in your shelter? You don’t know how to build one, even if you had the saws and whatnot to make use of the trees in your yard (assuming you have a yard with trees in it and aren’t—like millions—an apartment dweller). There’s no redundancy in your food supply; even rural dwellers might no longer have some chickens in the yard which could be eaten, or a solid vegetable garden. And so on.
And ‘lazier’ is a cop-out. If modern economies lead to mental laziness, and that reduces resiliency/redundancy, modern economies reduce resiliency-redundancy! The exact mechanism doesn’t matter—the ultimate result does. ‘The operation was a success; unfortunately, the patient died.’
They have more redundancy at least to the extent that they operate with a greater surplus of wealth above subsistence. The greater interconnectedness and surplus wealth of modern economies also allows for resources to be quickly re-allocated across large geographical distances in response to a localized disaster.
In primitive economies the majority of the population are often living very close to a subsistence level and are able to accumulate little in the way of savings or capital to fall back on in hard times. In wealthier modern economies a disruption may cause dramatic swings in relative wealth but starting from a much higher level means there is a considerable cushion before facing a life threatening situation.
How do you propose to measure redundancy? One possible way to attempt to quantify redundancy might be to look at how modern vs. primitive economies cope with natural disasters. Modern economies usually see greater damage in dollar terms than primitive economies but much less loss of life as a percentage of the affected population. The lower casualty rates can be attributed to a number of properties of modern economies that derive from their greater wealth and interconnectedness. This includes things like higher quality, more robust buildings; greater stocks of non-perishable food, clean water and medicine; better trained, funded and equipped emergency services; quicker and better resourced rescue efforts from outside the worst affected area; a population that is not starting out in a state of malnourishment or ill health and greater individual resources enabling many to get out of the worst affected area.
Another possible test of redundancy would be to look at how modern economies cope with large scale warfare. Both Japan and Germany were more advanced pre-WWII than many poor countries today. Both countries lost a major military conflict which involved extensive destruction of infrastructure and massive civilian and military casualties. Both countries recovered over time and there are few if any examples of countries which started out with less modern economies, suffered comparable levels of damage due to warfare and demonstrated greater resiliency by recovering faster.
So in what sense are primitive economies more resilient than modern economies? You might argue that they suffer less dramatic swings in wealth in response to disruption than wealthier modern economies but in a disaster situation I would suggest the really important thing is not the magnitude of the change in wealth but whether it takes you ‘below zero’ and leads to individual deaths or total societal collapse. On this measure the historical record suggests to me that modern economies are more robust than primitive ones.
Another possible meaning might be that while no individual primitive economy is more robust than a modern one they are less interconnected and so failure in one does not cause a cascade to others. This sounds plausible in theory but I don’t see strong historical evidence in this direction.
Finally I suppose you may be claiming that modern economies are more vulnerable to some black swan event beyond anything that appears in the historical record. This is obviously a hard theory to test. My feeling however is that a disaster of unprecedented type or scale would not be qualitatively different to previous disasters. You might see greater swings in ‘dollar damage’ or even relative wealth but the modern economies would still do better in absolute terms before and after such an event than primitive economies.
They have more redundancy at least to the extent that they operate with a greater surplus of wealth above subsistence.
This is obvious; but it seems like little of the surplus is devoted to distributing infrastructure and resources or defending against rare contingencies like a highly specialized and interdependent society must. Let’s say that America is per capita $20,000 higher than subsistence thanks to specialization and interdependence; what fraction of that goes to the previous listed needs? FEMA, for example, is a few billion a year or ~17$ per capita; even adding in all the other disaster-preparedness services such as the strategic petroleum reserves, does it compensate enough?
How do you propose to measure redundancy?
I don’t. That’s far above my pay-grade. It’s an interesting area of thinking and like most interesting areas, doesn’t have all the answers rigorously worked out—any more than SIAI has all the details of AI worked out, and much of which thinking relies on us finding certain propositions plausible.
Both Japan and Germany were more advanced pre-WWII than many poor countries today. Both countries lost a major military conflict which involved extensive destruction of infrastructure and massive civilian and military casualties. Both countries recovered over time and there are few if any examples of countries which started out with less modern economies, suffered comparable levels of damage due to warfare and demonstrated greater resiliency by recovering faster.
Rare examples of nation-building gone right. How’s Haiti working out? Or Argentina? Both used to be among the richest countries in the world. I’ve heard Iran was depressed for centuries after the Mongols destroyed their extremely elaborate agricultural systems. Primitive places like Afghanistan just keep on trucking.
And then there are examples of highly advanced economies sabotaging themselves. The Mayans come to mind, as does the ‘Fertile Crescent’ - thanks to salinization caused by millennia of agriculture, not so fertile any more!
Another possible meaning might be that while no individual primitive economy is more robust than a modern one they are less interconnected and so failure in one does not cause a cascade to others. This sounds plausible in theory but I don’t see strong historical evidence in this direction.
The Great Depression. The Asian currency crisis. Recent events.
FEMA, for example, is a few billion a year or ~17$ per capita; even adding in all the other disaster-preparedness services such as the strategic petroleum reserves, does it compensate enough?
I think we need to clarify a lot of our underlying assumptions and terminology if we are to bridge the yawning epistemic gap that appears to lie between us. Let me try and clarify my interpretation of some of the terms we are using and see if we are on the same page.
You originally said: “I find interesting the general phenomenon that economic development seems to make economies ever more fragile and liable to collapse”. There’s at least three terms we could be disagreeing on here: economic development, fragile and collapse. By economic development I understood ‘a trend towards greater complexity, interdependence and specialization’. By fragile I understood ‘easily broken or destroyed’ rather than merely volatile or erratic. By collapse I understood ‘cease to function due to a sudden breakdown’ rather than merely impaired function. I dispute the strong interpretation of this sentence implied by the definitions I give here but do not necessarily dispute a weaker interpretation.
The other area that needs clarification is covered by your question ‘does it compensate enough?‘. I certainly think that economic development will tend to make societies better off in absolute terms under essentially all disaster situations that we have a historical precedent for. If you measured volatility of wealth by some measures you might find modern economies more volatile but in the context of concern for ‘collapse’ or existential risk it is not volatility in itself that is dangerous but the potential for going ‘below zero’ - being wiped out in investment terms. If you are at subsistent level a 10% drop in wealth (in the broadest sense) could be fatal. In a modern economy losing 50% of your wealth is painful but completely survivable for most people. In other words it is possible for modern economies to be both more volatile from some perspectives and less prone to collapse because of the much greater buffer provided by the extra wealth they create.
How do you propose to measure redundancy?
I don’t. That’s far above my pay-grade.
I feel that if you are going to make the claim and wish to defend it then it is incumbent upon you to at least attempt to propose some measure by which the truth of your claim might be judged. Otherwise you are merely engaging in wordplay and not rationality.
Rare examples of nation-building gone right. How’s Haiti working out? Or Argentina? Both used to be among the richest countries in the world.
Haiti’s problems are deep rooted. It has nothing that can be described as a modern economy and that is part of its problem. Argentina is a very different case. It has had a history of economic mismanagement and financial crises but it is in a completely different league to Haiti (10x GDP per capita and vastly better off by any measure of economic or social development). Argentina is actually something of a success story in Latin America at the moment after its troubles at the turn of the century and Buenos Aires is considered a ‘hot’ destination.
But we could get into a long and involved discussion of history and debate interpretations and how they support or contradict your theory. I’d rather hold off on that until we can establish the exact nature of any disagreement we have.
The Great Depression. The Asian currency crisis. Recent events.
I consider these support for my view in that all were examples of great volatility but not of anything approximating collapse. They in no way canceled out the benefits of the periods of economic growth that preceded them (and followed in the first two cases).
I actually think people tend to underestimate the frequency and severity of crises of various kinds but overestimate the long term impact. I am much more pessimistic than average about the current economic situation (see my New Year’s predictions here for example) but much more optimistic about how things will ultimately turn out than most people would be if they expected the same level of disruption.
I feel that if you are going to make the claim and wish to defend it then it is incumbent upon you to at least attempt to propose some measure by which the truth of your claim might be judged. Otherwise you are merely engaging in wordplay and not rationality.
All I was doing was raising an interesting theory and linking to those who do defend it.
I feel as if I had mentioned that the sky looked kind of blue today and wasn’t that kind of interesting, and the person standing next to me immediately said, ‘oh, blue—physiologically or by wave-length? Are you taking into account Rayleigh scattering? For that matter, is it blue by absorption or reflection? Let’s see your numbers, chap, I think you may be having me on.’
You ask some interesting questions, but I see now that any reply is just going to lead to an in-depth argument/discussion which I am not equipped for and don’t really feel like having now. If you want to argue about, I’ve already pointed to a relevant forum.
EDIT: To the downvoters: consider what you’re saying by downvoting - ‘I disapprove of someone explicitly withdrawing from a conversation, and would rather that one side simply never reply and leave the other person hanging.’ Is that really what you would prefer?
More primitive societies don’t have centralized government, so they don’t have the risk of government going bad on a grand scale.
The canonical example here is, I think, China. Going from the impressive Renaissance-like period of 100 Schools of Thought during the Warring States period, to Zheng He, then to stultification.
Is bad government a sort of disaster which should be considered in this discussion?
Possibly. I wasn’t considering it because I took ‘modern economies’ to imply (more or less) liberal democracies with (more ore less) free markets. I interpreted the original comment to be in reference to the theory that the increasing interconnectedness, globalization and specialization we observe within such economies is making them more vulnerable to catastrophic collapse. Bad government is certainly a problem but I hadn’t seen it as a major component of this line of thinking.
More primitive societies don’t have centralized government, so they don’t have the risk of government going bad on a grand scale.
It is an interesting question whether more complex economies (in the sense I describe above) must necessarily go hand in hand with more centralized government. I don’t think that is the case and I certainly hope it is not the case (because it implies that complex economies must inevitably self-destruct) but it is a disturbing possibility.
The Soviet Union or the Third Reich were more like a “modern economy” than they’re like hunter-gatherers or primitive agriculturalists, and (though it doesn’t seem likely so far), a modern economy is more likely to have a government that goes bad than it is to turn into h-g or p.a.
When I was talking about centralized government, I didn’t mean central economic planning. (Did you?) I just meant that modern governments have well-defined centralized control over (usually) a good-sized region and population.
When I was talking about centralized government, I didn’t mean central economic planning. (Did you?) I just meant that modern governments have well-defined centralized control over (usually) a good-sized region and population.
I see centralized government as implying more central economic planning as well as more pervasive state intervention in all areas of life. I contrast it to a more federalized or devolved allocation of political power. I believe a complex economy is compatible with government that is more federal and less centralized than the modern United States and even less centralized than the European Union. I don’t believe that the stability, security and free movement of trade and labour that are foundations of a complex modern economy require ever more centralized political power, although historically both have tended to increase alongside one another more often than not.
Not to mention that if all but a few were destroyed and there was a need to rebuild technology and set up society again basic skills needed to do this would be non existent in the general public things like chemistry, electronics and mechanics, things we base our lives on today, are not common knowledge and we wouldnt be able to rebuild what we have today
We have massively literate societies and a culture in which all the knowledge is shared massively. After a crisis, the remaining few would have to pick up a lot of skills they lack before crisis, but they would have the means to do so in said stores of knowledge, plus the immense advantage of knowing that the things destroyed are possible. The general public -is- capable of learning.
Hunter-gatherers had no knowledge of chemistry, electronics, and mechanics, nor any concept that the things we do with them were possible.
We live in an age of uncertainty, complexity, and paranoia. Uncertainty because, for the past few centuries, there has simply been far too much knowledge out there for any one human being to get their brains around; we are all ignorant, if you dig far enough. Complexity multiplies because our areas of ignorance and our blind spots intersect in unpredictable ways—the most benign projects have unforseen side effects. And paranoia is the emergent spawn of those side effects; the world is not as it seems, and indeed we may never be able to comprehend the world-as-it-is, without the comforting filter lenses of our preconceptions and our mass media.
-- Charles Stross (Afterword: Inside the Fear Factory)
--Autonomous Technology: Technics-Out-Of-Control (1989), Langdon Winner
Quoting myself, but since this is a reply maybe I can get away with it. I left this as a comment several months ago about a danger in the current recession that most commentators seem to miss:
You can see the same kinds of problems with people being unable to do basic home repair, like fixing a faucet or a porch railing. I remember in the late 1970s there were a lot of people doing their own remodeling and stuff, partially because of the sucky economy at the time.
If the economy doesn’t really start to improve, we could be looking at a situation worse than the Great Depression, even if none of the financial indicators get as bad, simply because people are much more dependent on buying services through the economy and less able to do for themselves than any previous “hard times”.
At least we have the Internet, so we are better able to find directions on how to do something we’ve never done by ourselves before.
The Internet sucks for learning. See my short post http://williambswift.blogspot.com/2009/04/web-is-still-not-adequate-for-serious.html . Plus what you need for actually doing things are skills which you cannot pick up by reading, even with decent sources.
Two comments:
1) Magic: the Gathering strategy was developed and refined almost entirely through the Internet. If you want to be a competitive Magic player, you need the Internet.
2) If you need narrow advice—“how to fix a broken faucet” is pretty narrow—than the Internet works pretty well. If you want to learn to be a plumber, yeah, the Internet kinda sucks, but if you have relatively limited needs, it works.
Yes, it’s an interesting topic. I find interesting the general phenomenon that economic development seems to make economies ever more fragile and liable to collapse; http://globalguerrillas.typepad.com/ is the best source I know of for this kind of thinking.
http://www.shirky.com/weblog/2010/04/the-collapse-of-complex-business-models/ discusses some of this.
This is not at all accurate description of what happened to Romans, and I find it rather dubious that he knew enough about Mayas or Chaco inhabitants to make such claims as opposed to pulling it out of his ass.
I’m not sure if economic development actually makes economies more fragile and prone to collapse—if a very undeveloped economy collapses, do we not notice it because we label it something else, e.g. famine or civil unrest?
The theory goes that less developed economies almost by definition have wasteful redundancies and lack of hyper-specialization.
As we’ve seen with the Green Revolution and the last few centuries, the freeholding small farmer is highly inefficient—they produce far less food with far more human input than our farming system. But! The small farmers are highly resilient: if a bomb takes out one Afghani village, the others are unaffected. On the other hand, if a bomb takes out a country’s only refinery or port, all its farms are soon going to grind to a halt because they’re mechanized and need gas.
So it’s a trade-off: efficiency versus resiliency/redundancy. Market economies seem to be biased towards efficiency and against redundancy—efficiency pays off now, resiliency much later if ever. (If I really wanted to be trendy, here’s where I’d bring up black swans.)
Modern systems are highly resilient and redundant in places where this is likely to pay off. Look at the power system. Look at the Internet. They are capable of working in spite of big localized failures.
The Internet is sometimes capable of working. It can go down and has; the Morris worm wasn’t even malicious (according to Morris). Designs for ‘Warhol worms’ which do the same thing in just a few minutes have been floating around since the mid-nineties—it’s just that botnets are more profitable. And even inadvertent mistakes can cripple lots of functionality.
In the real world, malicious attacks are just as valid a source of failure as randomness. (It doesn’t matter why the patient dies if he dies.)
Neither Morris worm nor any other worms caused long term damage to the Internet.
Neither societal collapse nor any other economic failure caused long term damage to the Humanity.
This is also true, but Internet worms have particularly little effect of any kind, even for definition of “long term” being a “month or more”.
Actually, I think modern economies have more redundancy and are less prone to a catastrophic collapse than more primitive ones. My point was that people seem to have become lazier, especially intellectually, over the last few decades, which could cost them dearly in a prolonged economic contraction.
More redundancy? I don’t see that at all.
Where’s the redundancy in your water supply? ‘Bottled water at my local Walmart’ doesn’t count. Where’s the redundancy in your shelter? You don’t know how to build one, even if you had the saws and whatnot to make use of the trees in your yard (assuming you have a yard with trees in it and aren’t—like millions—an apartment dweller). There’s no redundancy in your food supply; even rural dwellers might no longer have some chickens in the yard which could be eaten, or a solid vegetable garden. And so on.
And ‘lazier’ is a cop-out. If modern economies lead to mental laziness, and that reduces resiliency/redundancy, modern economies reduce resiliency-redundancy! The exact mechanism doesn’t matter—the ultimate result does. ‘The operation was a success; unfortunately, the patient died.’
They have more redundancy at least to the extent that they operate with a greater surplus of wealth above subsistence. The greater interconnectedness and surplus wealth of modern economies also allows for resources to be quickly re-allocated across large geographical distances in response to a localized disaster.
In primitive economies the majority of the population are often living very close to a subsistence level and are able to accumulate little in the way of savings or capital to fall back on in hard times. In wealthier modern economies a disruption may cause dramatic swings in relative wealth but starting from a much higher level means there is a considerable cushion before facing a life threatening situation.
How do you propose to measure redundancy? One possible way to attempt to quantify redundancy might be to look at how modern vs. primitive economies cope with natural disasters. Modern economies usually see greater damage in dollar terms than primitive economies but much less loss of life as a percentage of the affected population. The lower casualty rates can be attributed to a number of properties of modern economies that derive from their greater wealth and interconnectedness. This includes things like higher quality, more robust buildings; greater stocks of non-perishable food, clean water and medicine; better trained, funded and equipped emergency services; quicker and better resourced rescue efforts from outside the worst affected area; a population that is not starting out in a state of malnourishment or ill health and greater individual resources enabling many to get out of the worst affected area.
Another possible test of redundancy would be to look at how modern economies cope with large scale warfare. Both Japan and Germany were more advanced pre-WWII than many poor countries today. Both countries lost a major military conflict which involved extensive destruction of infrastructure and massive civilian and military casualties. Both countries recovered over time and there are few if any examples of countries which started out with less modern economies, suffered comparable levels of damage due to warfare and demonstrated greater resiliency by recovering faster.
So in what sense are primitive economies more resilient than modern economies? You might argue that they suffer less dramatic swings in wealth in response to disruption than wealthier modern economies but in a disaster situation I would suggest the really important thing is not the magnitude of the change in wealth but whether it takes you ‘below zero’ and leads to individual deaths or total societal collapse. On this measure the historical record suggests to me that modern economies are more robust than primitive ones.
Another possible meaning might be that while no individual primitive economy is more robust than a modern one they are less interconnected and so failure in one does not cause a cascade to others. This sounds plausible in theory but I don’t see strong historical evidence in this direction.
Finally I suppose you may be claiming that modern economies are more vulnerable to some black swan event beyond anything that appears in the historical record. This is obviously a hard theory to test. My feeling however is that a disaster of unprecedented type or scale would not be qualitatively different to previous disasters. You might see greater swings in ‘dollar damage’ or even relative wealth but the modern economies would still do better in absolute terms before and after such an event than primitive economies.
This is obvious; but it seems like little of the surplus is devoted to distributing infrastructure and resources or defending against rare contingencies like a highly specialized and interdependent society must. Let’s say that America is per capita $20,000 higher than subsistence thanks to specialization and interdependence; what fraction of that goes to the previous listed needs? FEMA, for example, is a few billion a year or ~17$ per capita; even adding in all the other disaster-preparedness services such as the strategic petroleum reserves, does it compensate enough?
I don’t. That’s far above my pay-grade. It’s an interesting area of thinking and like most interesting areas, doesn’t have all the answers rigorously worked out—any more than SIAI has all the details of AI worked out, and much of which thinking relies on us finding certain propositions plausible.
Rare examples of nation-building gone right. How’s Haiti working out? Or Argentina? Both used to be among the richest countries in the world. I’ve heard Iran was depressed for centuries after the Mongols destroyed their extremely elaborate agricultural systems. Primitive places like Afghanistan just keep on trucking.
And then there are examples of highly advanced economies sabotaging themselves. The Mayans come to mind, as does the ‘Fertile Crescent’ - thanks to salinization caused by millennia of agriculture, not so fertile any more!
The Great Depression. The Asian currency crisis. Recent events.
I think we need to clarify a lot of our underlying assumptions and terminology if we are to bridge the yawning epistemic gap that appears to lie between us. Let me try and clarify my interpretation of some of the terms we are using and see if we are on the same page.
You originally said: “I find interesting the general phenomenon that economic development seems to make economies ever more fragile and liable to collapse”. There’s at least three terms we could be disagreeing on here: economic development, fragile and collapse. By economic development I understood ‘a trend towards greater complexity, interdependence and specialization’. By fragile I understood ‘easily broken or destroyed’ rather than merely volatile or erratic. By collapse I understood ‘cease to function due to a sudden breakdown’ rather than merely impaired function. I dispute the strong interpretation of this sentence implied by the definitions I give here but do not necessarily dispute a weaker interpretation.
The other area that needs clarification is covered by your question ‘does it compensate enough?‘. I certainly think that economic development will tend to make societies better off in absolute terms under essentially all disaster situations that we have a historical precedent for. If you measured volatility of wealth by some measures you might find modern economies more volatile but in the context of concern for ‘collapse’ or existential risk it is not volatility in itself that is dangerous but the potential for going ‘below zero’ - being wiped out in investment terms. If you are at subsistent level a 10% drop in wealth (in the broadest sense) could be fatal. In a modern economy losing 50% of your wealth is painful but completely survivable for most people. In other words it is possible for modern economies to be both more volatile from some perspectives and less prone to collapse because of the much greater buffer provided by the extra wealth they create.
I feel that if you are going to make the claim and wish to defend it then it is incumbent upon you to at least attempt to propose some measure by which the truth of your claim might be judged. Otherwise you are merely engaging in wordplay and not rationality.
Haiti’s problems are deep rooted. It has nothing that can be described as a modern economy and that is part of its problem. Argentina is a very different case. It has had a history of economic mismanagement and financial crises but it is in a completely different league to Haiti (10x GDP per capita and vastly better off by any measure of economic or social development). Argentina is actually something of a success story in Latin America at the moment after its troubles at the turn of the century and Buenos Aires is considered a ‘hot’ destination.
But we could get into a long and involved discussion of history and debate interpretations and how they support or contradict your theory. I’d rather hold off on that until we can establish the exact nature of any disagreement we have.
I consider these support for my view in that all were examples of great volatility but not of anything approximating collapse. They in no way canceled out the benefits of the periods of economic growth that preceded them (and followed in the first two cases).
I actually think people tend to underestimate the frequency and severity of crises of various kinds but overestimate the long term impact. I am much more pessimistic than average about the current economic situation (see my New Year’s predictions here for example) but much more optimistic about how things will ultimately turn out than most people would be if they expected the same level of disruption.
All I was doing was raising an interesting theory and linking to those who do defend it.
I feel as if I had mentioned that the sky looked kind of blue today and wasn’t that kind of interesting, and the person standing next to me immediately said, ‘oh, blue—physiologically or by wave-length? Are you taking into account Rayleigh scattering? For that matter, is it blue by absorption or reflection? Let’s see your numbers, chap, I think you may be having me on.’
You ask some interesting questions, but I see now that any reply is just going to lead to an in-depth argument/discussion which I am not equipped for and don’t really feel like having now. If you want to argue about, I’ve already pointed to a relevant forum.
EDIT: To the downvoters: consider what you’re saying by downvoting - ‘I disapprove of someone explicitly withdrawing from a conversation, and would rather that one side simply never reply and leave the other person hanging.’ Is that really what you would prefer?
Is bad government a sort of disaster which should be considered in this discussion?
West Germany bounced back a lot more than East Germany.
More primitive societies don’t have centralized government, so they don’t have the risk of government going bad on a grand scale.
The canonical example here is, I think, China. Going from the impressive Renaissance-like period of 100 Schools of Thought during the Warring States period, to Zheng He, then to stultification.
Possibly. I wasn’t considering it because I took ‘modern economies’ to imply (more or less) liberal democracies with (more ore less) free markets. I interpreted the original comment to be in reference to the theory that the increasing interconnectedness, globalization and specialization we observe within such economies is making them more vulnerable to catastrophic collapse. Bad government is certainly a problem but I hadn’t seen it as a major component of this line of thinking.
It is an interesting question whether more complex economies (in the sense I describe above) must necessarily go hand in hand with more centralized government. I don’t think that is the case and I certainly hope it is not the case (because it implies that complex economies must inevitably self-destruct) but it is a disturbing possibility.
The Soviet Union or the Third Reich were more like a “modern economy” than they’re like hunter-gatherers or primitive agriculturalists, and (though it doesn’t seem likely so far), a modern economy is more likely to have a government that goes bad than it is to turn into h-g or p.a.
When I was talking about centralized government, I didn’t mean central economic planning. (Did you?) I just meant that modern governments have well-defined centralized control over (usually) a good-sized region and population.
I see centralized government as implying more central economic planning as well as more pervasive state intervention in all areas of life. I contrast it to a more federalized or devolved allocation of political power. I believe a complex economy is compatible with government that is more federal and less centralized than the modern United States and even less centralized than the European Union. I don’t believe that the stability, security and free movement of trade and labour that are foundations of a complex modern economy require ever more centralized political power, although historically both have tended to increase alongside one another more often than not.
Not to mention that if all but a few were destroyed and there was a need to rebuild technology and set up society again basic skills needed to do this would be non existent in the general public things like chemistry, electronics and mechanics, things we base our lives on today, are not common knowledge and we wouldnt be able to rebuild what we have today
What -are- you talking about?
We have massively literate societies and a culture in which all the knowledge is shared massively. After a crisis, the remaining few would have to pick up a lot of skills they lack before crisis, but they would have the means to do so in said stores of knowledge, plus the immense advantage of knowing that the things destroyed are possible. The general public -is- capable of learning.
Hunter-gatherers had no knowledge of chemistry, electronics, and mechanics, nor any concept that the things we do with them were possible.