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<\/p>\nBY CHARLES HUGH SMITH
\nOf Two Minds<\/p>\n
Back in 2017 when I composed this graphic of overlapping crises, the word polycrisis<\/i>\u00a0was not yet in common use.\u00a0Polycrisis<\/i>\u00a0has various definitions, for example: \u201cthe simultaneous occurrence of several catastrophic events.\u201d<\/p>\n
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But this doesn\u2019t explain the truly dangerous dynamic in polycrisis, which is the nonlinear,\u00a0mutually reinforcing<\/i>\u00a0potential of disparate crises to generate effects much larger than the initial causes. This definition is closer to the mark: \u201cMany different problems happening at the same time so that they together have a very big effect.\u201d<\/p>\n
Put another way: 1 + 1 + 1 doesn\u2019t generate an effect of 3, it generates an effect of 9.<\/p>\n
You\u2019ll notice the crises on my graphic are\u00a0internal<\/i>\u00a0socioeconomic dynamics: state-cartel centralization, demographics, soaring debts, Imperial overreach, technological disruption, disunity in elites and diminishing returns on financial predation.<\/p>\n
Many don\u2019t see these as crises; they\u2019re seen as factors, not as potentially catastrophic dynamics. This is the linear analysis: None of these dynamics is actually threatening to the stability of the U.S.<\/p>\n
The nonlinear analysis is: Considering each one as a discrete dynamic, that\u2019s true. But these are\u00a0mutually reinforcing crises<\/i>\u00a0because\u00a0the status quo \u201csolutions\u201d to each one become mutually reinforcing problems<\/i>\u00a0which generate much larger effects than most believe possible.<\/p>\n
Note that external factors such as war and climate change are not shown. These conditions are not entirely controllable by U.S. policy decisions. They affect the entire world, not just one nation-state. That said, external crises add additional nonlinear influences to the polycrisis.<\/p>\n
The human mind is not particularly well-adapted to\u00a0polycrisis<\/i>: We struggle to adapt to the drought, then the earthquake knocks down the village walls, then the tsunami pounds what was left, followed by the epic flooding, then the hurricane batters the survivors, who witness the volcano erupting and wonder what they did to anger the gods and goddesses so mightily.<\/p>\n
Now, not all polycrises are equal, and it\u2019s worth noting the different types of crises, and how the \u201csolutions\u201d can turn the crisis from controllable to uncontrollable. One way to understand crises is\u00a0supply and demand<\/i>: If there are supplies on hand and the problem is a lack of money to pay for the supplies, governments can print or borrow the money to ease the crisis.<\/p>\n
In other cases, a scarcity of supply can be ameliorated by drawing upon reserves that were set aside for just such a shortage.<\/p>\n
But if there\u2019s insufficient supply and no substitutes or reserves, the crisis can quickly overwhelm the system. Consider fresh water. A short-term drought can be managed by tapping water stored in dams or drilling deeper wells.<\/p>\n
But once the drought becomes long-term, there are no longer any reserves or substitutes available. Water is heavy and costly to transport, and it\u2019s not feasible to import it from other countries.<\/p>\n
Once borrowing or printing more money can\u2019t solve the problem, or becomes the problem, the wheels fall off. We\u2019ve lost the ability to solve any problems that can\u2019t be resolved painlessly and without elites and incumbents making any sacrifices.<\/p>\n
Printing or borrowing money can\u2019t solve the problem. The entire edifice of the\u00a0market economy<\/i>\u00a0is based on the assumption that there\u2019s always a substitute available if there\u2019s enough money to buy it. Markets no longer function when there are no substitutes, as the wealthy will buy up whatever is available and everyone else will do without.<\/p>\nNo Market Solution to Moral Decay<\/b><\/h2>\n
What\u2019s the\u00a0market solution<\/i>\u00a0to moral decay and the decline of civic virtue? There isn\u2019t one. Markets assume price will be discovered by supply and demand, and so corruption becomes a \u201cmarket\u201d of bribes and favors, an auction that \u201cworks\u201d as a market even as it undermines civil society.<\/p>\n
The sacrifice-free \u201csolutions\u201d approved by the self-serving status quo elites end up generating self-reinforcing dynamics that generate new crises. Borrowing or printing money is every elites\u2019 favorite \u201csolution.\u201d But if \u201cfree money\u201d doesn\u2019t solve the crisis in short order, the excess of \u201cfree money\u201d becomes its own problem.<\/p>\n
In other words,\u00a0doing more of what\u2019s failed<\/i>\u00a0because that\u2019s what worked in the past becomes a self-reinforcing crisis as the elites cling to whatever is easiest and demands the least sacrifices.<\/p>\n
Put another way: The system is broken beneath the surface, but these structural failures only become visible when they reinforce each other in a polycrisis. Elites and institutions have grab bags of \u201csolutions\u201d based on prior crises, grab bags which are inadequate when new, mutually reinforcing crises emerge.<\/p>\n
But since they\u2019re constrained by what\u2019s acceptable to elites, interest groups and incumbents, their \u201csolutions\u201d are limited to \u201csafe\u201d responses that don\u2019t demand any sacrifices of elites, interest groups and incumbents. These policy tweaks are simply too limited to address the problem, and so they exacerbate the problem rather than solve it.<\/p>\n
Nobody in a position of responsibility believes the systems we depend on can unravel. This belief in the permanence of systems that are actually inherently fragile cripples those in charge, as their crisis responses are completely inadequate to the scale of the effects generated by mutually reinforcing crises.<\/p>\n
The erosion of accountability doesn\u2019t seem to matter now, but it will matter when things start unraveling. Everyone will have an excuse, call another emergency meeting and demand that somebody somewhere else do something to make the pain stop.<\/p>\n
But the decay of accountability is consequential, and there won\u2019t be anyone available to \u201csave the day\u201d because those who demanded accountability of others have been cashiered or sent to bureaucratic Siberia.<\/p>\n
Everyone believes they\u2019ll have plenty of time to craft a response, but time is what becomes scarce in rapidly delaminating nonlinear crises. We\u2019re prepared for discrete events that occurred in the recent past, but not for self-reinforcing\/mutually reinforcing dynamics.<\/p>\n
The system is designed to handle one challenge at a time, but not a long-term multiplicity of challenges.<\/p>\n
And as noted above, the status quo is unaware of its own systemic flaws because sclerosis and corruption are all anyone has known. A broken system can still function when the demands placed on it are modest. But when things get serious, the system breaks down, and everyone who ignored or denied the structural weaknesses is caught off guard.<\/p>\n
Not all polycrises are equal. Those that can be resolved by borrowing or printing money are controllable, at least until the expansion of \u201cfree money\u201d itself becomes a self-reinforcing crisis.<\/p>\n
But problems that can\u2019t be resolved painlessly with more \u201cfree money\u201d \u2014 systemic sclerosis and corruption, moral decay, warring elites, demographic decline, diminishing returns on financial predation, state-cartel strangleholds on the economy, supply scarcities for which there are no substitutes \u2014 have the potential to reinforce one another to the point the system\u2019s structural rot becomes visible.<\/p>\n
By then, it\u2019s too late.<\/p>\n
How could this be happening?<\/i>\u00a0Indeed. How could this be happening? That\u2019s the difficulty with nonlinear, mutually reinforcing crises: Our overconfidence, hubris and refusal to consider sacrifices will be our undoing.<\/p>\n