THE NEWS

Authored by Charles Hugh Smith via OfTwoMinds blog,

The system has reached the limits of its adaptability. Everything else is entertainment.

A great many people have immense faith in political solutions to looming crises: if only we elect new leaders, if only we replace current policies with new policies, everything would be fixed and the crises will all dissipate.

There are powerful reasons for this faith and equally powerful reasons why political solutions fail in crisis. Our faith in politics is nurtured by recency bias in eras of relatively low-level volatility: when the system is humming along, decade after decade, the incremental adaptations of politics are enough to resolve whatever spots of bother arise.

There are three key points here. One is that politics is by its nature incremental, and there are profound reasons for this aversion to radical reforms. All organisms are well-served by the innate conservatism of natural selection: if it isn’t broken, don’t fix it. If the current set of instructions–genetic, epigenetic, social, cultural, economic, political–is working, then it makes sense to conserve what works and be cautious about adapting new instructions.

Natural selection tinkers with experiments when selective pressure is applied to a species, and this is an incremental process: if random mutations in an individual offer some meaningful advantage in changing conditions, over time that improvement spreads through the species.

Experiments that fail to offer advantages are eliminated by, well, death. Not exactly warm and fuzzy, but when push comes to shove, Nature doesn’t fool around.

This is why humans experience financial losses so sharply and forget the euphoria of winning. In the big picture, gains are nice and we enjoy the dopamine hit, but losses can be catastrophic, and so we’re wired to be risk averse as a key survival trait.

In the political realm, this plays out as favoring incremental policy adjustments over radical–and therefore difficult to risk-assess–course changes. Enthusiasm to really tackle the crisis head-on is tempered by fears that some unforeseen consequence could emerge from the untested policy that triggers losses or instability that cannot be reversed.

The second key point is everyone in a position of power or influence is committed to preserving the status quo that has rewarded them so well. Outsiders with no power or influence may be chomping at the bit to overthrow the stale, sclerotic, do-nothing status quo, but insiders are self-selected defenders of the status quo, as it has served their interests so well: they rose to wealth and power within this system, and no matter how great the crisis, all their energies are devoted to preserving the system that has served them so splendidly.

Self-service is neatly cloaked by a belief that since the system has served me so well, it serves everyone equally well, and so defenders of modest, incremental adjustments in policy naturally believe the system is the best possible and worthy of protecting, despite its flaws.

A third source of incrementalism is the lack of consensus and the self-serving divisions in the Power Elite. There are ideological differences which lead to disagreements over policy–welfare queens in Cadillacs, etc.–and there is the auction of favors where to get the vote / approval of a powerful politician, some utterly nonsensical, needlessly costly bauble must be tossed to them–for example, an outdated rocket engine must be manufactured in their district even though the cost is higher and the harm to the project is irreversible.

This is the infamous “making sausage” of political wheeling and dealing. Incremental change is all that’s possible when few of the participants are feeling any real pain that demands radical adaptations and the majority aren’t feeling they’re getting anything for supporting radical change. Rather, they’re risking their career on a longshot which might end up harming their constituency and position in the party / power structure.

This is why we see tepid, baby-step, and ultimately ineffective policy adjustments as empires crumble into crisis. Insiders are loathe to relinquish power or admit that the status quo is incapable of dealing with the crises threatening to overwhelm the empire, and so they agree to doing more of what’s failed as this is 1) the safe bet and 2) what all the squabbling power players can agree on.

In crisis, the safe bet is the losing bet, but insiders are blind to this reality, for in their blinkered, self-serving recency bias view, the system could not possibly be at risk, so their only concern is preserving their slice of the pie and making as few risky changes as possible.

Since radical reforms inevitably reduce somebody’s slice of the pie, they’re politically impossible. Never mind the risk of collapse, a reduction in my slice of the pie is completely unacceptable. As a result, collapse is the politically acceptable default.

The faith that “it will all work itself out if we leave it alone” is persuasive after decades of stability. That this faith is catastrophically misplaced will only become apparent after it’s too late.

I often refer to these excerpts, as they so succinctly capture the key dynamics is this delusional drift into disaster. The first is from Michael Grant, author of The Fall of the Roman Empire, who describes the clueless mindset of the ruling elite faced with novel crises that are beyond the reach of the usual bag of “safe” (and self-serving) policies:

“There was no room at all, in these ways of thinking, for the novel, apocalyptic situation which had now arisen, a situation which needed solutions as radical as itself. His whole attitude is a complacent acceptance of things as they are, without a single new idea.

This acceptance was accompanied by greatly excessive optimism about the present and future. Even when the end was only sixty years away, and the Empire was already crumbling fast, Rutilius continued to address the spirit of Rome with the same supreme assurance.

This blind adherence to the ideas of the past ranks high among the principal causes of the downfall of Rome. If you were sufficiently lulled by these traditional fictions, there was no call to take any practical first-aid measures at all.”

The second excerpt is from Ray Huang’s 1587, A Year of No Significance: The Ming Dynasty in Decline, which describes how the status quo, wedded to past success, guided by self-interest and risk aversion, impervious to any real change in its power structure, is beyond the reach of any leader or reform because it has reached the limits of its adaptability and thus of its ability to deal with crises:

“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.”

In the late stage of crises unmet with anything but magical incantations (cough, The Fed) and reliance on past glories, the public’s assessment of crises forks off from the complacent hubris of the ruling elite, as evidenced by this survey, which found that the top 1%–unsurprisingly, given their lofty opinion of their god-like abilities–has supreme confidence in their matchless leadership and wisdom, while the general public has lost faith in the entire ruling elite.

source

Those reckoning that new leadership and new policies will avert the crises just ahead will be disappointed. The ship’s wheel is lashed tight by all the factors listed above: risk aversion, supreme confidence in either doing nothing or incremental adjustments, blindness to the novelty of the crises, reliance on past solutions, i.e. doing more of what’s failed, the dead hand of mummified ideologies, the shackles of self-interest, and last but not least, a hubristic confidence in the status quo and their own abilities to emerge victorious no matter what the crisis, even as the status quo has reached the limits of its adaptability.

All of which is to say: we’re on our own. One might as well rely on the magic of waving dead chickens while doing the humba-humba around the midnight campfire than rely on the magic of the Federal Reserve or some witches’ brew of policies that first and foremost satisfy the power players’ desires and delusions.

The system has reached the limits of its adaptability. Everything else is entertainment. Rome was eternal, and so were the Ming Empire and the Soviet Union. Everything is forever until radical adaptations become too difficult and painful to bear.

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