I read a couple of things recently that are connected, but perhaps not in a way intended by all of the authors. The first is by Sally Goerner, on the rise of American oligarchy. The second is a paper from McKinsey on capitalism’s short-termism problem.
The Sally Goerner post takes a long view–around 250 years–and positions America’s current political crisis as the latest in a series of 70-90 year cycles in which oligarchy flares up. It follows a familiar pattern, says Goerner, like so:
- Economic “Royalists” infiltrate critical institutions and rig political and economic systems to favor elites.
- Rigged systems erode the health of the larger society, and signs of crisis proliferate.
- The crisis reaches a breaking point; seemingly small events trigger popular frustration into a transformative change.
- If the society enacts effective reforms, it enters a new stage of development. If it fails to enact reforms, crisis leads to regression and possibly collapse.
- Over time, transformed societies forget why they implemented reforms; Economic Royalists creep back and the cycle starts a new.
I suspect we could map similar cycles in other countries.
The systemic model that sits behind it is this:
“Scientifically speaking, oligarchies always collapse because they are designed to extract wealth from the lower levels of society, concentrate it at the top, and block adaptation by concentrating oligarchic power as well. Though it may take some time, extraction eventually eviscerates the productive levels of society, and the system becomes increasingly brittle. … In the final stages, a raft of upstart leaders emerge, some honest and some fascistic, all seeking to channel pent-up frustration towards their chosen ends.”