The unraveling of social cohesion has consequences. Once social cohesion unravels, the nation unravels.
My recent posts have focused on the systemic financial risks created by Federal Reserve policies that have elevated moral hazard (risks can be taken without consequence) and speculation to levels so extreme that they threaten the stability of the entire financial system.
These risks are well known, though largely ignored in the current speculative frenzy.
But there is another systemic risk which few if any see: the collapse of social cohesion.
President Carter was prescient in his understanding that a nation’s greatest strength is its social cohesion, a cohesion that America’s unprecedented wealth / income / power inequalities has undermined. Consider this excerpt from his 1981 Farewell Address:
It Always Ends The Same Way: Crisis, Crash, Collapse – Investment Watch
investmentwatchblog.com - get the latest breaking news, showbiz & celebrity photos, sport news & rumours, viral videos and top stories from investmentwatchblog.com Daily Mail and Mail on Sunday newspapers.
Democracy is fundamentally about advocacy: the people are free to
advocate for their interests and form groups to represent their shared interests. In the broadest scope, the people are free to advocate for what they hold as the
common good, policies and programs that benefit the entire populace rather than one special-interest group.
Since the state (all levels of government) concentrates wealth and power via taxation and a monopoly on force, groups advocate/lobby the state to recognize and respond to their interests. At the local level, this advocacy entails contacting city council members, speaking at council meetings, developing outreach tools (email lists, website, etc.), holding rallies at city hall, etc.
It’s all so pathetic, isn’t it? The only way left to get ahead in America is to leverage up the riskiest gambles.
It’s painfully obvious that the only way left to get ahead in America is crazy-risky speculation, but nobody seems to even notice this stark and stunning reality. Why are people piling into crazy-risky bets on speculative vehicles like Gamestop and Dogecoin? The obvious answer is because others have reaped a decade or two of wages in a few weeks, and skimming a couple hundred thousand dollars in a few weeks or months is the only way an average wage earner is going to be able to buy a house, fund a retirement account, afford to have a family, etc.
America’s financial system and state are themselves the problems, yet neither system is capable of recognizing this or unwinding their fatal synergies.
why do some systems/states emerge from crises stronger while similar systems/states collapse? Put another way: take two very similar political-social-economic systems/nation-states and two very similar crises, and why does one system not just survive but emerge better adapted while the other system/state fails?
The answer lies in what author Geoffrey Parker termed
Fatal Synergies and
Benign Synergies in his book Global Crisis: War, Climate Change, & Catastrophe in the Seventeenth Century. Synergy results from “interactions that produce a combined effect greater than the sum of their separate effects.” In other words, 2 + 2 + 2 + 2 = 8 is linear, while synergy is 2 X 2 X 2 X 2 = 16.
vimarsana © 2020. All Rights Reserved.