There’s a simple fact that’s not noticed or remarked on nearly enough. The world’s two large English speaking societies, America and Britain, are collapsing. And they are collapsing in eerily similar ways, for eerily similar reasons, too. Yet in these societies, this basic point doesn’t seem to be understood much, if at all. And yet it’s not really a matter for debate. It’s a simple empirical fact.
There are only two societies in the rich world where life is getting shorter, poorer, meaner, and more hopeless — fast. Where life expectancies, incomes, and savings are all falling. America and Britain. Where middle classes have imploded, people live hand to mouth, and upward mobility has all but vanished. Where the idea of living a better life is somewhere between a joke and a distant memory. Where entire generations of young people — at last count, three, Gen X, Millennials, and Get Z — live worse lives than their parents and grandparents. Just two such societies where trust, happiness, and purpose have all imploded catastrophically — while depression, rage, anxiety, and suicide are all surging.
In fact, there are just a handful of societies with those grim statistics anywhere in the world — Venezeula, perhaps, Russia, North Korea, war torn African shells. Failed states, in other words. That is what America and Britain are becoming.
In a failed state, progress has become regress. That’s what happened to these societies. They are self-destructing. America, of course, is further down that road. But Britain is catching up fast. So how did they get here?
America and Britain have entered a vicious cycle, a death spiral. It’s a novel and bizarre phenomenon for a modern, rich society, unseen since Weimar Germany. It goes like this. In the 1980s, America began decades of underinvestment in public goods and social systems. It privatized whatever there was to privatize. The idea was that whatever it was — healthcare, education, finance — the private sector could do it better. The Reagan Revolution was in full effect — as a backlash to the advances civil rights made in the 1960s and 1970s, the good white American using “choice” as a shield to protect themselves from ever having to invest in or mingle with those dirty, filthy subhumans. All that was called “neoliberalism.” Let markets sort it all out! Translation: let the strong survive, and the weak perish.
But the result of massive underinvestment in public goods was predictable: stagnation, debt, falling living standards, and a permanent loss of mobility. More and more people were forced to desperately compete for all those “private sector” jobs, which didn’t really exist to begin with, since jobs were just slashed and cut en masse. Instead of creating tons of new jobs, the private sector built…huge monopolies, which, by today, employ scant numbers of people, like a Facebook or a Google or an Uber.
That competition for what few decent jobs there were led to massive wage stagnation. What “private sector” jobs did exist weren’t very good ones, and over time, they degenerated further, to the point that now many of them aren’t really “jobs” at all, but shells, with no benefits or mobility or protection. Today, America and Britain have record low unemployment…and plummeting real incomes. That should be an economic impossibility. It’s a reality that tells us their economies are unable to employ their populations at decent levels of income anymore.
At the same time, the “private sector” which was supposed to provide good healthcare, education, retirement, finance, and so on, began to charge the average American more and more for these things, while lowering their quality. After all, corporations are profit-seeking entities: their motivation is money. And so over time, the average American began to pay prices for things that astonished the rest of the world: $50K for childbirth, $200K for an education, and so on. How could they afford the basics of life at ever increasing prices — when their incomes had begun to stagnate? They couldn’t — so they began to go into massive debt (and today, the average American dies in debt.)
As a necessary consequence, social systems and public goods were eviscerated — and left undeveloped. America has no functioning social systems at all at this point, from healthcare to education to retirement — precisely because for nearly half a century now, it hasn’t invested enough (read: almost anything) in them. Hence, those poor kids in the pic above: they really don’t have much of a future, and increasingly, they know it.
Today, the situation is this. The average American is in a “low-wage job” — translation: they earn less than the poverty line. Yes, really. That’s why most Americans live paycheck to paycheck and can’t afford to save, much less ever live better lives than their parents or grandparents. He desperately needs things like healthcare, education, retirement, finance, to have any hope — any — of living a better life, instead of just a worse and worse one every year. But he himself can’t afford to fund those things anymore, because now his income is too low. How can he pay more in taxes to fund the things he needs most, like healthcare or retirement — when he earns a relative pittance to begin with? What is he supposed to live on then?
That, my friends, is a death spiral for an economy (and a society.) Let me put that more precisely.
America and Britain are in an austerity-poverty death spiral. Austerity causes poverty which causes more austerity which causes more poverty. It goes like this.
- Underinvesting in public goods and social systems led to fresh poverty
- As profit-seeking corporations lowered wages and raise prices.
- The result was that the tax base itself shrank — and now the average American or Brit will tell you they’re “too poor” to afford a functioning society. They’re not kidding. They are. They don’t have the money to invest in public goods or social systems anymore. They can’t make ends meet as it is.
- But without those very things, all that’s left is permanently, perpetually lower wages and higher prices…into oblivion, because that’s what a profit-seeking system demands.
- Bang! Game over. Your economy dies, and your society goes with it, pursuing follies like Brexits and Trumpisms, instead of solving its real problems.
Do you see the death spiral? Let me flip it on it’s head so it’s even more crystal clear. What’s the lesson here for other societies?
The less that we invest in public goods and social services as nations, the more that our economies corrode and our societies disintegrate. Incomes fall and prices rise, as all that’s left are people competing for private sector jobs, of which there aren’t enough, while paying ever increasing private sector prices. The average person is left impoverished. But because the average person is impoverished, there isn’t enough then left to fund the kind of tax base that can provide generous basics for everyone. Yet without those things, societies just decline into…forever. Regress becomes a way of life.
Below a certain threshold of investment, economies enter a death spiral. We must never let the amount that we invest in public goods and social services as a society fall too low. How low? Well, Britain and America give us hard proof: about 25% of an economy. When investment falls to that level, societies find themselves in the austerity-austerity-poverty death spiral. They may never emerge. Regress becomes locked-in, like in Russia.
(On the contrary, in Europe, rates haven’t fallen that low. They’re falling nonetheless though, hence reactionary movements like the Gilets Jaunes. And if they fall to such a point, Europe too will enter just such a death spiral.)
America and Britain’s future is questionable at this point — and I’m being generous. Think about what the above really means: these societies are caught in a trap from which there might well be no escaping. The average person needs more and better healthcare, education, finance, safety nets to ever live a better life again. But now they themselves are too poor to fund those things. What’s the obvious implication? That they will never have them again. That is the point. America and Britain let themselves be ruined. They fell into a trap — from which there is no good way out. Maybe no way out at all. Regress has likely become permanent, perpetual trend.
We are seeing a weird and gruesome new thing in the modern world. Rich countries which become failed states. In a precise and hard sense: they enter death spirals of austerity-poverty which cause a chain reaction self-destruction. That is the story of America and Britain’s twin collapses. Having let their investment rates fall too low, kicking off a vicious spiral of austerity and poverty leading to more austerity and poverty…which left the average person too poor to invest in anyone else, let alone him or herself…now no recovery towards a path of progress may be possible. Their future is just more of this, more regress, only harder and faster. Their destiny now well may be written in stone. They are joining nations like Russia and Venezuela in decline and collapse.
Let us hope that other nations are wise enough to learn from their mistakes. Because what follows folly is horror. What follows such death spirals, of course, is fascism, authoritarianism, and all the horrors of history.
Global Government 