#Brexit, the populist surge and the crisis of complexity

Brexit

The British vote in favour of an exit from the EU has thrown the UK’s political system into chaos and shocked Europe and the world. The long-term consequences of this vote are still unclear, but some fear it could trigger the undoing of the UK and accelerate the disintegration of the EU. Many see this outcome as a new victory for populist movements, which are on the rise across much of the Western world. Something more fundamental, however, might be at play.

A tale of two disunions

The British citizens’ vote in favour of an exit from the European Union has thrown the United Kingdom into an unprecedented crisis and sent shockwaves across Europe and the world.

Prime Minister David Cameron, who seemed to have won a convincing re-election just over a year ago, stepped down and announced that he would leave it to his successor to deal with the fallout of the referendum result. The race to succeed him as Conservative Party leader and Prime Minister is on, and is likely to leave the party bitterly divided and weakened for years to come. The opposition Labour party is also left in tatters, with leader Jeremy Corbyn – elected less than a year ago in a landslide – facing an internal revolt after failing to convincingly campaign in favour of remaining in the EU. Meanwhile, the referendum results are also reviving divisions and tensions between the nations that compose the UK. Scotland – which voted overwhelmingly for staying in the EU – has made it clear that it would not be forced out of Europe against its will. The Scottish Parliament may withhold the consent needed to pass the UK legislation required to leave the EU, which would throw the country into an unprecedented constitutional crisis, and the Scottish Government may call a new referendum on independence, which if successful would end the 3-centuries-old union between Scotland and England. Northern Ireland, which also voted in favour of remaining in the EU, could be tempted to go its own way as well, and maybe even to leave the UK for joining the Republic of Ireland.

The UK’s political system – in fact, the UK itself – now appears to be at risk of imploding. In a matter of days, one of the world’s seemingly most solid and stable democracies has been thrown into chaos. Across the nation, the blame game is in full swing, and bitter recriminations are flying. Some accuse David Cameron for his recklessly irresponsible gamble, which was apparently mostly aimed at settling the European question within the Conservative party once and for all, but ended up blowing up everything. Others blame Boris Johnson, the charismatic and popular former Mayor of London, who opportunistically threw his weight behind the ‘Leave’ campaign in order to take his former buddy’s place at the helm of the party and in Downing Street, but ended up being part of the wreckage, incapable of outlining a credible plan for the country outside the EU and even of competing for the Conservative party leadership. Most blame the populist tactics of the UK Independence Party (UKIP) and of its colourful – and now departing – leader Nigel Farage, who spent years campaigning for an exit from the EU, distorting facts and propagating semi-truths or even outward lies in the process. Many also accuse the British media, dominated by a tabloid culture that for decades has distorted political reporting and framed the EU debate – and pretty much everything else – in an ever-more simplistic and hysterical way. Some also point out the delusional, post-imperial cognitive disorder that still seems to linger on in parts of the English society, convinced that the EU is a continental plot to dominate Britain and that breaking away from it will help the country reassert its past power and greatness. Let’s ‘Get Our Country Back’, the story goes, and we will ‘Make Britain Great Again’…

Needless to say, the referendum results have left a large part of the British society in a state of shock and utter disbelief. Nobody, it seems, had really anticipated this outcome. Most of the ‘Remain’ voters are genuinely dismayed and are struggling to come to terms with the fact that a majority of their countrymen voted them out of the EU. They feel betrayed and angry, let down by a country that they think just decided to sacrifice their present, their future and that of their children. It’s now their turn to want their country back, the ‘Cool Britannia’ they grew up in and that suddenly seems to have vanished like a mirage. The ‘Brexiters’, they think, are surely just ‘Little Englanders’ who resent the country’s successful globalisation drive, xenophobic bigots who reject the successful multicultural society that Britain has become, losers who want to bring down the rest of the country with them, old and fearful people who want to hold on to their privileges at the expense of their children, or at best a bunch of uneducated, poorly informed and gullible folks who have proven to be easy preys for shameless demagogues.

For most of the ‘Remain’ voters, something has gone terribly wrong and “democracy has failed us”, as singer Damon Albarn claimed on stage at the Glastonbury festival. Some call upon the British Parliament to reject or ignore the result of the referendum, which in itself is not legally binding. Some want this result overturned, and millions have signed a petition to run a second referendum, apparently convinced that many of the ‘Leave’ voters already understand and regret their mistake. Some vent their anger on social media and take to the streets in protest, apparently hoping that Brexit can still be stopped. Some are not so convinced and are rushing to apply for citizenship and passports from other European countries. Others start questioning the legitimacy of popular referendums or even of universal suffrage, which has the great defect of giving no more weight to the enlightened vote of a young, urban and open-minded professional than to the foolish vote of an old, racist and uneducated loser. The atmosphere is poisonous, and polarisation has never been so pronounced. The nation’s wealthy, dynamic and cosmopolitan capital city, which elected a Muslim Mayor only weeks ago and where a large majority voted to stay in the EU, suddenly feels estranged from the rest of England and wants more autonomy. Across the country, families are torn apart by bitter dissensions. More than at any time in living memory, it looks like it wouldn’t take much for the UK to descend into some spiral of political violence.

The Brexit blow has been no less powerful on the other side of the Channel. There again, it seems that nobody really believed that British voters would dare to do it. Of course, the UK has been an uneasy and even reluctant member of the ‘European family’ for decades, never fully engaged and staying away from some of the bloc’s most integrated policies, in particular the single currency and the border-free Schengen travel zone. However, it seems blatantly obvious from the continent that the UK has benefited immensely from its EU membership, through gaining access to the world’s largest market and acquiring strong influence over its political direction and regulatory regime. British influence has in fact been on the rise in Brussels over the last two decades as Brits have been steadily gaining ground in the EU’s bureaucratic machinery, but also in the growing armies of lobbyists and lawyers, contractors and consultants that gravitate around it and influence its work in various ways. English has become the lingua franca of the EU’s business, giving British nationals an often-neglected advantage over continentals, and Anglo-Saxon free-market capitalism has progressively displaced French-inspired technocratic dirigisme and German-type social democracy as the unofficial but dominant ideology of the European project. All of this, in addition, has been obtained for a reduced membership fee, as the UK has been benefiting from a rebate on its contribution to the EU budget since 1984. Viewed from Brussels and from most European capitals, the UK has in fact had an incredibly good deal for decades, one that nobody in their right mind would consciously reject to suddenly and foolishly jump into the unknown.

The UK’s decision to leave the EU has thus left most of Europe stunned, and in some cases angry and resentful. The result is all the more infuriating that some of the UK areas that voted most largely in favour of Brexit are remote areas that tend to benefit from generous EU subsidies. Many on the continent therefore want the UK to initiate and complete the exit process as quickly as possible, rejecting any ‘informal’ negotiation before London actually invokes article 50 of the Lisbon treaty – something that David Cameron intends to leave to his successor. Others are more willing to let the dust settle and warn against the risks of rushing the exit. All, however, are unlikely to be willing to be generous with London once the formal negotiations start. The promise of the ‘Leave’ campaign’s leaders to safeguard Britain’s access to the EU’s single market without having to abide by its regulatory standards, granting freedom of movement to its citizens or contributing to its coffers is unlikely to be kept, as EU negotiators will want to avoid making anyone think that exiting the EU can be without costs.

In Brussels and in a number of continental countries, in particular the six founding members, some want to see Brexit as an opportunity for the EU to finally get its acts together and make a leap towards a ‘better’, i.e. more integrated Union. They point out that Britain has been a major impediment to further integration for decades, and some even believe that a lot of what is wrong and dysfunctional about the EU results from Britain’s systematic sabotaging of the project. With the UK out, they think, the march towards ‘ever closer union’ will finally resume, and citizens will start loving the EU once again. Some French commentators even start dreaming about a return to the good old days of the ‘Franco-German motor’, when Paris was in the driving seat and Berlin happy to go along, and when the EU’s bureaucracy was mostly speaking French. English may in fact now have to be dropped as an official language of the EU, since no other Member State than the UK notified it as its official idiom. However, this is likely to be resisted by a majority of Member States, in particular the anglophile Northern and Eastern European countries whose accession to the EU was championed by the UK, or even Germany that has no intention of giving up the bloc’s driving seat. In addition, there is no real appetite for any Paris- or Brussels-inspired integration leap in most EU capitals, including in Berlin where there is dwindling trust in France’s capacity to revive its sclerotic economy and in the European Commission’s leadership. Except maybe in some quarters of Brussels’ EU bubble that tend to indulge in groupthink, Europe has for a long time realised that the federalist dream was nothing else than a dream.

In fact, the outcome of the UK referendum is much more likely to further expose the EU’s fault lines than to trigger a renewed integration drive. Already, several Eastern European countries have launched very undiplomatic attacks against the European Commission’s president Jean-Claude Juncker, whom they accuse of not having done enough to prevent a British exit that they perceive as fundamentally detrimental to their interests. Those countries now want to have a bigger say in shaping the bloc’s agenda and policies, and they favour a more intergovernmental approach rather than a new push for integration. A rift between new and old members over the future direction of Europe is widening, which adds up to the already existing rifts between Northern and Southern members over the management of the euro zone and between Eastern and Western countries over the migration crisis. A rift that also adds up to what is arguably the most fundamental tension at the heart of the EU, i.e. the growing dissensions between France and Germany, who still pretend to jointly lead the bloc but “have long slept in the same bed with very different dreams”.

These compounding dissensions all but guarantee that no major overhaul of the EU’s governance and policies will take place anytime soon. Instead, the bloc will continue to muddle through and try to come up with supposedly ‘pragmatic’ common solutions to its mounting problems. Solutions that, if the recent past is of any indication, do not actually solve anything but just help buying time at best. This, it seems, has become the EU’s default operating mode. Any more ambitious approach is off the table as it would likely require a treaty change, and hence unanimity among the member states – which seems unattainable for the foreseeable future – and referendum ratifications in a number of countries – which national leaders will not dare to call for a very, very long time. Such referendums – or even exit referendums if they were to take place in other countries – would most likely give the same results as in the UK. In fact, the EU’s problem is less the British exit per se than the fact that the pursuit of the European project now seems unable to obtain citizen consent almost anywhere across the bloc. There lies the EU’s tragedy, the tragedy of a political construction that is becoming increasingly divided and dysfunctional but that cannot be fixed any more than it can be orderly undone.

Those in Brussels, Paris and elsewhere who now claim that Britain was blocking the EU’s march and rejoice at seeing it go might come to realise that the UK’s membership was maybe, on the contrary, one of the fundamental elements that was holding the complex EU edifice together. In fact, if Brexit might damage the British economy and may trigger the breakup of the UK, it is probably even more likely to accelerate the disintegration of the EU, which many fear is “now running at full speed” and some believe is “practically irreversible”. The London Stock Exchange took a beating in the wake of the Brexit vote, but continental stock markets literally nosedived, suggesting that international investors might be more concerned about the risk of an EU breakup than about the risk of the British economy getting into freefall. Concerns are mounting, in particular, over the health of Italy’s banking system. Italian banks have been struggling for years with a rising load of ‘non-performing’ loans and weak profitability in an environment of ultra-low interest rates. A fresh banking crisis might now be looming, which would be likely to further test Europe’s cohesion and raise renewed concerns over the permanence of the euro zone and the EU itself. This, in turn, would further boost those ‘populist’ political forces that seek to bring down the whole edifice and that are on the rise in a growing number of Member States.

The populist surge – or the stories we tell ourselves

The rise of populist movements, in Europe and now also in the U.S. with the advent of Donald Trump, is perceived by many as a major cause of the political crisis that seems to be engulfing the Western world. In this view, shameless politicians – ambitious demagogues at best, dangerous fascists at worse – propagate falsities and gross simplifications that resonate with the frustrations, irrational fears and prejudices of certain people and groups, while also feeding them. They use a complicit media system to their advantage, which amplifies their propaganda and widens their audience. Over time they build up popular support for their simplistic, divisive rhetoric and they end up disrupting or hijacking the democratic process.

When the progress of populist movements proves to be either irresistible or persistent, many then tend to assume that it is because their voters are typically ‘ignorant’, ‘stupid’ and ‘racist’. How else could it be that a majority of British people would want to leave the EU? How else could it be that so many U.S. citizens seem to be intent on voting for Donald Trump? These people must surely be just plain dumb…. This narrative seems to be increasingly widespread, in particular among the urban professional classes. It is a very convenient one, for at least two reasons. First, because it makes it morally legitimate to question and challenge electoral victories of populist movements, which are assumed to be obtained on the basis of lies and deceptions and/or to reflect the vote of ignorant fools. Second, because it makes it possible to ignore or even deny that people voting for populist movements or for the causes that these movements champion may have any kind of legitimate reasons for doing so.

These two reactions are clearly on display in the aftermath of the Brexit referendum, which outcome is perceived by many ‘Remain’ supporters as illegitimate and even morally outrageous, and which is seen as a victory of the ignorant over the educated, of the old and out of touch over the young and connected. The ‘Leave’ decision, in their view, is a victory of those who, out of frustration or sheer idiocy, want to get back to a country and a world long gone over those who are busy running the country today and inventing the world of the future. A victory of the people of yesteryear – old, intolerant, simplistic, bigoted, fearful and narrow-minded – over the people of tomorrow – young, cosmopolitan, complex, tolerant, innovative and creative. It should thus be resisted and, if possible, nullified, especially as the people of yesteryear are on their way out of this world.

The convenience and popularity of this narrative, however, do not make it right. First, it is at odds with the very concept of democracy, at least insofar as this concept has developed in the Western world over the last couple of centuries. A democratic society is a society in which the people make decisions about the ways in which they are governed. Democracy is about people having the right to make decisions, not about people having to make the right decisions. In a democratic society, those who believe they know what the right decisions are should be intent on persuading their fellow citizens – and not solely during referendum campaigns – rather than on invalidating or delegitimizing their vote. Their inability to be persuasive shows that a majority of citizens fail to find their arguments compelling, but it does not render the outcome of a vote democratically illegitimate. Second, this narrative can be counterproductive as it risks further antagonising those whose vote is dismissed and who may not enjoy being routinely called ‘old’, ‘stupid’ or ‘racists’. In the Brexit case, a second referendum would maybe give a different result as some ‘Leave’ voters may have second thoughts, but it would probably be even more likely to infuriate those whose vote would have been invalidated and to further increase division and polarisation, possibly leading to an even more resounding exit vote. Third, and perhaps more importantly, this narrative only provides a partial view of what is at play, and therefore obscures many other important factors that need to be taken into account to make sense of the situation.

There is little doubt that some of those who voted for Brexit are old, intolerant, fearful, racist, stupid and what have you – people who want to vote away a modernity they dislike and who are sure to end up being disappointed. It doesn’t mean, however, that population ageing, intolerance, fear, racism or stupidity are the only reasons Brexit won, or even the main ones. There is no evidence, in particular, that the populist surge across the Western world can be related to any sudden epidemic of stupidity. One could of course argue that the continuous stream of mindless entertainment Western consumers are bombarded with may be causing a general ‘dumbification’ of the populace, or at least that it may be hampering the cognitive abilities of certain people. Some scientific studies actually suggest that average intelligence, which increased during much of the twentieth century across the world, may have been going down at global level in recent decades. However, this downward trend, if it exists, should logically be affecting younger generations rather than older ones, and it is thus a rather poor candidate for explaining the allegedly ‘stupid’ vote of Britain’s oldies.

An alternative – and probably more convincing – narrative views Brexit and the populist surge across the West as an anti-establishment revolt by globalisation losers. Globalisation, in fact, has not been the win-win game that some of its supporters had claimed it would be. It may have lifted millions out of poverty and triggered the emergence of a middle class in developing countries, but it has at the same time, and in a pendulum swing, undermined working and middle classes in the West. First through the large-scale offshoring of manufacturing jobs towards emerging countries, and second through the effects of mass migration that has increased competition for low-skilled jobs, put continuous downward pressure on their compensation, and in some cases eroded social cohesion. For most workers across the Western world, real wages have been stagnant or even falling for decades, employment opportunities have dried up in many areas, and job and social insecurity have spiked.

These long-term trends are often ignored or dismissed by those who insist that globalisation has brought and is still bringing major economic, social and cultural benefits. That may actually be true, but in developed economies these benefits tend to accrue to some sections of the population only. These include those who derive the bulk of their income from capital investments, who in a globalised world benefit from vastly increased investment opportunities. More generally, these also include those who are equipped to find their place and thrive in the ‘service economy’, or who aspire to do so.

Across much of the Western world, the rise of the services sector that has been concomitant with globalisation has been driven by technological progress and, even more fundamentally, by the ‘financialisation’ of the economy. A rising share of nominal wealth creation – and of the workforce – has been derived from – or dedicated to – activities that fundamentally consist in pushing money around to make more money, and a myriad of other service activities have developed around those, being funded from the proceeds. These include a number of high value-added activities such as technology and professional services, but also a whole array of lower value-added activities such as restaurant waiters, bartenders, laundry, hair salon or retail jobs, and pretty much anything else in between including a variety of ‘creative industries’. For those who have the skills and connections to thrive in such service-based economy, i.e. the modern ‘elites’, globalisation, open borders – and by association the EU – mean vastly enhanced prospects and opportunities. For them, migrant workers, legal or otherwise, represent the willing and malleable workforce that is required to power the service economy they navigate in, as well as to put a cap on the price of a number of services they value and want to have access to. For those who, for a number of reasons, are not equipped or do not have the possibility to jump on the service economy bandwagon, globalisation and open borders mean a growing risk of disenfranchisement and social relegation. For them, migrant workers typically represent an illegitimate competition for scarce jobs, housing and public services, which undermines the value of their labour force, threatens their welfare and disrupts the communities they live in.

In most Western countries, globalisation has been feeding rising inequality between those two groups, and there is no evidence that it could be any other way. The populist surge that is now at play is, to a large extent, a reaction of those who have been on the losing side of this trend. They tend to be on average rather older, more rural and less educated than those who have benefited from globalisation or aspire to make their way into the service-based, globalised urban ecosystems and have reasonable prospects of succeeding. Deep down, however, the divide is much more about social class than about age or education. Our reluctance to recognise this reflects the extent to which class issues have become taboo in Western societies. We don’t like to talk about class divisions, we don’t want to see them, or we pretend they don’t exist or they are not anymore relevant, but that doesn’t make them go away.

The rise of populist movements is therefore a sign that a growing number of voters tend to perceive themselves as being on the losing side of things. Whether this perception corresponds to a statistical reality for all of them is debatable, but largely irrelevant: in politics, perception is reality. A growing sense of anxiety is spreading among those voters, as well as resentment and anger against an economic and political system that they believe is failing them. This is pushing an increasing number of them towards political movements that promise a clean break from this existing status quo or sometimes a return to a preceding state of affairs presented as more satisfactory or more reassuring. These movements’ narratives need not be coherent, credible or even sane; as long as they resonate with voters’ resentment or anger, they get increasingly popular. And most of the arguments typically used to try to lure voters away from these populist movements are ineffective or even counterproductive. Trying, for example, to scare people away from the Brexit vote by claiming that it will ruin the UK’s otherwise bright economic growth prospects is unlikely to change the minds of people who feel they have not been experiencing the benefits of economic growth for years.

The end of growth and the crisis of complexity – or the stories we choose to ignore

More than globalisation itself, the underlying cause of the populist surge might in fact lie in the slow disappearance of economic growth at global level, and in particular in the West. Almost a decade after the onset of the global financial and economic crisis that erupted in 2007-2008, the world economy remains weak and the hoped-for ‘recovery’ elusive. Everywhere, the economic policies conducted since then have largely failed to trigger the return to growth that was expected after the ‘Great Recession’. The unprecedented monetary stimulus unleashed by the world’s main central banks may have prevented a complete collapse of the global financial system and then kept it afloat, but it has done little to stimulate the productive economy. The only significant factor that has kept the global economy going in recent years – China’s runaway state-driven, debt-fuelled overinvestment, overcapacity build-up – is now slowing down sharply, pushing world growth further down.

This dearth of economic growth is causing significant disruption and generating major challenges in world that had previously become accustomed to rapid expansion, and where growth has come to be considered as the ‘normal’ and almost ‘natural’ state of things. In the West in particular, businesses assume that their revenues and profits should expand, consumers that their purchasing power and living standards ought to go up, governments that their tax revenues will naturally climb over time. Lenders and investors assume that borrowers will be able to repay their debts and businesses to pay dividends. All make their spending and investment decisions, as well as related long-term financial commitments, on the basis of the widely shared assumption that the economy will grow. Voters, in turn, assume that political leaders will maximise growth and use its proceeds to constantly increase societal welfare. To a certain extent, economic growth has come to form part of the Western social contract, and its absence is perceived by some as a breach by government of its tacit contractual obligations.

The assumption of – and need for – continuous and significant growth has become embedded in the world’s established economic, political and social order, to the point that economic growth has become a key requirement for this order to keep functioning and to remain stable. A prolonged period of low growth would in fact undermine this order in several and mutually reinforcing ways. In particular, it would be likely to hamper the rise of living standards, increase financial instability, volatility and distress, and exacerbate income and wealth concentration and inequality as the process of capital accumulation – i.e. the essence of capitalism – takes place in a context where there is no more ‘rising tide’ that could ‘lift all boats’. It would also make it increasingly difficult to maintain fiscal sustainability, generate rising social and political tensions, and increase the risk of political/geopolitical dislocation or fragmentation. To some extent, all of this is already happening.

There is indeed a growing sense that political and economic leaders across the world are increasingly at the mercy of economic and geopolitical forces beyond their control, most of which can be traced back to the slow disappearance of economic growth, and that are feeding a seemingly unstoppable rise of political instability in developed as well as developing economies. In the latter, this is often leading to a rise of authoritarian rule, and in the worst cases to the outright implosion of the established order; in the former, this is leading to a sort of slow-motion ‘sophisticated state failure’, whereby political institutions maintain a semblance of functionality but are getting increasingly incapable of solving the major issues facing complex societies. This evolution is increasingly undermining the liberal world order that has prevailed in recent decades, and even in some countries the foundations of liberal democracy itself. In particular, it is fostering intolerance and a retreat of individual freedoms; to a large extent, increased tolerance and the extension of the realm of individual freedom in recent decades have indeed been by-products of rising prosperity and of a widespread faith in a better future, which now seems to be evaporating.

Slow economic growth is not just an after-effect of the Great Recession but part of a deeper malaise that predates, and indeed may have helped cause, the financial crisis. A number of narratives have emerged in recent years to try to explain this global dearth of growth, such as the ‘debt overhang’ narrative, which states that growth is primarily hampered by an excessive indebtedness of economic agents, or various versions of the ‘secular stagnation’ narrative, which sees the cause of slow growth in a chronic shortfall of demand resulting from population ageing and the rise of income and wealth inequality, and/or in the diminishing returns of technological innovation. These various narratives probably all have some degree of validity. However, they tend to focus on developments that, even if they act as mutually reinforcing drags on growth, are in fact symptoms of the world’s economic predicament rather its deeper root causes.

Even more than from what most economists usually look at, i.e. constraints on capital and labour and on the productivity of their use, the slowdown of global economic growth since before the financial crisis might be resulting from factors that they typically ignore, i.e. constraints on the supply of energy and other biophysical resources that feed into the economic process and impact its functioning. In fact, the world’s capacity to create additional wealth is getting increasingly eroded by biophysical boundaries that over time tend to raise the acquisition costs, constrain the quantity and degrade the quality of the flows of energy and natural resources that can be delivered to the economic process, as well as by the constantly increasing costs of some of the economic process’ side effects (i.e. ‘negative externalities’ including environmental degradation and climate change), and the growing need to ‘internalise’ them into the price system. These biophysical constraints, as they increase, tend to weigh more and more on the economy’s productive capacity, thus eroding the potential for productivity and output growth.

The root causes of the long-term erosion of the world economy’s growth potential, therefore, may be related to biophysical constraints rather than to factors affecting just capital and labour inputs. As a consequence, policies aimed at boosting or reviving economic growth by targeting solely capital and labour inputs and the productivity of their use are highly unlikely – and, as a matter of fact, have failed in recent years – to deliver their intended results. Pursuing such policies would typically mostly lead to putting ever-growing pressure on those factors of production – and most particularly on the traditionally weaker factor of production, i.e. labour – to try to obtain productivity improvements and output growth that would consistently fail to materialise. In fact, continuous dual pressure on labour – upward on productivity, downward on compensation – has already been at play for several years, and this dual pressure is a major contributor to the populist backlash now underway in many countries.

Over the last decades, the industrialised world has found a workaround to biophysical constraints by expanding the reach of global capitalism but also and maybe more fundamentally by substituting debt accumulation to genuine wealth creation. This debt-fuelled growth, which has been instrumental in enabling the transition of Western countries to a service-based economy, imploded in 2008-2009 and has since then only been maintained on life support by the massive liquidity injections made by the world’s major central banks, as well as by the massive and compounding asset bubbles that have been blown as a result in developed as well as emerging economies. These injections and bubbles have so far prevented a brutal deflation of the financial assets that underpin the entire global financial and economic system, but the ability of central bankers to contain this deflationary spiral is dwindling as time passes and as genuine growth continues to be lacking.

In addition to weighing on economic growth, biophysical constraints – in particular the various rising constraints on the energy supply – may also negatively impact societies’ capacity to innovate and to maintain their level of complexity. As shown by American anthropologist and historian Joseph Tainter, human societies can historically be conceived as problem-solving organisations, which tend to develop ever-greater organisational and technical complexity in order to solve the social, economic and political problems they are confronted with. As their complexity rises, the problems they have to deal with become more difficult to solve, requiring growing investment in further economic and societal complexity.

A key determinant of a society’s capacity to develop greater organisational and technical complexity, according to Joseph Tainter, is its capacity to harness ever-growing supplies of energy. The availability of abundant, inexpensive, high quality energy has indeed been historically instrumental in the development of industrial societies’ capacity to build increasing complexity into their economic, technical, political and social systems. As biophysical constraints on the quantity and quality of energy and other resources rise, this ‘energy-complexity spiral’ may transition from being an upward spiral to being a downward one. Technical innovation that increases productivity may slow down this evolution, but research shows that innovation in industrialised countries tends to become more expensive and less productive over time, meaning that societies need to continuously step up their investments in innovation to continue solving problems through building up increasing complexity.

At some point, however, investment in socio-political complexity typically reaches a point of diminishing returns, meaning that the marginal beneficial returns (i.e. problems solved) of additional complexity begin to decline, leading to a lowered capacity to solve the new problems that arise and to deal with their consequences. These returns may even turn negative, at which point societies are not anymore capable of upholding the level of complexity they have reached. Typically, they then tend to break down to a lower complexity level.

Ever since their emergence, industrial societies have continuously become more complex, and they are continuing to do so. An example of increasing societal complexity is the development of sophisticated public health, welfare and redistribution systems aimed at safeguarding or enhancing social cohesion, which tend to become ever more complex over time and require ever-growing investments that many countries now struggle to keep up with. More recent manifestations of increasing societal complexity include the development of just-in-time global supply chains, the growing dependence of all critical systems and infrastructures on the Internet, or in another domain the increasing diversification of the ethnic and social make-up of Western societies. Diversified, multicultural societies are typically more complex social constructions than ethnically and culturally homogeneous societies, and they tend to be more complex to govern as a result.

In the field of governance, increasing societal complexity also includes the development of complex transnational political structures, such as the EU. As a governance system, the EU is more complex than the nation states it is composed of and builds upon. By historical standards, the fact that such a complex transnational governance system may have been put in place and made to work for a time is remarkable, maybe even miraculous. However, this system is now becoming increasingly dysfunctional, and the critical resources needed to make the additional investments in complexity required to solve its problems – in particular political capital – are missing.

The political crisis that is now engulfing Western countries, and more particularly Europe, suggests that we may be reaching or even have reached the point identified by Joseph Tainter where our standard way of solving the problems we face – i.e. investing in organisational and technical complexity – is yielding diminishing returns. If this is the case, we should not be surprised that more and more of our complex economic, technical, political and social systems are showing signs of stress, or even early signs of failure. As our capacity to invest in further complexity continues to get eroded by energy-related and other biophysical constraints, we should expect more stress to develop across the board, potentially leading to some sort of systemic breakdown and forced simplification. The growing popular revolts against globalisation, the EU, or multiculturalism are signs that our societies are already struggling to uphold their level of complexity and are subject to strong forces that are pulling towards a break down to a lower complexity level (i.e. localised economies, national governance, homogeneous societies, etc.).

These trends are largely obscured, however, by our habit of thinking about the problems we face in purely political terms, i.e. in terms of governance, leadership and policy choices, regardless of the historical circumstances in which they are made. If something doesn’t turn out the way we expect, we tend to blame policy-makers and the decisions they have taken or failed to take, or in some cases voters and the choices they have made. More rarely, we question the adequacy of our public institutions. Faced with the protracted crisis of the EU, we blame the current generation of European ‘leaders’ for their mediocrity and inability to rise up to the standards of their predecessors – even if those predecessors are precisely those who are responsible for building the EU’s dysfunctional edifice in the first place. We try to imagine solutions that would allegedly solve the EU’s problems, but we conveniently choose to ignore that the conditions and requirements for their adoption and successful enactment can probably not be fulfilled. By pursuing in this direction, we will most likely end up making policy or institutional choices that will fail to reach their intended objectives, and that will bring about new problems we will be unable to solve or even comprehend, and unintended consequences we will be unable to control.

As there are growing signs that we might be in a crisis of complexity caused by rising biophysical constraints and characterised by diminishing returns of investments in societal complexity, we are entering an era when circumstances will trump personalities and institutions. What we now need, hence, is not so much to find new political ‘leaders’ capable of designing and enacting grand plans to lead us further up the complexity pathway, but to ensure that we can make collective choices that are fit and appropriate for an age of scaling-down expectations. There is no sign that this could happen anytime soon, or even that it might be possible. It is therefore entirely reasonable to expect that our economic, technical, political and social systems might continue to become increasingly dysfunctional and drift towards breakup point. The journey to that point will probably continue to leave most of us puzzled, and will most likely be filled with the disturbing clamour of populist caudillos.

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73 thoughts on “#Brexit, the populist surge and the crisis of complexity

    1. Automation isn’t mentioned here. If people are being replaced by technology, there are less incomes to tax and thus the organizational complexity machine actually loses funding (energy) to maintain. Also, it seems like you contradict yourself when you say that this isn’t an issue of stupid voters, but your solution is to change expectations, which I interpret to mean that people are too stupid to understand the world.

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  1. Hi Paul

    I have reblogged this on my own sites if that is OK. Thank you for the comment on my blog and my own far less impressive consideration of these issues!

    Somewhat parenthetically, I doubt the Brexit vote will lead to Northern Ireland being unified with the Republic of Ireland. The Vote was a lot closer than in Scotland and, interestingly, did not split along sectarian lines – the Ulster Unionist Party backed Remain along with the Nationalist/Republican parties leaving the DUP the only major Leave party.

    Thank you for your analysis and a very interesting blog.

    Seamus

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  2. You should have a look at our paper “Refactoring Society: Systems Complexity in and Age of Limits” (http://limits2016.org/papers/a2-raghavan.pdf). Here’s the abstract:

    “Research in sociology, anthropology, and organizational theory indicates that most societies readily create increasingly complex societal systems. Over long periods of time, accumulated societal complexity bears costs in excess of benefits, and leads to a societal decline. In this paper we attempt to answer a fundamental question: what is the appropriate response to excessive sociotechnical complexity? We argue that the process of refactoring, which is commonplace in computing, is ideally suited to our circumstances today in a global industrial society replete with complex sociotechnical systems. We further consider future directions for computing research and sustainability research with the aim to understand and help decrease sociotechnical complexity.”

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  3. A persuasive grand narrative analysis which has much to recommend it. However, I fear the Hegelian-style logic-of-history approach has a key blindspot: neoliberalism. I’m not sure I buy the idea that industrial societies have become ever-more-complex as if by a natural/inevitable process; rather its an ideological imposition that could have been otherwise (and could still be otherwise). The “four freedoms” of the EU are contingent freedoms that could/may need to be challenged. Union power exists to a greater or lesser extent in different parts of Europe (and the US), as do labour rights. These things are all within the realm of discussion and politics, not simply hidden levers to which we can have no access. Immigration policies can be a reflection and mature response to ageing demographics (Germany) rather than simply a Brexit-esque reaction. A shift to a services-oriented economy again is a politically motivated decision in the sphere of human agency, not simply part of the logic of things. Who knows how things would be in the US had the Democratic Convention nominated Sanders instead of Clinton?

    What’s also confusing/needs clarifying is the extent to which this Tainterian idea that the diminishing returns of complexity has reached its end state in post-industrial societies by itself, or whether its the biophysical constraints (the end game of conventional petroleum) that are the key determining factor. I think the latter has more plausibility – that what’s really at work is the shift from conventional to non-conventional oil in an era of undeniable climate change is putting the global financial system under increasing stress. Financial markets are determined by perceptions and outlooks, which themselves are formulated through risk analysis. We all know what’s on the horizon for the planet..

    None of this is meant to be dismissive – the piece is a bravura work of analysis and a stimulating/nourishing read!

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  4. It’s interesting that Paul says we can’t legitamently call them stupid but then goes onto say that it is because they are reacting against the establishment & globalisation & this is the more likely reason than their stupidity. As it is & has always been Tories & their fellow travelers who have pushed to reduce wages & conditions & line the pockets of the rich & that this has been what has occurred over the last 30 odd years, yet in protest they vote for Tories, Rebulicans & bunyib Tories in Oz proves along with their consumption of Rupert “news” beyond doubt they are stupid

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    1. When one set of politicians ignores your plight while another claims to understand your plight and can solve your problems, whom do you vote for?
      Historically, people have voted for the people who have sounded like they have the solution, while not themselves understanding the problem. Most people don’t spend the time to wade through all the BS that comes from politicians to distill the essence of the debate. Most people don’t take a course in electronics before buying a cell phone. For the most part, in the past, that has worked out just fine.
      The voters are not stupid, they have just assumed they could make a sensible decision on the basis of limited analysis and study.
      The historic division of labour – elites spending their time making sure that governance is on the right track, the rest just going about their lives – has failed. This is a failure of the elites, not a failure of the rest.
      The elites have shirked their responsibility. In the UK, members of the elite pushed for Leave for various reasons and were rewarded – Boris the Reckless becomes Foreign Minister. That alone condemns May to a place in history in which few would want to appear.
      In the US, the Republican party is forever tarnished by allowing Trump to become their candidate. I expect the party to splinter and dissolve, leaving nothing in its wake. A monumental failure of the elite.
      Had we taken a few thousand of those you are calling stupid and used them to replace the entire political class, there is a high probability that both Brexit and Trump would have been avoided.

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    2. I think it useful to make mention of the role of capital itself in all of this. In particular, the internal logic of capital; it is all very well to point the finger at the Tories in the UK,( and who wouldn’t), but I believe that, although culpable, to a greater or lesser extent and dependent upon historical contingency, the Tories have no real elbow room here. Perhaps a re-reading of Marx would help?
      Regards

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  5. A compelling and provocative analysis that seems in part to depend on the assertion that the age of cheap and universally available energy is closing, when in fact thanks to the surge in renewables it may just be beginning.

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    1. “when in fact thanks to the surge in renewables it may just be beginning”

      No, actually there is no surge, and you must live in a bubble to believe there one. The so called modern “renewables” still produce a tiny part of the energy, and they have a ridiculous cost. They only exist in the bubble of ecoloon policies. (And there is no such thing as “renewable” energy.)

      Donald Trump has been elected, in case you don’t know. He will pull the plug in ecoloon subsidies. A move that liberals should support, as they have been saying for years (or maybe decades) that “renewables” are cheaper than x (x being coal, fossil fuels, or even fission).

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      1. “No, actually there is no surge, and you must live in a bubble to believe there one. The so called modern “renewables” still produce a tiny part of the energy, and they have a ridiculous cost. ”
        Actually simple-tourist, renewables apparently surpassed coal last year to become the largest source of installed power in the world according to new International Energy Agency data. http://www.ecovoice.com.au/historic-milestone-renewables-now-largest-source-of-installed-power-in-the-world/

        It’s also worth considering – when calculating costs – exactly what you are including and excluding in your accounting. What is the value of ecological function? Biological nutrient cycling? etc..

        Liked by 1 person

      2. There is no renewable anything. You have stuff labelled “renewable” just like you have stuff labelled “organic”, with an arbitrary and quasi religious definition (why are GMOs excluded?).

        Energy is not renewable, but some means of production of useful forms of energy are sometimes said to be “renewable”, but it depends. There are “renewable mandates” which force producers to have a given fraction of “renewable” production, but these mandates sometimes exclude big hydro, which is the single most important source of “renewable” energy.

        So it depends on who you ask. And yes, big hydro is very efficient. But it also has a huge impact on ecosystems and people.

        Other “renewable” systems exist mostly or only as part of big green scam. They produce a ridiculous, worthless (usually intermittent and unpredictable) output with a huge financial cost and disproportionate impact on wildlife.

        The effect of pushing those “green” monsters is:
        – more expensive energy
        – financial bubbles
        – less reliable energy
        – lower standards of living
        – more money for the “green” industries
        – more damage on ecosystem
        – waste of fossil energy resources
        – waste of other materials

        At the end of the day, this is just a subsidy for fossil fuels, esp. nat gas. Big Oil is behind Big Renewable.

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  6. This is an engaging and thorough analysis, thanks. The only thing I’d add is that I think groups like ISIS and other religious extremists can be read as a function / outcome of the same general type of populist resentment against globalisation which gave rise to Brexit and Trump.

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  7. It’s not against democracy to call bigots and xenophobia what they are. Globalisation is failing AND bigots exist. They just come crawling out in times of economic stress.

    Also it’s not undemocratic if we demand more than 50% to vote for change. Brexit was 37%.

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    1. “It’s not against democracy to call bigots and xenophobia what they are”

      Spoken like a true brainwashed cultural marxist.

      What you fail to understand is; whilst you’re happy to be inward thinking ‘little Europeans’ by building that EU wall higher & higher, those who voted to leave what to look outwards to the world. So explain, why are you a xenophobe? Do you want to stay hidden behind that EU wall because Europe is white, are you a rampant racist & a bigot?

      “Also it’s not undemocratic if we demand more than 50% to vote for change. Brexit was 37%”

      None of this came up before the referendum when remain believed they would win by a landslide. Thus, you accepted the rules of the game by taking part. Changing the rules of the game after it has finished is, well…….. you get the gist.

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      1. Why do you think the EU is “wall building”? It clearly wants to create trade deals with the rest of the world in the same fashion the UK now wants to.

        Just look at this map: http://trade.ec.europa.eu/doclib/docs/2012/june/tradoc_149622.pdf

        The fact people think a solo-UK can negotiate equal or better deals than an entire united continent is truly mind boggling and honestly delusional. That’s what you are “failing to understand”.

        What about either leaving the single market, or leaving the EU but staying in the single market (with a much more expensive deal for the same benefits and no say,) screams “outward looking” to you? You do know we will still have to follow all the same trading rules don’t you? The 109 regulations involving pillows will still have to be followed if pillow manufacturers wish to sell outside of the UK.

        Brexit is pure, emotional, nationalism, plain and simple. I hope you guys are right and in the future we’re all sitting around with our British Bill of human rights having a great time. But at the moment, there is literally no evidence any of this makes sense, it’s just feelings, blind optimism and lies.

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      2. Are you saying that it IS against democracy to call bigots and xenophobia what they are? Say whatever you like mate, the future is white, transgender, gay men, holding black babies with an Asian wife, and there’s nothing you can do about it. So chew on your grumpy isolated racist biscuits as the world passes you by and you become more and more confused. If you’re lucky, the biscuits will be maid in Britain.

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      3. Respectfully, I think you are leading up a garden path here. ‘Those who voted to leave want to look outwards to the world’. Maybe you. Not the sizeable ‘alt right’, racist pensioners, little englanders……

        Socialism is the best way forward for cohesion. I think we are in the midst of an Individualism v collectivism battle, and individualism will destroy the planet and social cohesion

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  8. I think the second half of the essay is missing some key points, which together explain the current situation better than the essay’s thesis:

    1) Energy is currently moderately priced by historical standards, and so far our actions have done little to prevent future climate change. Therefore, biophysical constraints should not currently be a significant drag on our economies.
    2) Certain specific events have had a large impact on our political and economic climates. The EU’s drive towards “ever closer union” regardless of voters’ desires has cost it legitimacy among much of the population. Social media has ensconced people in “thought bubbles” and increased extremism. And so on.
    3) The last few decades have not actually been a time of economic decline. Globalization has led to a massive increase in living standards for billions of people worldwide, while leading to stagnation for hundreds of millions of people in the Western middle-to-lower classes. This “economic osmosis” does not generate equal returns for all people, but in the big picture, the world economy has grown massively.

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  9. Paul – another component to add to your analysis regarding biophysical limitations – apart from the financial system being slowly forced to account for externalities, is the relative decline of Energy Return On Investment (EROI) and the small matter of renewables having a lower EROI. This is an excellent paper on the matter, which I think you’d like: http://www.sciencedirect.com/science/article/pii/S0301421513003856

    If you like read section 7 first, as it is most relevant. The claim would be that the basis for slower growth in post-industrial societies is largely factored by the decline in EROI of the energy sources which power them.

    All the best.

    Jeremy

    Liked by 1 person

  10. Brilliant, I found this article, from George Monbiot’s recommendation in the Guardian today.

    A very good read, very well thought out, and some very deep thinking on the issues surrounding Brexit, and the world economy.

    I did vote to remain in the EU, as I am a liberal, global person, who fits into your ‘service industry’ type. However, I do understand very well, why many people voted to leave. And you are right on many counts. I would say, there is also a real movement within society, to get back to local policy. It is often very destructive, to have policy governed from afar, and if you think on it, you will see that this was already happening in the UK, long before Brexit. Scotland and Wales have pushed for greater regional powers. Other areas of Britain, including the north, and Cornwall have even been murmuring about wanting the same. And this is not a recent thing. It is a real need in people, to have policy that is tailored for their own needs, rather than policy that is given out on a ‘one size fits all’ basis.

    As to your comments on growth, I 100% agree with you. Growth is not something we can rely on forever, nothing in the world grows forever, and if we use finite resources to fuel that growth, (and in fact nothing in the universe is infinite), then we must accept that there is an optimum state, where we are self sustaining, without growth or contraction. If we can maintain that optimum state, then we have achieved the best that we can. Focusing on sustained growth is just really a fools errand. It is an illusion. The Western illusion of constant growth has been achieved firstly by enslaving others to produce labor growth, then burning up resources to fuel growth, then finally by invading and burning up resources of other nations. Obviously we are now running out of planet that we can toss into the fire of eternal growth. And I think this knowledge, although perhaps not spoken about openly, is actually the driving force in most environmental and anti-war groups. Economists who believe that economics can exist and function, independently from physical resource based reality, are wrong. Not only are they wrong, but they are technically delusional. Although it is possible, in a closed loop, to make money from money. There is no way to do it on a global level, without taking some physical resources from somewhere in the first place.

    Thank you for a really good read, and I hope you will continue to write such in depth, and thought provoking words.

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  11. “If people are being replaced by technology, there are less incomes to tax and thus the organizational complexity machine actually loses funding (energy) to maintain”

    You really are a Luddite.

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  12. “the relative decline of Energy Return On Investment (EROI)”

    Only because propagandists managed to convince people that nuclear fission is a bad thing. Let fission play its role and EROI goes through the roof!

    Anti nuclear propaganda is a crime against humanity, and maybe one of the worst hoax of history (together with the vaccines are based on science hoax, the nutrition is robust science hoax, and the climate science is robust science hoax).

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    1. In THIS I agree with you, and partly with how renewables aren’t effective right now.
      Your other posts, not so much, especially not the one about non-existent right-wing bubbles. Bubbles doesn’t just mean not seeing anything else, but rejecting out of hand anything that goes counter to already accepted ideas.

      Nuclear power and GMO food are two of the things we need to avoid ecological boundaries. Retreating from nature to give nature breathing space, even while humanity grows to the forecast 9-10 billion. We need to stay (for some) and become (for others) a high energy society, because without it, how can we hope to solve our problems. If humans do manage to stay within those numbers, we may not hit hard ecological boundaries, even if stable numbers come with their own issues because right now we’re living in this ‘keep growing’ paradigm. We’ll need to replace that with a framework that I have hardly any real ideas about how it should look like, other than mimicking ecosystems that have growth and change and decay within a larger stable frame. It’s hard to look outside the paradigm you live in.

      The current political and economical troubles are making this challenge even bigger than it is. I wonder if we need to try to tackle this first, but I fear it will take precious time that we can’t afford to lose. I think we can take advantage here form our large numbers, dividing the work. Some people to wrestle with politics, some with trying to steer away from ecological disaster, some thinking up new frames of mind to live within other than our current growth model.
      Am I dreaming? Maybe, but I rather do my part hoping we will still pull through than in despairing surety that it can only get worse till there’s nothing of worth left either in society or in nature.

      So, simple-touriste, shall a lefty like me and a looks-like-righty like you try to find ways together to keep a viable society and not harm nature too much more while we do that?

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  13. “Social media has ensconced people in “thought bubbles” and increased extremism.”

    Nope. There is exactly zero evidence of either bubbles or “increased extremism” except in liberal circles.

    That’s a concept pushed by the globalist, mainstream media, in order to hide its own abject failure of objectivity. There is one gigantic liberal bubble, period.

    The conservatives do not live in a bubble. They couldn’t if they wanted (short of going full Amish). They would still hear liberal lies, everyday. They know about ALL the lies pushed by pro-Hillary shills, pro-EU shills, etc.

    The idea of many bubbles is the typical liberal lie. It’s wrong on its face.

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    1. You’re contradicting yourself. No evidence of bubbles, except in liberal bubbles? A cursory visit to Twitter will disavow you on this. I made a single comment on Twitter against someone who hates liberals aka Social Justice Warriors, and his network descended on me like a pack of dogs, all mutually liking each other’s tweets etc. If that isn’t a bubble I don’t know what is, on social media. I did not experience this bubble because ‘mainstream media’ told me anything. Therefore this view of yours is also flawed in the general. The media is not liberal, heck, much of it is owned by billionaires, the likes of Rupert Murdoch. There isn’t a single left wing mainstream newspaper in the UK, all of these papers too are ‘for profit’, so perhaps your characterisation of mainstream media is mistakenly conflated with a number of columnists that are tolerated at each of these media outlets. Even the BBC is run by Tories.

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      1. “You’re contradicting yourself.”

        Really? Where?

        “If that isn’t a bubble”

        It isn’t. It’s a bunch of apparently sane people mocking you.

        “The media is not liberal, heck, much of it is owned by billionaires”

        Relevance? The billionaires are mostly progressive liberal trying to screw the working class even more. They are not conservative who respect every individuals!

        “Even the BBC is run by Tories.”

        Oh, that degenerate “right wing party”? That pro-Islamofascism party?

        If fascism isn’t “liberalism” and “progressivism”, I don’t know what it is!

        In case you don’t know, the real right wing party in GB is UKIP now. UKIP is not running the BBC.

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  14. Thanks for a very thoughtful article! I do like the argument that societies are getting super-complex and would also underline that recent outcomes are the legitimate democratic result of rising wealth gaps in most societies. I am less convinced that the biophysical “Limits to Growth” are either a very new idea (the book is from 1972) or actually the underlying reason for changing perceptions of society. As Eric mentions, energy is currently moderately priced, as its external effects on the world of our children (global warming etc) are not priced in.

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  15. Good article. There is nothing new about the concept of limits to growth. In fact in the early 70s a report by the Club of Rome predicted it would happen. The facts are pretty straight forward. The earth’s resources are finite, and, particularly with oil, the cheaper and easy to access resources will be used up first with poorer and more expensive sources used later, until the cost of accessing the resources exceeds the level of viability. And the best measure for this is energy returned on energy invested. What is unstateable though, is the idea that there will not be a new source of energy that will arrive in the nick of time to supersede oil. Wood and man power was exceeded by coal, coal was superseded by oil, and oil will be superseded by……. Nothing. Discussion of the implications of this have been covered in numerous books by Richard Heinberg and John Michael Greer. We are reaching a historical turning point. However, it will only be accepted in the fullness of time with reflection.

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  16. Impressive piece. I’d include representative democracy as another destructive component of complexity, requiring leaders to over-promise, complicate when they try to fulfil their promises and fuel discontent when they fail.

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  17. “David Cameron intends to leave to his or her successor” no, it’s *his* successor. The successor may be male of female (female, as it turns out), but the person they are succeeding is a man…

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  18. Firstly, critics of Brexit and Trump love using the word “populist”, as if it is nefarious. Populism refers to the wants of the majority of people. Populism = Democracy. To be anything but populist is to be anti-democratic.

    Critics of Brexit and Trump also love criticizing Brexit and Trump supporters as “uneducated”, “old”, “poor” and “bigoted”. For them to say this, makes them the biggest bigots. They think that they are superior, more educated, richer and self-righteous.

    I find the following funny:

    “For most of the ‘Remain’ voters, something has gone terribly wrong and “democracy has failed us”, as singer Damon Albarn claimed … Some call upon the British Parliament to reject or ignore the result of the referendum…Some want this result overturned…”

    They claim that democracy failed them. How? A vote was taken. Then they want parliament to reject or ignore the result, or to over turn it. That’s supposed to be democracy? To do so is completely anti-democratic. Their hypocrisy is so blatant that it is hilarious.

    The following is the one of the most un-democratic and bigoted things you can say:

    “… referendums …which has the great defect of giving no more weight to the enlightened vote of a young, urban and open-minded professional than to the foolish vote of an old, racist and uneducated loser.”

    So, one group of people thinks that they are superior to the other group? Yet, they call the other group “racist”?

    What the article doesn’t understand is that economics and money may not have equal importance as social issues. The article seems to be dumbfounded as to why Brits would want to give up access to the EU market or subsidies. This is because some things might be more important. I don’t know what it might be, but the voters would know. I can only guess. Maybe it’s related to the 10,000 British girls and children getting raped by Muslims. According to a British MP, up a million might have been raped or “groomed”. Maybe the voter places more importance on preventing his/her daughter from getting raped than any amount of access to the EU market.

    The following is ironic and funny:

    “…propagate falsities and gross simplifications that resonate with the frustrations, irrational fears and prejudices of certain people and groups, while also feeding them. They use a complicit media system to their advantage, which amplifies their propaganda and widens their audience. Over time they build up popular support for their simplistic, divisive rhetoric and they end up disrupting or hijacking the democratic process.”

    The above is what the media did. They propagated falsities and gross simplifications. Visit untruthaboutdonaldtrump is see only one list of media lies.

    Fascist is also a ridiculously over-used term. Fascism implies racism and dictatorship. Trump is likely racist, but no more racist than most white people or non-white people that you know. In fact, Trump is likely less racist than most people you know. He fought his country club to get them to let in blacks, Jews and Hispanics. Clinton paid $20,000 to join a white segregated country club. Also, the media has brainwashed people into believing that illegal aliens from Mexico is a race. The media has brainwashed people into believing that it is racist to complain about Judge Curiel, who is Caucasian.

    Also, nobody has been able to explain how Trump will become a dictator. If anything, Clinton was more like a dictator. Dictators throughout history have cheated to get power and controlled the media. Clinton, with the help of the media, cheated. The media rarely criticized Clinton, which is how media treats dictators.

    The following is funny as well and an extremely bigoted claim:

    “old, intolerant, simplistic, bigoted, fearful and narrow-minded – over the people of tomorrow – young, cosmopolitan, complex, tolerant, innovative and creative”

    Where did the author get all of these adjectives? Why not add in more adjectives for the Leavers, just for the hell of it, such as “taller”, “blonde”, “blue-eyed”?

    The author tries to explain why Brits are becoming stupid. One possible explanation is the influx of people from countries with lower IQs. Search for “IQ Research WORLD RANKING OF COUNTRIES BY THEIR AVERAGE”.

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    1. You’ve misread the meaning of almost everything he’s said, insofar as he’s not making qualitative judgements on groups of people, but defining perceived/media created characterisations of the different groups.

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  19. This comes to me as a thoughtful read – and much of the analysis goes deep. I agree that we are already since quite some time on the road to a level of complexity which suprasses the handling capacity of our nowadays standard mental software.

    The author does not make any suggestion about how to escape the predicament but, of course he is under no obligation to do so. To ably point out the source of a problem, even without offering any quick-fix or long-term solution is already in itself a valuable contribution, because it helps focus attention on real issues instead of dilluting it to incapacitation.

    If we step back a little, we can see that this isn’t exactly a new situation in human history. We have repeatedly run into and mastered situations in which our then ability to handle complexity hit limits – and we overcame the limits always in the same manner: we were forced to adapt a newly emergent, previously not discernable … hmmm … let me call it “mental operation system”. This goes together with the adoptation of a radically new set of values – and with values I don’t mean lofty statements, but intrinsic motivations which drive our choices and actions. The late Clare Graves has described this process already in the 50th till 70th with amazing clarity and he has highlighted certain universal patterns. According to his observations (please do the detailled reading for yourself, a sufficient exposition of his approach would blast the frame of a blog comment) the value systems we adopt in order to handle the respective next level of complexity have been oscillating between two poles. On one pole the central feature is self-expression, on the other pole the central feature is the sacrifice of self-expression for something regarded as more important. Value-systems around self-expression lead to an increase of diversity on the highest already mastered level of complexity, value-systems around “sacrifice self-expression” integrate the existing diversity on a new level into a new whole.

    If we look at the historical record and at Clare Grave’s interpretation it seems to be that – individually and collectively – nothing but having exhausted all other options can motivate us to make the move into a more complex “mental operating system”. Such a move comes with a radical process of transformation. What motivated us up to then looses much of its appeal, what had next to no appeal turns into a motivating force. –

    To give an example: in the presently still dominant “mental operating system” success and “designing my own destiny” are the main drivers. A well established and neccessary mental capacity here is to think in evolutionary terms, to be familiar with the the world being no static place but dynamic and ever evolving. The perceived challenge is to learn how to steer one’s own ship within this dynamic environment towards self-selected goals. Clare Graves described the essence of the motivational dynamics as “express self in a sufficiently clever way to make no enemies”. Our democracies – to name one obvious example – are an expression of this value system.

    The next value system has very different characteristics. Clare Graves termed it “sacrifice the expression of self in order to obtain the agreement of others”. The neccessary mental capacity is here to think in relative terms, to be at ease with taking other perspectives on what we are doing (in the predecessor system this is a major mental stretch and not at all done routinely). “Designing your destiny” and personal success become completely unattractive if from somebody else’s perspective that has negative side effects. The driving motivation in this value system is other people’s agreement, because we take such agreement as an indication that our choices have not only personal value but are acceptable from many perspectives. It wouldn’t come to our mind to not actively ask for other people’s take on our intended actions and a thumbs down deflates our motivation to go ahead until we have re-assessed our plans by taking into account the additional perspective. I don’t find it especially difficult to see the integrative potential of that approach and the radical shift in social dynamics it brings – and luckily we find it already opperating in this world to a visible degree.

    But alas, as far as I understand Clare Graves, even this approach is still no match for the complexity of the world we find today. We need to move urther on and we need to move on fast. The next system (again centered on self-expression) he describes at “express self, but not at the expense of others”. This system overcomes the potential confusion of relativ points of view through the ability to recognize the larger patterns which produce individual perspectives. It requires what some people today call “integral thinking”. This, in today’s world is no main-stream ability. Moreover, it is absolutely impossible to run such a mental operating system without being intrinsicly aware of the expenses of others – and we acquire this ability – as individuals and as society – while learning how to navigate the relativity centered system that comes before – a system which, as usual, we do not leave before we have explored it to exhaustion. The last system Clare Graves was able to describe – again a sacrifice centered system – he terms “sacrifice the expression of self for the well-being of mankind”. Now, as an authentic motivational operating system THIS is still a very rare bird, even if we can already recognize that as a species we need to be heading in this direction.

    My take on the whole complexity issue is: The dynamics of society typically unfold between two adjacent mental operating systems, one producing and one integrating diversity. The operating systems which define the dynamics in today’s world are hopelessly inadequate and the ones which are required are still deploringly rare. Still, it gives reason to hope if we know, that there ARE other approaches to life and that they are as compatible with the human condition per se as are the dominant approaches we are seeing today. The question is: how do we move there sufficiently fast to not be thrown back into an environment in which the most adequate mental operating system would be “express self for mere survival”?

    My best answer might come as a surprise and it will probably challenge some readers beyond their willingnes to follow someone’s thought: If we look into history, we have reason to expect assistance from a peculiar phenomenon which has repeatedly been linked to a value-system shift of such scope and profundity, both in individuals and in society, that it gave rise to a whole new culture – and this is the “emergence” of a new religion. Actually, the word “emergence” is misleading, because to our best knowledge at least the latest of the great religions, those which became foundations of centuries spanning cultures, have been initiated by single individuals – Moses, Buddha, Zoroaster, Christ, Muhammad… If we don’t dismiss this thought straight away, but are willing to at least explore it a little, we could, for example, ask ourselves what characteristics a new religion would have that could pull mankind out of its present predicament? It would have to assist the shift towards motivational structures like “express self, but not at the expense of others” and “sacrifice self for the well-being of mankind”. It would pick people up in the motivational structures in which we are embedded today and provide sufficient attraction to move ahead, to re-configure self and society from bottom up and from top down – even before a complete breakdown leaves no other choice. Far from promoting another static “this is the only truth” world view it would address evolutionary dynamics, the relativity of viewpoints and beyond such relativity the unegotiable requirements of life on this planet. Intensely novel, throwing new light on age-old questions, it would instill a vision that goes far beyond the visions produced from today’s typical perspectives – a vision bold and vast enough to become the foundation of a complete new and world encompassing culture. It would pose the same threat and challenge for an establishment which has parked itself on the known religions as those religions have once been threat and challenge for the establishment that preceeded them. We would find it being an ally of our deepest longings while simultaneously requiring us to re-examine some of our most cherished choices and preferences. It would produce a community highly motivated to pioneer a desirable future for mankind no matter under what present local conditions.

    In this description I haven’t done much else than transfering a rare but historically known phenomenon to our times – and if that doesn’t sound completely rediculous, why not keep at least half of an eye open? After all, we need no less than “a transformation in the whole character of mankind, a transformation that shall manifest itself, both outwardly and inwardly, that shall affect both its inner life and external conditions”.

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    1. The real challenge of the new religion is its metaphysics, because old religions that reference the literal truths of superbeings will struggle to gain additional traction where any level of sophisticated education is undertaken.

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  20. Pingback: | wildermetaforce
  21. I would like to ask Paul A to give us an update on his article, post- the Trump victory. I have for many years been an opponent of the alleged truism that ‘growth is good, stagnation is bad’. Why – because I have seen lots of NON-PROFITABLE GROWTH!
    What is better? An organisation with revenues of €100million and a profit before tax of €30 mill – often described as some ‘unimportant minnow’ or the like? Or a behemoth with a €1 billion turnover at break- even only after the use of some creative accounting? No contest is it? But the whole of our society has become driven by short- term growth.
    Given a stable balance sheet, the first company can put up to €30 million cash- flow back into the economy and remain stable. The second company could well be cash- flow negative soaking up liquidity from the market.
    We need to change the way markets are driven. No – forget that. IF we change the way markets are driven then we will avoid PAIN If not, one day markets will implode.
    I think we have forgotten something. ‘What are financial markets for?’ The clue is in the name – ‘Financial Services’. Despite their arrogance, they are there to SERVE. To serve whom? Ultimately, people and organisations who make things! Without this ultimate use (sometimes so far down the chain it virtually disappears) we don’t need stock, options are currency markets, since no goods are moving. A Luddite view? No- just returning to basics. Without a real economy underpinning it, Financial Services MUST die. It’s just circle jerk!
    If we manage the process of shrinking Financial Services we can achieve a soft landing. If not…………………?

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    1. Paul R., thank you for your comment. I actually published a post after Trump’s victory, which you can find at: https://paularbair.wordpress.com/2016/11/15/trump-and-the-autumn-of-democracy/
      I do agree with you that economic growth is not necessarily a good thing. Or more precisely, I believe that we have now reached a point where the efforts we now make at boosting growth are yielding diminishing returns – i.e. we have to invest or ‘sacrifice’ always more to obtain less and less growth in return – and where the kind of growth we manage to achieve comes with ever-higher costs – i.e. financial costs in terms of ever-rising debt, social costs in terms of rising inequality, or environmental costs in terms of environmental degradation including climate change. However, even with these diminishing returns economic growth is still what gives democracy a ‘competitive advantage’ over other forms of governance. Absent economic growth, democracy loses its edge over other political regimes in terms of its capacity to peacefully mediate and arbitrate between conflicting or opposing interests or values, and thus tends to degenerate and break down. I think this is where we are and what we are now witnessing.

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  22. I really enjoyed the thesis presented in your post. Systems naturally develop complexity as they encounter limits to growth and begin searching for steady state. In systems like these, the goal is really more to do with sustainability than growth. Rejecting complexity makes for a bumpy ride trying to avoid the inevitable.

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  23. This claim has been made ad nauseam in the mainstream media but the evidence for it is actually scant:

    “The populist surge that is now at play is, to a large extent, a reaction of those who have been on the losing side of this [economic] trend.” Especially in the US, the starkest divide is between rural areas and cities, in many of which 15% or fewer of voters supported Trump. The implied claim that city people tend to be economic winners whereas their suburban and exurban counterparts are on the losing side is absurd. Look at Flint or Detroit as the most extreme examples.

    If you think city dwellers are all rich and successful, you must be hopelessly deluded. Philadelphia, Chicago, Baltimore, Washington, New York, all older American cities have been suffering from neglect, underinvestment, and White Flight for decades. Why don’t the poor and middle class people in these places support the “populist”, more accurately reactionary, movement? There must be something other than economic statistics to account for the divide. Culture?

    I do agree that the inevitable slowdown in economic growth challenges the predominant socio-political model. A reality-based economic policy (which must focus on efficiency and redistribution rather than growth) is currently nowhere on offer. That is the huge, huge failure of the political establishment (both liberal and right-wing share equally in that failure). I have published some work of my own on the impossibility of maintaining growth in a finite world: http://www.slideshare.net/amenning/presentations

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  24. P.S. I would also strongly dispute the claim that the new “populism” is an anti-establishment, anti-elite movement. That isn’t true in Britain, where the mainstream media and part of the political establishment have always been anti-EU, and it’s not true in the US, unless billionaires count es underdogs. Trump’s appeal is precisely in his being (or appearing) successful and rich, a billionaire born with a silver spoon in his mouth who is surrounded by other rich people, internationally connected plutocrats like his son-in-law Jared Kushner. His nominees to cabinet positions are almost without exception members of the super elite, hedge fund managers, CEOs of some of the world’s most powerful (and reviled) corporations – Exxon, Goldman Sachs. So far there is no sign whatsoever that Trump’s “anti-elite” voters have a problem with a cabal of plutocrats leading the nation. They are rich white men, why not trust them? Americans, especially on the right, admire wealth. They readily support cutting taxes on the rich. They even invented a religion that officially worships Mammon (prosperity gospel). The talk about elitism is based on Orwellian language. When the reactionaries use the term elite as an insult, they don’t mean the rich and powerful. They mean people who look and think and live differently. Liberals.

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  25. I find some truth in the decreasing returns of investments in increasing complexity, but the issue to get out of this spiral of decreasing or stagnant growth is much simpler.
    Political leaders must reconnect economic thought with political thought that peoples and nations must be mostly cultural and at its “borders” interculturally intelligent and receptive, to keep internal cultural development dynamically healthy. This is not populism and it is ok that say and to convince that populism is not only mediocre, it does reflects a biological, etnical and or spiritual need for a more balanced management of cultural homogeneity and intercultural cross-pollination.
    In concrete terms, for the UK, instead of brexiting which is definitely economically negative for all involved parties but more for poor-Britons’ household economies, though a logical not stupid step to achieve simplicity instead of ongoing increase of low return complexity , England should lead the transformation of the 4th freedom of the EU, free movement of people, into regulated freedom by national goverments, giving them freedom by a new European Agreement to establish language and other cultural requirements, on both EU-migrants and of course, too, non-eu-migrants. These diverse and maybe somehow diverting national migratory policies would just and simply become part of the competitivity dynamics of a shared, free, single market within the EU but as said with politically managed regulated freedom of persons’ movement, just with simple visa-entreprise agreements controlled in home countries with very quick digital border checks withouit customs burocracy.
    On the other hand, rich countries and big companies must agree with migrant expelling countries really fargoing investment plans (like Marshall plans etc.) believe again in slow but steady grow in devastated areas, securing firstly their agro-ecological systems to be at least 60% selfsufficient in food, which is a climatological-economical-strategic need for peace in any country. Peoples must work to develop their own countries and culture. All this is possible when politics gets more power on investment plans of big (multi)national companies.
    People-nations are nests for individual personal growth which needs balanced intercultural encounter but multiculturalism when overwhelming does not provide that. So the issue is integrating political-cultural thinking and policies in free market thinking and make free market economies less vulnerable for the unsustainable difference between benefit on labour and benefit on capital and uncontrolled income difference between people, both wotkers and capitalists. Piketty makes sense.
    The problem for England will be, that after a hard Brexit most of its capital and smart people will flow to other countries with bigger markets, lower wages, and single market economies of scale where tax income of states are secured and better invested in “wise” complexities.
    Another problem, the elephant in room England, and specially for the political leaders of the Tories and UKIP, is that they have abused of democracy with both the Referendum itself (the question itself was far too simple) and the Referendum result. They must be sent to their home to become honest citizens. Brexit means Brexit is a big, political, populist, lie. Brexit does NOT mean Brexit. Brexit means:
    – we want to preserve or own culture and identity, migrants must speak our language and adapt to our culture and not take jobs away from Britons (here England with other countries should lead some transformations in the EU)
    – we want to send David Cameron to home (already achieved)
    – we don’t want to have less wealth because of being an EU-member (it is documented and can be easily shown and communicated that GB has achieved more wealth because of being an (privileged) EU-member).
    It is untrue that all the issues where GB can lead, can be better done when outside the EU. The opposite is true. Stop to get mad by lies; act honestly and politically as european country that you are. The anglosaxons came from Germany. Europe is nothing without the EU, and an adjusted, non-federalist single market EU with regulated freedom of movement of persons is the only functional model for world goverment that humanity has ever seen.

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