Posts Tagged ‘decline’
“Leadership of a world-economy is an experience of power which may blind the victor to the march of history”*…
Benjamin Braun and Cédric Durand on the citical tension between “factions of capital” in the second Trump administration…
Hegemonic decline, according to the historian Fernand Braudel [see here and here], has historically come with financialization. Amid declining profitability in production and trade, capital owners increasingly shift their assets into finance. This, according to Braudel, is a “sign of autumn,” when empires “transform into a society of rentier-investors on the look-out for anything that would guarantee a quiet and privileged life.”
This specter of Braudelian decline haunts key figures in the second Trump administration. “Tell me what all the former reserve currencies have in common,” Scott Bessent, now Treasury Secretary, mused during the campaign. “Portugal, Spain, Holland, France, UK … How did they lose reserve currency status?” The answer: “They got highly leveraged and could no longer support their military.” While Bessent, a former hedge fund manager, officially denies a program of dollar depreciation, speculators have been driving down the US exchange rate since Trump took office in January. Secretary of State Marco Rubio is the author of a 2019 report on “American investment in the 21st century,” in which he lambasts Wall Street for its shareholder value regime that “tilts business decision-making towards returning money quickly and predictably to investors rather than building long-term corporate capabilities.” His views on finance are shared by self-styled Republican “populists” such as Josh Hawley.
This residual hostility toward Wall Street has marked an ideological rupture in the first months of Trump’s second administration; on the one hand, the President’s “Liberation Day” tariffs have roiled financial markets; on the other, Wall Street has retaliated with financial panics, working to discipline the White House. Whether a coalition of self-styled MAGA populists and Trump’s electoral base—which expects rising living standards and secure jobs delivered via a tariff-led revival of US manufacturing and a deportation-led tightening of the labor market—is sustainable remains a central question of the second Trump administration. Fossil fuel firms and defense-oriented tech companies such as Palantir and Anduril find much to like in militarized nativism. But Trump’s trade policy clearly harms private finance and big tech, two sectors that have consistently supported Trump and expect to be rewarded. Attacking those sectors threatens to alienate the very factions of US capital that have heaved him back into office.
For these capital factions, US decline is relative and can—cue Japan—be managed in a gracious manner. As Giovanni Arrighi observed in 1994, finance has always intermediated, and thus benefited from, hegemonic transitions. Today, asset management titans profit both from re-balancing US portfolios away from the declining hegemon and from offering fast-growing capital pools from China and other rising Asian economies access to US assets. Big tech, meanwhile, aims at general control over knowledge and economic coordination. It has much to lose from geoeconomic fragmentation that could cut it off from access to data, reduce its network effects, increase the cost of its material infrastructure, and push non-aligned polities to pursue digital sovereignty.
In its efforts to revive the American Empire, the Trump administration will thus have to delicately balance the interests of both manufacturing-oriented nativists and capital factions whose interests span the globe. Navigating these competing agendas will pose an enormous challenge to the longevity of the Trumpian coalition—and the stability of the global financial system as a whole…
Eminently worth reading in full: “America’s Braudelian Autumn,” from @phenomenalworld.bsky.social.
* Fernand Braudel
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As we debate development, we might recall that it was on this day in 1940 that Government of Vichy France, the collaborationist ruling regime/government in Nazi-occupied France during World War II, was established.
Of contested legitimacy, it took shape in Bordeaux under Marshal Philippe Pétain as the successor to the French Third Republic and was finally settled in the town of Vichy. The government remained in Vichy for four years, but was escorted to Germany in September, 1944 after the Allied invasion of France. I t then operated as a government-in-exile until April 1945, when the Sigmaringen enclave was taken by Free French forces. Pétain was permitted to travel back to France (through Switzerland), by then under control of the Provisional French Republic, and subsequently put on trial for treason.
“By improving health, empowering women, population growth comes down”*…
… And increasingly across the globe, starting in the developed world, we’ve been doing a better job of that. Indeed, some are beginning to worry about a kind of problem that the modern world has never faced– depopulation.
History Today offers a fascinating snapshot…
During the 1930s and early 1940s, many Americans held off on starting families because of the economic insecurity of the Great Depression and uncertainty of World War II. But the prosperous postwar era led to an increase of births between 1946 and 1964 that gave the baby boomer generation its nickname. Over this 19-year period, the booming birth rate helped the U.S. population grow by more than 50%. The country’s demographic makeup shifted so rapidly that by 1960, there were 64.2 million Americans under age 18, out of 180 million overall — a whopping 36% of the population. For context, in 2022, an estimated 22.4% of the U.S. population was under 18.
General fertility rates in the baby boom era peaked in 1957 at 122.9 live births for every 1,000 women aged 15 to 44 — that’s 4.3 million babies that year alone. The general fertility rate took a nosedive throughout the 1960s as the birth control pill became more widely available and women entered the workforce at much higher rates. By 1970, the general fertility rate was 87.9, and the much smaller Generation X was well underway.
The baby boomer generation didn’t reproduce at the same rapid clip as their parents, but because there were so many of them, they still produced a lot of offspring. Indeed, 1990 — the year all those 1957 babies turned 33 — was another banner year for births, with 4.2 million millennials entering the world, despite a general fertility rate of just 70.9…
Consider these population pyramids from the U.S. Census Bureau:
This picture is of course in aggregate: some locales (e.g., Utah) continue to grow and are “younger”; others, like Alexander County, Illinois are much “older.” And globally, the picture is even more mixed:
The global population reached nearly 8.2 billion by mid-2024 and is expected to grow by another two billion over the next 60 years, peaking at around 10.3 billion in the mid-2080s. It will then fall to around 10.2 billion, which is 700 million lower than expected a decade ago. However, changes in global population are uneven and the demographic landscape is evolving, with rapid population growth in some places and rapid ageing in others…
… The world’s overall fertility rates are dropping, with women having one child fewer on average than they did around 1990.
In more than half of all countries and areas, the average number of live births per woman is below 2.1 – the level required for a population to maintain a constant size.
Meanwhile, nearly a fifth of all countries and areas, including China, Italy, the Republic of Korea and Spain, now have “ultra-low fertility,” with fewer than 1.4 live births per woman over a lifetime. As of 2024, population size has peaked in 63 countries and areas, including China, Germany, Japan and the Russian Federation, and the total population of this group is projected to decline by 14 per cent over the next thirty years…
While the slow growth or decline of populations is occurring mainly in high-income countries, rapid population growth will occur in low-income and lower-middle-income countries.
Specifically, Angola, the Central African Republic, the Democratic Republic of Congo, Niger, and Somalia, very rapid growth is projected, with their total population doubling between 2024 and 2054.
This population growth will increase demand for resources, especially in sub-Saharan Africa and South Asia and, combined with poorly managed urbanisation and rising living standards, it will worsen environmental impacts.
Climate change, a major challenge, affects these countries the most, where many rely on agriculture – and food insecurity is prevalent.
In countries including India, Indonesia, Nigeria, Pakistan and the United States [our inherent decline offset to some extent by immigration… at least until now], population is also expected to increase through 2054 and could potentially peak in the second half of the century or later…
Implicit assumptions of a growing population underlie many– if not most– of the decisions we’ve made about everything from social policies (e.g., social security) to business plans (e.g., growing markets).
Populations grow for some combination of three reasons: fertility is above replacement level, people live longer, and/or immigration swells the ranks. For quite a while, the U.S. was hitting on all three cylinders; more lately, on the latter two. But recently, life expectancy has stalled.
Immigration is currently strong (and, as noted above, keeping U.S. population growth positive), but it’s looking increasingly uncertain: political energy to restrict (indeed, to undo) immigration is high, even as the pressures of climate change and political upheaval are increasing numbers of people from around the world hoping to find a home in the U.S.
If, as Comte is said to have suggested, demography is destiny, then what is ours? “In 1960, more than a third of the U.S. population was under 18.”
Apposite: “Why people over the age of 55 are the new problem generation,” gift article from The Economist
* Bill Gates
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As we dig into demographics, we might send thoughtful birthday greetings to Robinson Jeffers; he was born on this date in 1887. A poet renowned both for his longer (narrative and epic) verse and his shorter work, he was an icon of the environmental movement. His philosophy of “inhumanism” argued that transcending conflict required human concerns to be de-emphasized in favor of the boundless whole.
“Tourism basically boils down to the leisure of going and seeing what has become commonplace”*…
Last year six European countries (seven if, given Istanbul’s gateway status, you count Turkey) dominated the list of top-ten countries most visited by foreigners; France alone had over 100 million visitors.
Janan Ganesh argues that the continent’s success in attracting tourists is a problem…
This is the first century in several that Europe won’t shape. Even the 20th one, the “American” one, played out on the continent’s world war battlefields and cold war frontline. The largest ideas, Einstein’s and Keynes’s, were conceived by Europeans in Europe. So were those experiments — Picasso’s in painting, Joyce’s in literature, Le Corbusier’s in architecture — that we bunch under the name Modernism. European states had colonies well into the second half of the century, which brought discredit, but also clout.
All of which makes our present impotence sting a bit. Europe has a lack of major tech companies, a reduced share of world output and, as protectionism spreads, no hope of matching American or Chinese largesse on domestic industries. In a trading world, Europe had one superpower, the “Brussels effect”, by which EU regulations became the de facto global standard. The fragmentation of trade could deprive Europe of even that vote on the shape of the future.
Now, at the risk of bathos: tell me about your summer break. It involves Europe, doesn’t it?
I suggest these two things — the irrelevance of the continent, and the popularity of it — are linked. Because Europe commands the interest of the world without trying, it struggles to understand how marginal it has become, and to respond. It can count on levels of attention that other places must fight for. It can reap a level of income from visitors that is near-unique in the rich world. In 2019, the last pre-Covid year, tourism was 12 per cent of GDP in Spain, 8 in Portugal and 7 in Greece. No western nation outside Europe, save New Zealand, got to 3 per cent. Nor did Japan or (despite an airport that could be a destination itself) Singapore.
Europe is forever sweet-talked — “You matter” — and not by tourists alone. Think of the wider cultural patronage it receives as the glamour continent. If a regime wants to sportswash itself, it acquires Paris Saint-Germain, not the Lakers. If a Chinese rural-dweller wants to advertise their ascent into urban affluence, LVMH products, not the US equivalents, are de rigueur. Europe should never shrink from these strengths. It would be crackers not to monetise its own prestige. But such mastery of the “soft” stuff might blind it to what is afoot in tech and other harder realms. The danger is that Europe becomes the geostrategic equivalent of a person too beautiful to ever need do or say anything interesting. It can be flattered into not noticing that the century is being authored elsewhere.
And so the phrase “tourist trap” acquires a new meaning. The entrapped aren’t the visitors. Yeah, smirk all you like when they order a “cross-ont” at the pâtisserie and overpay to boot. The locals are the ones with the problem, and the problem is a sort of lucrative stagnation.
Tourism is said to despoil places. But that can be managed. Venice has banned tour groups larger than 25. Barcelona has put up its tourist tax again. Europe could charge more without losing custom because, in the end, nowhere else can match it for sheer geographic compression of what we can only call good stuff. (I did Zurich to London in 75 minutes on a flight this year. I can’t do waking to exiting the bed in 75 minutes.)
No, the “blight” of tourism isn’t, or isn’t just, environmental. It is mental. It saps a place’s incentive to modernise. It rewards ossification. For a long time, theories have circulated as to why market reforms are so difficult to enact in Mediterranean Europe in particular. These include: some collectivist ethos in Catholicism (but then how to explain businesslike Bavaria?), weather so good as to induce a taste for leisure (what about Australia?) and high expectations of the welfare state (unlike Scandinavia?).
None of these explanations check out, quite. Doubtless, no single one ever could. But it matters that southern Europe can get a lot wrong in policy terms and still expect to be patronised, in at least one sense of that word, by outsiders bearing not just hard currency but ego-boosting attention. What an exorbitant privilege. And what a nice way to decline…
“Europe’s real tourist trap” (gift link): the continent gets too much attention from the world to recognize its irrelevance. @FT.
* Guy Debord , The Society of the Spectacle
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As we rebook, we might want to recall that it was on this date in 1894 that a major contributor to French and European tourism this summer was founded: the International Olympic Committee. The IOC is responsible for organizing the modern (Summer, Winter, and Youth) Olympic Games, and for governing the (currently 206) National Olympic Committees (NOCs).
“The advance of machine-technique must lead ultimately to some form of collectivism, but that form need not necessarily be equalitarian”*…
Whither our relationship with the technology that’s become so engrained a part of our lives? And what of the companies that provide it? Tim Carmody muses…
The end of the heroic age of the tech giants does not imply that tech giants are in decline, but confusing the two is natural. Observers and analysts usually talk that way about companies, especially tech companies and the platforms they enable: they grow, mature, then decline (in relevance if not in revenue).
In general, what characterizes this phase of the tech giants’ development is a shift from unlocking user creativity and customer value to doubling down on surveillance, usually augmented by AI. Mass surveillance was always an important emergent part of the tech giants’ strategy, but was arguably secondary to delighting users and giving them greater capabilities. Now surveillance and nonhuman solutions are dominant, and the creative possibilities are now almost all residual.
(Yes, this “emergent/dominant/residual” schema is a Raymond Williams reference.)…
… Both of these declines — the decline of the consumer experience and the decline of the market forecasts — are driving tech companies’ retreat from what I’m calling their heroic phase. But neither are identical to it.
We can imagine — in fact, I predict — that these companies’ stock prices will rebound along with the rest of the market. Their profits will soar — the newfound emphasis on profits rather than reinvestment demands that they soar. Their technical innovations will continue, especially in AI, automation, and cloud computing. And yes, customers from you and me to the DoD will continue to shop for, use, and stream their products.
The main difference is that it’s now clearer than ever before that these companies’ interests are not the same as their customers’, or their workers’. There’s nothing universal about the technology revolution, no rising tide that lifts all boats. We have to give up that fiction in order to see things as they really are…
Eminently worth reading in full: “Two ways to think about decline,” from @tcarmody via @sentiers.
* George Orwell, The Road to Wigan Pier
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As we (re-)think tech, we might recall that it was on this date in 1871 that Andrew Smith Hallidie received a patent for an “endless wire rope way” which he then put into practice as the Clay Street Hill Railroad– the start of the San Francisco cable car system.
A view of the railroad in 1876 (source)
“You say you’re a pessimist, but I happen to know that you’re in the habit of practicing your flute for two hours every evening”*…
A couple of weeks ago, (R)D featured a piece by Jonathan Haidt, “Why the Past 10 Years of American Life Have Been Uniquely Stupid,” in which Haidt critiqued, among others, Robert Wright and his influential book, Non-Zero. In the spirit of George Bernard Shaw (who observed: “Both optimists and pessimists contribute to society. The optimist invents the aeroplane, the pessimist the parachute.“) Wright responds…
… There are three main culprits in Haidt’s story, three things that have torn our world asunder: the like button, the share button (or, on Twitter, the retweet button), and the algorithms that feed on those buttons. “Babel is a metaphor for what some forms of social media have done to nearly all of the groups and institutions most important to the country’s future—and to us as a people.”
I would seem uniquely positioned to cheer us up by taking issue with Haidt’s depressing diagnosis. Near the beginning of his piece, he depicts my turn-of-the-millennium book Nonzero: The Logic of Human Destiny as in some ways the antithesis of his thesis—as sketching a future in which information technology unites rather than divides…
Well, two things I’m always happy to do are (1) cheer people up; and (2) defend a book I’ve written. I’d like to thank Haidt (who is actually a friend—but whom I’ll keep calling “Haidt” to lend gravitas to this essay) for providing me the opportunity to do both at once.
But don’t let your expectations get too high about the cheering people up part—because, for starters, the book I’m defending wasn’t that optimistic. I wrote in Nonzero, “While I’m basically optimistic, an extremely bleak outcome is obviously possible.” And even if we avoid a truly apocalyptic fate, I added, “several moderately bleak outcomes are possible.”
Still, looking around today, I don’t see quite as much bleakness as Haidt seems to see. And one reason, I think, is that I don’t see the causes of our current troubles as being quite as novel as he does. We’ve been here before, and humankind survived…
Read on for a brief history of humankind’s wrestling with new information technologies (e.g., writing and the printing press). Wright concludes…
In underscoring the importance of working to erode the psychology of tribalism (a challenge approachable from various angles, including one I wrote a book about), I don’t mean to detract from the value of piecemeal reforms. Haidt offers worthwhile ideas about how to make social media less virulent and how to reduce the paralyzing influence of information technology on democracy. (He spends a lot of time on the info tech and democracy issue—and, once again, I’d say he’s identified a big problem but also a longstanding problem; I wrote about it in 1995, in a Time magazine piece whose archival version is mis-dated as 2001.) The challenge we face is too big to let any good ideas go to waste, and Haidt’s piece includes some good ones.
Still, I do think that stepping back and looking at the trajectory of history lets us assess the current turmoil with less of a sense of disorientation than Haidt seems to feel. At least, that’s one takeaway from my argument in Nonzero, which chronicled how the evolution of technology, especially information technology, had propelled human social organization from the hunter-gatherer village to the brink of global community—a threshold that, I argued, we will fail to cross at our peril.
This isn’t the place to try to recapitulate that argument in compelling form. (There’s a reason I devoted a whole book to it.) So there’s no reason the argument should make sense to you right now. All I can say is that if you do ever have occasion to assess the argument, and it does make sense to you, the turbulence we’re going through will also make more sense to you.
“Is Everything Falling Apart?” @JonHaidt thinks so; @robertwrighter is not so sure.
Apposite: “An optimist’s guide to the future: the economist who believes that human ingenuity will save the world,” and “The Future Will Be Shaped by Optimists,” from @kevin2kelly at @TedConferences.
* Friedrich Nietzsche (criticizing Schopenhauer)
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As we look on the bright side of life, we might send darkly-tinted birthday greetings to Oswald Spengler; he was born on this date in 1880. Best known for his two-volume work, The Decline of the West (Der Untergang des Abendlandes), published in 1918 and 1922, he was a historian and philosopher of history who developed an “organic theory” of history that suggested that human cultures and civilizations are akin to biological entities, each with a limited, predictable, and deterministic lifespan– and that around the year 2000, Western civilization would enter the period of pre‑death emergency whose countering would lead to 200 years of Caesarism (extra-constitutional omnipotence of the executive branch of government) before Western civilization’s final collapse. He was a major influence on many historians (including Arnold Toynbee and Samuel “Clash of Civilizations” Huntington).
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