Arrested Development

There are many economic advisors and forecasters who offer sound advice on dealing with the admittedly enormous problems that the First World is experiencing. It would seem, however, that the majority of pundits, both in the media and in the houses of legislature, seem unable to grasp the big picture and can only manage to recommend a variety of band-aid solutions; solutions that, truth be told, will ultimately only exacerbate the problems at hand. Interestingly, this is not a localised situation, but is common throughout the First World.

In Europe, we observe the Greek politicians, who beg the European Union (EU) for bailouts, but fail to implement the fiscal restraints necessary to help the economy to stabilise itself. The Greek people, in lockstep, insist that entitlements be increased, even though it is patently obvious to any mature mind that the present level of entitlement has become unworkable in the extreme.

So, we look to the Germans (the creators of the EU), who are regarded as the frugal, businesslike, fathers of the EU to explain to the Greeks and the other PIIGS that, in order to receive bailout funds, they must toe the line. However, the German government has already broken its promise to its people and paid huge sums to bail out less responsible nations like Greece.

It would be reasonable therefore, to expect a blowback by the German people, but, in fact, Germans, while conceptually being opposed to the bailouts, offer no real solutions. German public opinion distrusts the EU, but recoils at the idea of ending it, or even breaking it into North/South EU's. They seemingly cannot abandon the ideal, despite the facts.

Likewise in the UK, where, even in the face of the recent riots, those who have been affected continue to support the ideal. Both the media and the general public have expressed sympathy for rioters. Liberals, in particular, have come to the rioters' defense.

This should not be terribly surprising as an immediate reaction. But perhaps their views would take a turn as soon as they needed to go down to the local Sainsbury's to buy the week's groceries and found that it had been torched or looted. (A loss of food to eat is perhaps the greatest motivator to a change in sympathy toward rioters.) Yet this has not happened. The majority cling to the nanny-state ideal, the thought that government should provide our every need, despite all evidence that this has led to serious problems.

On the other side of the pond, we see many Americans stubbornly sticking to entitlement-consciousness and sympathy for those demonstrators who make utterly irrational demands. (Sign held by a Wall Street Occupier: "We demand guaranteed jobs and guaranteed wages"). Far from softening on the entitlement status quo, these folks are demanding a dramatic ramping up of the nanny-state.

And so, we see a major (and formidable) irrational force at work, not just in isolated spots, but throughout the First World. Such consistency of thought cannot be happenstance. Rather, it is indicative of a major trend that was seeded decades ago and has been consistently watered and fertilised. Far from being on its way out, I believe that this trend of thought is just now coming into full flower.

Let's take a step back and look at its development.

It is the norm for youth, particularly in their late teens and early twenties, to become dissatisfied with the inequities that they observe in the world around them. While older people sometimes consider the youth to be presumptuous by questioning their elders, to me, the dissatisfaction of youth is born out of genuine concern and thus is praiseworthy.

Since their experience is limited, it is predictable that the solutions that they come up with are often poorly thought through, shortsighted and unworkable. When they are advised of this by their elders, they tend to assume that their elders are simply being stubborn and old-fashioned. The youth therefore bristle and often become adamant that their impractical solutions be implemented regardless of the rejection of their ideas by their elders.

Over time, however, the young experience the real world and, as they evolve through their twenties, thirties, forties, etc., they come to understand that many of these simplistic solutions, while praiseworthy in concept, do not resolve the problems.

This was certainly true for my generation, who, in the 1960's came up with a whole series of largely socialistic solutions for problems existing at that time. Many of us, as we grew up and became involved in business, became conservatives by default. (After all, most conservative thinking is not ideal by any means; it is arrived at because it is the only way that works.)

However, many of my generation never did evolve with time. Certainly, those who became civil servants or teachers, or joined unions had no need to evolve. Quite the opposite: they had every reason to remain liberal in their thinking and to continue to champion "feel-good" solutions, since they did not have the responsibility of paying for them, as businesspeople do.

But what happens if a country's political trend is in the direction of increasing socialism? Certainly, this has been true for decades in all of the First World countries. We are now faced with a First World in which teenage logic has been so actively encouraged that "feel-good" solutions are adopted with regularity by the governments of Europe and America. The result is that we have large numbers (often a majority) of voters who, when faced with major systemic problems, stubbornly cling to teenage solutions, even though they are doomed to exacerbate the already desperate situation.

Any country that experiences a dramatic rise in prosperity, at some point, will also decline. At its height, a prosperous society may pride itself on an increase in gifts from the public treasury to those less fortunate, which increase over time to the point that they become an economic burden, resulting in a decline in the very prosperity that created them. In addition, they encourage complacency and a lack of thrift, which add to the decline. Once this has become the norm, the public, having abandoned their industriousness and sense of self-determination, are ripe for rule by dictatorship, which tends to follow.

Most of the First World countries are now in the latter stage of this evolutionary process - all at the same time. The spoiled populations that were produced by decades of productivity have reached their logical conclusion: an unwillingness to "grow up" and face the fact that two and two do equal four, and no more than four, no matter what kind of spin is put on it.

Unfortunately, over generations, those who sought power have made promises that two and two can equal five through governmental entitlement programmes. Following election, they then provided false evidence that made this appear to be true. Increasing taxation, borrowing from social security, creation of debt, etc. have made two plus two appear to be six, then eight, then twelve.

Little wonder now that crunch time is occurring, that the more gullible factions of the public simply will not believe that this cannot continue. In fact, their reaction has been, as evidenced above, that the logical next step is to demand that two and two equal sixteen.

And that is just what we are seeing: demands that defy reason.

Those of us who have, all along, remained more realistic in our expectations, may now be inclined to be cynical and say, "Now they'll get their comeuppance. Now they'll have to accept reality." But this is not so. What is far more likely is that they will dig in their heels and demand ever more from the nanny-state and, as we are beginning to see, will become ever more violent as their frustrations grow.

As the present economic debacle grows worse, I believe that we are likely to see an increasing number of groups spontaneously form and hit the streets. They will be from most walks of life and represent a great variety of political leanings. Many will not even have a collective point of view. What they will have in common will be frustration, which, for each new group, will evolve into fear, then into anger, then into sporadic violence as the situation worsens.

This will be dealt with by police who, also frustrated, will go on the counter-attack. The violence will soon escalate into mob violence, and the authorities will ultimately respond by calling in the armies. I expect as soon as a year from now, that this latter condition will exist in most major cities throughout the First World and will be seen on the evening news on a daily basis. The videos from London will be indistinguishable from those from Detroit, Madrid or Los Angeles.

In human nature, when anger sets in, rational thought ceases. Once the violence becomes ubiquitous, it will also become self-generating.

But there is another factor here that most pundits do not seem to be recognizing. Most protest movements are born out of a desire to improve some facet of the social and/or political fabric of the country. To some degree that is the case with the present protests; however, as the depression worsens, the loss of jobs and homes and the fear of food shortages will raise the intensity of the demonstrations to a higher level, worldwide. Moreover, as long as these conditions continue (which is likely, and for an extended period), the more desperate the protestors will become.

There is every reason to believe that, over the next few years, we are likely to see a level of social chaos and violence throughout the first world that is beyond anything we have ever experienced.

Fasten your seat belt.

Tags: economic collapse, debt crisis,