Smith: Interlocking Traps

Continuing his articulation of The Collapse here, Charles Hugh Smith describes a series of mechanisms by which the Endarkenment will continue to accelerate.

Opener:

***
Interlocking Traps

July 1, 2009

A number of lethal traps hobble structural reforms to the failing Status Quo.
NOTE: I apologize for the delays in responding to reader email; yesterday I was away from my desk all day and today our Internet service was down.


While I often refer here to cycles, trends and feedback loops, there is another class of forces called traps which are self-explanatory: once entered, traps are difficult or impossible to escape due to their inherent (ontological) nature. While all the traps have conceptual elements, each is very much grounded in the real world.

For example: once a nation misallocates its capital into unneeded malls, office towers and exurban housing which now sit vacant and decaying, that capital can never be recovered.

Here are few such traps:

1. Stagnation Trap. A pernicious positive feedback loop is at work as the Plutocracy and State continually increase their share of the national income: their power and influence increase proportionately, which then enables even more wealth acquisition and ever greater influence.

The primary consequence of this widening gap between the ever-poorer middle class taxpayers and the ever wealthier State and Plutocracy is a structural divergence between the interests of the Plutocracy and the State and those of the middle class. This widening structural imbalance of power and share of the national wealth creates an ontological (inherent) cynicism and profound political disunity which is reflected in the blocking of any structural solution by the State and Plutocracy.

Since the structural problem is State and Plutocracy over-reach, any real solution will necessarily reduce their shares of the national income and limit their joint powers. Loathe to accept even the smallest reduction in their income and power, both the Plutocracy and the State (including all those dependent on its various fiefdoms) resist all structural change with every force at their command.

The inevitable consequence is a profound structural stagnation in which real reform is betrayed in the name of compromise, the same simulacrum "solutions" which leave the powers and income of the State and Plutocracy fully intact are trotted out under new Orwellian names ("Save the American Homeowner Act," etc.) and all discussions of truly structural solutions are ruthlessly eliminated from the mass media or belittled/undermined in classic propaganda manner.

Thus the State and Plutocracy prefer stagnation and eventual collapse to any present-day reduction in their income and power. This is the stagnation trap: in resisting structural change, the State and Plutocracy guarantee a stagnation which inevitably leads to collapse of the very system of privileges and powers they seek to maintain.

2. Scalability Trap. This is a way of describing the inevitability of job losses in any industry as it scales up to technologically optimum (automated) production. Oftwominds.com correspondent K.D. (who coined the term Scalability Trap, as far as I can tell) termed this process a "modernity tax," or the cost of modern productivity.

Iit might be also be considered a "technology/trade tax on employment." That is, if an economy refused technological production then it could not trade such expensively produced products profitably. Even the lowest-cost labor is more expensive than machines because machinery does not get sick, does not need to be trained, does not spoil production with errors, does not riot when idled, etc.

Just as the agricultural workforce of the U.S. has fallen to 2% from 50% as mechanization scaled up, any work which can be largely automated (not just manufacturing, but software coding, tax preparation, etc.) will fall into a scalability trap once the technology is available to automate production...
***

Read the whole thing, as well as the takes by Billy Beck and Ed Rasimus on Smith's prior piece.

Myself, I'd add two more traps to Smith's list:

1) The taxation trap, whereby lower collections beget higher rates, which in turn beget still lower collections, requiring more tyrannical behavior by government apparatchiks in a vain attempt to fund unsustainable levels of government parasitical employment/services; and

2) The freedom trap, whereby well-intentioned folks engage in behavior that, if taken to its logical conclusion, might impact the boot aimed at one's face. The trap arises due to the actors' failure of intellectual honesty and will, resulting in a refusal to extend the actions to their necessary endpoints. Snyder nailed this one a decade ago.

Buckle your seat belts, kiddies --- storm wall's dead ahead.