> Negative interest rates signal that the system does not work, that a dollar is worth more today than it will be tomorrow, that investing dollars today destroys value.
Thanks for writing this. If I understand correctly at the individual level there is a possible flight to security (gold/bitcoins/housing), but at society level, there is no possible flight to security, because the highest instances of government are planning for declining societies.
If this is the case, people will search inspiration in societies that look successful. This happened after WWII when people felt the American society was much more successful than other societies and therefore was a reasonable role model.
There's also the question of what you think is the cause of the failure.
The old theory (pushed by that ecologist Howard Odum) is that we are running out of fossil fuels, so that the "dollar/emergy" ratio peaked around 1970, which was when the US experienced it's own "oil peak" for conventional oil.
(Emergy is "embedded energy" and traces back the energy content of fuels to the sun, liquid fuels and plant-based foods have 200,000 units of emergy per unit of energy)
Circa 2000 I was worried about running out of energy and I did some monte carlo simulations about solutions (use less fuel, find alternative sources, ...) racing problems. It seemed possible to me that problems would win, but I never convinced myself that it was certain or even likely.
In the age of fracking "running out of oil" seems distant, but now we are concerned with climate change. That's a tougher one because market mechanisms automatically push people to solve the "running out of energy" problem but the 50-year time delay prevents that from working against climate change.
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The other theory is that we're experiencing "cultural rot" of some kinds and that our problems can be fixed by fixing a damaged culture.
(The thought of that is exhausting, but you can get further arguing with Republicans than you can arguing with the law of conservation of momentum)
The most interesting culture that "seems to work" is China right now.
In a stable communist society (e.g. post-revolution) the communist party comprises an elite of perhaps 2% of the population. It's not too different from how it is here, but it is institutionalized so that really inferior people (e.g. the Hapsburgs and Romanoffs) don't entrench themselves in power and that superior people have a chance of moving in.
It is a mechanism for enforcing loyalty (communists who fail get sent to the proletariat) but Xi is re-focusing it in on recruiting and developing a person who is more "Expert" than Red". No longer will you get membership in the party because your uncle fought in the cultural revolution.
However, culturally uniform societies have a big problem: they are excellent at covering problems up in the short term. They have a hard time with dangerous technologies such as air travel, nuclear power, etc.
People in the US don't agree about the details, but we all agree that racism is a problem. We ask what race you are on the census. People in France are "all french" so they don't ask. In China they kill the Uyghurs and would block this message because I said that.
A diverse and high-performance society could be more honest and more able to deal with dangerous technology. (e.g. nuclear power, space travel) If we react by stepping on the gas instead of the brake, the U.S. could rise to the "Chinese Challenge" by taking competition to a place where a closed society can't go.
Thanks for writing this. If I understand correctly at the individual level there is a possible flight to security (gold/bitcoins/housing), but at society level, there is no possible flight to security, because the highest instances of government are planning for declining societies.
If this is the case, people will search inspiration in societies that look successful. This happened after WWII when people felt the American society was much more successful than other societies and therefore was a reasonable role model.