The Phaserl


What Triggers Collapse?

Massive disruption often happens quickly

by Charles Hugh Smith, Peak Prosperity:

Though no one can foretell the future, it is self-evident that the status quo—dependent as it is on cheap oil and fast-expanding debt—is unsustainable. So what will trigger the collapse of the status quo, and what lies beyond when the current arrangements break down? Can we predict how-when-where with any accuracy?

All prediction is based on extrapolating current trends. If we expect ‘more of the same’, it’s not too difficult to make predictions about the near future. But history is not always simply more of the same.

Suppose we are in the midst of an era that is as monumental as the first Industrial Revolution or the fall of Rome. Suppose we’re in an era that will compress a century of transformation into the ten years from 2017 to 2026. In this scenario, those who get it right will be riding the disruptive wave that is crushing everyone who blithely expected ‘more of the same’.

It is especially challenging to forecast the outcome of crises that break the status quo and establish a new social/economic order.

We are carried along by the broad sweep of history with a piecemeal understanding of the larger dynamics that are reshaping our world. We discern these forces in fragments of data, but cannot predict how they will unfold, for we are constantly extrapolating trends that are rapidly evolving. As a result, our predictions fail to capture the way these dynamics will transform our world.

As Marx famously noted, “everything that is solid melts into air” as capitalism dismantles old systems and spawns new ones. These forces don’t just shift the economic landscape; they also disrupt the social order, the political system, finance, family relations and our relationship with Nature—in other words, our entire mode of production.

Our Mode of Production: Centralized, Industrialized, Globalized, Financialized, Networked, Fossil-Fuel Dependent, Neofeudal and Neoliberal

What is a mode of production? The Wikipedia entry offers a deft summary. A mode of production (in German: Produktionsweise, meaning ‘the way of producing’) is a specific combination of productive forces (financial capital, labor and the means of production — tools, equipment, buildings, technologies, knowledge, resources and improved land) and social and technical relations of production — the social, legal and political relations governing a society’s productive assets.

“According to Marx, the combination of forces and relations of production means that the way people relate to the physical world and the way people relate to each other socially are bound up together in specific and necessary ways. For Marx, the whole ‘secret’ of why/how a social order exists and the causes of social change must be discovered in the specific mode of production.”

What characterizes our current mode of production?

It is centralized (controlled by central governments and banks that hold monopolies on power and money), industrialized on a global scale (production and labor are commoditized), financialized (dependent on the processes of finance—debt, leverage and the proliferation of financial instruments), networked (dependent on flows of information and feedback loops) and dependent on fossil fuels (roughly only 3% of total global energy consumption is currently generated by alternative renewable energy sources).

I have long argued that this mode of production is fundamentally neofeudal, meaning that the few at the top of the power/wealth pyramid benefit at the expense of the many, as the entire system is structured to create and protect privilege, which I define as unearned wealth, power and benefits.

In effect, the current structure of state-finance-capitalism is an updated version of the old feudal model of landed nobility skimming rentier wealth from serfs. In the current version, the employed serfs are fragmented and politically powerless, and the rentier skim is typically financial (hence my use of the term debt-serfs).

This is the result of the dominance of finance capital over industrial capital: state-cartels such as banking, healthcare and higher education enforce pricing that extracts profits by limiting competition, and foster a dependence on debt (for housing, higher education and consumption) that effectively enforces a financial form of feudal servitude on debtors.

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1 comment to What Triggers Collapse?

  • Ed_B

    “So what will trigger the collapse of the status quo…?”

    First, let’s ask whether or not a “trigger” is needed. What happens when the system goes as far as it possibly can and then… flop. No trigger needed other than that time simply runs out.

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