Survive- The Economic Collapse

by Piero San Giorgio

  The poor and lower middle class will be hit hard by the death of the “nanny state.” It will be in the interest of retired persons, the handicapped, and sick to have families to look after them. But paradoxically, those at the greatest risk will be those who enjoyed professional success. Everything these people worked and conspired for over the years will no longer exist: their income and savings will evaporate; their apartments and villas will be worth next to nothing; their cars will no longer run; all their status symbols will disappear. This category of persons will tend to take to drink, abuse drugs, or commit suicide. And we are talking here about dynamic people with useful skills and experience. They will be a significant loss for society. How will they learn to redefine success without the ability to produce and consume? It will be the worst possible time to fall into depression, for we will have the greatest possible need of their mental and physical resources in order to get back on our feet and act.

  Scenarios

  The collapse scenarios we shall have to face over the coming years are difficult to predict with precision, for there are many of them. And so much uncertainty is due to the nonlinear dynamics of human nature and unforeseen external events. In fact, human history is often determined by threshold effects. It’s like a pregnant woman: we know the progressive, more or less rapid process that ends up putting her in that condition, but a woman cannot be half pregnant or gradually pregnant. It is an either/or binary. Similarly, a molecule of water will changes its state once it accumulates or loses a certain fixed amount of energy: suddenly, water is vapor, or it is ice. There are unforeseen elements that have enormous consequences in a favorable environment, while they would have been insignificant otherwise. Examples are numerous: the assassination of the Austrian Archduke at Sarajevo in 1914, the storming of the Bastille in 1789, the Boston Tea Party of 1773. . .

  So what are the most probable scenarios for the next few years? Below, I imagine a few. Though some might seem impossible or bizarre, we shouldn’t forget the dramatic, unforeseen turns history has made over the centuries. The scenarios I propose can be graphed, with the horizontal axis representing the size of the catastrophe, the vertical axis—its rapidity:

  1. Techno Utopia

  It’s the End of History

  The promise of liberal capitalism delivers worldwide. Financial crises come and go, but, in general, the world experiences steady economic growth. The massive debts of Western states are a burden, but these are countered by the discovery of massive oil reserves off the coast of Brazil, guaranteeing affordable oil for the foreseeable future. Chinese and Indian manufacturing power the global boom.

  Not everyone benefits, though. International finance operates on an almost unregulated basis, and boom-and-bust cycles regularly wipe out unwary investors. Ordinary people occasionally face outright disaster, but the very wealthy continue to prosper. The world has its first “trillionaire” (in U.S. dollars)—an Indian financial and media magnate.

  With general prosperity comes political apathy. Celebrity divorces, outlandish fashion, and electronic diversions are far more interesting to the masses than economics or government. “Smart clothes” are the newest rage, outfits that can change color according to the wearer’s mood (determined by body temperature and an aggregate of social-networking status updates).

  Social observers and pollsters conclude that people are, in general, satisfied. Political agitation is rare. Wars are almost entirely a thing of the past, and authors and talking-heads praise the “end of violence.” A few “Chavist” guerillas in Latin America and jihadists in Afghanistan give the world’s militaries something to do, but the insurgents are more an object of pity than a threat.

  Though a few media progressives bleat about inequality, severe global poverty is a thing of the past. Genetically modified foods and lab grown meat allow the entire world to be supplied with water and cheap, ostensibly nutritious food. Obesity is going global. With basic needs met and a (more or less) efficient global administration, the world population stabilizes around 10 billion people.

  This population boom allows a dramatic increase in productivity. The global marketplace grows even more integrated and interconnected, as societies are defined by increasing consumption and trade. The quality of life for people around the world rises more dramatically in a shorter period than at any other time in history.

  Market-friendly environmentalism integrates seamlessly with the global economy, as new technology allows for significant reductions in the amount of electricity and fossil fuels consumed by industry, transportation, and housing. Nearly 40 percent of energy now comes from renewable sources. Defying pessimistic predictions, international press reports that “global warming” was simply a short, abnormal phase in the long pattern of climatic cycles of the Earth. With no serious resource crises on the horizon, global corporations and governments prepare to launch the first colonizing and mining missions to the Moon and Mars.

  Most important, perhaps, the great dream of the international elite is finally realized as a culturally and politically interdependent world finally yields to an efficient global administration. Based out of Jerusalem, the world government is headed by figures such as Henry Kissinger and Jacques Attali (or at least their brains preserved in vats of amniotic fluid connected to a mainframe computer.) The new leaders are able to act without much interference from the rump national governments. However, this regime is keen on preserving elections and parliaments as part of its efforts in “democratization.” No one seems to care. Voter non-participation reaches levels of almost 80 percent, and mandatory voting—done digitally on smartphones and smart-TVs—is seriously debated.

  Despite global unification, economic growth, and increasing lifespans, the people of the planet Earth are gripped by an undefined malaise. The vast majority are on some kind of pharmaceutical anti-depressants, and self-medication through alcohol and legal (and illegal) drugs are so commonplace as to pass without comment. The latter, however, has no political outlet, and is thus funneled into ever more bizarre subcultures or electronic simulacra. After all—there’s no profit to be made in rebellion.

  Of course, out on the fringes, there are still a few neo-Malthusian prophets of doom talking about the impossibility of infinite growth in a finite world. No one takes them seriously. As one public intellectual repeatedly puts it, “They haven’t learned anything.” Everything works out for the best—in this, the best of all possible worlds!

  2. Responsible Management

  The Wheel Turns

  The financial crises never really ended in the developed world. Western governments were forced to implement severe austerity measures and strict spending controls. Governments collapsed in the face of public outrage, and even the Eurozone finally broke apart.

  Faced with angry voters, politicians turned on the financiers deemed responsible for the crisis. Thanks to the work of the new “International Tribunal for Financial Crimes,” many of the most successful investors and financiers from the 1980s onward were put on trial. Vast fortunes were surrendered to the state. As the debt-driven financial system collapsed, American voters turned on the Federal Reserve, and the once untouchable institution was dissolved. A new, gold-backed dollar was instituted. It was worth 1/100 of the retired “greenback,” but this devaluation allowed the American economy to regain its footing and begin a slow recovery.

  And besides, the damage had already been done. The American standard of living was gutted by a decades-long, quiet recession; some regions declined to Third World status. Still, though there is occasional civil unrest, the American sense of patriotism coupled with an aggressive national-security state allows the country to hold together. Troops from the National Guard and even the United States Marines become familiar sights on the country’s streets, as the military takes on a more prominent role in what is delicately called “domestic peacekeeping.”

  Meanwhile, millions of people in Africa and Asia die because of droughts and climate irregularities. Scientists concl
ude that they underestimated the effects of global warming, and various developed nations collaborate more seriously to ensure climate security. A great series of nationalizations ensues around the world, especially of banks and large-distribution companies. This hinders economic growth but creates a stable food supply.

  The sudden scarcity of resources causes the mostly White nations of the West to implement repatriation programs for their Latin American, Middle Eastern, and African populations. As the welfare state is largely abolished, millions “self-deport” back to their countries of origin. Millions more are enticed or compelled to do so through largely successful “de-immigration” programs. After a period of turmoil, the Third World actually benefits during this time of crisis from the return of skilled workers from the West, the repudiation of debts, and higher prices for raw materials and food.

  Largely driven by economic and ecological concerns, a world government slowly begins to take shape. Mostly represented by the G20 and a Security Council of 10 nations from the UN, the new global administration aggressively moves to limit greenhouse gas emissions. Oil is rationed and has been declared a “common resource of humanity” on the model of water.

  Oil-producing nations, especially in the Middle East, are outraged by this new global order. However, the new UN Army, largely composed of a working partnership between the American and Chinese militaries, discourages resistance. With developing nations having secured their needed resources, the world settles into impoverished stability. The Western standard of living plunges to about the level of China, but changing lifestyles make this easier to bear. For the first time in centuries, Westerners flee the cities, and agrarian life and values become more prominent.

  Of course, the global government and a rather authoritarian world order are not without their critics. However, most people do not see any other alternative. The global administration is able to effectively weather a series of environmental problems, including a severe hurricane season in the American Southeast. Better management of land and food stocks allow for a successful response to what historians begin to call the Great Drought. Finally, the effective institution of a Chinese-style One Child Policy over all of Africa, India, Latin America, and the Middle East—abundantly financed by private patrons and put in place under the threat of severe economic and military sanctions—creates a drastic fall in the birth rates. It is estimated that the world population will stabilize at around eight billion, eventually falling to six.

  The world is hardly prosperous, but at least it is peaceful. And besides, say many observers, things could have been far worse. . .

  3. Pax Sinica

  The Chinese Century

  On the 20th of May, the First Secretary of the Chinese Communist Party and President of China proudly announced the creation of a new Asiatic Co-Prosperity Sphere. The members included Japan, the Unified Korean Republic, Vietnam, Laos, Cambodia, Myanmar, Thailand, and Malaysia.

  The new economic and political order was enabled by China’s crushing victory in what their propaganda ministry called the “Lightning War” against India, Australia, and New Zealand. Though critics pessimistically mutter about huge scores of civilian causalities in Indonesia caused by chemical weapons, there is no denying Chinese hegemony over the entire Pacific. Indonesia itself is put under Chinese military occupation. The Anglosphere’s Pacific outposts of Australia and New Zealand are transformed into Chinese protectorates at the small price of guaranteeing delivery of raw materials and fishing rights to Beijing. Most Australians and New Zealanders are relatively satisfied with the new arrangement, considering it inevitable. As for India, the “world’s largest democracy” quietly realigns with the Chinese world bloc, joined by second-tier powers such as Russia and Brazil.

  The roots of the Chinese victory lay in its quick response to a systematic crisis caused by a slowing economy and unemployment. Recognizing the extent of the crisis, the Chinese leadership crushed dissent ruthlessly using both internal security forces and the military.

  Unencumbered by domestic political considerations, China exploited the West’s weakness caused by the global economic crisis. China forged a long series of military and mutual-support alliances with its trading partners in Asia, Africa, and the Middle East. At the same time, the Chinese aggressively developed its power-projection capabilities—with the help of technology from export-hungry countries such as Israel and Russia.

  The rise of Chinese military power went almost unopposed by the West because of its own serious political situation. The collapse of the Eurozone and demographic tensions within the ancient nations of Europe largely crippled the Continent’s military power. As for the United States, disastrous military blunders in Syria and Iran pointlessly expended scarce resources, while alienating potential allies. From Angola to Zimbabwe, Third World nations openly renounced the American world order and put themselves under the protection of the Chinese Navy in the Indian Ocean.

  When a conflict finally erupted between the American and Chinese militaries, the United States was simply exhausted. An incident between the Chinese aircraft carrier Zheng He and an American spy ship escalated into a short but intense naval battle between the titans. After the loss of several submarines, the United States had threatened to attack targets on Chinese territory. China responded by putting its nuclear weapons on high alert, which quickly forced the American political establishment to back down.

  China also exploited America’s demographic weaknesses by helping to instigate race riots in Los Angeles, Oakland, Atlanta, Washington, DC, and Detroit. Faced with more pressing domestic considerations and crippled by an inefficient political system, America retreated. Uncle Sam eventually withdrew from its bases in Korea and Japan, claiming that these were “cost-cutting measures” or efforts in “democratization.” The truth was that America could no longer afford to compete with a serious military competitor in the Indian Ocean.

  The Chinese government also exploited the atmosphere of crisis during what became known as the Great Drought. China used its vast stockpiles of rice and cereals to assist Asian and African nations, saving an estimated 150 million lives. African nations, who supplied the labor force for Chinese agriculture and even some industry, took the hint. Pakistan and even India also accepted Chinese aid after a disastrous conflict over water resources in Kashmir. By the end of the decade, long-lost Taiwan was peacefully reunited with the People’s Republic.

  By the middle of the 21st century, China found itself as the most prominent nation in the world. As the exhausted populations of Europe and the United States grasped for alternatives, China’s efficient model of market authoritarianism looked ever more attractive.

  Of course, after droughts, resource scarcities, and military conflict, the global population has fallen considerably, sinking to four billion. But the world is, at least, at peace under the new order of “Pax Sinica.”

  4. With a Whimper and a Bang

  The Return of History

  In theory, the financial crisis that ripped apart the West in 2008 should have led to important changes. However, the governments of the world largely left the existing system in place. Enormous amounts of money were spent, but no one knew exactly where it all came from—other than the printing press. While some banks went under, others were recapitalized.

  Still, as promised, consumption ticked up, stock prices rose, and most people thought the worst had been avoided. Many complained about news of record-breaking profits for multinationals and big banks and outlandish bonuses for CEOs. The case of one cheeky Wall Street trader who got a “bonus of a billion” on Christmas made headlines around the country, but there was no serious political momentum behind reform as long as the economic figures remained generally favorable.

  However, in the absence of systemic change, the underlying instability of the financial sector quietly grew worse and worse. The price of gold continued to rise, as countries with a budget surplus bought more and more of it—as did the few savers who saw inflation destroying t
heir fortunes. The price of $10,000 per ounce was breached . . . then quickly surpassed.

  When the long-expected hyperinflation finally arrived, Europe’s periphery was hit the hardest. Portugal, Ireland, and Greece were put under direct IMF control. Considerable unrest broke out, and the European Central Bank and the EU decided on a plan of direct aid to their populations, to be financed by a new European tax.

  The American government responded the only way it knew how, with more “quantitative easing.” Though this round was ostensibly directed towards small businesses and homeowners overladen with debt, observers quietly noted that the money ultimately went to the banks. The American press largely ignored this slow-motion fiscal collapse, choosing instead to focus on a “sex tape” scandal involving the President. While the masses were glued to tabloid TV, the global economic and political situation spiraled out of control.

  The bottom fell out when the price of oil, increasingly negotiated in the Chinese yuan, rose to $250 a barrel. Economic instability in China led to shocking crackdowns by government security forces (there were rumors of hundreds of thousands of casualties). Meanwhile, the so-called American “middle class” began sleeping at the office or in their cars to avoid having to commute. Prosperous suburban neighborhoods transformed into bankrupt war zones plagued by crime and nonexistent public services. Europe experienced similar turmoil, but the impact was cushioned by widespread public transportation.

  As politicians railed against “austerity” and cuts in government outlays, Western populations began to experience something much more painful—scarcity and market failures. The savings of lifetimes were consumed overnight by rising prices.

  Helpless to deal with the economic crisis, populist politicians seized power in Europe and Latin America with promises to restrict immigration and protect national resources. The European Union imposed an outright moratorium on immigration. The United States took a more militarized approach, creating minefields and machine-gun turrets in the new “No Man’s Land” of the U.S.-Mexican border.