Three notes about what's wrong with the world
A theory about how secret inflation, collective neglect, and too-powerful oligarchs are messing up our society.
This is the introduction to a 3-part series of essays… stay tuned for the first one tomorrow. Thank you, as always, for reading these essays, which are more “long-read” than your typical internet article. And thank you in advance for your feedback!
The system is broken! Revolution!
Oh, I love those words. I’m like a kid who hears someone whisper “chocolate ice cream” across the room – I stop mid-sentence, drop my toys, and look around with wild eyes asking, “hey, hold on now, did somebody say the R word? Can I help?”
But whenever I really think about it, my pure and clear revolutionary impulse gets foggy with formless, multiplying questions. What in the world does it mean when we say “the system is broken”? Is it the political system, or the capitalist economy, or our culture (however you define that)? Or all of the above?
Yes, all of the above, that’s it.
OK, but how, exactly, is it broken, and how did it get that way? Is the rise of conspiracy-obsessed extremists the inevitable result of increased migration, or widening inequality, or social media? Is climate change the consequence of unregulated capitalism, or consumerist culture? Why is capitalism so unregulated, anyway – maybe the real cause is how politicians are financed?
That’s the problem with this damned broken system: you never know if you’re looking at the problem itself or just a symptom of some distant, more profound maladie. I have an intuition that it’s all connected somehow, but I can never seem to put my finger on the crux of the matter.
But then, a few months ago, I read a brilliant unpublished paper by a Hungarian economist (my friend, Attila Gajdics), about a normally boring topic – how we measure inflation – and as the implications of this paper seeped into my brain, I started to feel like I understood a web of problems that are more cause than symptom, a kind of knot deep in the system.
We all carry around these mental models of how the world works, a vague picture of the big machine of Society that rests at the edge of our consciousness, silently explaining things. When I read Attila’s paper, somehow the image snapped into focus in my head.
These ideas are still rough, so I’ve decided to use this newsletter to flesh it out and gather your feedback. Maybe you’ll tell me I’m all wrong, or maybe this is all so obvious that it doesn’t merit discussion. Or maybe it helps you, in some small way, understand what’s wrong with our system, too.
I’m going to publish this as a 3-part series in the coming days and weeks, one long essay to explain each of three connected ideas.
The first one starts with Attila’s paper, and then I describe in broad strokes what are, I think, the implications of his insight. Here’s the overall argument in a nutshell:
In 2010, when interest rates went to zero, significant inflation began in the US and Europe, but it was hidden from official statistics. This secret inflation decreased the real value of our dollars and euros, making all of us poorer than we realize. The implications of this are massive. The secret inflation also masked the power of recent advances in technology, which have actually increased productivity (and decreased costs) even more than is apparent in the official numbers – but only in certain sectors.
Secret inflation means that we’ve been spending much less than we thought on caring for people through our healthcare, childcare and education systems; and in the meantime, these systems are precisely the ones that are the least helped by the technology that has been so transformative, even more than official numbers suggest, in other parts of our lives. This double impact of less real, inflation-adjusted spending and no productivity gains has led to a gigantesque under-investment in care. It was already bad, and it got much, much worse in the past 12 years: we’re just not spending even close to enough time and money on taking care of ourselves and each other. As a result, we have been suffering the consequences of collective neglect, like a breakdown in social trust and increases in substance abuse and aggression.
In the meantime, secret inflation and extra-powerful tech has benefited only the very richest in our societies: the billionaires, both individuals and companies. I’m heavily influenced by the work of the political scientist Jeffrey Winters and his theory of Oligarchy. Winters argues that extreme wealth creates a special kind of power, the power of oligarchs who act to protect their wealth, and that throughout history there has always been a balance of power between oligarchs, nation-states and the masses. It seems to me that in the past 12 years the balance of power has tipped: Oligarchs now have the upper hand. I can see two direct and immediate consequences of the new balance of power that I’ll explain: one, it is now nearly impossible to fight climate change through advocacy, lobbying or litigation, which is why the climate movements have not been more successful so far; and two, that our media landscape is now totally warped and less trustworthy than ever.
There are, of course, other dynamics in the past decade that are likewise more cause than effect, tectonic plates shifting under our feet and reshaping the landscapes of our societies in 2022. Like the significant increase in international migration this past decade, and the impact of climate change on peoples’ lives everywhere, and the widespread adoption of social media. This web of interdependent problems I’m writing about here is not comprehensive by any means.
But understanding these issues more deeply has given me some clarity in imagining solutions. So if I still have any subscribers left at the end of this series, I’ll write in the future about possible paths forward.
Thank you, as always, for reading these essays, which are more “long-read” than your typical internet article. And thank you in advance for your feedback.
So here we go. Tomorrow I will start with Part 1, an essay about the secret inflation of the past decade.
I can’t wait to hear what you think.
number 1 was excellent - when you doing number 2?
Yes to complex systems where cause and effect are so tangled they may be indistinguishable... Can't wait to see the full articles.