Monday, June 6, 2016

Review of War and Peace and War: The Rise and Fall of Empires by Peter Turchin

After my experience with The Better Angels of Our Nature (2/5), I should've known better than to buy another book that tries to wrap up all of human history in one tidy theory (and then use it to predict the future). How often is a "radical new theory of X" correct or useful?

However, I like Peter Turchin's concept of "elite overproduction" (see 1 and 2), so I bought his book War and Peace and War. I want to preserve a few important concepts / mental tools that he does bring to the table:

  • "Different groups have different degrees of cooperation among their members, and therefore different degrees of cohesiveness and solidarity. Following the fourteenth-century Arab thinker Ibn Khaldun, I call this property of groups asabiya: [the] capacity of a social group for concerted collective action. Asabiya is a dynamic quantity; it can increase or decrease with time."
  • "Groups with high asabiya arise on metaethnic frontiers [] places where between-group competition is very intense."
  • "The very stability and internal peace that strong empires impose contain within them the seeds of future chaos. Stability and internal peace bring prosperity, and prosperity causes population increase. Demographic growth leads to overpopulation, overpopulation causes lower wages, higher land rents, and falling per capita incomes for the commoners. At first, low wages and high rents bring unparalleled wealth to the upper classes, but as their numbers and appetites grow, they also begin to suffer from falling incomes. Declining standards of life breed discontent and strife. The elites turn to the state for employment and additional income and drive up its expenditures at the same time that the tax revenues decline because of the growing misery of the population. When the state's finances collapse, it loses control of the army and police."
Does that third bullet point sound like 21st century United States or what? What he's talking about is what High Plateau Drifter covers in his essays for this blog. Yet Turchin does not mention immigration, nor explain it as a tool that elites in the U.S. and Europe have been using deliberately to drive land rents higher and per capita incomes lower. You have to hand it to this theory (not that it is original to Turchin), the overpopulation does explain why we are seeing $100 million apartments in Manhattan.

Anyway, the civil war that follows after the third bullet point reduces the population, resulting in falling rents and rising per capita incomes. The ranks of the elites shrink, with many simply abandoning aristocratic pretenses. These oscillations between prosperity and collapse are what Turchin calls "secular cycles".

What does this tell us about investments? If the elites get their way and a pro-immigration candidate wins, or if an anti-immigration candidate is successfully turned or thwarted, rents will keep spiraling up and labor cost increases will be dampened. High profit margins for the S&P 500 will continue. When you look at it that way, it's hard to believe that the elites won't be able to beg, borrow, or steal the election!

On the other hand, there's a decile or so of the income/wealth distribution that is highly intelligent and doesn't really benefit from the demographic growth and attendant increasing rents and stagnant wages. These are non-oligarchs, they are upper middle class and drink good coffee but their kids don't inherit a franchise from them (professors, architects, lawyers). Spiraling rents mean that their children, who are reverting toward the mean of population IQ, are going to have to move to a cheaper part of the country and so they won't be able to see their grandchildren. This decile has access to high quality information about what is happening in the world thanks to the internet and is very slowly starting to organize for its interests.

Speaking of grandchildren and civil war, Turchin has another interesting thought about this:
"A civil war begins like a forest fire or epidemic - violence leads to more violence in an escalating spiral of murder and revenge. Eventually, however, people become fed up with constant fighting and a civil war 'burns out'. Both the survivors of civil war and their children, who had direct experience of conflict, are reluctant to allow the hostilities to escalate again. They are, thus, 'immunized' against internecine violence. The next generation, the grandchildren of the civil warriors who did not experience its horrors at first hand, is not immunized. If the social conditions leading to conflict (the main one being elite overproduction) are still operational, the grandchildren will fight another civil war."
This makes us think of the Germans. The post-war generations have a mentality of avoiding conflict at all costs. This has made it easy for the elite to do what an elite always wants to do: flood the country (or union, in this case) with people in order to drive down wages and drive up rents.

But a 20 year old German today has no memory of WWII and was even born after the Wall came down. All that he is going to care about is how little he makes in relation to the cost of buying a house in a country with more and more "no-go zones". Similarly, a 20 year old American has no memory of the civil rights era; just a series of economic crises throughout his whole life and a country where every major metro area consists of about half "no-go zones" by land area.



CP said...

Why Housing is About to Eat the US Economy

This seems to take it for granted that open borders will win.

James said...

Great review, thanks. It sounds like Turchin's book in another example of the dynamic you commented on last year, namely that most books have one article-worthy idea that they stretch out to excessive lengths.

This seems to take it for granted that open borders will win.

His post is really unimaginative, and I can't understand its popularity. It essentially says, "If economy is no different today than it's been over the past 40 years, then we're due for a huge housing boom." It's obvious that the economy is different in a lot of ways: interest rates, student loans, people delaying--or forgoing--marriage and children, etc.

CP said...

Thanks James - the Theory of Books post:

Actually, csen's post is more muddled now that I think about it further. He seems to be assuming that unlimited amounts of construction labor won't be free to move here, yet there will be big demand for housing units.

Also, I hypothesize two factors for expensive housing: number one, huge "no go zones" with "bad schools" which artificially constrain housing purchases from the land area of an entire city to just an archipelago of enclaves. Second, low interest rates are encouraging baby boomers to hoard empty houses and land. I see it every day in my neighborhood.

Taylor Conant said...

The idea that there is a shortage of people willing and able to do menial, backbreaking labor is... bizarre, to me. But then, nearly everything I've ever seen this guy write is bizarre to me. I have no clue why he is managing money other than "This is a bubble, people are paid for stupidity."

Will re-read and comment on the book review later.

CP said...

We had previously noted that csen wrote that "demand" would be a "key scarce input".

James said...


CP said...

Steve Sailer June 3, 2016 at 5:35 am

The first great work of American social science, Benjamin Franklin’s essay from the early 1750s, “Observations Concerning the Increase of Mankind,” which inspired the intellectual breakthroughs of Malthus and Darwin, was an immigration restrictionist pamphlet. Franklin’s argument was that Americans were born privileged due to having more land per person than Old Worlders and that it was insane not to organize politically to keep that privilege.

bjdubbs said...

The no-go zones is an interesting question. I've heard people say that there is no shortage of housing, there is a shortage of housing that people want to buy. I see that in DC, plenty of houses in Anacostia, PG county, southeast, etc but all the buyers try to squeeze into the same neighborhoods. Lots of cities like that . . . DC, Atlanta, Baltimore, Philly, to mention only cities that aren't in the Rust belt.

This article on Philly suggests that degentrification is outpacing gentrification.

Anonymous said...

Black violence is a real estate strategy. They use it to get a 75%-90% discount to what property would cost if it was owned by whites or Asians.

People in Charlotte are probably thinking hard about their real estate holdings right now.