In a recent podcast for the Odd Podcast, Vanderbilt University anthropologist Prof. Arthur Demarest discussed the signs of a civilization on the verge collapse. Prof. Demarest postulates a unique point of view, arguing that a civilization is at its very vulnerable at its supposed zenith, when its political, economic, and cultural achievements are at their highest, and the territorial extent at the greatest. Instead of the civilization showing gradual decline with reduced wealth and territory over centuries, civilizations are much more likely to collapse decades after achieving the zenith.
The logic behind the unique viewpoint is the concept of "overextension." As states become bigger and more complex, its political elites create more infrastructures and more institutions to hold together an ever-larger and more diverse society. Maintaining the ever-enlarging set of social structures, at some tipping point, quickly become unsustainable for the state's limited finances and ability to directly control, leading to established systems spiraling out of control in a short period of time. The result is a spectacular destruction of the said systems right after they reach their visually most complex.
In the podcast, the moderators made concerted efforts to relate Prof. Demarest's theory to the modern-day. And indeed, there are plenty of examples both in the political and business world. The British Empire might be a prominent one. The continued expansion of the Empire brought with it more and more conflicts of interests with more and more greater powers, straining the limited resources of the state's administrative capacity. World Wars quickly drained the remaining resources of the state, bringing about decolonization in the "east of Suez" moment and quick collapse of the Empire.
An important, but unsaid, extension of Prof. Demarest's thesis may be how a civilization (or a business, for that matter) at its zenith is so focused on maintaining the spectacular systems they created that they often have no energy and resources to invest in innovations that would allow it to adapt to changing times. The rise of nation-states put empires in the dustbins of history, and the rise of social media did the same for news portal sites such as Yahoo. As new systems of new players prove to be more suitable for current reality, the heavily invested old systems of big players become obsolete, bringing the big players down with them.
In other words, putting in more resources to a system in place does not automatically make it better. But overinvestment in the system does definitely make it more and more difficult to alter over time. The inertia associated with big systems is precisely because of overextension that increase the system's overall size and extent, making even tiny changes to the system.prohibitively time-consuming and costly. When changing times require tweaks to the system for continued usefulness, the system's operators would find it more convenient to replace the whole thing rather than attempting to reform it.
Yet, despite the negative consequences of overinvesting in systems that can become obsolete over time, states and businesses remain quite fond of undertaking such grand projects. On the political side, the Chinese undertaking of the "One Belt, One Road Initiative" is a contemporary example worth examining. The project calls for a network of physical infrastructure in the form of roads, railroads, electrical transmissions, and ports to stimulate global trade. But it is difficult to say whether global trade of the high-tech society decades from now will still need those physical infrastructures.
Similarly, multinational manufacturers tend to invest massively in R&D and new production facilities that allow them to create the most cutting-edge gadgets, whether it be smartphones, cars, or home appliances. But it is difficult to predict whether the same gadgets, in that high-tech society decades from now, will still be favored by consumers. Considering such grand projects involve investments that will show effectiveness that lead to recouping of initial investments decades from their groundbreaking, it is difficult to say how wise governments and businesses are when they decided to move the projects forward.
Of course, for investors, the long-term concerns may be much less than short-term benefits. Inflation decreases the value of debt to be repaid over time, while projects undertaken now increase employment and company net worth. So the projects becoming useless in the long-term is not a matter of concern. But that assumption can only be made if the investors are willing to make a clean break with unworthwhile projects at some point and take the obsolete physical monuments as sunk costs. If they refuse to do so and continue shoving money in them, it could lead to collapse of the investors themselves.
The logic behind the unique viewpoint is the concept of "overextension." As states become bigger and more complex, its political elites create more infrastructures and more institutions to hold together an ever-larger and more diverse society. Maintaining the ever-enlarging set of social structures, at some tipping point, quickly become unsustainable for the state's limited finances and ability to directly control, leading to established systems spiraling out of control in a short period of time. The result is a spectacular destruction of the said systems right after they reach their visually most complex.
In the podcast, the moderators made concerted efforts to relate Prof. Demarest's theory to the modern-day. And indeed, there are plenty of examples both in the political and business world. The British Empire might be a prominent one. The continued expansion of the Empire brought with it more and more conflicts of interests with more and more greater powers, straining the limited resources of the state's administrative capacity. World Wars quickly drained the remaining resources of the state, bringing about decolonization in the "east of Suez" moment and quick collapse of the Empire.
An important, but unsaid, extension of Prof. Demarest's thesis may be how a civilization (or a business, for that matter) at its zenith is so focused on maintaining the spectacular systems they created that they often have no energy and resources to invest in innovations that would allow it to adapt to changing times. The rise of nation-states put empires in the dustbins of history, and the rise of social media did the same for news portal sites such as Yahoo. As new systems of new players prove to be more suitable for current reality, the heavily invested old systems of big players become obsolete, bringing the big players down with them.
In other words, putting in more resources to a system in place does not automatically make it better. But overinvestment in the system does definitely make it more and more difficult to alter over time. The inertia associated with big systems is precisely because of overextension that increase the system's overall size and extent, making even tiny changes to the system.prohibitively time-consuming and costly. When changing times require tweaks to the system for continued usefulness, the system's operators would find it more convenient to replace the whole thing rather than attempting to reform it.
Yet, despite the negative consequences of overinvesting in systems that can become obsolete over time, states and businesses remain quite fond of undertaking such grand projects. On the political side, the Chinese undertaking of the "One Belt, One Road Initiative" is a contemporary example worth examining. The project calls for a network of physical infrastructure in the form of roads, railroads, electrical transmissions, and ports to stimulate global trade. But it is difficult to say whether global trade of the high-tech society decades from now will still need those physical infrastructures.
Similarly, multinational manufacturers tend to invest massively in R&D and new production facilities that allow them to create the most cutting-edge gadgets, whether it be smartphones, cars, or home appliances. But it is difficult to predict whether the same gadgets, in that high-tech society decades from now, will still be favored by consumers. Considering such grand projects involve investments that will show effectiveness that lead to recouping of initial investments decades from their groundbreaking, it is difficult to say how wise governments and businesses are when they decided to move the projects forward.
Of course, for investors, the long-term concerns may be much less than short-term benefits. Inflation decreases the value of debt to be repaid over time, while projects undertaken now increase employment and company net worth. So the projects becoming useless in the long-term is not a matter of concern. But that assumption can only be made if the investors are willing to make a clean break with unworthwhile projects at some point and take the obsolete physical monuments as sunk costs. If they refuse to do so and continue shoving money in them, it could lead to collapse of the investors themselves.
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