The ‘and them some’ is what causes the trouble. Complex societies collapse because, when some stress comes, those societies have become too inflexible to respond. In retrospect, this can seem mystifying. Why didn’t these societies just re-tool in less complex ways? The answer Tainter gives is the simplest one: When societies fail to respond to reduced circumstances through orderly downsizing, it isn’t because they don’t want to, it’s because they can’t.
In such systems, there is no way to make things a little bit simpler – the whole edifice becomes a huge, interlocking system not readily amenable to change. Tainter doesn’t regard the sudden decoherence of these societies as either a tragedy or a mistake—”[U]nder a situation of declining marginal returns collapse may be the most appropriate response”, to use his pitiless phrase. Furthermore, even when moderate adjustments could be made, they tend to be resisted, because any simplification discomfits elites.
When the value of complexity turns negative, a society plagued by an inability to react remains as complex as ever, right up to the moment where it becomes suddenly and dramatically simpler, which is to say right up to the moment of collapse. Collapse is simply the last remaining method of simplification.
Can’t do anything about securitization, they say. It’s too critical to lending. So reinflate the bubble and hope for the best!
ADDING:
— A reader is underwhelmed by The Wall Street Journal’s new iPad app, saying “doesn’t it look like a desktop-publishing newsletter circa 1998?” Actually, yeah it does:
Corporations developed for the purpose of creating limited personal liability for all members. Trusts had served that purpose for the beneficial owners but not for the trustees themselves. The British Crown (and later the State Legislatures) found corporations a useful fiction because their creation involved the payment of large amounts of money to the sovereign. One of the many compromises of the Federal Constitution was that the right of granting a limited liability franchise would be held by the states, not the national government. What no one questioned was the need for such entities. Even the Founders who most hated bankers (usually because they were in debt to them) accepted the necessity of having associations whose members could not directly be sued. They really had no choice. Every school and church in the country already was such a limited liability association; and, as in so many things, Harvard was among the first. Logic - and the establishment clause of the 1st Amendment - required that even those heretical citizens who preferred Mammon to God had to the right to seek corporate charters. The origin of our present difficulties has far more to do with the decision of Congress to create limited liability entities - FNM, FRE, SEIU - whose franchises were immune from any state regulation. There, too, as in so many things, Harvard led the way; as taxpayers, we can all thank Felix Frankfurter for much of our present ruin.
#1 Posted by LetUsHavePeace, CJR on Fri 2 Apr 2010 at 02:08 PM