Dark Age America: Involuntary Simplicity | John Michael Greer

[Tace]

Oct. 28, 2014 (Archdruid Report) -- The political transformations that have occupied the last four posts in this sequence can also be traced in detail in the economic sphere.

A strong case could be made, in fact, that the economic dimension is the more important of the two, and the political struggles that pit the elites of a faliing civilization against the proto-warlords of the nascent dark age reflect deeper shifts in the economic sphere. Whether or not that’s the case -- and in some sense, it’s simply a difference in emphasis -- the economics of decline and fall need to be understood in order to make sense of the trajectory ahead of us.

One of the more useful ways of understanding that trajectory was traced out some years ago by Joseph Tainter in his book The Collapse of Complex Societies. While I’ve taken issue with some of the details of Tainter’s analysis in my own work, the general model of collapse he offers was also a core inspiration for the theory of catabolic collapse that provides the basic structure for this series of posts, so I don’t think it’s out of place to summarize his theory briefly here.

Tainter begins with the law of diminishing returns: the rule, applicable to an astonishingly broad range of human affairs, that the more you invest -- in any sense -- in any one project, the smaller the additional return is on each unit of additional investment. The point at which this starts to take effect is called the point of diminishing returns. Off past that point is a far more threatening landmark, the point of zero marginal return: the point, that is, when additional investment costs as much as the benefit it yields. Beyond that lies the territory of negative returns, where further investment yields less than it costs, and the gap grows wider with each additional increment.

The attempt to achieve infinite economic growth on a finite planet makes a fine example of the law of diminishing returns in action. Given the necessary preconditions -- a point we’ll discuss in more detail a bit later in this post -- economic growth in its early stages produces benefits well in excess of its costs. Once the point of diminishing returns is past, though, further growth brings less and less benefit in any but a purely abstract, financial sense; broader measures of well-being fail to keep up with the expansion of the economy, and eventually the point of zero marginal return arrives and further rounds of growth actively make things worse.

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