A theory that “elite overproduction” leads to political instability (2020)

This could just as easily be suggesting that "overproduction" of elites is due to, some two decades prior, a creeping sense among the populace of nascent but growing inequality and increased stratification? Or put differently, "Grandpa worked in the plant and made a good life for himself, and I work in the plant and make a good life for my family too, but I see the writing on the all and am going to make certain that my son or daughter becomes a [lawyer/banker/software person/etc]". And the instability today is just that initial rising inequality reaching fruition.

Something like that seems much more likely to me, that creeping change exists that is palpable at the individual level, and expressed through the emphasis given to the next generation.

The non-advanced-educated feel marginalized because it will be ridiculously hard for them to get the education, and as things get more expensive their livelihood will go down relative to the elites.

The advanced-educated-but-not-good-enough will feel marginalized because they spent their time and money and got nothing in return, and now have debt and degraded livelihood compared to the elites.

When enough people feel marginalized AND something happens that weakens the state's power/influence, political instability will occur.

It compounds in US/Europe with regards to education, given that these two groups are politically opposite of each other, and advanced education is becoming a barrier of entry to upward mobility.

Turchin's 2016 book Ages of discord explains these ideas in detail.

Turchin's prediction:

> “The next decade is likely to be a period of growing instability in the United States and western Europe,” he asserted, pointing in part to the “overproduction of young graduates with advanced degrees”.

...overlooks something key: they didn't produce an a new elite, only "elitists," who never quite arrive. The resentment from people who became middle class after graduating from debt funded college is the result of how all that work didn't deliver on the promise of upper-middle security. The Gen-X cliche of baristas with masters degrees has simmered for a couple of decades, and it has metastisized into a deep loathing for the working people Gen-X grads haven't been able to differentiate themselves from, and hence the "burn it all down," attitude you see in a lot of them. The coders and general contractors who didn't go to university who out earn and out-succeed grads is a real cultural factor, and a big part of the U.S. red/blue divide.

If you look up Girard and "mimetic violence," you can get a useful framework with predictive power on the dynamic they're describing. The promise of college and debt was they would be elevated into an elite, but of course, they weren't, and now these smart-enough and educated people bitterly hate what they call the "trash" and neighbors they still too-closely resemble, and who the remaining elite confuses them with.

The political instability aspect of it in the article is that if you want to see who is setting fires in cities and throwing rocks at police, it's people with just enough security and social capital to get away with it, but not enough to meet their self image as legit members of the elites their educations allowed them to percieve.

Brainy? No. Promised something and told it was because they were brainy? Probably.

Some descriptive work such as: https://www.pnas.org/content/115/2/E144.full

Sone of the work [0] has been criticized on methodological grounds [1] and some recent (2017) related work [2]. Finally, in his own words, a comparison of Psychohistory and Cliodynamics (2012) [3]

[0] https://www.nature.com/articles/s41586-019-1043-4 [1] https://github.com/babeheim/moralizing-gods-reanalysis [2] https://www.pnas.org/content/114/30/7846.full [3] http://peterturchin.com/cliodynamica/psychohistory-and-cliod...

Yeah let’s make sure we have an underclass of uneducated people so they don’t notice any of the problems, that will make sure there is less “political instability”.

Brave New World is a good book to understand why this is a bad idea. It seems that Orwell and Huxley books are being used as manuals instead of the cautionary tale that they are.

This is not a new observation. Eric Hoffer made it in "Working and Thinking on the Waterfront" (1959).

Having a degree does not mean one is smart, it does not mean someone will get a job. Maybe we should put more effort into explaining life to people or actually start making them smart instead of "smart". If people would be really smart they would know how much effort is needed to become elite in any discipline.

I have another article: https://www.bloomberg.com/opinion/articles/2016-12-22/if-you...

This isn’t an issue of blue collar tradespeople seeking college degrees.

It’s an issue of people who are already college graduates seeking further education beyond their degrees.

In a healthy society, most people will have a secondary education and a significant minority will have a college level degree.

But if a graduate degree is necessary to find a job, or be an informed citizen, then there are serious problems.

I think part of the issue is the “professionalization” of HR.

Apply this to the time when most people couldn't read and you were a dangerous radical if you taught workers, blacks and women how to read because they would "no longer be content with their place in life". I think most people on this site would agree that keeping people uneducated just so they don't start realizing how unfair their lot is would be morally wrong and that the correct option is right the unfairness...right?

Brainy is completely relative.

those who are good at ruling, kept people stupid. for knowledge make them harder to rule.

for those oppose this translation, argues on the word "ignorant" and it's definition by Laozi which meant earnest rather than ignorant.

So it's really advocating an honest, earnest society with high trust model where ruler and it's populace cooperate.

But the fact remains both interpretation exists, and I'd wager the current Chinese government is the supporter of the former naive translation.

Anyway just some knee jerk thoughts reading this article, it's always fascinating to see different culture collide on the same pain points.

But the result is: some people stop being able to climb the ladder, and some seem happily stuck at the top.

    Hard times create strong people = 1910-1940s
    Strong people create good times = 1950s
    Good times create weak people = 1970s
    Weak people create hard times <- you are here

What are you guys gonna do? Keep producing elite, or no?

The idea behind capitalism is that economic power is in the individual. The ideal is that there is an owner for everything, including the "means of production" and sometimes even public goods like land. Because each decision maker has a small impact on the rest of the economy misbehaving (behaving = perfectly optimizing for current market factors) actors will quickly be weeded out.

The difference in agility between a startup vs a slow moving large company vs the government is pretty obvious. When that start up fails nobody is going to remember it and that is a good thing. The bigger the organization the less likely it is going to obey market forces.

It does have its positives and negatives but I am not here to talk about the small fry problems like monopolies.

I'm here to talk about the fact that the free market is built around the idea that local decision making by individuals is superior to global decision making by a large organization. The truth is that we need both. To be more exact, we need to use the government to transfer information and put a share of the burden of global decision making onto individuals so that the local optimum for individuals is the same thing as the global optimum for the economy as a whole. We need to break the prisoner's dilemma and the paradox of competition that arises from it.

Here are the three factors:

1. Get rid of all trade imbalances

It is very easy to intentionally run export surpluses at the expense of other nations. The importing nation has to take on debt and in the case of a perpetual surplus the debt cannot be repair, ever.

The only ways export deficit countries can defend against this is either via protectionism which ends in trade wars (and decision making errors by politicians) or they must increase their own competitiveness through devaluation of their currency. Both are a race to the bottom. When every country is trying to achieve an export surplus then global absolute trade will trend to 0. I'm not talking about export surpluses going down, I'm talking about ceasing trading entirely.

Keynes suggested an ICU that sanctions export surplus countries and distributes money to workers via a UBI (or tax cuts) to raise their purchasing power and thus eliminate the import deficit which involves handing out more and more loans. If you never buy anything from the borrower then a default/bailout is inevitable.

2. Sanction large savings accounts

There is no mechanism in capitalism that forces investments, other than the dreaded "inflation". Inflation creates risk and erodes the value of idle money that is doing nothing. Thus it becomes obvious that you must run a business or keep working to get ahead of inflation by obtaining a future income stream. This is necessary for money to fulfill its purpose as a medium of exchange. It must pass from hand to hand all the time. It is not allowed to get stuck anywhere.

When inflation is very low there is barely any incentive to invest. People start hoarding money, which fuels a deflationary spiral. Central banks all around the world are trying new party tricks to get the private sector to invest again. They drive yields on safe assets to nothing to create more risk. They make borrowing cheaper so that investments are profitable and old unprofitable investments can be refinanced under better terms. All that QE isn't ending up anywhere except maybe real estate. The cheap financing costs are also letting large companies hoard money and do stock buy backs, which further reduces their incentive to invest their money. Young people take on mortgages which drives up prices high but buying an old house for double its original price isn't investing. Old people pay their mortgages off before they retire and don't take new ones during their retirement.

Instead of hoping that investments happen on their own because the economy just happens to encourage them via inflation we could just skip the middle man and maybe even get rid on the dependence of inflation and reintroduce the mechanism in an official fashion. We introduce wealth taxes on money in bank accounts of private individuals and large companies. 2% per year and they get to deduct debt to reduce the wealth tax. The money can then be handed back via a UBI or tax cuts. The point isn't funding welfare, it's to punish behavior that is globally suboptimal.

3. Land value tax

It's actually the same mechanic as with money. People hoard land instead of money. However, we can't create more land to catch up with demand if people move to cities for jobs. Real estate tends to go up in value much faster than money because of the fixed supply. The owners of the land didn't work to earn this money, they simply waited for the population to grow. Buying land as an investment should be a terrible idea. People taking on bigger and bigger mortgages for a low productivity investment like buying a house shouldn't happen. If anything, land values should be shrinking over time. The only way someone should be able to make money off of real estate is by building a house and renting it out or by saving money through owner occupation. The fundamental problem is that living in suburbia only works if some people do it. If everyone does it, then the system collapses as early homebuyers get their land and house for dirt cheap at the expense of future generations who no longer can afford them. You're going to see a lot of pitchforks.

The land value tax is just a flat (% or fixed amount) tax on land that reduces the benefit of holding onto land. Again, we can use the proceeds of punishing suboptimal behavior to fund a UBI but I personally would just do wholesale tax cuts on income and replace capital gains and corporate income taxes with the lowered income tax. (a simpler tax code is fairer for those who cannot exploit it).

1. and 2. bring back jobs and create financial stability, 3. reduces living costs by punishing rent seeking.

All these proposals are built around the same idea: local decision making may lead to a benefit for the decision maker at the expense of everyone else, thus decision making should be based on what the global optimum is, so that all decision makers make decisions that benefit everyone in the long run instead of focusing only on themselves. This is actually strongly in favor of capitalism as it shows that local decision making can reach a global optimum. The idea that local decision making inevitably leads to infighting and thus mass exploitation is something the communists always criticized about capitalism. The hope was that fixing core problems like housing by avoiding the prisoners dilemma would lead to a better society even if it is at the expense of individual freedom and thus efficiency. To be honest, they got housing right (although they neglected maintenance). They built a lot of housing in east Germany. Even west Germany built a lot of social (=affordable and government owned) housing that made renting extremely affordable in Germany. The problems started as soon as the government sold its social housing. They made a quick buck but then housing prices started rising. Private ownership of land just doesn't work.

America, for example, is a socialist nation as soon as your income hits a certain level. They look out + take care of each other in a generational fashion, at the same time advocating for policies that preach individualism and divide.

On the contrary, I'd claim relative instability was predicted by a fairly large group. The decline of the US has been described and predicted across the political spectrum. Gridlock was a pretty visible thing ten or thirty years ago.

pointing in part to the “overproduction of young graduates with advanced degrees”

This is an ...uh, bizarre definition of "elites". The elites are broadly rulers, the owners specialized, etc - those consuming and managing a significant portion of a society's resources.

As far back as ancient Rome and imperial China, Mr Turchin shows, societies have veered from periods of political stability to instability, often at intervals of about 50 years.

Things go up and things go down. A remarkably prescient view /s.

This article reads like "collapse of complex societies"[1] for idiots. Where lots of young people with PhDs figure in these speculations is hard to say (I mean, this is small of any elite overreach). It's sad how many poor quality articles like this one have been popping up here lately. I suggest the original Tainter as well as Jared Diamond's Collapse, at the least.

Edit: I should also note The Economist may well be misstating Mr Turchin's on elites but this is the linked article.

[1] https://en.wikipedia.org/wiki/Joseph_Tainter