After 30 years this remains one of the most celebrated books in the history of the social sciences, and deservedly so. The “Law of Diminishing Returns” applies not just in conventional economics, but to societies and civilizations. In one way or another, it is a driving factor in their survival or collapse.
Even more to the point, Tainter cites the critical need for a “new energy subsidy” to revive a civilization faced with an economy that can no longer support the “cumulative organizational complexity” that it has become used to. All too often, collapse to a lower level of complexity becomes the only practical alternative, given institutional rigidity and the vested interests of the ruling class. But if there is a nearby “peer” country, that country may move in to engineer a regime change, forestalling collapse. Given today’s global economy, these kinds of takeovers will likely become more common, forestalling a global collapse.
The big problem today is that, given a bloated global population and a societal superstructure of extreme complexity, renewable energy does seem up to the task. Successful development of nuclear fusion certainly would, but it always appears to be 50 years in the future. Many of us expect that the diminishing returns on fossil fuels will become much more prominent during the next decade or two, not just episodic. This will certainly help mitigate climate change, but horrendous cost if it drove us toward global economic collapse. This is why Tainter’s book remains so timely.
One factor in collapse that needs more elaboration is what Tainter calls “legitimacy”. In particular, the decline of legitimacy, so evident today, often comes from escalating inequality. That is, economic returns may still be increasing but most of those returns accrue to the ruling classes, leaving the workings classes ripe for rebellion. Or if returns are stagnant or decreasing, the peasants or workers are forced to take the biggest hit, as in the fall of the Roman empire. Tainter downplays this “conflict theory” as an explanation of collapse. However, it does play a key role in the dynamics of regime failure, as Peter Turchin documents so well in his work on the rise and fall of empires, building off Ibn Khaldun’s concept of “asabiya”, or collective solidarity. Thus, in theory at least, a regime or civilization could avoid collapse if it could be managed by a collective downsizing, without loss of asabiya or legitimacy.
Has such “we’re all in this together” downsizing ever this ever happened before? Certainly, according to Piketty’s work on the returns demanded by capital, this would appear to be virtually impossible for a capitalist economy. However, there is a possible exception: Universal ownership of most of the profits of key enterprises and resources, or at least universal redistribution of the benefits of such ownership. Or is this such a superhuman fantasy that we are doomed?
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