The Collapse
The immediate fate of liberal capitalism, which plunges into a free fall towards the implosion of a black hole boosted by the constant growth of a systemic crisis and that is inevitably attracted by the sucking maelstrom of an ominous global collapse, shows fascinating similarities with the sudden extinction of the moai culture that took place in Easter Island. Of course, I am talking about the famous giant statues (around 900 in total) that tourists admire in a lost, arid and almost deserted moor thousands of kilometers away from the coast. Well, the impressive moai were built with ceremonial purposes by a blooming civilization that embarked in a process of accelerated growth with a peaking zenith that was reached during the 17th century of our era, in order to fall from there (1680) into a whirlpool of collective self-destruction that was the end of the islander civilization just before the arrival of European colonizers.
The best story of this cultural tragedy is included in the book Collapse (2005) by the evolutionist geographer Jared Diamond, which uses it as a pedagogical illustration (among other analogue extinctions, such as the Mayas of Yucatan or the Vikings in Greenland) to explain how the intensification of the competition for resources can lead to the collective suicide of the competitors. In order to do this, Diamond uses the so-called “tragedy of the commons” proposed by biologist Russell Hardin in 1968, which predicts the exhaustion of ecosystems from a certain threshold of exploitation. But the originality of Diamond resides in that, despite being a well known ecologist, he deducts that the ultimate cause of the collapse is not biological, but social. What makes a system unfeasible and forces the collapse is not the lack of resources (as in the Malthusian argument), but overexploitation, and the effects can only derive from escalated social competition. The diverse clans of Easter Island embarked in a collective game of ostentatious prestige, where everybody strived to beat the others in the construction of the moai. For this purpose, they did not hesitate to exhaust the forest where they extracted the wood in order to transport the stones used. Upon the scarcity of wood, they stopped building the canoes used for fishing, their main source of protein. Nonetheless, they continued building taller and taller moai until they could not do it anymore. Then there was a coup, civil war exploded and Easter Island bled until the end.
The parallel I propose with the current drift of the global crisis is transparent: The moai are the speculative bubbles erected by our state and entrepreneurial clans. They are moai built on financial and real state speculation that, upon an intensified competition, will not take long to exhaust the productive resources of our real economy.
Don’t tell me it is not depressing to see those empty cities of the Mediterranean coast (Manilva) or the outskirts of Madrid (Cesena); they are authentic deserted moai abandoned after the burst of the housing bubble. Just like the islanders who got into debt and exhausted their sources of livelihood in order to build the moai, our islanders of liberal capitalism have done the same in order to build their leveraged speculative pyramids. They have sucked on public soil, solvent credits, productive labor and the entrepreneurial web, leading the system to a collective collapse.
How can we stop and reverse this self-destructive drift?
What escape scenarios can we imagine for this constant escalation of the global crisis? Jared Diamond points out that when we enter a spiral of intensified competition, there are only two ways of avoiding the collective collapse: the self-limitation of the competitors or the rationing imposed by public powers. These two solutions are equal to the self regulation of markets and the Keynesian intervention by the State. But one excludes the other, so we still do not know which one will prevail in the long term. So let's make some science fiction and speculate about the four possible ways out of the crisis.
The first one is the liberal escape proposed by global financial powers, backed by international organizations such as the UN, the IMF or the OECD: an intense crisis that will last only 2 or 3 years until the deleveraging process is completed, with very high social costs, after which a slow recuperation will take place that will give place to a new self-sustained, stable growth process, eventually subject to open new business sources that can become moai (pyramids or speculative bubbles). This cyclic scenario means not changing the current market system, where the Keynesian State is merely decorative, servile and temporary, but whose exceptional intervention will restore the absolute domination of the global market. The chances of this escape are uncertain because the light Keynesianism “Barack Obama style" seems to be destined to fail, since free markets cannot be governed as they are a spontaneous order. The invisible hand of the State can regulate them, changing their incentive structure, but it cannot impose any executive regulations. When it tries to do so, the invisible hand of the market reacts, generating a spontaneous mess like the current one.
Thus, we come to the second predictable way out of the crisis, which is the definite collapse of the markets after the failure of light Keynesianism, forcing the State to a hardcore intervention through massive bank and bankrupt enterprise nationalization and the possible closing of stock markets. This escape implies the suppression or the suspension of free markets, which will be replaced by a mercantile protectionism (Colbertism) of Chinese style and Prussian inspiration. However, with this, the virtuality of economic cycles will be annulled, and the crisis will stop being an inflection point between recessive and ascendant phases in order to become a state of stable stagnation in the shape of an L (descendant falling branch followed by a long lasting lateral depression).
But if the depression perpetuates itself, the state or protectionist escape will aggravate the climate of social conflict. Then, a third exit will be possible, and
maybe probable, which can be violent, warlike or even revolutionary. In the end, the collapse of Easter Island became a bloodbath. The same thing occurred with the economic depression of the 1930s, which ended with the decline of the protectionist gods.
Let’s hope that historic memory can teach us to prevent the worst and allows us to learn how to pursue a less self-destructive way out. What could it be? There is a fourth escape, at least a theoretical one. As improbable as it may be, it is to convert the current crisis into a real systemic crisis eventually capable of giving birth to a new model of society. A sustainable society no longer based on the neoliberal capitalism predator, which from cycle to cycle and from bubble to bubble is leading the planet to an imminent collapse like the one in Easter Island, which is now massively amplified to a global scale.