Joe90 in open mike this week posted a reference to an interesting article in New Scientist. The article was written by a mathematician called Peter Turchin.
The essence of his article is that he considers that mathematics can predict events such as the recent constitutional crisis in America that saw the Government being shut down and the world’s economy put on the brink of a disaster as the most powerful nation on earth threatened to default on its debt.
Turchin has constructed a model based on social and economic data that he believes predicts periods of instability and disaster for nations. He has based this model on analysing historical events and he believes that the model is valid. He considers that there have been historical cycles of instability two to three centuries long and that the basic cause of this instability is inequality.
According to the model the basic problem is that from time to time too much power concentrates in the hands of the few and the instability is caused by small elites already with considerable power fighting for more with no thought of the repercussions for society as a whole. Sound familiar?
From the article:
Workers or employees make up the bulk of any society, with a minority of employers constituting the top few per cent of earners. By mathematically modelling historical data, Turchin finds that as population grows, workers start to outnumber available jobs, driving down wages. The wealthy elite then end up with an even greater share of the economic pie, and inequality soars. This is borne out in the US, for example, where average wages have stagnated since the 1970s although gross domestic product has steadily climbed.
This process also creates new avenues – such as increased access to higher education – that allow a few workers to join the elite, swelling their ranks. Eventually this results in what Turchin calls “elite overproduction” – there being more people in the elite than there are top jobs. “Then competition starts to get ugly,” he says.
The richest continue to become richer: as in many complex systems, whether in nature or in society, existing advantage feeds back positively to create yet more. The rest of the elite fight it out, with rival patronage networks battling ever more fiercely. “There are always ideological differences, but elite overproduction explains why competition becomes so bitter, with no one willing to compromise,” Turchin says. This means the squabbling in Congress that precipitated the current shutdown is a symptom of societal forces at work, rather than the primary problem.
In Turchin’s theory, such political acrimony is paralleled by rising discontent among workers left with less and less, and increasing state bankruptcy as spending by the elite who control the government coffers spirals. Ultimately, the situation gets so bad that order cannot be maintained and the state collapses. A new cycle begins.
The next part of the article is really interesting:
Turchin finds that a simple mathematical model, combining economic output per person, the balance of labour demand and supply, and changes in attitudes towards redistributing wealth – the minimum wage level is one proxy for this – generates a curve that exactly matches the change in real wages since 1930, including complex rises and falls since 1980. Such close agreement between model and reality is exceptional in social sciences, says Turchin, and shows that all three factors control the rise of inequality, as predicted.
This theory neatly compliments the work of Richard Wilkinson and Kate Picketton in the book the Spirit Level. If society’s resources are distributed more equitably then Turchin’s calculations suggest that dissent amongst the elites will reduce and periods of instability will lessen.
Now all we need to do is persuade the elites that it is better for everyone, themselves included, if the wealth is shared around a bit more …
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