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Notes on the Polycrisis
The limits of social science
Polycrisis is one of those sexy words that you know will take-off as soon as you hear them. But what is the meat on the bone? Is it empty wordplay that is at risk of becoming “a ridiculed meme by next year” as some on the sharper corners of the New American Left seem to think?
In what follows, I will spell out the logic of the polycrisis as I see it. Our point of departure will be the social scientific view that sees the polycrisis as a wake-up call for siloed technocratic elites to peer out of the silos at the interaction term. This was nicely spelled out by Martin Wolf, the resident adult of our world.
The present conjuncture features, Wolf writes, “an inflation shock that emanates from the disruptions caused by a pandemic, the policy responses to that pandemic and an energy shock caused by a war,” a war that is itself due to “the breakdown in relations among great powers”;
a crisis of global macroeconomic stability due to the sudden revival of hard-currency monetary cycles to fight said inflation; a crisis of “political stability in many high-income democracies”; and, supervising this ensemble of crises, the meta-crisis of global heating.
These crises are irreducibly codependent. That’s why I think there is much to commend Zoltan Pozsar’s feedback loops between geopolitics, economics and finance. Indeed, none of this is unanticipated. The point is that our traditional arrangement of siloed expertise is no longer sufficient.
It is indeed convenient to think about the world in intellectual silos, focusing in turn on macroeconomics, finance, politics, social change, politics, disease and the environment, to the exclusion of the others. In a reasonably stable world, this may even work well. The alternative of thinking about the interactions among these aspects of experience is also too hard. But sometimes, as now, it becomes inescapable.
Martin Wolf. Financial Times, November 29, 2022.
This “polycrisis as a social scientific wake-up call,” says simply, “LOOK at the interaction term!” It has much to recommend it. We’ll soon get to what this reference frame leaves out. But we must acknowledge the power of this critique of our present arrangements.
The climate crisis is the meta-crisis that undergirds the polycrisis. Without the climate emergency, we wouldn’t be talking about the proliferation and interaction of multiple crises in the sense we are. Let me illustrate with the concrete example of the reinsurance business.
Reinsurers are basically giant pools of capital that agree to absorb catastrophe losses from the insurers in exchange for ceded premium. This allows the insurers to compete for market share without worrying too much about the buildup of risks on their balance sheets. This is what allows you to buy insurance on your house or car cheaply, quickly, and rather effortlessly.
In an earlier life, I was a reinsurance pricing actuary. Here’s what you need to know about that craft: The crucial assumption that allows reinsurance to work is that insured catastrophes are “acts of god” that are basically uncorrelated. So, in any given year, you might have to shell out money for a hurricane here, a flooding there, a wildfire somewhere else. This is a profitable business only as long as the joint probability of all risks for which you’re on the hook is roughly the product of the probability of individual catastrophes—and the product of small fractions is a very small fraction indeed. This crucial assumption is now breaking down.
We expect double-digit percentage premium rate rises for property catastrophe cover in 2023 driven by insured losses of about USD120 billion in 2022 and the increasing frequency and severity of natural catastrophe claims.
Fitch Ratings, November 23, 2022.
The interaction term is visible in Fitch Ratings’ accident-year combined ratios (roughly, the ratio of losses to premiums) for 2022: 86% excluding those related to Russia etc, but a devastating 100% with it. So, the breakdown of relations with Russia is directly impacting the economics of the reinsurance industry.
This particular shock is well within the risk-bearing capacity of reinsurance capital. But the rapidly rising frequency, amplitude and correlation of “natural” catastrophes due to global heating poses an existential risk to the industry. No one knows how long the industry can survive — it is completely exposed to the risk that we will fail to temper global heating. Under the business as usual scenario — which, fraudulent reports to the contrary notwithstanding, remains the baseline scenario — the industry will probably not survive into the second half of the twenty-first century.
OK, so the whole is certainly more than the sum of its parts. And this insight of the polycrisis is now well on its way to being digested by the informed. Now I want to convince you is that there is much more to the polycrisis than the interaction term emphasized by Tooze and Wolf, and contested by normies like Noah Smith. Actually, that’s unfair to Tooze, who is more sensitive to the entanglement of historical processes beyond the interaction term; even if there’s bits missing in Toozian thought too.
The first and most important bit missing is the etiology of the polycrisis. Wolf’s “reasonably stable world” where siloed expertise worked is gone. How did it die? Contra Wolf, this is not a happenstance; it’s not for some random reasons we are now, at this time, in a world where the interaction term has acquired particular force. The reasonably stable world is gone for reasons endogenous to modernity. Specifically, the assassin is Ulrich Beck.
BECK SPELLED OUT the multiple ways in which risk is manufactured at scale by industrial modernity. Until the twentieth century, natural hazards dominated our risk portfolio. They dominated so completely that our entire imaginary — from the Flood to our notions of sacred violence, heroism, and fate —was governed by the threat posed by the gods, so to speak. Writing in the aftermath of Chernobyl, Beck described the transition to a very different kind of world; one where the sacred violence of the gods is replaced by the blind violence of the big machine of industrial modernity.
Although longtermism has been discredited, its dystopias illustrate the transition nicely. Existential risks to our civilization are now all anthropogenic: nuclear war, global heating, anthropogenic pandemics, super AI, etc. We are now the source of risk, not the gods. This is no coincidence, or happenstance. It is the consummation of the deep historical process identified by Beck.
We are now the source of risk, not the gods.
One aspect of this was not emphasized enough by Beck. This is the issue of the time-dilation intrinsic to anthropogenic catastrophic risk. Basically, the issue is that we’re riding a hockey stick of capabilities that is simultaneously a constantly accelerating source of risk production in the sense identified by Beck. What we need, in order to be self-aware historical actors in the polycrisis, is a sense of exponential time. As we ride up the hockey-stick, the weight of our species on the web of life increases exponentially; in effect, accelerating the passage of time. To put it somewhat tongue-in-cheek, a 2% growth rate means bigger and bigger absolute additions to the familiar pie, which, recall, doubles up as catastrophic risk exposure in the Beckian frame.
The social scientific view of the polycrisis is also not satisfactory because the polycrisis is historically-specific. Other civilizations in history have faced and often succumbed to the contemporaneous appearance of multiple crises — as when shocks interacted with fiscal and political instability to destroy state formations and entire civilizations.
We’re in a very different world from that. First, accelerating risk production is intrinsic to our world in ways that was never truly the case in historic civilizations. Second, modernity itself is the motor of this process, so it could not have obtained before the modern breakthrough in the 1870s. Third, there are historically-specific processes that have come to weigh on our collective capacity to deal with the proliferation of risk, in ways that may have their historical counterparts, but which are quite specific to our time.
The intensification of the Beckian process, the evil twin of “Progress”, is aided and abetted by other secular processes. At the top of the listing of missing factors are two closely-connected meta-crises that undermine our capacity to grapple with, and organize to contain, the out-of-control Beckian risk production intrinsic to mature industrial modernity.
THE FIRST is “the crisis of authority in the new millennium” identified by Martin Gurri. He describes “a prodigious bonfire of narratives” that he traces ultimately to the disintermediation of the public sphere. Narratives such as those that worked at midcentury have approximately zero change of success today because of the sudden arrival of something that has never truly existed before in history: an instantly-accessible, hyper-redundant and therefore unkillable, Global Information Sphere.
“Homo informaticus, networked builder and wielder of the information sphere,” Gurri writes, “poses an existential challenge to the legitimacy of every government he encounters.” The crisis of authority goes well beyond regimes, however. All authority is under assault. We’ve seen how the crypto catastrophe, dismissed by Tooze as a tempest in a teapot, has undermined the prestige of everyone involved from Sequoia to the NYTimes and Andrew Ross Sorkin. That’s just one instance of the new fragility of authority.
Nowhere is the crisis of authority as pronounced as among the media intermediaries that monopolized narrative control in the midcentury world.
The graph above (see here) demonstrates that Gurri is wrong to assume mono-causality. It was not simply the disintermediation of the public sphere that is responsible for the crisis of authority. Take the most recent shock, Matt Taibbi’s epic drop yesterday.
It seems likely that Musk invited Taibbi to rummage through the evidence left behind by the executives at Twitter — although that is no reason to doubt Taibbi’s integrity. As it turns out, he did not uncover any evidence that the Biden Team had directly “requested” the platform to censor the Hunter laptop story (phew!).
Of course, we were already aware that they had suppressed the story. What was new in The Twitter Files was the revelation that the censorship extended to sharing the NYPost article via DMs, and the general picture of the work of the “Global Escalations Team” at the platform and their relations with other centers of power and authority. The most chilling tweet in the thread illustrated the businesslike process by which the Biden team instructed the platform to muzzle the speech of private citizens.
The revelation prompted me to propose specific guardrails against this dangerous practice, alongside a more comprehensive solution.
There’s a lot more to come on this. But already it is has all the makings of a comprehensive crisis of authority for the Democrats, the social media platforms, and the media houses that toed the corrupt line. What is important to note is that Matt Taibbi would not have been able to do anything like this before Gurri’s revolution of the public sphere. But at the same time, the story itself wouldn’t exist without the breakdown of elite-mass relations and the attendant class-partisan war—the second secular intensifier of the polycrisis.
TODD ARGUED that the relatively egalitarian world of midcentury was, in the final analysis, due to his second revolution — the universalization of high school education that was first achieved in the postwar United States. His third revolution, the expansion and vulgarization of college education was a necessarily more restricted phenomenon that topped out at a third of the population. This meant that, while the second revolution was democratic and egalitarian, the third revolution vertically polarized society along the diploma divide.
The spread of college education was soon followed by the rise of the prestige schooled meritocracy, which displaced the suburban middle class as the hegemonic class sometime in the Nineties. While Clinton was throwing parties at the White House to celebrate the New Economy, the new hourglass occupational structure was undermining the reproduction of the working-class family; followed soon thereafter, not coincidently, by the rise of Case and Deaton’s ‘deaths of despair’.
Soon after, and more precisely, some thirty-two years after 1968, the Democrats began hemorrhaging working-class supporters: the modern electoral map with blue dots in a sea of red dates to the 2000 election. Fast-forward another twenty years and we arrive at the working-class revolt of 2016, which turns out not to have been a blip after all. The same process continues to unfold after 2016, within a system characterized principally by the absolute rigidity of the class-partisan trench warfare.
The class-partisan war, a symptom of the underlying breakdown of elite-mass relations, is a crucial piece of the polycrisis. For without it we cannot begin to comprehend how the United States has emerged as a source of instability and policy uncertainly on the global stage — most evident in the chips escalation that has put us in a confrontation with adversaries, allies and third-parties alike.
Why is the Biden team pursuing this harebrained idea? What explains the chips escalation is ‘the threat from below’ revealed by 2016. The Biden team’s diagnosis is that Trump’s critique of globalization is correct: even if working-class fortunes cannot be restored by decoupling, at least some sort of social discipline can be achieved in a new cold war. In other words, it is an attempt to solve the crisis of authority and reverse the breakdown of elite-mass relations. Seen in the proper context, it is immediate that this wager cannot work, even as it poisons relations with other countries and empowers a future De Santis administration. Meanwhile, it is sure to worsen the inflation challenge for the foreseeable future. Worse still, it poses a significant risk that the United States will succumb to a delirium of the sort we saw in the post-9/11 years, a source of considerable policy errors and attendant catastrophes.
In sum, the polycrisis is historically-specific to our moment. It involves a lot more than the dangerous interaction of crises on multiple fronts that threaten to engulf policymakers. The polycrisis calls for more than technocrats looking out of their own silos. We must learn to think of the polycrisis as a comprehensive crisis whereby the authority and capacity of policy elites to deal effectively with the ensemble of Beckian crises has itself been undermined by the crisis of authority.