Turchin’s model applies to China probably as well as to America. The relative immiseration of the median class has gone on for the past forty years”. Seriously?
58% of Americans are living paycheck to paycheck, CNBC says and their median household net worth is $97,300*, while Chinese urban household net worth is $363,536 PPP, thanks to 96% home ownership and $42 MRIs.
By 2035 there will be 1 billion middle class Chinese, up from 600 million today. By 2049, everyone will be what today we call 'middle class'.
You have completely missed the point of BM's use of the phrase "relative immiseration of the median class." As BM explicitly states, this does not mean that the median class has become poorer, but rather that it has been greatly outdistanced by the really rich. This has most certainly happened in China as well as in America. Both countries have significant billionaires classes - their net worth far surpasses your cited $363K PPP for Chinese urban net worth.
On the other hand, despite China's much bigger, faster-growing economy, it has far fewer billionaires than the US, 96% of its people own their homes, and real poverty has disappeared. That will slam their current 0.38 Gini coefficient when it hits.
Besides, the best way for billionaires to stay rich is to invest in the government's Five Year Plans, foremost amongst which is reducing the 3,000-year-old income gap between coastal and inland provinces.
May I draw your attention to: Bas van Bavel (2019) Power concentration and state capture: Insights from history on consequences of market dominance for inequality and environmental calamities. (Spotlight 1.1 in UNDP Human Development Report 2019). (Link: https://hdr.undp.org/system/files/documents//hdr2019pdf.pdf ).
van Bavel uses two axes: inequalty and 'well-being' and plots historic development of market societies as a circular movement in this space. Six stages can be identified:
1. Markets emerge in an equitable setting and grow by creation of institutions that secure easy access to broad groups.
2. The opportunities of market exchange push up economic growth and well-being as long as the fruits of growth are fairly evenly distributed.
3. As markets become dominant - especially the markets for land, labour and capital - inequality grows in a slow process as ownership of land and capital concentrates.
4. As inequality grow, economic growth initially continues, but to a lesser degree get translated into broad well-being. Purchasing power stagnates for large parts of the population. Shrinking demand and declining profitability shift investments to financial markets away from productive sectors.
5. Wealth is instead used to acquire political leverage through patronage and buying political positions.
Through their dominance in financial markets and their role as creditors of the state the wealthy acquire key positions in the fiscal regime,bureaucracy and finance.
6. Over time markets become less open and equitable, through both large wealth owners’
economic weight and their ability to skew the institutional organization. Productive investments declines and the economy stagnates. Economic inequality rises further, feeding into growing political inequity and social unrest, resulting in coercion, rebellion and breakdown.
After breakdown the process starts to build up anew from a position
of more equal distribution of wealth and power.
All considered van Bavel's model has at least these variables: inequality, well-being, market formation and financialization. I think this puts a little flesh on your one-variable discussion of Turchin.
We are obviously at 'End Times', but will soon be at 'Start Times'.
From a historical point of view, Mr. Turchin's model doesn't survive the empirical test: there's no correlation between inequality and revolutions.
The only scenario I can imagine his model making some sense is if we consider History as starting in 1945. The "postwar miracle" era (1945-1975) was an age of historically low inequality in some places. But that's it.
It is not true that the American system is long-lived. From a rigorous, archaeological point of view, we're already in USA III, that is, the USA was already destroyed and rebuilt two times. The first USA was the revolutionary USA (1776-1861); the second USA was republican USA (1865-1929) [between 1861 and 1865, there was an interregnum between the two phases, that is, the destruction of revolutionary USA, called the War of Secession]; the third phase is the empire USA (1929-present), of which only the period that started in 1945 can be considered to be the phase of the "world empire". If we somehow revived George Washington, he would not be able to recognize the USA as his country.
So, the USA as we know it was actually only created in 1945, so its political system is just 78 years old.
However, it is true the USA almost certainly won't fall like the USSR. The key here is that capitalism is a much more decentralized system than Soviet socialism. In the Soviet system, the CPSU was everything: once it crumbled, the USSR automatically crumbled. You cannot dissolve the USA -- or any other capitalist nation-state -- with a belovezhskaya agreement. The most likely scenario of the fall of the USA is the Roman one: a slow but inexorable decline through growing empoverishment, depopulation and bloody civil wars, headed by local billionaires (chieftains) in a fragmented territory.
Thanks for the review. Adding this one to my list to read. There has been a lot of research recently showing that many negative effects come from inequality on the personal level as well (mental health, community relationships, physical health, etc). At this point I don't know how anyone can justify the neoliberal model when it is clearly shown to increase inequality. I don't know what exactly should replace it, but it seems like a focus on improving the conditions of the poor and working-class at the expense of a portion of the massive wealth of the 1% would be a good start.
A questions for Branko: for all the years of work Turchin has put into the modelling and amassing the data, did you think his analysis was actually that different from Theda Skocpol or Jack Goldstone?
Peter Turchin's model/theory/data does indeed possess quite a bit of intellectual prowess.
Over 40% of Americans can not deal with a crisis that costs more the $400.
Half of American households earn $49,000 - over less.
Half of Americans either have NO healthcare insurance, or their insurance is essentially a nonfactor in their lives due to the limitations of the policy.
Depending on one's interpretation, half of Americans are poor - to one degree or another.
Of course, being poor in America is quite different than being poor in Africa, Asia and South America. Nevertheless, the American Dream is a completely irrelevant concept to half of US citizens.
Niall Ferguson wrote many years ago, that history has shown that when empires collapse - it happens much quicker than most people realize. It just goes -- rather quickly.
America is in debt. Serious debt. Inescapable debt.
Its roads, bridges and airports are aging, crumbling, and deteriorating at an alarming degree.
America has lost control of its finances.
The elite are getting richer by the day. The Middle Class has declined rather dramatically.
There are not enough quality jobs produced by the American economy.
As a consequence, millions of young people have dropped out of college, or have decided not to attend. They are right to ask, 'What's the point?'
Our political leadership is very weak. Like the Titanic, everyone is trying to find a means to survive now that the ship of state is beginning to list and sink.
Nevertheless, we can save ourselves. But it will take a revolution of thought and action.
As of right now, we are doomed. The unbridled greed of a few -- may very well doom us all.
Wars, Climate Change, Inequality, a diminishing access to space, overpopulation, and a growing and relentless wave of migration around the world signals that a harsh and bitter future awaits us all.
It is not a stealth-like crisis. We can see it. Sense it. Smell it. Taste it. It's like an oncoming tsunami.
Yet, we are frozen. By fear. By inaction. By indecision. What the hell do we do?
This dystopian reality is fast approaching the people of this planet. But, we can turn it around.
However, from what I have witnessed so far, we are in big trouble. Damage will occur.
Whether it be direct, or collateral, but damage will occur due to our self-induced paralysis.
Peter Turchin's data and analysis may not be completely correct. Not perfect. But it is a warning!
Folks, we are in trouble. History is often ignored. Ridiculed. Dismissed. Deemed unworthy of our time.
Yet, it looms just over the horizon. It is foreboding and it is unmerciful to those who disrespect it.
Peter Turchin's work reminds us that there are much more powerful forces at work than ourselves.
If you start charging for access to this site, the paywall would prevent my readers from seeing it -- so I will post many less links to it on my site: www.inequalityink.org Ctr on Capital & Social Equity. Need to choose between leadership and $$.
Thanks for your book recommendations. I hope Turchin's model is compatible with a future in which Chinese, American, Russian, and other political systems can thrive equally. Cheers.
Nice review, certainly looks worth picking up- I've been meaning to familiarise myself more with Turchin's work for a while.
By the way, any chance a new book, ' Mute Compulsion:A Marxist Theory of the Economic Power of Capital' by Søren Mau has come across your radar? It looks very impressive and seems to have some interesting insights on how our system continues to reproduce and sustain itself despite all manner of shocks.
Maybe an interesting one for your next review? I find your takes on Marx and Marxism interesting so would be neat to hear your take on this book
the biggest fallacy of the works like this is that they use a country as the universal boundary of the analysis. at least, since the fall of the Berlin Wall, the national bureaucracies and business leaders and 'intellectuals' are not restricted by the national borders. For any international conflict, there is global approval for it. Urk-Rus war happened <-- Libor shoot from almost 1% to 6% (the war is just the refuge of the interest rate growth). Internal violent conflicts, it is a consequence of the unfinished business of nation-building. Even the UK has not finished this business albeit it has been subsidizing Scotland and the Northern Ireland for decades. The bottom line, there is the global circle that decides who gets what. The irony is that this circle is dominated by americans. They want to scale up their american way of capitalism to the rest of the world. For which, there is an opposition led by RUS and CHN leadership, who are morally socialist. Unfortunately, this leadership style in RUS and CHN is like dinosaurs - doomed to extinction. Capitalist-loving swine played a big role in this.
Turchin’s model applies to China probably as well as to America. The relative immiseration of the median class has gone on for the past forty years”. Seriously?
58% of Americans are living paycheck to paycheck, CNBC says and their median household net worth is $97,300*, while Chinese urban household net worth is $363,536 PPP, thanks to 96% home ownership and $42 MRIs.
By 2035 there will be 1 billion middle class Chinese, up from 600 million today. By 2049, everyone will be what today we call 'middle class'.
*Federal Reserve Consumer Finance Survey
You have completely missed the point of BM's use of the phrase "relative immiseration of the median class." As BM explicitly states, this does not mean that the median class has become poorer, but rather that it has been greatly outdistanced by the really rich. This has most certainly happened in China as well as in America. Both countries have significant billionaires classes - their net worth far surpasses your cited $363K PPP for Chinese urban net worth.
You're right. Thank you.
On the other hand, despite China's much bigger, faster-growing economy, it has far fewer billionaires than the US, 96% of its people own their homes, and real poverty has disappeared. That will slam their current 0.38 Gini coefficient when it hits.
Besides, the best way for billionaires to stay rich is to invest in the government's Five Year Plans, foremost amongst which is reducing the 3,000-year-old income gap between coastal and inland provinces.
We shall see, I guess.
"Turchin’s model has one variable: inequality".
May I draw your attention to: Bas van Bavel (2019) Power concentration and state capture: Insights from history on consequences of market dominance for inequality and environmental calamities. (Spotlight 1.1 in UNDP Human Development Report 2019). (Link: https://hdr.undp.org/system/files/documents//hdr2019pdf.pdf ).
van Bavel uses two axes: inequalty and 'well-being' and plots historic development of market societies as a circular movement in this space. Six stages can be identified:
1. Markets emerge in an equitable setting and grow by creation of institutions that secure easy access to broad groups.
2. The opportunities of market exchange push up economic growth and well-being as long as the fruits of growth are fairly evenly distributed.
3. As markets become dominant - especially the markets for land, labour and capital - inequality grows in a slow process as ownership of land and capital concentrates.
4. As inequality grow, economic growth initially continues, but to a lesser degree get translated into broad well-being. Purchasing power stagnates for large parts of the population. Shrinking demand and declining profitability shift investments to financial markets away from productive sectors.
5. Wealth is instead used to acquire political leverage through patronage and buying political positions.
Through their dominance in financial markets and their role as creditors of the state the wealthy acquire key positions in the fiscal regime,bureaucracy and finance.
6. Over time markets become less open and equitable, through both large wealth owners’
economic weight and their ability to skew the institutional organization. Productive investments declines and the economy stagnates. Economic inequality rises further, feeding into growing political inequity and social unrest, resulting in coercion, rebellion and breakdown.
After breakdown the process starts to build up anew from a position
of more equal distribution of wealth and power.
All considered van Bavel's model has at least these variables: inequality, well-being, market formation and financialization. I think this puts a little flesh on your one-variable discussion of Turchin.
We are obviously at 'End Times', but will soon be at 'Start Times'.
From a historical point of view, Mr. Turchin's model doesn't survive the empirical test: there's no correlation between inequality and revolutions.
The only scenario I can imagine his model making some sense is if we consider History as starting in 1945. The "postwar miracle" era (1945-1975) was an age of historically low inequality in some places. But that's it.
It is not true that the American system is long-lived. From a rigorous, archaeological point of view, we're already in USA III, that is, the USA was already destroyed and rebuilt two times. The first USA was the revolutionary USA (1776-1861); the second USA was republican USA (1865-1929) [between 1861 and 1865, there was an interregnum between the two phases, that is, the destruction of revolutionary USA, called the War of Secession]; the third phase is the empire USA (1929-present), of which only the period that started in 1945 can be considered to be the phase of the "world empire". If we somehow revived George Washington, he would not be able to recognize the USA as his country.
So, the USA as we know it was actually only created in 1945, so its political system is just 78 years old.
However, it is true the USA almost certainly won't fall like the USSR. The key here is that capitalism is a much more decentralized system than Soviet socialism. In the Soviet system, the CPSU was everything: once it crumbled, the USSR automatically crumbled. You cannot dissolve the USA -- or any other capitalist nation-state -- with a belovezhskaya agreement. The most likely scenario of the fall of the USA is the Roman one: a slow but inexorable decline through growing empoverishment, depopulation and bloody civil wars, headed by local billionaires (chieftains) in a fragmented territory.
You're responding to your interpretation of Branko's review, not the book. I suggest you read the book, first.
Thanks for the review. Adding this one to my list to read. There has been a lot of research recently showing that many negative effects come from inequality on the personal level as well (mental health, community relationships, physical health, etc). At this point I don't know how anyone can justify the neoliberal model when it is clearly shown to increase inequality. I don't know what exactly should replace it, but it seems like a focus on improving the conditions of the poor and working-class at the expense of a portion of the massive wealth of the 1% would be a good start.
A questions for Branko: for all the years of work Turchin has put into the modelling and amassing the data, did you think his analysis was actually that different from Theda Skocpol or Jack Goldstone?
Peter Turchin's model/theory/data does indeed possess quite a bit of intellectual prowess.
Over 40% of Americans can not deal with a crisis that costs more the $400.
Half of American households earn $49,000 - over less.
Half of Americans either have NO healthcare insurance, or their insurance is essentially a nonfactor in their lives due to the limitations of the policy.
Depending on one's interpretation, half of Americans are poor - to one degree or another.
Of course, being poor in America is quite different than being poor in Africa, Asia and South America. Nevertheless, the American Dream is a completely irrelevant concept to half of US citizens.
Niall Ferguson wrote many years ago, that history has shown that when empires collapse - it happens much quicker than most people realize. It just goes -- rather quickly.
America is in debt. Serious debt. Inescapable debt.
Its roads, bridges and airports are aging, crumbling, and deteriorating at an alarming degree.
America has lost control of its finances.
The elite are getting richer by the day. The Middle Class has declined rather dramatically.
There are not enough quality jobs produced by the American economy.
As a consequence, millions of young people have dropped out of college, or have decided not to attend. They are right to ask, 'What's the point?'
Our political leadership is very weak. Like the Titanic, everyone is trying to find a means to survive now that the ship of state is beginning to list and sink.
Nevertheless, we can save ourselves. But it will take a revolution of thought and action.
As of right now, we are doomed. The unbridled greed of a few -- may very well doom us all.
Wars, Climate Change, Inequality, a diminishing access to space, overpopulation, and a growing and relentless wave of migration around the world signals that a harsh and bitter future awaits us all.
It is not a stealth-like crisis. We can see it. Sense it. Smell it. Taste it. It's like an oncoming tsunami.
Yet, we are frozen. By fear. By inaction. By indecision. What the hell do we do?
This dystopian reality is fast approaching the people of this planet. But, we can turn it around.
However, from what I have witnessed so far, we are in big trouble. Damage will occur.
Whether it be direct, or collateral, but damage will occur due to our self-induced paralysis.
Peter Turchin's data and analysis may not be completely correct. Not perfect. But it is a warning!
Folks, we are in trouble. History is often ignored. Ridiculed. Dismissed. Deemed unworthy of our time.
Yet, it looms just over the horizon. It is foreboding and it is unmerciful to those who disrespect it.
Peter Turchin's work reminds us that there are much more powerful forces at work than ourselves.
If you start charging for access to this site, the paywall would prevent my readers from seeing it -- so I will post many less links to it on my site: www.inequalityink.org Ctr on Capital & Social Equity. Need to choose between leadership and $$.
Excellent review.
Thank you very much for your review and references.
I think the “competing elites “ thesis applies to de Rusia-Ucrania war.
The ultra rich west elites rejects the powerful economic elite that emerge from the post
1990 Rusia , competing for world riches.
They need to destroy this new rival applicants.
War is the ultimate resource to resolve capitalist interest conflicts.
This is a war in the highest level of capitalism.
They need this war.
And ,I think, “more is on the way “.
Thanks for your book recommendations. I hope Turchin's model is compatible with a future in which Chinese, American, Russian, and other political systems can thrive equally. Cheers.
Thank you very much. I'll move that to the top of my long and long suffering reading list.
Nice review, certainly looks worth picking up- I've been meaning to familiarise myself more with Turchin's work for a while.
By the way, any chance a new book, ' Mute Compulsion:A Marxist Theory of the Economic Power of Capital' by Søren Mau has come across your radar? It looks very impressive and seems to have some interesting insights on how our system continues to reproduce and sustain itself despite all manner of shocks.
Maybe an interesting one for your next review? I find your takes on Marx and Marxism interesting so would be neat to hear your take on this book
the biggest fallacy of the works like this is that they use a country as the universal boundary of the analysis. at least, since the fall of the Berlin Wall, the national bureaucracies and business leaders and 'intellectuals' are not restricted by the national borders. For any international conflict, there is global approval for it. Urk-Rus war happened <-- Libor shoot from almost 1% to 6% (the war is just the refuge of the interest rate growth). Internal violent conflicts, it is a consequence of the unfinished business of nation-building. Even the UK has not finished this business albeit it has been subsidizing Scotland and the Northern Ireland for decades. The bottom line, there is the global circle that decides who gets what. The irony is that this circle is dominated by americans. They want to scale up their american way of capitalism to the rest of the world. For which, there is an opposition led by RUS and CHN leadership, who are morally socialist. Unfortunately, this leadership style in RUS and CHN is like dinosaurs - doomed to extinction. Capitalist-loving swine played a big role in this.
I urge you to read the book before you talk about its "biggest fallacy".