Peter Turchin's "End Times"; Some Comments

Friday, 26 July 2024, 10:42 am
Opinion: Keith Rankin

An important (and widely commented on) book published last year is End Times: Elites, Counter-Elites, and the Path of Political Disintegration, by Perer Turchin. Before reading this book I read his 2007 book War and Peace and War (see my 30 Jan 2024 article Asabiyya), Ages of Discord (2016, an application of Turchin and colleagues' cliodynamic model to the history of the United States), and the Kindle summary of Secular Cycles (2009).

Despite the millenarian undertones suggested by the book's primary title, this is a product of the application of statistical analysis to macrohistory; the content is mainly about United States' history, but the model may be applied to other nation states.

The model of sweeping history was originally developed to explain big change in 'agrarian civilisations' of the historical world; the 'rise-and-fall of civilisation' kind of history that was more in vogue in the nineteenth than in the twentieth century. It is an application of the deductive scientific method (think of Karl Popper's Logic of Scientific Discovery; 1959 in English, 1934 in German), which uses a sparse theoretical 'model' and tests the predictions of that model using whatever relevant data his team are able to find. For historical work, Turchin has had to make substantial use of proxy data, because rarely is the required data for a historical period actually collected in that period. Turchin's project is a heroic endeavour, but nevertheless very effective.

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The essence of the structural-dynamic model is the alternation of integrative and disintegrative long-phases of nation's histories. And, from his earlier work, there's a strong sense that civilisations go through three of four of these alternations before civilisational collapse finally takes place.

If we apply the model to various liberal western countries, we see similar patterns, though the historical turning-points – the short-periods in which one long-phase gives way to another – are rarely identical. Nevertheless, we can apply the model to western civilisation in general, though with slightly different transitions from one phase to another.

The central drivers of the model are demographic and economic; changing levels of inequality, and a kind of Malthusian population struggle between elites, aspirant elites, and counter-elites. The central dynamic of his model is what he calls the 'wealth pump'; though it’s a dynamic which uses 'wealth' in its financial sense rather than its economic sense. (Economists would call economic growth a 'wealth pump', and see growth as an equalising rather than an unequalising process; for Turchin, the wealth pump represents a transfer of financial wealth from the poor to the rich.)

Key phrases in Turchin's model are 'popular immiseration', 'elite overproduction', 'ruling class', and 'counter-elites'. It's essentially a model of class war, but not a Marxist model.

225 years of United States' structural-dynamics

We may start with the United States after its late-eighteenth-century revolution; this start should be familiar to everyone who attended and absorbed the story of Hamilton (the Musical), which had a successful theatrical season in New Zealand in 2023.

We may date the United States's first integrative phase from the 1790s. The first part of the phase – from the 1790s to the 1820s was characterised by low levels of class inequality, and hence a period of political consensus in which elite incomes were not excessive relative to the incomes of free workers. (While Turchin doesn't shy away from the issue of slavery, this is understood as a 'given' and hence not a source of division between the elites and the free populace of an America dominated by the South.)

Things change in the late 1820s, when class-based divisions start to appear, and new elites begin to assert themselves. This is the second part of the integrative phase, the formation of elites during a period nevertheless of general economic growth. The disintegrative phase begins with the Civil War in the early 1860s, and continues through the Gilded Age into the early 20th century.

Population growth is the principal driver of phase-change. The 'Malthusian' argument is that elite-opportunities grow arithmetically whereas elite-aspirants grow geometrically (a less emotive word than 'exponentially').

The disintegrative phase begins with 'popular immiseration' (essentially inequality arising from the spoils of economic growth being almost entirely captured by the elites rather than by the various working classes); and when frustrated elite-aspirants form counter-elites; the context being that almost all successful revolutions in history have been instigated by counter-elites rather than by an immiserated populace.

The shift to a new integrative phase may be very violent, or may take a more enlightened form. Turchin argues that the transition happened in the United States in the first three decades of the twentieth century; starting with the middle-class 'progressive movement' (which, incidentally, drew inspiration from changes happening in New Zealand in the 1890s and 1900s) which peaked under the first President Roosevelt, and ending with the Great Depression and the 'New Deal' instigated by a second President Roosevelt. While there was much political violence in those three decades, the revolution that took place was nevertheless as peaceful as a class revolution can be.

The first and most important (relatively egalitarian) stage of the next integrative phase can be summarised as 1930s' New Deal to 1960s' Great Society; with the rumblings of next phase change beginning in the late 1970s, and coming to fruition in the 1980s under the presidency of Ronald Reagan (ie Reaganomics).

The period from the 1980s to the 2000s are the period of growth characterised by elite-expansion and growing elite-rivalry. In that sense, the Global Financial Crisis comes at the same stage of the secular cycle as the 1860s' Civil War. And the 2010s' formed an increasingly tense period in which the new counter-elites emerged; in the United States these counter-elites may be regarded as the 'intellectual-backers' of 'Trump's mob', of Donald Trump's MAGA transition of the Republican Party into a nationalist party pitching to the populace. Here the populace are the precarious labour class, the precarious small business class, and – increasingly – the underclass which is overrepresented by the African-American descendants of the former slave population. So, Turchin's model points to the United States at present as being at the cusp of a revolution that could turn violent.

While Turchin emphasises the particular control of the 'ruling-class elite', the 'one-percenters', he also notes the significance of the new elites, the 'ten-percenters'. Indeed, we may see that the present politicisation in the west as the 'liberal' ten-percenters clashing against a coalition of the 'very rich' and the new immiserated poor.

In New Zealand, we can see clear parallels with these historical dynamics. We note that the last ten years in New Zealand saw a substantial expansion of elites, especially what might be called 'progressive elites'. Since the 2023 election, however, there has been a precipitous decline in elite income-earning positions; the result is an increasing number of thwarted elites, noting that successful violent revolutions in history have been masterminded by counter-elites.

Some nuance

Peter Turchin's structural model is powerful in its simplicity. Other factors, largely omitted from Turchin's discussion, may actually strengthen his conclusion; a suggestion that the whole of western civilisation may be approaching an explicable, and likely violent, turning point.

The 'wealth pump' has created huge amounts of poverty amidst an unsustainable plenty. And that sheer unsustainability of the elite wealth machine has informed one component of the new and young counter-elite; the Green movement, which is forming youthful alliances around geopolitical human rights, as epitomised by the persecution of Palestine and a growing awareness of its history.

So, the first of the three extra points to emphasise is the clash of elites and new counter-elites as a generational conflict. This applies as a more general feature of youth-immiseration; most deeply felt by the frustrated adult children of the expanded elites of the 1990s, 2000s, and 2010s. Much of their frustration is not just Green idealism and international social justice; it's about the practical realities of finding houses to live in, and, for at least the heterosexual young, to at least contemplate the possibility of family formation.

Turchin's model is based on normal demographic growth. Today's situation is supercharged by today's exceptional demographics, which include very low first-world fertility, aging bulge generations; and economic pressures towards international economic migration, comparable with the pressures many of our ancestors faced in their homelands, but with the cruellest of nationalist barriers in place to suppress such migration and despite labour shortages in the recipient countries.

As part of his model which emphasises population growth and wages, Turchin notes immigration policy as a factor that reinforces the domestic wealth-pump. The elites favour immigration, he argues, to keep wages low.

My second extra point is to extend the definition of 'elite'. Turchin uses an essentially financial definition; that being elite is a defined principally by income and wealth, noting that wealth gives a person or a clique power over others (as in the ruling one percenters) or at least (for the ten-percenters) enough power to resist having one's life choices determined by others.

I would additionally define elites as subscribers to the dominant social narratives, and to a lesser extent subscription to prominent counter-narratives. Thus, to be an elite you have to conform to one or other social narrative; indeed, that's how elite careers are structured. It means that to have a nice house and to have a family life with a sense of economic security, you may have to give up a degree of intellectual autonomy.

My third extra point is the role of interest rates in supercharging Turchin's wealth pump. (Refer to my Is Inflation Really Too High? Scoop 23 July 2024, and The Truth in New Zealand about Price Inflation and Interest Rates, Evening Report 22 July 2024.)

In Turchin's model, the driving force is population growth, creating excess labour supply, meaning that real hourly wages set in competitive markets fall, or they don't rise as the economy grows. While the same applies at the elite level, people who want to get ahead in this kind of labour market look to transition from the ranks to the elites. So long as this transitioning – 'getting ahead' – is the vital dynamic, then the nation remains in its integrative phase.

The wealth pump, at least in the recent phases of the cycle, has predicated on positive real interest rates. These are the above-inflation interest rates which enable compound interest to do its 'magic'; a financial alchemy which is in reality a transfer from productive poor people (workers, small businesses) to rich people many of whom must be classed as unproductive by any sensible definition of that word. Thus, the wealth pump may be supercharged by high interest rate policies. (Balanced budget low tax fiscal policies serve a similar purpose, leaving the private elites with ever more surplus wealth.)

This chart (from the Evening Report article) shows this 'wealth pump' norm as it was in New Zealand during the years 2000 to 2008. We can understand recent high interest rates as an attempt by the financial elites to reestablish the interest rate boost to the wealth transfer mechanism identified by Turchin.

(We may note that, when the wealth pump is turbo-charged by high interest rates, the structural-cycles pass more quickly. Turchin cites another example of an accelerated cycle; polygamous ruling classes, such as in late-medieval Egypt, which bred elite-aspirants at a much too great a pace to find elite positions for them.)

The main impact of sustained positive real rates of interest is popular immiseration; keeping the poor poor, and expanding the ranks of the poor as increasing numbers of businesses fail.

Ukraine

Peter Turchin is an American of Russian heritage. Included in his argument is an evaluation of 'plutocracies' as a somewhat exceptional form of nation state. In this sense, he is acquiescing in the notion that the United States is an exceptional state; a plutocracy – ruled by the rich (especially the super-rich) for the rich – rather than an administrative or military bureaucracy.

Turchin identifies Russia in the 1990s as an unstable plutocracy, which reverted in the 2000s to a militarised bureaucracy. He shows that Belarus, Russia's ally, was never a plutocracy. And he argues that Ukraine continued to be a Russian-style plutocracy, because it never had its Putin moment. (We in New Zealand may remember that Russia's Putin-moment happened in 1999; indeed Vladimir Putin left the Auckland APEC convention early, as the Boris Yeltsin regime was falling as Yeltsin himself faced his own mortality.)

In an insightful few pages, Peter Turchin argues that Ukraine continues to be one of the few genuine plutocracies in the world, and that Ukrainian domestic history this century has essentially been one of clashing oligarchs, with a particular demarcation between that country's eastern and western divisions. It is this plutocratic alliance that particularly attracts United States' interest, he argues; and one could argue that the Biden family's former involvements in Ukraine reflect that political love affair. (Hunter Biden does remind me of a character from HBO's award-winning drama, Succession.)

Conclusion

The West may or may not be poised on the cusp of a violent revolution, driven by counter-elites; but I'm sure it's on the cusp of some turning point. Too much that is happening in the United States is also happening in the other countries of the western 'first-world' alliance. Turchin expects that the world will pass through a revolutionary turning-point by 2040; either renewal or collapse.

Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.

Keith Rankin

Political Economist, Scoop Columnist

Keith Rankin taught economics at Unitec in Mt Albert since 1999. An economic historian by training, his research has included an analysis of labour supply in the Great Depression of the 1930s, and has included estimates of New Zealand's GNP going back to the 1850s.

Keith believes that many of the economic issues that beguile us cannot be understood by relying on the orthodox interpretations of our social science disciplines. Keith favours a critical approach that emphasises new perspectives rather than simply opposing those practices and policies that we don't like.

Keith retired in 2020 and lives with his family in Glen Eden, Auckland.