Odd Lots - 55: Here Are The Signs That A Civilization Is About To Collapse

Episode Date: November 18, 2016

All great civilizations eventually collapse. It's inevitable. So what are the signs of their demise? On the latest edition of Odd Lots, we speak with Arthur Demarest, a professor at Vanderbilt University who specializes in the end of civilization. Demarest is an anthropologist and archaeologist who's most well known for his work on the Mayans. He tells us about his work, what he's learned -- and what we should be watching out for today.See omnystudio.com/listener for privacy information.

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slash audio. That's vanguard.com slash audio. All investing is subject to risk vanguard marketing Corporation Distributor. Put knowledge to work and grow your business with CIT. From transportation to health care to manufacturing, CIT offers commercial lending, leasing, and treasury management services for small and middle market businesses. Learn more at CIT.com. Put knowledge to work. Welcome to another edition of the Odd Lots podcast. I'm Tracy Allaway, executive editor of Bloomberg Markets. And I'm Joe Wisenthall, managing editor at Bloomberg Markets. So Joe, how do you feel about the future of civilization at the moment? Tracy, it's just all looks so bleak.

Everything is so depressing. It seems like all of the things that we took for granted in terms of political norms and systems that we just assumed were permanent, all seemed to be going down the drain. It just seems to be all over, doesn't it? That's one way of putting it. Was that a little more grim than I should have gone?

It was. It was actually. You know, I'm always trying to cheer you up. So I thought today we could talk to an expert on the collapse of civilizations. That sounds wonderful. That sounds like the perfect pick-me-up topic. In all seriousness, I think you're going to like this particular guest because I know that you have an interest in Guatemala in particular. I think your mother lives out there now.

She does. That's right. Yeah. That's right. My mom is sort of retired to Guatemala to be a painter and live at the. side of a lake. And I spent a month out there, actually, right before I joined your team, so I got to see some of the old Mayan monuments, things like that. And the Mayan civilization is, of course, famous for its collapse, one of many ancient civilizations that have collapsed over the millennia,

I suppose. And to talk about that today and to connect it to what's potentially happening in the rest of the world right now, we have a guy who has at various times been dubbed. the real Indiana Jones. Oh my God. Yeah. And actually, the person who recommended him to us was a previous guest on this show. It's John Shane, also known as Merle Hazard. And he described our guest as a man who spends much of his time in a tent in various tropics with bottles of scotch and philosophy books.

But I should give him a proper intro. It is Arthur Demarest. He is an anthropologist. He's the author of something like 20 books about various societies. And he is also a professor at Vanderbilt University. So I think it's going to be really, really interesting. Well, I think living in tents and drinking scotch and reading philosophy books may be in all of our cards at some point in the future. So I'm not really that bleak. But I can't wait. Let's get it started. Arthur, thank you so much for joining us today. Thank you. Thank you. I have some comments on your comments if you'd like it. Yeah, just jump right in. We don't even have to ask you a question. Well, you know, a living in the jungle, it's like 98 degrees all the time and mud and full of snakes and scorpions and stuff and mosquitoes. But living in a tent in the jungle, once you get used to that, you kind of need some scotch in the evening.

But, I mean, you can't binge drink it because you've got to make it last. Yeah, I was just going to say you have to bring it in yourself, right? There's probably not an easy way to place to a... No, it's boat and four-wheel-drive vehicle, and you can't get there except by riverboat ultimately. Oh, wow. And I do have the best philosophy library in the entire Patan rainforest. I'm reasonably sure of that. I haven't actually checked, but...

I already like this episode, I just want to say. I love it there. I really love it there. Let's talk about civilization collapsing. Happier topics. What makes a civilization collapse? Almost all civilizations collapse, especially complex ones. And there are many different reasons. But my, after studying, you know, I teach about 18 or 19 collapses, and I'm working now with Angor collapse. I've also been working with business people like Bart Victor at the Owen School of Business about it. and you see patterns, but the broadest pattern is that often, maybe usually, the strengths of a civilization, its basic characteristics over time are the same things that bring it down.

And the other thing you see is a broad characterization. People think collapse, you know, decline, things fall apart little by little. The apages of civilizations, the great fluorescences, are often the collapses. The collapses going on in it. looks really good from the monuments and stuff. And then there are a bunch of patterns that you see over and over again, many of which apply to us and business and so on. So I can't really help you with being optimistic. I'm sort of, it's kind of, it's, I'm sort of like, you know, a funeral parlor director of civilizations. I, I emphasize the collapses because from the way they collapse, you

can go back and see what went wrong and how they were structured. So it's also just a way to look more carefully at the basic features of civilizations, too. I'm curious. So you said that often civilizations collapse due to the same characteristics that may have defined their strong period. So the strengths become their weaknesses. Give us a concrete example of this civilization. where, you know, you can point to one aspect of the civilization that made it thrive, and then that same aspect proved to be its undoing. Well, it's never one aspect, but a perfect example is the Maya civilization, and I've been working comparatively with Angor in Cambodia.

You know, they have Angkor Wat, and it's very similar in both of them, and that is that high civilizations really aren't supposed to exist in tropical forest because of the thin soils, the fragile environment, and all of that. And they really, you know, the lost cities in the jungle thing, it's kind of like what I do. And that's one of the reasons why there's so much public interest because you always have those in the movies. But there really aren't a lot of places.

And so their successful secret was to adapt their cities to the tropical forest and to make them kind of dispersed, more dispersed, more green, and spread out, and to mimic the diversity and diversion of the, all different kinds of field systems, nothing like Kansas, you know, no monoculture of one crop, but a lot of different kinds of field systems sensitive to the micro-environment. And that means it had to be decentralized so the local farmers could do things. And that was great. And, you know, many things can go wrong, though, as you start to get too successful,

and build up and population grows, that begins to put a strain on the environment. But the latest stuff that I've been doing, and this is work that I'm doing now at Con Quen, this Maya city, and the whole region, my projects cover a whole region. It's actually a big part of that's owned by Vanderbilt. But anyway, they started to switch.

The whole world of Mesoamerica began to switch to something much closer to our kind of economy. You know, a long-distance exchange. Over the basic characteristics of our economy, since Mesopotamia, Western economies, is overproduction of one thing in one area and then overproduction of another thing in another area and exchange through a market.

Like, you know, you have tons of wheat in one area and goats in another, and then you have a market exchange, sometimes over large distances. That had started to spread. because, you know, that's sort of, it's closer to capitalism in a way, is very successful, and it kind of spread through Mesoamerica, and once that really took hold, the Maya area was not very competitive.

And eventually their trade routes were, you know, taken over by various peoples and moved to the coasts. And also, their decentralized system, how do you hold together a civilization? that's like that dispersed. And the answer you see in Angkor Wat, and with the Maya, is this divine kingship system where these huge rituals

in these beautiful ceremonial centers that kind of hold the state together and the king's power isn't just political, it's largely religious, they're divine kings, and that's perfect for the forest, but also the king is, you know, he's a general, he's a ruler,

he's also like the pope, he's also a ball player in their games he's also a performer they sang and danced and anything that goes wrong is his fault because you know even if it's just like you know bad rains or crops or hurricane whatever it is he's supposed to be talking to the gods and the ancestor you know but anyway that's that's an example of a civilization whose basic wonderful adaptation in the rainforest to the rainforest made them vulnerable anger has the same exact type of collapse. I mean, ours will be very, very different from that, more like the Indus, I think. So I'm just curious, when these societies start nearing collapse, do you see certain patterns

of behavior by their elites, like their kings and their religious figures? Because, of course, with the rise of Donald Trump and some other populist or nationalist parties in Europe, we've really seen a lot of judgment heaped on the elites of those particular political. political systems. Well, yeah, you do see counter movements and counter trends, which are sometimes good and sometimes not, but those are usually reactions to an ongoing, as you said, an ongoing collapse. What you see most, and this is one of the things that, you know, you can talk about to CEOs and all, is that the leaders do more of what they do. They intensify whatever they do, because that's, you know, they don't know about doing something else.

So they just intensify. So they double and triple down on the existing order? Yeah, and it is almost always counterproductive. It's almost always counterproductive. With the Maya and Angkor, you know, things are not going well. So obviously you've got to build more temples. They have to be more impressive, bigger rituals, make the gods happy, but also make the people happy. and so you're taking more and more energy out of the environment

and bringing things down. And you see that over and over again. And it's, you know, I think it's going on pretty obviously right now. I would say more in business and technology than in politics. I think in our case the politics is sort of, you know, a reaction to the trend, not leading it. That is often the case. We've got to take a quick break for a word from our sponsor, and we'll be right back. Put knowledge to work and grow your business with CIT.

From transportation to health care to manufacturing, CIT offers commercial lending, leasing, and treasury management services for small and middle market businesses. Learn more at CIT.com. Put knowledge to work. And we're back with Professor Arthur Demerast. He's a anthropologist who studies the collapse of Zubarak. civilizations. He's been called the real life Indiana Jones. We're talking about before the break how when civilizations collapse, you see leaders doubling and tripling down on whatever they're doing now. You mentioned that you see that a lot in business, not just in civilizations, but you

see it in business. What are some examples? When you talk to business schools and business leaders. What are some examples that sort of really highlight this behavior? That behavior often also comes from short-term thinking and leaders trying to hold on to power by doing more of what they do. And you really see that with CEOs now, I think. The short cycle in which they're judged, and this is also happening with politicians. It's shorter and shorter cycles on which they're judged leads them to try to make fast reactions, fast solutions. And you really can't, like, a business, a CEO is like a president, like can't go out and say, well, you know, we're going to slow down

and have really much slower growth and probably, you know, lower stock prices for three or four years. And we can build back up, you know. And then, you know, all these politicians are, you know, the new president, and actually all of them will say, well, we're going to fix all this, and they're only in there for four or eight years. You can't fix anything with that. You know, you can just lay groundwork.

So they, during that period, you have time to restructure things. So you just intensify. And, you know, that's a pattern that's very common. And that's one of the reasons why apages or fluorescences, you know, the peak of things, actually looks really great to us, especially with ancient civilizations or even historical ones, but that really is some of that going on. And I think it's also some of that, you know, you see in bubbles, the bubbles you see with, like the high-tech bubble and the e-bubble, all of that. That is, the real estate bubble, that is a perfect example of intensifying more and more something that has been success.

and is actually beginning to undermine the system, and then it leads right into collapse. And so once you start studying that, you look back at things like the Renaissance in Italy, which everyone, wow, what a great, the Renaissance was a collapse. It was a complete collapse, and it ended in, you know, disaster, as did the golden age of Greece and so on. So when people are looking for, you know, the down periods, they don't see that. factor. And it is really very common. And that's because of that leadership, problems, you run problems. It just leads you to think in sort of desperate solutions, shorter and shorter solutions. It's happening, I think, also with high tech a lot. The hypercoherence is just being made worse

constantly. Joe and I have spent probably many hours at this point talking about market bubbles and what tips bubbles, you know, from euphoria into fear and pain, I suppose. Is there a particular thing, like one thing that you could pinpoint that's the tipping point when it comes to civilizations? Not one. The thing that, you know, I'm making these statements and they apply, the thing that's great about the study of civilizations, and I'm teaching this class right now that is a seminar that's 18 civilizations.

They have different lessons, and so you draw different aspects from different cultures, and then you can see that those patterns reapplying. So not all of the collapses or that kind of apogee bubble thing. You do see the pattern of that intensification of what you do. You do see the pattern almost always of shorter and shorter-term thinking. You know, you're getting into trouble, so you're trying to fix it faster and faster,

and that is another counterproductive response. You can also see, you know, you also study non-collapse. I mean, most of the time there's a near-collapse, and then they change some things, and they have maybe kind of a big recession, and then they go on. So you also get to study, you know, why there was a collapse in this case and not in another case. Our civilization, I would take from the industry,

hypercoherence. What does that mean hypercoherence? Explain that term. Well, it's one of those really great strengths. I mean, well, I think one of you is in Abu Dhabi. It's the integration of the society. The society gets better and better integrated, leading to better decision-making, leading to great wealth.

A good example is our situation. We're probably the most hyper-coherent. where the computer, the internet, satellites were all really all tied together, and that's great. And it's getting more and more over time, and that's creating more and more wealth. And, you know, with the e-network and Amazon and all the rest. But if there's a problem in one part of a system, it radiates through the whole system, and at a certain point can bring the whole thing down, which we see, you know, Like there's a slowdown, not even a recession in China, and pizza parlors are closing all over, you know, Chile.

You can see it when, well, I mean, I see it. I tell people that the foremost common words in the English language are the system is down. You hear that everywhere. And there's some glitch in something in Atlanta and Delta has to cancel 3,000 flights. I mean, that happens all the time, that kind of thing. We are really hyper-coherent, and it's the source of our great wealth, but it really is becoming a vulnerability. And the response to that, because you have business competition, is more and more integration, better and better systems of integration, and more and more hyper-coherence and more and more fragility.

I was just going to say, it seems like the natural conclusion from that point would be to build sort of walls into the system, or to build some sort of like protection or buffer. But people up until very recently didn't really seem to like doing that. Like going against the grain of globalization was seen as a bad thing, particularly for markets and economics. These are things that business people in particular don't like to hear. Well, there's a lot of reasons for that. One of them, and this we've taken from business with my interactions,

with my colleagues, but there's one popular theory that as societies become more complex, investment has diminishing marginal returns. You know, at first you make an investment of $100 in Microsoft, and then, you know, over time, you don't get, you know, a thousand percent profit. It slows down gradually. And eventually, as you add more employees and so on, it breaks off or even causes the system to slow down. to become less productive, and you go from diminishing marginal returns to diminishing returns. And that happens a lot in complex societies.

The other problem is status rivalry, which you see with men. That's one of the problems in the Renaissance, you know. You see it with us, it's companies and countries. And so when you know that you really should sort of slow down and, it's, and it costs money to do the backup systems and may just require cutting down on the degree of hypercoherence. That causes profit loss. That causes that diminishing marginal returns.

And the rulers of the Maya states or the rulers of the Renaissance cities, they can't get away with that. They've got a public that wants things more quickly. And again, when you have that kind of competition, the desire to beat the other guy or do better is really, that's what the leader depends upon. Does that competition sort of engender what you say, these apogee's of civilization, the building of pyramids, the funding of great works of art, is that part of what drives that? So you have everyone competing for status and trying to establish something great to compensate. for the decline, and so we get these periods that look amazing, but they're actually a phenomenon of decline. That's perfect, I think, better phrase than mine. I'm not accustomed to saying things

in less than an hour and a half, but that's why it's called status rivalry. Status war is a form of status rivalry, but also, like the Renaissance is a good example, competitive art and building cathedrals better than the other guy and so on, and it does generate this magnificence. And Bill Gates had just said this is something about this is the best time in history or our history in terms of the way the world is or something. And I said, wow, that's really ominous because that's when you start to say something like that, maybe you're in a crescendo, maybe you're in a bubble. And you see that over and over again. It looks really, really great. Like the Maya civilization, wow, Angkor, incredible stuff they're building in the jungle.

one admires, the Renaissance, look at all of that, looks great. But that's more and more expenditure, and it's also leaders competing with other leaders. It's more with CEOs now, but also with countries. And that keeps it accelerating, keeps it looking better and better, and keeps making it more and more fragile. So when Donald Trump says he wants to build a great wall and start an infrastructure fund and ramp up defense spending and things like that. How worried should we be? Well, we should, again, I think these things are more of, you know, people are worried about Trump and yeah, that's, you know, a symptom more than a cause.

It's the pressure for shorter and shorter term results, which happens as things begin to not keep up and people begin to get dissatisfied, like all of the workers in Pennsylvania and so on, you then, you know, you see counter movements and reactions. But the problem with what he wants to do and what every president has wanted to do to some degree, the promises of renewing our infrastructure and building the wall, the problem is that that can't be done quickly. And, I mean, that really ties into a whole other group of theories that some people call in tanks. theory, which is that you build this infrastructure that is so great and so wonderful,

but then over time, the government, the institutions, the people are sort of entangled in it, and as you lose resources, you're dependent on this system that you can't maintain, and it's impossible to really scale back. I mean, you know, you can't say, well, we can't maintain this interstate system. So we're just going to concentrate on some main roads or this subway line is really losing money. So we're just going to close it. Mayors can't do that. They'll get kicked out.

So what you get is this. This happened with Angor and a lot of them. This dependence on this infrastructure and no way to really, when it gets to be hard to fund and maintain, no way to do that. So you have, you know, you intensify efforts and you just don't have the resources. bring the whole civilization down. Real quickly, because we're just about out of time, just a few seconds. How quickly can it all collapse? Very quickly.

I'm sorry. This has been very depressing. With more time, I could make your listeners weep. Would you like that? No, I mean, it can happen very, very quickly. The Maya civilization was most spectacular at around 780. 790, 785, and by 8.10, it was just in pieces, 800 in a lot of places. So it can happen really, really quickly. It's often happened slowly in one part, and then that reaches a critical point,

and then it just runs through the whole system, which is what happened also with the Maya. I have one more quick question before you go. When civilization collapses, can Joe and I come stay in your tent and drink Scotch and read philosophy books? That's the key question. Hey, man, you know what? I am ready. I am ready than any survivalists. We have no electricity, no running water, but we have a river right there.

We have a tent. The Maya grow, the food all around there, the turkey's in the corn. And I don't think we're even going to know when the collapse comes out there, except it'll be hard to get the good scotch. And that really may shut us down. Well, Tracy and I will definitely bring some. Professor Demaris, thank you so much. Fascinating, depressing, but still very enlightening.

Lots to chew on. Now I'm going to go read all your books. Really appreciate you joining us. Okay, thanks. So, Joe, are we all sufficiently depressed, or are you going to be reaching for the Scotch tonight? No, you know what? I think I'm in a better mood than I was.

You know, at the beginning, I was feeling pretty glum. and then obviously that was pretty downed. But now I'm just sort of excited about studying a new thing. And I'm not joking. Now I'm going to go download all his books to my Kindle. And, you know, it's the circle of, you know, it's good to know that patterns repeat. It's sort of comforting. Yeah, I know what you mean.

Like the idea that even if Western civilization collapses, that's kind of a normal thing across the millennia. It's unfortunate for us, though, if we live through that collapse, but yes, it's somewhat comforting. I never thought of things like the pyramids or the Renaissance. I thought that was a fascinating idea that these things that we associate with the peak are actually signs of the decline. It sort of makes me think of all of history in a way a little bit differently. All right. Well, that's it for another edition of Odd Lots.

You can follow me on Twitter at Tracy Alloway. And I'm Joe Wisenthal. You can follow me on Twitter at The Stallard. Thanks for listening. To Work and grow your business with CIT. From transportation to health care to manufacturing, CIT offers commercial lending, leasing, and Treasury Management Services for small and middle market businesses. Learn more at CIT.com.

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