Dr. Who once said, “The very powerful and the very stupid have one thing in common. Instead of altering their views to fit the facts, they alter the facts to fit their views… which can be very uncomfortable if you happen to be one of the facts that needs altering.”
History is littered of examples where the ruling class made sure everyone stayed in line by reminding them how wonderful things were. For millenia, humans believed the earth to be flat; a flat disc floating in the ocean. Ancient scientists believed it had actual “ends” and “edges”. Norsemen were afraid to sail off the end of the earth for fear of the Jormungandr, a giant snake that circled the entire planet and could touch its tail.
Interestingly enough, the Chinese were one of the last societies to buy into the concept of a spherical earth. As late as the Ming Dynasty of the early 1600s, Chinese philosophers were advocating that the earth was one big rectangle floating underneath a round canopy sky.
It was about this time that China maintained the title of the wealthiest place on earth. The Ming Dynasty brought about one of the golden ages of China thanks to their laissez-faire policies and the Emperor’s reduced role in society. Merchants took a powerful rule in the state and living standards were high.
Despite using paper money early on, the Ming became a silver-based economy. As evidence of their great wealth, one Fujian merchant family routinely traded millions of taels of silver, despite a tiny fraction of that being considered an enormous sum among westerners.
After all, it wasn’t that long ago that Europeans were living in total squalor. They were still recovering from that little thing called the Plague. Huts made of thatch or mud made up shelter for many. No wonder the Renaissance was all about pining for the classical age.
To have said in the late Middle Ages that economic dominance would move from China to the west would have been seen as ridiculous. The wealthy merchants would have laughed you back into your European mud hut. But that was exactly what happened.
And it happened to countless other places as well. Around the same time, Ivan the Terrible was made the first Czar of Russia. He finished off the Mongols and created a yet modern state. He set forth a new code of laws and opened up educational and religious centers. Russia’s isolation was heralded as a bold step forward in creating an impenetrable kingdom. Things were looking up, until the famine and torture started.
As power shifted from Asia to Europe to the Americas, few saw it coming. Nor would they want to understand the reasons why.
We all want to believe we’re living in the utmost of Golden Ages. We snidely look back on past, more primitive cultures and sneer at how unknowledgeable they were, never giving a thought to what part of our own lives will be disproven one day.
These days, the western world is going along like everything is just dandy, without giving a thought to its impending downfall.
Geniuses like Ben Bernanke are pumping out trillions of dollars in fiat money because that’s what you do in today’s modern era. Those who suggest a return to gold and silver are merely proponents of a relic used by barbarians. Those who look to the future and see Bitcoins awaiting them are dismissed out of hand.
With the US back in recession, their policies haven’t worked. But changing course now would be changing their views to suit the facts. That’s not how power works.
Just like ancient proponents of bloodletting or a flat earth, today’s economic ringleaders fail to learn from history. They can’t imagine that the en vogue methods they’re used to could be wrong. Yet part of learning from history is learning to read the tea leaves for the future.
One thing we can learn from fallen societies is that they don’t fall overnight. The shift of power from China to Europe was gradual. First, cracks start forming. Then the cracks get bigger. Finally, the cracks become noticeable. And by then, there’s little that can be done. Like huge aircraft carriers in the Pacific, countries don’t turn on a dime.
When the aircraft carrier/country in question is biggest and baddest of them all, things happen even more slowly. Perhaps never.
The United States started its descent over fifty years ago. The population had long grown accustomed to the government dipping its hand in their pocket and was ready to embark on a massive spending spree. “Poverty”, “Drugs”, and other ills topped the list of reasons to start deficit spending. Once they how just how – ahem – wonderfully that spending worked, they approved of more. And more. And more.
After all, no 1960s American would ever hear of another country usurping its dominance. Ever since being the main beneficiary of post-War economic policy, they felt infallible.
They should have read the tea leaves.
Governments don’t read tea leaves. Their job is to keep you fat and happy as long as they can. Looking to things like Bitcoin would undermine their control over you. Big Government has no vested interest in abandoning the mindset that worked for them, even if that mindset says the world is a flat disc.
Throughout history, both bad societies and bad ideas had some form of significant backing that kept them afloat. For The Land of the Free, that backing has been its currency’s reserve status and it’s bankers ability to spend and print themselves silly with few consequences. As that charade comes to an end and power shifts to other parts of the world, it’s only a matter of time before the government’s flat earth methodology is exposed.