America is headed toward collapse History suggests how to stave it off

How has America slid into its current age of discord? Why has our trust in institutions collapsed, and why have our democratic norms unraveled?

Peter Turchin tried to find answers to these questions in his recent piece for The Atlantic.

Human societies experience recurrent waves of political crisis, such as the one we face today. My research team built a database of hundreds of societies across 10,000 years to try to find out what causes them. We examined dozens of variables, including population numbers, measures of well-being, forms of governance, and the frequency with which rulers are overthrown. We found that the precise mix of events that leads to crisis varies, but two drivers of instability loom large. The first is popular immiseration—when the economic fortunes of broad swaths of a population decline. The second, and more significant, is elite overproduction—when a society produces too many superrich and ultra-educated people, and not enough elite positions to satisfy their ambitions.

These forces have played a key role in our current crisis. In the past 50 years, despite overall economic growth, the quality of life for most Americans has declined. The wealthy have become wealthier, while the incomes and wages of the median American family have stagnated. As a result, our social pyramid has become top-heavy. At the same time, the U.S. began overproducing graduates with advanced degrees. More and more people aspiring to positions of power began fighting over a relatively fixed number of spots. The competition among them has corroded the social norms and institutions that govern society.

The U.S. has gone through this twice before. The first time ended in civil war. But the second led to a period of unusually broad-based prosperity. Both offer lessons about today’s dysfunction and, more important, how to fix it.

To understand the root causes of the current crisis, let’s start by looking at how the number of über-wealthy Americans has grown. Back in 1983, 66,000 American households were worth at least $10 million. That may sound like a lot, but by 2019, controlling for inflation, the number had increased tenfold. A similar, if smaller, upsurge happened lower on the food chain. The number of households worth $5 million or more increased sevenfold, and the number of mere millionaires went up fourfold.

On its surface, having more wealthy people doesn’t sound like such a bad thing.
But at whose expense did elites’ wealth swell in recent years?

Starting in the 1970s, although the overall economy continued to grow, the share of that growth going to average workers began to shrink, and real wages leveled off. (It’s no coincidence that Americans’ average height—a useful proxy for well-being, economic and otherwise—stopped increasing around then too, even as average heights in much of Europe continued climbing.) By 2010, the relative wage (wage divided by GDP per capita) of an unskilled worker had nearly halved compared with mid-century. For the 64 percent of Americans who didn’t have a four-year college degree, real wages shrank in the 40 years before 2016.

From the December 2020 issue: The next decade could be even worse
As wages diminished, the costs of owning a home and going to college soared. To afford an average house, a worker earning the median wage in 2016 had to log 40 percent more hours than she would have in 1976. And parents without a college degree had to work four times longer to pay for their children’s college.

Even college-educated Americans aren’t doing well across the board. They made out well in the 1950s, when fewer than 15 percent of 18-to-24-year-olds went to college, but not today, when more than 60 percent of high-school grads immediately enroll. To get ahead of the competition, more college graduates have sought out advanced degrees. From 1955 to 1975, the number of students enrolled in law school tripled, and from 1960 to 1970, the number of doctorate degrees granted at U.S. universities more than tripled. This was manageable in the post–World War II period, when the number of professions requiring advanced degrees shot up. But when the demand eventually subsided, the supply didn’t. By the 2000s, degree holders greatly outnumbered the positions available to them. The imbalance is most acute in the social sciences and humanities, but the U.S. hugely overproduces degrees even in STEM fields.

This is part of a broader trend. Compared with 50 years ago, far more Americans today have either the financial means or the academic credentials to pursue positions of power, especially in politics. But the number of those positions hasn’t increased, which has led to fierce competition.

Competition is healthy for society, in moderation. But the competition we are witnessing among America’s elites has been anything but moderate. It has created very few winners and masses of resentful losers. It has brought out the dark side of meritocracy, encouraging rule-breaking instead of hard work.

All of this has left us with a large and growing class of frustrated elite aspirants, and a large and growing class of workers who can’t make better lives for themselves.

The decades that have led to our present-day dysfunction share important similarities with the decades leading to the Civil War. Then as now, a growing economy served to make the rich richer and the poor poorer. The number of millionaires per capita quadrupled from 1800 to 1850, while the relative wage declined by nearly 50 percent from the 1820s to the 1860s, just as it has in recent decades. Biological data from the time suggest that the average American’s quality of life declined significantly. From 1830 to the end of the century, the average height of Americans fell by nearly two inches, and average life expectancy at age 10 decreased by eight years during approximately the same period.

This popular immiseration stirred up social strife, which could be seen in urban riots. From 1820 to 1825, when times were good, only one riot occurred in which at least one person was killed. But in the five years before the Civil War, 1855 to 1860, American cities experienced no fewer than 38 such riots. We see a similar pattern today. In the run-up to the Civil War, this frustration manifested politically, in part as anti-immigrant populism, epitomized by the Know-Nothing Party. Today this strain of populism has been resurrected by Donald Trump.

Strife grew among elites too. The newly minted millionaires of the 19th century, who made their money in manufacturing rather than through plantations or overseas trade, chafed under the rule of the southern aristocracy, as their economic interests diverged. To protect their budding industries, the new elites favored high tariffs and state support for infrastructure projects. The established elites—who grew and exported cotton, and imported manufactured goods from overseas—strongly opposed these measures. The southern slaveholders’ grip on the federal government, the new elites argued, prevented necessary reforms in the banking and transportation systems, which threatened their economic well-being.
As the elite class expanded, the supply of desirable government posts flattened. Although the number of U.S. representatives grew fourfold from 1789 to 1835, it had shrunk by mid-century, just as more and more elite aspirants received legal training—then, as now, the chief route to political office. Competition for political power intensified, as it has today.

Those were cruder times, and intra-elite conflict took very violent forms. In Congress, incidences and threats of violence peaked in the 1850s. The brutal caning that Representative Preston Brooks of South Carolina gave to Senator Charles Sumner of Massachusetts on the Senate floor in 1856 is the best-known such episode, but it was not the only one. In 1842, after Representative Thomas Arnold of Tennessee “reprimanded a pro-slavery member of his own party, two Southern Democrats stalked toward him, at least one of whom was armed with a bowie knife,” the historian Joanne Freeman recounts. In 1850, Senator Henry Foote of Mississippi pulled a pistol on Senator Thomas Hart Benton of Missouri. In another bitter debate, a pistol fell out of a New York representative’s pocket, nearly precipitating a shoot-out on the floor of Congress.

This intra-elite violence presaged popular violence, and the deadliest conflict in American history.

The victory of the North in the Civil War decimated the wealth and power of the southern ruling class, temporarily reversing the problem of elite overproduction. But workers’ wages continued to lag behind overall economic growth, and the “wealth pump” that redistributed their income to the elites never stopped. By the late 19th century, elite overproduction was back, new millionaires had replaced the defeated slave-owning class, and America had entered the Gilded Age. Economic inequality exploded, eventually peaking in the early 20th century. By 1912, the nation’s top wealth holder, John D. Rockefeller, had $1 billion, the equivalent of 2.6 million annual wages—100 times higher than the top wealth holder had in 1790.

Then came the New York Stock Exchange collapse of 1929 and the Great Depression, which had a similar effect as the Civil War: Thousands of economic elites were plunged into the commoner class. In 1925, there were 1,600 millionaires, but by 1950, fewer than 900 remained. The size of America’s top fortune remained stuck at $1 billion for decades, inflation notwithstanding. By 1982, the richest American had $2 billion, which was equivalent to “only” 93,000 annual wages.

But here is where the two eras differed. Unlike the post–Civil War period, real wages steadily grew in the mid-20th century. And high taxes on the richest Americans helped reverse the wealth pump. The tax rate on top incomes, which peaked during World War II at 94 percent, stayed above 90 percent all the way until the mid-1960s. Height increased by a whopping 3 inches in roughly the first half of the 20th century. Life expectancy at age 10 increased by nearly a decade. By the 1960s, America had achieved a broad-based prosperity that was virtually unprecedented in human history.

The New Deal elites learned an important lesson from the disaster of the Civil War. The reversal of elite overproduction in both eras was similar in magnitude, but only after the Great Depression was it accomplished through entirely nonviolent means. The ruling class itself was an important part of this—or, at least, a prosocial faction of the ruling class, which persuaded enough of their peers to acquiesce to the era’s progressive reforms.

As the historian Kim Phillips-Fein wrote in Invisible Hands, executives and stockholders mounted an enormous resistance to the New Deal policies regulating labor–corporate relations. But by mid-century, a sufficient number of them had consented to the new economic order for it to become entrenched. They bargained regularly with labor unions. They accepted the idea that the state would have a role to play in guiding economic life and helping the nation cope with downturns. In 1943, the president of the U.S. Chamber of Commerce—which today pushes for the most extreme forms of neoliberal market fundamentalism—said, “Only the willfully blind can fail to see that the old-style capitalism of a primitive, free-shooting period is gone forever.” President Dwight Eisenhower, considered a fiscal conservative for his time, wrote to his brother:

Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things … Their number is negligible and they are stupid.

Barry Goldwater ran against Lyndon Johnson in 1964 on a platform of low taxes and anti-­union rhetoric. By today’s standards, Goldwater was a middle-of-the-road conservative. But he was regarded as radical at the time, too radical even for many business leaders, who abandoned his campaign and helped bring about his landslide defeat.

The foundations of this broad-based postwar prosperity—and for the ruling elite’s eventual acquiescence to it—were established during the Progressive era and buttressed by the New Deal. In particular, new legislation guaranteed unions’ right to collective bargaining, introduced a minimum wage, and established Social Security. American elites entered into a “fragile, unwritten compact” with the working classes, as the United Auto Workers president Douglas Fraser later described it. This implicit contract included the promise that the fruits of economic growth would be distributed more equitably among both workers and owners. In return, the fundamentals of the political-economic system would not be challenged. Avoiding revolution was one of the most important reasons for this compact (although not the only one). As Fraser wrote in his famous resignation letter from the Labor Management Group in 1978, when the compact was about to be abandoned, “The acceptance of the labor movement, such as it has been, came because business feared the alternatives.”

We are still suffering the consequences of abandoning that compact. The long history of human society compiled in our database suggests that America’s current economy is so lucrative for the ruling elites that achieving fundamental reform might require a violent revolution. But we have reason for hope. It is not unprecedented for a ruling class—with adequate pressure from below—to allow for the nonviolent reversal of elite overproduction. But such an outcome requires elites to sacrifice their near-term self-interest for our long-term collective interests. At the moment, they don’t seem prepared to do that.