Wealth and Civilization

The three essential elements of Carroll Quigley's "instrument of expansion" are "incentive to invent, accumulation of surplus, and application of this surplus to the new inventions." I direct your attention to the second of these. Quigley writes on page 132:

[Society] must be organized in such a way that somewhere in the society there is accumulation of surplus—that is, some persons in the society control more wealth than they wish to consume immediately; ...

Accumulation of "surplus" is accumulation of wealth. Just to be clear on that. 

Last time we talked, I started by presenting Quigley's mechanism of expansion. This mechanism includes the accumulation of surplus. Then halfway through the essay I was suddenly talking about "wealth".

It's the same thing. By Quigley's definition, accumulation of surplus *IS* accumulation of wealth.

I just wanted to point that out.

Last time we talked about the instrument of expansion, the mechanism that generates the growth of a civilization. It is this growth mechanism that enables a society to endure and expand, so that the society becomes a civilization.

Following Quigley, when the "instrument" becomes an "institution" the growth mechanism becomes corrupted and no longer provides adequate growth. Lacking adequate growth, other problems arise, and the civilization enters its decline stage. Quigley is specific and explicit on this point (page 132):

The civilization rises while this organization is an instrument and declines as this organization becomes an institution.

The transition from instrument to institution, the corruption of the mechanism, is clearly laid out in the Foreword as

the transformation of social arrangements functioning to meet real social needs into social institutions serving their own purposes

Finally, as noted yesterday, Wikipedia explains why this transformation works out as it does:

because of the preexisting influence that existing organizations have over the existing framework, change that is brought about is often in the interests of these organizations.

 

Quigley's growth mechanism works by accumulation of surplus which is used to invent more products and processes that make the surplus bigger. 

The "preexisting influence that existing organizations have over the existing framework" means that changes in the system will tend to be "in the interests of" the wealth-holders, and to serve their purposes rather than the needs of society.

The "surplus" is wealth, and the growth mechanism makes wealth-holders wealthier, whether or not the civilization is growing. The accumulation of surplus is always in the interest of wealth-holders. And by Adam Smith's principle of self-interest, they don't have to care if what's good for them is good for the rest of us. After the accumulation has reached a tipping point it is still good for wealth-holders, but there is not enough left over to make things good for society as a whole, and the rest of us suffer.

It makes a good story, doesn't it? And it is easy to add features. I'm tempted to say, for example, that when wealth is widely scattered the "preexisting influence" of wealth-holders will be varied rather than focused. Much of this "influence" will be self-cancelling because the varied interests contradict one another. But when wealth is highly concentrated, the influence will be highly focused, and highly effective. So then capitalism evolves at a faster rate.

It is a good story, but it has a lot of moving parts. It's not Occam-simple.

Keynes, in the General Theory, concerned himself with the same problem, except that he described it in terms of the economy, not in terms of civilization.

But Keynes's story is much simpler than Quigley's. Keynes in essence said Wealth undermines the growth of wealth. Keynes (chapter 3, section ii) wrote:

Not only is the marginal propensity to consume weaker in a wealthy community, but, owing to its accumulation of capital being already larger, the opportunities for further investment are less attractive...

 For Keynes, it all comes down to diminishing marginal returns.

It took me three or four essays to make good sense of Quigley's story. Three or four days, with several blogless days between each. It summarized nicely the last time (29 July) but it took me a long time to get there.

Keynes, by contrast, is Occam-simple. And Keynes doesn't depend on institutions going bad, or the reasons they do, or any of that. Nor does he get me all riled up and cursing at billionaires.

Still, wealth is wealth. Q talks about accumulation of surplus, which is accumulation of wealth. K talks about a problem arising when societies have a lot of wealth. They're not that far apart, these two.

 

I'm going to finish up now by repeating something I said before:

When the growth of wealth outpaces the concentration of wealth, civilization grows. When the concentration outpaces the growth of wealth, civilization declines.