Note: The weekly Taki post is up. It ties in with the post today about the cost of the custodial state. Behind the green door is the weekly podcast.

In his book, The Collapse of Complex Societies, Joseph Tainter argues that societies collapse when their investment is sustaining their societies reaches the point of diminishing returns. The complex systems they evolved to solve the problems they have faced come with a cost. Complexity itself brings a cost, as maintaining any complex system has special requirements. These costs are not fixed. They increase over time and at some point, they exceed the benefits.

In modern life, this is obvious in software systems. They are initially created to solve a specific set of problems like accounting or tracking parts in a warehouse. Over time they become increasing complicated as they are expanded to solve other problems like tracking costs or forecasting cash flows. They are patched, upgraded and modified continuously until they reach a point where the cost of maintaining them is greater than the cost of replacing them with something new.

This idea of diminishing returns is useful in thinking about how the custodial state is evolving and how it will end. There is a cost to making sure you are not using the wrong pronouns or teaching your kids the wrong values. There is a cost to bullying people into taking certain medicines or avoiding certain foods. Of course, there is a cost to dreaming up these new taboos. The American university system, which is the primary source of production for this stuff, is not cheap.

In prior societies, the care, custody and control of the population was not much of a concern to the ruling class. The duty of the king, for example, was to make sure his lands were safe from threats. Otherwise, his people were on their own as far as raising crops and managing their affairs. They had duties to their lord, but those were in terms of labor and produce. The church made sure everyone followed the cultural rules, but the cost of that was paid for through rents as well.

Even in liberal societies of the 19th and early 20th century, the people in charge did not invest much into making sure people had the right thoughts. Public education was focused on improving the workforce. Public safety was about securing the property and safety of rich people. Public administration was still largely focused on collecting taxes for the state. In 19th century America, social reform was a private affair, financed by the wealthy as a form of public piety.

It is in the 20th century things began to change. Public education became universal in the West and shifted from the basics to moral and social conditioning. When politicians say that parents should have no role in the training of their children, this is not the radical idea that many claim. Inside the ruling class, this is just assumed and has been for a very long time. A century ago, Progressive reformers assumed education was necessary to train people to be good social democrats.

The little light on the dashboard of your car telling you that you are too close to another car and the warnings about drinking the contents of the shampoo bottle are all part of the custodial state and they come with a cost. The federal government spent over six trillion dollars in fiscal year 2021. That is 30% of the GDP. State and local government spent another three trillion. Roughly half of the U.S. GDP is consumed with the cost of governance. This is true throughout the West.

This is not the end of it. Regulatory costs do not show up in the government budget, but they show up in private budgets. When companies impose vaccine mandates, they are incurring a real cost. Some percentage of their workforce will quit. The cost of hiring and training employees is substantial. Then there is the cost of making sure everyone has the Nth booster shot. This is just one example, but there are thousands of these sorts of costs incurred by every business.

One way the managerial system has made this work is through socializing the costs around the world via the currency. The U.S. exports the cost through dollar production and trade. They create money which is spent on foreign goods. This exports the inflation to the foreign producer, but some of it comes back as foreign investment in government bonds and equities. American asset values go up while the quality of life goes up without causing domestic inflation.

This is one reason European consumer culture lagged behind America. The individual countries with their own currencies could not do this trick. Once the Euro was in place, consumerism in Europe took off. The consumer culture of the West, a feature of the custodial state, was made possible by shifting costs to low cost countries in the newly “free” east, South America and Asia. The spike in inflation suggests this has run its course and the West can no longer export the cost of custodialism.

The problem we see with Covid, is the custodial state comes with an ideology that justifies it and drives its development. Covid was a real problem, but the system wildly overreacted because it exists to manage these problems to an ever increasing level of detail that has now taken on a life of its own. The extreme example of this is New Zealand, where the ditzy Prime Minister has said that her Covid tyranny is now a permanent feature of life. She is the Kiwi den mother.

Another problem in addition to the direct cost is the cost of what managerialism does to the population of a society. Public services are declining rapidly as the people in those jobs no longer feel any duty to them. Like children shirking their chores, people in the custodial state stop caring about their work. The great Covid sick out we are experiencing is a glimpse of things to come. If your needs are the responsibility of the custodial state, why should you work hard and be conscientious?

One of the realities of Soviet communism was that it was more expensive to maintain than it was worth. It was a system that had a 70-year run and if you net out the years through the war, it was a two generation system, give or take. There have been kings that have served longer. The reason it was short-lived is it turned social capital into the fuel to maintain the system. Worse yet, it consumed the means of producing social capital, which accelerated the collapse of the system.

The Western system took longer to form up than communism. Its development was retarded by the necessity of the Cold War. In the thirty years since the end of communisms the custodial system has evolved quickly. Along with it the social costs have gone up and the stock of social capital has declined. In the 1980’s, no one saw the collapse of the Soviet empire coming, but the signs were there. Similarly, Western custodialism is headed to collapse for the same reason.

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