This essay argues against the idea that Peter Turchin’s Elite Overproduction in incorrect. It’s in response to an essay published by Yascha Mounk on Substack.
Peter Turchin’s thesis that “elite overproduction” explains America’s instability is conceptually confused and empirically false.
Let’s test this hypothesis by slightly rephrasing the argument. Piketty has divided the two power interests in society into Brahmin Left and Merchant Right. Presumably, elite overproduction would be occurring if the Brahmin Left had grown too powerful or society was producing too many university graduates to fill these roles. Perhaps the greatest symptom of this oversupply of the Brahmin Left would be if too many resources were being devoted to employing people in the public sector, rather than providing the actual public services ordinary citizens need like publicly commissioned healthcare, economic transfers, social security/pensions and other social safety net provisions.
Now let’s look at Australia. It has more than ample social safety nets. It’s universal healthcare is superior to almost every European universal healthcare system, welfare provisions are generous, as are public pensions. Military spending is nearly twice that of the bare minimum 2.0% which Trump has been demanding fellow NATO members adopt. Only in K-12 equivalent educational funding does Australia lag somewhat behind spending $17,360 per student annually, compared to the OECD average of $17,875.
Now what does it take to run all this in terms of manpower in the public sector? 15.6% of the working population in Australia is deployed to the public sector. Most countries lie about their figures. The UK claims it’s public sector is around 20% of the working population, but investigative reporting by the Telegraph shows the figure to be 33%. America pretends it has a small number of federal employees, but it only accomplishes this bureaucratic sleight of hand by burying a substantial portion of mandatory spending bureaucrats at the State level, whilst simultaneously subjecting the State to regulatory oversight which absolutely prevents any attempt to innovate away this wasted labour.
Any source online will tell you that American tax revenue as a percentage of GDP is slightly lower than Australian tax revenue as a percentage of GDP. This is just plain wrong, or bullshit. Before the pandemic, America was taxing GDP at a rate of 43%, whilst Australia was taxing GDP at a rate of 38%. One of the main reasons for this discrepancy relates to America’s subsidy system. For example a healthcare deduction functions (and has cost implications) exactly similar to direct government spending, but appears as a revenue reduction on the Federal or State balance sheet. The Australians tend to be honest, and commission their superior, universal healthcare directly.
So the Left does appear to be overfunding the Brahmin Left- it shows in manpower and it shows in the fact that the public services, universal healthcare and social safety nets Americans can access are markedly inferior whilst also costing the taxpayer more. Oh, and their public pensions system is significantly better at preventing elderly poverty.
I have no problem with more young people going to university, provided they recognise that a large portion of them recognise that a roofer or a kitchen fitter deserves better pay and higher social status than kids with liberal arts or humanities degrees. Of course, STEM is different as is Medicine, and for any graduate I would heartily recommend taking a Masters degree in a subject like engineering- it’s the highest ROI of any period of education and represents the opportunity to retool an otherwise useless skillset for the 21st century in a relatively short space of time.
There are a number of other symptoms we would see if the elite overproduction were true. Substantial soft cost inflation in large infrastructure projects. A substantial overstaffing of Big Tech companies by non-coding skillsets. The basic breakdown in competency and standards in prestige manufacturing companies as parasitic Brahmin Left types crowded out highly specialised knowledge workers, overruling the objections of engineers with decades of experience. Check. Check. Boeing.
And we’ve also witnessed the last acid test. Elite overproduction would produce a media consuming echo chamber substantial enough to create illusionary political reality completely divorced from the daily lives of most Americans. Allan Lichtman’s Thirteen Keys is still valid. And he didn’t face his first incorrect prediction in decades (other than a very likely stolen election) because of disinformation or misinformation. He got the keys wrong. The stock market only matters these days to the 10%. 66% of Americans would have said that both long-term and short-term economy were bad, because it’s what they witnessed in their pocketbooks. No major scandal? How about pretending a senile old man wasn’t senile for more than three years, and then being forced to perform a mass media U-turn within 24 hours, and replace the incumbent candidate months before an election…
Anyway. The point of the last paragraph was that elite overproduction would be able to generate an ecosystem of media not designed for the average American, and not really watched by them either- have you seen the viewing figures for CNN or MSNBC recently? Sure, the New York Times has always catered to a prestige class, but they’re the New York Times.
Re the image that you used and the contents of your essay too none of the people that you point to are in any way members of the elite, nor do they any kind of real political power. The are the now necessary worker bees who keep the system running as it now exists.
By contrast the real elites decide who is going to live and die on a mega scale. Which region or country whole countries are going to be the next (necessary!) sacrifice zone - which now includes the entire planet too
Big business and finance now have more power than most, even all governments. Much of what goes on in the Western world is now controlled by massive private hedge funds, increasingly so. In one way or another they are buying up all kinds of essential services including water supplies.
How many multiple billions (even trillions) of dollars does Black Rock and similar mega hedge fund control.
Never ending wars are of course very good for business.
Sure, I largely agree- although it's worth noting that when one looks at what hurts the economic interests of ordinary citizens, the unprecedented growth of the professional management class, and it's corresponding costs in governments, particularly with regard to regulatory bureaucracies and the huge compliance costs they cause, the proliferation of managers actually takes more out a worker's pay packet than capital. If we look at the Chinese SOEs, workers get paid about 10% and enjoy somewhat better benefits- this represents the difference in capital's 'share'. Bloated management, the unnecessary side of compliance costs, and their government counterparts in the bureaucracy probably cost the average worker's wages three times that.
Sure, it's WAG (wild-assed guess), but also a pretty SWAG (scientific WAG)- based upon research and reading on the subject. It's more than that on living standards, especially in areas like housing, where differences by State in relation to the freeing up of building land shows that housing costs can be severely impacted by planning processes, because this allows developers access to a guaranteed upwards asset speculation exploit- government has actually been helping BlackRock exploit you, albeit unintentionally. Housing is a speciality area of mine- only a 2% build land change in supply can create a doom spiral of upwards rents and house prices.
I should have given a better intro to Peter Turchin's essay on elite overproduction. It was his contention that the West was sending too many people into tertiary education and this was having a negative impact in terms of large numbers of people expecting the benefits of higher income and status which used to accrue from a university education, and not receiving it. The Germans have probably got the figure right- at no more 30% of the population going into tertiary education. But it should be noted that their economy is more hungry overall for high educated workers than most, particularly in roles where education and technology intersect.
Most people only look at government or corporations as the cause of what ails us. It's what drives polarisation in the West. But it's both. Sometimes government can be the solution, but more often government is the problem. One way this happens is in creating circumstances which capital can exploit- as with not freeing up enough land to build on and the BlackRock exploit. They are exiting the US market now, and it looks as though they plan to take advantage of the UKs Housing Crisis, by buying up small farmers land and building gated communities for the 10%. The other thing to really worry about is when Government and Big Business work together- it's the textbook definition of Fascism.
Here's the thing there is an easy fix to housing. The part government should do is build more short range rail. Cities aren't necessary as centres of commerce anymore- and instead need to reinvent themselves as leisure, culture and entertainment hubs. Remote working could be far more extensive, than it already is- because currently the data shows that only those with the leverage have been able to pry themselves out of the office- the drones are still working in those ghastly open plan offices, when it's completely obsolete and only technical departments actually need to turn up for work (because of the 'I know a man who does' factor).
Anyway, I digress. With freed up building land, and short range rail, homes like this become possible. Cheap to build. Cheap to heat or cool. Great thermal insulators. Great for the planet overall, because they also happen to a great method of carbon sequestration.
In America, they probably wouldn't cost more than $150K, and could be within an hour of the average small city. It's also worth noting that the Swedes are a lot more sensible about parking. There is usually easy access to homes by road, but parking is separate, within quick walking distance- or at least what I've seen of it. It's nicer, prettier and more efficient from a land perspective. In the UK, with it's high population density, housing takes up less than 1% of land, and much of that is gardens or green spaces. Roads are another matter- nearly 2% of total land surface area. Integrated driveways are a problem- especially in terms of how far you have to walk to a bus.
I think that there's a fundemental misunderstanding in the essay. Elite overproduction doesn't just relate to the left but to the right as well. The elite doesn't really worry about left/right labels - these are for lower levels. Piketty oversimplifies and his model shouldn't be taken as anything more than light entertainment. An essay diving into this topic in depth (and three times as long) would have been much more worthwhile.
That's a fair point, but it's worth noting that in America, for example, almost nobody in tertiary education voted for Trump. We have to recognise that the Overton Window has truly shifted to encompass Right Populism. I would generally use Far Right or Far Left to describe the small percentage at the polar extremes- ethnonationalism on the one hand, and communism or extreme socialism on the other.
My point would be this- other than a few relatively famous figures, there isn't really an elite to represent Right Populism. We saw this with the Brexit tribes- where a large majority wanted to drastically cut inward migration out of economic self-interest and a fear of losing their culture, and a tiny elite wanted to turn the UK into a free trade Singapore of the West (with the latter winning out).
This is also why most of the elite class of Right Populism in America has focused almost entirely on Culture War issues, with no thought to developing a suite of economic policies designed to uplift the blue collar class. For the most part, they are still economic libertarians, the same as the UK. Trump and Vance are exceptions. Trump has his tariffs and immigration. Vance has immigration and he was also one of the few Republicans who was willing to voice support for Biden's strengthening of the NLRB- as well being emphatic about the East Palestine clean up.
Vivek, RFK and Tulsi Gabbard are also outliers. But for the most part the cultural elite class shifting to represent the new Right Populist movement are standard GOP Republicans or Traditional Conservatives adopting Culture War issues as pet hobby horses. An example would be the Congressional Bathroom fiasco. It comes across as just plain mean- at least against someone with bottom surgery. The thing to focus on is teaching the gender spectrum to children, because it is a psychosexual intervention- it pushes kids to consider how they don't fit a gross stereotype of their gender and then imagine they might be nonbinary or trans.
I had one reader on a Discourse forum suggest I should have added a couple of paragraphs dealing with the parasitic nature of regulatory bureaucracies. He's a commercial lawyer and was keen to point out the huge compliance costs regulatory bureaucracies impose. He's right and I did think about it- but the essay itself was a spur of the moment thing. I hadn't had time to think about it. My main point was that most Western democracies are facing a spending crisis. Most are beyond what can reasonably extracted in terms of tax revenue whilst retaining any real economic growth, and Western economies are becoming lethargic as a result. They need to realise that you can have oversized bureaucracies or adequate social safety nets, but not both- unless you're Sweden:)
And Sweden is an outlier because it's close to America both in terms of innovation and the ability to monetise it. Here in the UK we only seem capable of the first. Arm Holdings built some of the technology powering Nvidia. It is or was a UK company. It's now on the Nasdaq.
Re the image that you used and the contents of your essay too none of the people that you point to are in any way members of the elite, nor do they any kind of real political power. The are the now necessary worker bees who keep the system running as it now exists.
By contrast the real elites decide who is going to live and die on a mega scale. Which region or country whole countries are going to be the next (necessary!) sacrifice zone - which now includes the entire planet too
Big business and finance now have more power than most, even all governments. Much of what goes on in the Western world is now controlled by massive private hedge funds, increasingly so. In one way or another they are buying up all kinds of essential services including water supplies.
How many multiple billions (even trillions) of dollars does Black Rock and similar mega hedge fund control.
Never ending wars are of course very good for business.
Sure, I largely agree- although it's worth noting that when one looks at what hurts the economic interests of ordinary citizens, the unprecedented growth of the professional management class, and it's corresponding costs in governments, particularly with regard to regulatory bureaucracies and the huge compliance costs they cause, the proliferation of managers actually takes more out a worker's pay packet than capital. If we look at the Chinese SOEs, workers get paid about 10% and enjoy somewhat better benefits- this represents the difference in capital's 'share'. Bloated management, the unnecessary side of compliance costs, and their government counterparts in the bureaucracy probably cost the average worker's wages three times that.
Sure, it's WAG (wild-assed guess), but also a pretty SWAG (scientific WAG)- based upon research and reading on the subject. It's more than that on living standards, especially in areas like housing, where differences by State in relation to the freeing up of building land shows that housing costs can be severely impacted by planning processes, because this allows developers access to a guaranteed upwards asset speculation exploit- government has actually been helping BlackRock exploit you, albeit unintentionally. Housing is a speciality area of mine- only a 2% build land change in supply can create a doom spiral of upwards rents and house prices.
I should have given a better intro to Peter Turchin's essay on elite overproduction. It was his contention that the West was sending too many people into tertiary education and this was having a negative impact in terms of large numbers of people expecting the benefits of higher income and status which used to accrue from a university education, and not receiving it. The Germans have probably got the figure right- at no more 30% of the population going into tertiary education. But it should be noted that their economy is more hungry overall for high educated workers than most, particularly in roles where education and technology intersect.
Most people only look at government or corporations as the cause of what ails us. It's what drives polarisation in the West. But it's both. Sometimes government can be the solution, but more often government is the problem. One way this happens is in creating circumstances which capital can exploit- as with not freeing up enough land to build on and the BlackRock exploit. They are exiting the US market now, and it looks as though they plan to take advantage of the UKs Housing Crisis, by buying up small farmers land and building gated communities for the 10%. The other thing to really worry about is when Government and Big Business work together- it's the textbook definition of Fascism.
Here's the thing there is an easy fix to housing. The part government should do is build more short range rail. Cities aren't necessary as centres of commerce anymore- and instead need to reinvent themselves as leisure, culture and entertainment hubs. Remote working could be far more extensive, than it already is- because currently the data shows that only those with the leverage have been able to pry themselves out of the office- the drones are still working in those ghastly open plan offices, when it's completely obsolete and only technical departments actually need to turn up for work (because of the 'I know a man who does' factor).
Anyway, I digress. With freed up building land, and short range rail, homes like this become possible. Cheap to build. Cheap to heat or cool. Great thermal insulators. Great for the planet overall, because they also happen to a great method of carbon sequestration.
In America, they probably wouldn't cost more than $150K, and could be within an hour of the average small city. It's also worth noting that the Swedes are a lot more sensible about parking. There is usually easy access to homes by road, but parking is separate, within quick walking distance- or at least what I've seen of it. It's nicer, prettier and more efficient from a land perspective. In the UK, with it's high population density, housing takes up less than 1% of land, and much of that is gardens or green spaces. Roads are another matter- nearly 2% of total land surface area. Integrated driveways are a problem- especially in terms of how far you have to walk to a bus.
https://builtoffsite.com.au/emag/issue-05/sweden-became-home-prefab/
I think that there's a fundemental misunderstanding in the essay. Elite overproduction doesn't just relate to the left but to the right as well. The elite doesn't really worry about left/right labels - these are for lower levels. Piketty oversimplifies and his model shouldn't be taken as anything more than light entertainment. An essay diving into this topic in depth (and three times as long) would have been much more worthwhile.
That's a fair point, but it's worth noting that in America, for example, almost nobody in tertiary education voted for Trump. We have to recognise that the Overton Window has truly shifted to encompass Right Populism. I would generally use Far Right or Far Left to describe the small percentage at the polar extremes- ethnonationalism on the one hand, and communism or extreme socialism on the other.
My point would be this- other than a few relatively famous figures, there isn't really an elite to represent Right Populism. We saw this with the Brexit tribes- where a large majority wanted to drastically cut inward migration out of economic self-interest and a fear of losing their culture, and a tiny elite wanted to turn the UK into a free trade Singapore of the West (with the latter winning out).
This is also why most of the elite class of Right Populism in America has focused almost entirely on Culture War issues, with no thought to developing a suite of economic policies designed to uplift the blue collar class. For the most part, they are still economic libertarians, the same as the UK. Trump and Vance are exceptions. Trump has his tariffs and immigration. Vance has immigration and he was also one of the few Republicans who was willing to voice support for Biden's strengthening of the NLRB- as well being emphatic about the East Palestine clean up.
Vivek, RFK and Tulsi Gabbard are also outliers. But for the most part the cultural elite class shifting to represent the new Right Populist movement are standard GOP Republicans or Traditional Conservatives adopting Culture War issues as pet hobby horses. An example would be the Congressional Bathroom fiasco. It comes across as just plain mean- at least against someone with bottom surgery. The thing to focus on is teaching the gender spectrum to children, because it is a psychosexual intervention- it pushes kids to consider how they don't fit a gross stereotype of their gender and then imagine they might be nonbinary or trans.
I had one reader on a Discourse forum suggest I should have added a couple of paragraphs dealing with the parasitic nature of regulatory bureaucracies. He's a commercial lawyer and was keen to point out the huge compliance costs regulatory bureaucracies impose. He's right and I did think about it- but the essay itself was a spur of the moment thing. I hadn't had time to think about it. My main point was that most Western democracies are facing a spending crisis. Most are beyond what can reasonably extracted in terms of tax revenue whilst retaining any real economic growth, and Western economies are becoming lethargic as a result. They need to realise that you can have oversized bureaucracies or adequate social safety nets, but not both- unless you're Sweden:)
And Sweden is an outlier because it's close to America both in terms of innovation and the ability to monetise it. Here in the UK we only seem capable of the first. Arm Holdings built some of the technology powering Nvidia. It is or was a UK company. It's now on the Nasdaq.