Is Violent Societal Unrest Now Inevitable? | Peter Turchin
Summary
Market Outlook: Peter Turchin highlights that the pressures leading to societal crisis have not reversed since 2010, indicating a continued path toward instability, particularly in the United States.Economic Insights: The discussion emphasizes the role of economic inequality and elite overproduction as significant drivers of societal unrest, with the U.S. showing high levels of both factors.Societal Dynamics: Turchin introduces the concept of "cleodynamics," which uses historical data and mathematical models to analyze societal cycles and predict potential periods of instability.Investment Implications: The potential for societal unrest and revolution could impact market stability, suggesting investors should consider geopolitical risks and societal health in their strategies.Global Comparisons: While the U.S. is highlighted as being closest to a crisis, other countries like France and Japan also face challenges, though they are at different stages of societal pressure accumulation.Policy Recommendations: Turchin suggests reforms such as shutting down the "wealth pump," which involves increasing worker compensation in line with productivity and addressing elite overproduction to stabilize societies.Key Takeaways: The conversation underscores the importance of addressing structural issues within societies to prevent potential unrest, which could have significant implications for global markets and investments.
Transcript
None of those uh trends that made me so worried back in 2010, none of them have been reversed. So all the pressures for uh crisis continue to increase. The adviseration is increasing uh production is increasing and obviously state uh fiscal fragility uh is increasing. So and until we see the trend reversals um uh there is no we are going to get uh into more and more trouble and I hope very much that this trouble will be relatively bloodless continue to be a relatively bloodless revolution but the unfortunately when countries are in such fragile situations uh outbreak of serious violence is um is quite likely if if not necessarily uh deter determined. >> Welcome to Thoughtful Money. I'm its founder and your host, Adam Tagert. On this channel, we spend most of our time talking about the economy, markets, and money, which are all very important, no doubt, but they exist in service to society. If society itself reaches a point where it starts unraveling, then our portfolios start to matter a lot less when compared to safety and survival. Today's guest expert is Peter Turchin, project leader at Social Complexity and Collapse: Complexity Science Hub in Vienna. Dr. Church's written a number of best-selling books on the current precarious state of Western society, including End Times: Elites, Counter Elites, and the Path to Political Disintegration, War and Peace and Peace and War, the Rise and Fall of Empires, Ages of Discord, and most recently, the Great Holene Transformation, what complexity science tells us about the evolution of complex societies. So, what does he see as mostly likely ahead for us? Well, we'll ask the man himself, Peter. Thank you so much for joining us today. >> Glad to be here. >> Thank you, Peter. It's a real honor to have you on. I know you have a busy schedule. Um, but I very much appreciate you taking time out of it to talk to to me and our audience here at Thoughtful Money. Got a number of questions for you based on your work, but if I can just start with a really broad one, if you don't mind, >> of course. >> Is what is your current assessment of our so social fabric? Um and where does America sit on the timeline of empire in your estimation? Well, um in my book end times which was published uh two years ago, I uh suggested that United States has entered a period of um uh a revolutionary situation when um a revolution was um quite possible to happen within the next uh uh you know short period of time. Well, since um uh inauguration, since the beginning of the second term of President Donald Trump, I argue that United States is now in a uh true revolution. Fortunately, it's not as violent as the types of revolutions we uh you know think about such as the French Revolution, the Russian revolution. Yes, people are not getting guillotined ex instead uh they are fired from government jobs. So why do I think that United States is in revolution? Well, there are two types of revolutions. First of all, this those are revolutions of the elites. That's when uh a new counter elite and I can explain what I mean by counter elites. when a new counter elite comes to power and attempts to replace u uh the previously established elites all right uh by taking over various power positions right so that is a revolution of elites and that's one type of revolution but um many of such revolutions are also could be transformative revolutions when the new powerh holders attempt to change the the cultural makeup of the society. And that and by that definition, what is happening right now in the United States also to me counts like a transformative revolution. At least it's an attempt. We don't know yet how it will all play out because revolutions typically take uh many years to remake societies but we are in the process of such a remake I would argue. >> Okay. So um it seems like watching from the cheap seats here not a political analyst. Um the new administration is definitely engaging in the former type of of revolution which is the new party comes into power and it really tries to disassemble u not not just the prior party but but the establishment and and one might call this even the deep state but but basically the the the Trump administration is is definitely cleaning house a lot but they are you know dismantling department of education I mean other programs like that they welcomed indo Doge TBD to see how much that's really going to impact it's going to have. It seems to have had a lot less than they initially thought it might. But still there really was a sense of like look we are trying to get rid of what we see as sort of a created bureaucracy that's that's not useful and try to replace it with something else. That seems more like the first one. When you talk about trying to on the transformation side change the cultural makeup of society. Can you give me some examples of of elements of that that you think are underway? >> Sure. So for example, let's think about um DEI, right? This has been developing over the over the past many years two three decades at least uh started as um as wokeness maybe and then uh had taken root u in uh the a variety of governmental organizations including the US army uh and uh many other arms of the government. And so now that is being rooted out quite ruthlessly by the mega movement that came uh to power. >> Mhm. >> Right. So that's one example. Another example is that United States has been has become a um um uh a global power since 1945 and really the most um consequential uh power uh and created an order, an international order that suited it. Um perhaps it suited its elites uh the American ruling class more than common people but certainly it has remade the international order over the past 60 years well actually 70 years now. So um what is happening now is that uh uh the Trump administration is um is dramatically changing the role of environment of of of uh excuse me dramatically changing the role of United States that it plays in the international arena specifically whether on purpose or not. It's very it's sometimes hard to to to tell what are the uh motivations of Donald Trump, but I'm not a psychologist. I just look at the results of his actions and his administration. It is in fact the results are that the previous order is being destroyed whether intentionally or not but it is destroyed. United States is um is pulling out um of uh you know from its previous um um uh commitments, right? especially with with respect to Europe uh for example and it is uh changing uh the um uh the previous geoeconomic order with the u somewhat um u somewhat uh inconsistent um tariff policy, right? But uh the tariffs uh that uh that uh Donald Trump tried to um impose may change you know 100% 120% then it's back to 30%. But the effect of it is that that uh that pre previous geoeconomic order is being destroyed and gradually dismantled. So here uh we have two examples um how the cultural genome so to speak of United States is uh being changed by the present administration. And let me just add it's uh the the um coming to power the especially the second uh uh second um um uh administration of Donald Trump is much more than uh that uh the change from Republican to Democrats that we have seen over the previous you know century or even more. It is much more revolutionary because previously uh Republicans would would um replace Democrats but the um well what's called what's called as deep state right established elites bureaucracy and even uh much not just only bureaucracy but much of the political class would would be uh preserved and certainly if you look at the policies u that United States had pursued food they would change only um uh on the margins. In fact, many people who are not you know people living outside the United States in China, Russia and even uh Western Europe, they uh would not even see that much difference between a Republican or a Democratic administration, >> right? Because so much of the political machinery didn't change. It was just career people in their same same jobs. Okay. And thank you. I I I now have a much better understanding what you mean by transformative. And I agree. You know, in terms of certainly international trade, America's role in the world, it's much more sort of, you know, America first these days. Uh pulling out of NATO is a big deal. um you know but but getting involved when when when it thinks it needs to involve need it needs to get involved again to advance both Americans interests but also the interests of its its allies. Uh the Iran bombing uh nuclear actor bombing probably a pretty good example of that something that probably wouldn't have happened under many previous administrations. I totally get the ideological change on DEI. um you're probably getting a a a good perch of that uh in in uh higher education because that's been something that's sort of been a target uh ideologically of the current administration as well. Sort of trying to clean house and change the ideologies that our our many of our universities have. And again, I'm not trying to paint a good or bad on this. I'm trying to just state what is. I think you do the same thing. Um okay, so um let's get to the heart of what you do, Peter. um you've deeply studied and please correct me if I'm not pronouncing this the right way. Um cleoddnamics. >> Yeah, that's how I prefer to say cleamics. >> So cleynamics which is as I understand it the history and math of societal cycles. You've really studied the past 5,000 years. Um and looking at your work, um one of the things that it seems that you have concluded from your work is that um social unheal is often uh accompanied with something that you call elite surplus. Uh that often times is concurrent with inequality. And um I'd love to I'd love to sort of understand the wise of that. But you know hearing that makes me nervous because it seems that much of the west currently scores uncomfortably high on both right now at least on a relative basis. Um so how how concerned are you about that? >> Yeah let's step back. Um essentially uh large scale complex societies organized as states um as the one in which we live and in fact the ones that have taken over the world. They're actually quite recent in our evolutionary history. The human species has been around for maybe 200,000 years, but it's only the last 5,000 years when the first state appeared and then took over the world. So when we start um studying the dynamics of uh such uh societies, we observe that there there is a very clear rhythm. All right? It's not perfect periodicity. One may think about boom bust dynamics but essentially such u state level societies they can uh function reasonably well for maybe a century or so. All right. Sometimes longer, sometimes less. But then uh at least in the past, inevitably they would get into periods of high social turbulence, political conflict uh and even disintegration and in some u extreme cases even collapse whatever is understood by that uh term. So the question is why why do um states um go get into such periods of uh instability and possible um uh vulnerability to collapse. That's what my research group and my colleagues have been studying over the past 25 or 30 years. And we use um the methods of cleoddnamics. So what is cleoddnamics? Cleo is simply the muse of history >> in Greek um um uh history and u dynamics is the science of change. All right. So it is essentially historical dynamics. It's uh uh looking at history through the lens of complexity science which means that uh if we want to understand why things change, we first have to translate our verbal ideas into mathematical models and then uh most importantly we want to test the predictions from mathematical models with uh historical data. So the empirical part is very important because there are many uh historians and sociologists and thinkers in the past have proposed many explanations for why things happen. You know for example why did the Roman Empire collapse right uh one German historian counted over 220 uh hypothesis and since then this number of hypothesis has even grown. So it's a strange situation the numbers of hypothesis multiply right unlike in uh physics or biology but um but there is no rejection of uh some hypothesis in favor of others and that's what creodnamics attempts uh to do. So we are um really a companion to traditional history. We are not trying to replace uh traditional historians but we uh are attempting to u start moving some of the many existing theories to the cemetery of uh theories. All right. And so that's uh that's uh the big one of the big question is why do this uh periodic um uh times of um well end times happen and there are many many uh possible explanations and so what we've been doing is we've been modeling them these dynamics and testing different explanations using historical data. >> I think that is so fascinating. Uh so you're basically taking history and its lessons out of the realm of opinion, maybe even a highly educated opinion, and bringing it into the world of data. Um and finding, you know, correlations, uh and and things that you can really hang your hat on because the data is so the data is revealing. So um okay, so uh I want to get to this um elite surplus and inequality in just a moment. Um, I'm guessing though that your models allow you to put in inputs like this is what's going on in the US, this is what's going on in Europe, this is what's going on in China, etc., and give you almost kind of like a heat map of who's doing well and who's who's maybe approaching endstages uh of their 100 year 100 plus years of of society. Um, true. And if so, what does the heat map look like right now in the world? Who's in trouble? Well, let's yeah, let's talk about uh the um the drivers of uh such uh periods of instability because that will uh tell us what you know think about it's like you know climatologists they uh when they wants to study global weather systems they need uh to uh measure the temperatures and pressures right across the world. So think about it. We need to to do a similar thing. We need to measure temperatures and pressures that result in things like hurricanes or well earthquakes uh and uh things like that. All right. But now we're talking about social quakes of course. So um what are the temperatures and um and pressures that uh we need to measure? Uh this uh is uh a result of testing different explanations. Each explanation proposes its own set of variables that are drivers of crisis, right? And so by collecting data on both the potential drivers and then quantifying instability we uh can and we we have been testing those different explanations. And the results are that uh one particular theory structural demographic theory that was uh proposed by sociologist Jack Goldstone around 1990 and that uh he and um my group and many others are have been studying. It turns out that this theory is the best uh empirically supported one of um of many. All right. It doesn't say that of course human societies are complex and any particular uh any particular outbreak of internal uh warfare uh can have many uh causal factors but we are looking at what are the general factors and these general factors uh are um three-fold. First of all, it's um quite um obvious that when the well-being of people of the majority of the population starts to stagnate and then even decline, this uh creates a lot of popular discontent which can be translated into mass mobilization potential that uh that could provide the raw energy for overthrowing the um ruling classes. and established elites. So that is easy to understand and many theories actually take that into account. But it turns out that just having popular discontent is not enough because um you need somebody has to organize it. All right, it takes organization and who um is who um can do that. That's where the role of elites becomes very important. So who are the elites? Uh we use a neutral sociological definition simply power holders, people in power. So one small proportion of population 1 2 3% who occupy power positions in um uh politics in um uh armies and um police uh in economics and also ideological uh positions. And so um the established elites are those who are already in those positions. All right. Uh now we need to think about um the long term. How are the elites uh reproduced? All right. Uh of course there's always more people because elite aspirants. These are elite wannabes. There are more elite wannabes than there are positions with them. And that's normal and that's fine because some competition is good for selecting better uh potential uh leaders. However, uh situations uh sometimes happen when there is just too many uh elite aspirants for positions. It uh you start with maybe two um candidates for a position then it goes to three, five, 10. You can imagine that when competition begins to be so fierce, then um you have much greater numbers of frustrated elites, right? Those who were not who were denied positions and some of those decide to use nonregular or illegal methods to try to advance their careers. So these are the counter elites. counter elites are those um elite aspirants who decide to attempt to overthrow the established elites uh and uh occupy their positions. So to make this quite concrete you know think about u vadiman and the bolsheiks all right or hidel castro and his loss barbudos and of course the maga movement led by Donald Trump. Donald Trump is a classical uh keep in mind that all counterits are also people who wield power, right? The revolutions are not made just by some random peasant or worker. They're always organized by counter elites like the Bolsheiks for example. Um and so these are uh people who build uh social power because they lead those uh parties or revolutionary parties or movements and um uh if they are successful then they end up leading the state. All right. So these are two. The third um condition is uh the um this the um the fiscal health and general health of the state of the state um of the bureaucracy political um organizations and uh things uh like that. So we look at uh specifically you know u money is what drives uh politics and and much more beside that. So turns out that when states get into spend some much more than they uh garner in taxes uh that those um situations they become much more fragile and liable to being overturned. So for example the French revolution uh happened because the French u an regime in the previous uh elites the the state was broke. Same thing with the English revolution in 1642 and many other revolutions and the other part of uh the state health is how much um the population actually believes in the state. How much legit legitimacy does it have? So when states lose legitimacy they become also extremely vulnerable to being overthrown. So those three drivers are the temperatures and pressures that we need to uh measure and um um in back 15 years ago uh 2010 um let me just step back. So by 27 or 28 um I and my research group has been studying historical societies and we and we essentially developed uh further the theory I was explaining to you the structural demographic theory and uh I didn't want at that time to study contemporary societies but every time I gave a talk people would ask me hey so where are we and so I decided to okay uh let's take a book, let's take an start collecting data on those indicators and I was uh shocked actually uh when I discovered that we were well on the road to crisis. And so in 2010 I in fact published um a short um article in uh one of the best um uh science journals called nature where I uh uh you know published this forecast for the next 10 years that by 2020 2020s really uh United States uh would be in a highly unstable situation and uh after that it was like being on a train wreck. you know, you just uh you know moving moving towards the precipice, you know, and finally it all um happened actually. >> Wow. Okay. So, let me just make sure I took good notes here. So the the key pillars for a society approaching revolution are um inequality where basically the the majority of the masses are feeling like their prospects are either stagnating or diminishing. Um it's having um surplus elites or you know a lot of elites to the point where you have members of the elite class that aren't really in power and are frustrated by that. Right. And and these I think as you said these are the folks that tend to be the leaders of of the revolution. Um, and then you have to have some sort of um, sense that the state isn't going to write itself. Meaning, hey, this country is falling into insolvency or a new leaders come in that just none of us have faith in. And that's sort of like the the the Tinder that gets lit by the uh, the elite revolutionary that the masses then then migrate to. You're nodding as I'm saying all this. Okay. So, you said you were kind of kind of taking address those issues. That's about right. But um let me um clarify that um for us the in inequality is not a driver rather it's a good proxy for other processes which are drivers. Think about it. Uh in fact the common person even you know you and I how do we know that inequality has increased right? It's um you know what does genie uh index mean? Uh what drives um uh what uh drives people's attitudes it's is actually what happens to them. So >> right it's the whole it's a recession if your neighbor loses their job. It's a depression if you lose yours. Right. You're just whatever happens to me is what I care about. >> Exactly. So when people when uh people see that they live worse than their parents, right? >> Yeah. >> That is that is um what uh drives uh their discontent, right? And and the same thing when we see too many elites, all right, um vying for positions. For example, we have too many wealthers, all right, and still the fixed number of political positions that some of them want to occupy. So this overp production of uh elites um together with imiseration that's what creates um um uh measures of inequality. Right? >> So uh it's a good measure um to have but it's not the driver. The driver is actually imiseration and u creation of counter elites massive creation of counter elites and the state uh legitimacy. for example the state losing a war right so that's what led to the revolution of 1905 in Russia losing the war with Japan or you know we can give many other examples of that so uh losing state legitimacy is often a trigger either that or sudden uh fiscal collapse the state loses control of the coercive force right and then all hell uh breaks uh loose because the different elite factions now start fighting it out amongst themselves. So those are the three most important things and plus of course many other factors you know uh geoeconomic things like sudden uh change in the price of um food for example or >> you could have a massive drought that that all of a sudden makes food scares climate change. So there are many other factors that uh that work together with those three main ones but those three minus ones are the general factors that we see in the uh on the road to crisis and that's what precisely what I saw in back in 2010. >> Okay. Yeah. So to me, and correct me if this is a bad analogy, but these three things together are like the cocktail of nitrog that makes nitroglycerin where it it's it sits there, right? You've got to have some sort of stimulus that that causes it to explode, whether it's a lost war, whether it's a famine, whatever, right? But but once you have those three things together, then you have the prospects for the explosive revolution. >> Exactly. So the power of adminiseration creates the raw energy. The counter elites provide organization and then the triggering event is often uh some kind of catastrophic failure at the state level which uh in fact allows all this to uh to break out and the explosion to proceed. >> Okay, good. So I want to I want to start talking about a couple different countries or regions with you to get your opinion. But I got to say, as you were sort of describing what could really make all this go go go south for a country, the country that was popping most of my mind was Iran. Um, and I'm not an expert on Iran, but you know, Iran basically just went through, you know, a fairly humiliating uh uh, you know, series of developments on the world stage where, you know, they were basically, as I understand it, sort of the chief funer of of a lot of the antagonism versus Israel. Over the past two years, a lot of the their infrastructure in their proxy countries has been dismantled by the Israelis largely. And then the US came in and took out Iran's nuclear facility there. And so, you know, they're kind of on their back heels right now as best I can tell. It seems to me that if you were looking for a country that was rich in these three things, Iran might score really highly on the list. Well um in order to do that um u we cannot just go on uh you know what we read uh in newspapers especially if these are you know um western newspapers that tend to present a very slanted story often times what we need to do is to actually go ahead and collect data we need to collect data on a variety of proxies for imiseration um literal production and state weakness we have not done that for Iran So that's why I cannot speak about Iran. But uh here's the good news. We just recently learned that we got a big grant uh from a European uh funding agency and Iran is the is one of the 12 countries that we will be uh studying using this approach. So ask me in maybe three years. All right. But uh so far we have done such um um uh detailed work and I can speak uh much more um solidly about United States, France, Japan, um uh UK. Uh so those are the countries for which we have collected data on their pressures and temperatures and >> Okay. Well, let let's go to those then and I'd love to hear your thoughts, but I'm I'm going to just make a guess. You can correct me. I'm gonna say France is in real trouble. >> Less so than United States, believe it or not. >> I don't I don't believe. Wow. >> Yeah. So, for example, um on the uh in terms of popular imiseration, France actually does not score very highly. Uh because uh the uh state there, it's quite paternalistic state. Uh of course, you know, half of 50% of you know what people earn is they paying taxes. that until recently the state has been actually pretty good at um you know but at maintaining the well-being of common citizens. Yes, of course there is still some discontent and of course the yellow vest movement um is a factor but remember that yellow vest movement did not lead anywhere right they just kept u you know protesting for you know I think more than a year uh and then nothing happened there was nothing like 1789 you know in uh Paris which lead to the French revolution so um so France is um has certainly a serious problem elite over production and uh our French colleagues have documented that. All right. And of course uh the state fragility there uh is obvious. All right. Uh and u specifically the fiscal uh health. I mean uh they are essentially broke but on the but there is not enough raw energy from the masses so to speak. Okay. Sorry to interrupt, but just in your answer, can you include the impact and this will be for a lot of other countries, but the impact of of any issues around migration because my understanding is is that's a becoming a big flashoint issue in in in lots of European countries, but France has been dealing with some really big um assimilation issues with some of its its migrants for a long time that seem to only be getting worse. >> Yeah. So um migration um has um a uh especially massive migration um has um a very uh uh strong effect on uh imiseration and the way it works is a fairly standard economic uh mechanism. You if you over supply labor right then uh you drive down its um uh its costs which means the wages. So we saw that happen in United in the United States where we had pretty massive migration from um starting in the late 60s and especially um in more recent decades. Uh we see um uh similar uh effects in Germany um and United Kingdom. All right. And and in France. So uh but because um you know because um the um this uh iron law of economics right when over supply of something uh leads to decreasing uh price of it can be actually managed by extra economic things by the political uh instruments and so if workers workers are protected against such pressures as happened in many social democratic countries especially like Denmark for example, but also France, right? Then um uh migration will not have such a huge effect um in on on immeasureration of the population. But of course, migration also has a big effect on on cultural um characteristics and divisions within country and that has been of course quite important in France. But let me just say basically France is not as in dire state as many other countries uh in Western Europe and especially North America like United States. That's what's interesting. >> It is interesting. And okay, I'm I'm I'm happy to be wrong there. Um to your point about um that there's got to be some sort of social um what do you want to call it? um you know cra uh we'll just call it social support I guess for for workers whose jobs are getting impacted by low wages for immigration. Um I guess that's got I guess I understand the criticality of that because I imagine and I think I'm seeing this in countries like Canada um where and you know where um if you are feeling personally emiserated right I lost my job because this migrant came in and totally undercut me right um not only is that imiseration of you personally but doesn't that also lead to your third point of of um legitimacy issues with the government which is like hey the government seems to care more about this Johnny come lately to my country than actual citizens or people who are naturally born here right so isn't that a dangerous part of the cocktail >> exactly so in the United States um we were a fairly standard socially democratic country from the new deal period until 1970s and after that uh those protections for workers that were pl in placed during the new deal they were dismantled one by one and that is why massive immigration in the United States resulted in rather contributed to imiseration. It was not not the only factor but it was a fairly major factor. And so that is why uh also in our theory why um the um uh support for the political institutes in the United States has started to unravel also about the same time from 1970s and has reached really uh uh you know the supporter has reached very low values by uh this point. So it's a combination of those things. But also keep in mind that elite over production leads to much more um uh conflict amongst the elites and that decreases the uh state efficiency because instead of trying to solve problems, right, the different elite uh groups and parties are fighting each other and that further uh diminish diminishes uh state legitimacy. So these factors really work together and very in a synergistic way. >> Okay. So it's interesting. Um it sounds like you just described the US political system but also I think probably all the other western countries you just mentioned there too. Um we seem to be at a point right now where bipartisanship it just doesn't even seem to be a credible option anymore. >> Yeah. Exactly. And but keep in mind that again using um inequality as a proxy for these uh pressures right uh you can see that United States was actually pioneer we started um increasing uh inequality which means imiseration and production >> by 20 years earlier than say in Germany and maybe 30 years earlier than in France and these pressures need to accumulate before they result in an explosion so that's another reason why uh uh you know France for example is not quite as advanced on this road to crisis as >> although with France the skeptic in me wants to push back and say yeah for now but until the country really starts like defaulting on debts and stuff like that then all bets are off. >> Well exactly. So for example right now uh the um the ruling party uh in France basically wants to increase imiseration instead of u uh we we know that in France um uh billionaires pay uh about 25% of their income in taxes whereas middle class pays 50%. >> Mhm. >> All right. So that seems like uh a basic unfairness and uh some people are trying to write this but the present government wants to solve the budgetary crisis by um putting all weight of it on common people. All right. And so by doing that they will be they will be increasing imiseration and eventually this is uh what will uh result in in an explosion if if they persist in this uh in this way. >> Okay. All right. Well, let's head over to the US which you've said a number of times is in pretty bad shape. And um yeah, I I I don't want to talk too much, but this, you know, this this growing divide between the heads h haveves and have nots in America is something I talk an awful lot about. And you know, I'm not I'm not a polyiana. I know that in any any society, you're going to have a top 20% that does better than the bottom 80%. Um you know, that that that's just um the paro principle to a certain extent. Um, but in America at least, you know, kind of the the social contract is that anybody has the ability to change their station, right? And when people start giving up on the belief in that social contract, I think that's when bad things happen. I think that's probably what we you would your work basically shows. Um so I guess my question is is in America specifically what are the things that are worrying you the most on these risk factors as you see them right now? >> Yeah. So all um uh complex societies they uh they have a lot of inequality. So what's important is you know United States back in 1960s also had a lot of inequality. But at that time uh a CEO of a typical 500 uh Fortune 500 company would earn maybe 35 times uh as much as the typical worker. Now it is uh 400 times as much. So what's happening? You have to look at this in the dynamic in the in the dynamical um from the dynamical point of view. um uh up to 19 uh late 1970s the you you've seen this uh famous graph the productivity of American workers and their compensation they were going together and then suddenly productivity continued to increase but compensation stagnated and even declined >> so I call this in end times I call it the wealth pump because all that extra all those fruits of economic uh growth did not go to the 90% right the right it went to capital labor. Yeah, >> exactly. They went not not on the capital. No, it went to the higher um you know to high paid um professionals, you know, and uh u many cos um retired with golden parachutes and things like that. So, it's really not u uh labor versus capital. It's really um the 1% versus the 99%. >> Okay, that's a good way to think of it. But but the way that I just help correct me here because I think like if you're in the top 1% or the top 10% you still hold the vast majority of the capital. Like there's very little below that. Well, you know, many highly paid uh corporate lawyers, for example, they are u they uh they they're just very highly paid uh and they may buy buy into buy uh into the stock exchange or something, but that's not really the source of their wealth. They're there. It's not like they are um invested capital and are living off the of its proceeds, right? They are earning those monies themselves. It's very important not to miss that group of highly very highly paid um workers. >> Okay. So, so, so you would maybe maybe a better way to describe it is is the the corporate um elite is are the ones who were hoovering up, you know, the vast majority of the spoils. >> Exactly. If you look if you look at where the newly wealthy people came from, the majority of them are not old wealth, but they are the newly created wealth. Some of them coming from very modest uh backgrounds and becoming billionaires. Well, Elon Musk, for example, you know, he he's not he his family was not particularly wealthy. >> Okay. So, totally get it. All right. So I interrupted you but but um we are having this increasing divide between the corporate elite and and kind of everybody else. Um and I I presume it's at some level now that you think is sort of dangerously near the boiling point. >> Yes. In fact we have been at that boiling point since 2016 essentially. >> Okay. Well let me ask you this. Um so you know what happened in 2016 right? we we had two darkhorse candidates um get a lot of popular support in the election cycle, which is kind of interesting. They were on opposite ends of the political spectrum, right? So, you had Donald Trump uh on the right and you had Bernie Sanders on the left, right? And and I'm not going to get into but some could say Bernie was sort of pushed out to get the establishment candidate Hillary on the ticket or whatnot. But both Sanders and Trump were, I think, manifestations of the populace saying, "Hey, look, the status quo is not working for me. So, I want to go with somebody who's not status quo." Um, so you're nodding as I'm saying this, and obviously Trump got in in 2016. Um, let me ask you this. Uh, and I'm I'm I'm I'm not asking this from a partisan standpoint, but, you know, let's look at Trump's second, uh, administration so far, right? very much make America great again. We're going to reshore our jobs. We're going to close the border to illegals. We're going to deport a bunch of the ones that got here. Um it it is very much a Main Street over Wall Street message. You know, we want to repair this country and the damage that have been done to the middle class. Now, people can debate whether that's really how it's being executed or whether it's being executed successfully and all that stuff, but are are Are are those actually starting are those measures that will bring down the temperature here because they seem more populist? >> Yeah. So, first of all, let's compare Donald Trump to Bernie Sanders. Donald Trump was a true counter elite because he he he was willing to break rules right from the very beginning. All right, that's that's his success. And Bernie Sanders was more of a dissident elite and you know everybody now pretty much agrees that he was unfairly excluded from uh in 2016 and he meekly exceeded to that. So, so that is a very big difference between true revolutionaries, right? Uh, you know, who don't exceed like thinking again Fidel Castra, right? He was willing to go into the hills and start, you know, a civil war. So, um, so so those are very important differences, but what uh what is common with them is populism. Uh now populism now in nowadays is used in a porative u uh way but actually you know uh if if you define populism as trying to improve the condition of the majority of the population what's wrong with that? In fact that's a very good way to stabilize societies. In fact, all um societies when they exit from crisis, they rebalance themselves in such a way that that uh the they improve the conditions of common people. Right? So, so that's um one thing. Now, specifically um the mega movement has several ideas which actually make sense from the populist point of view. So one of them is uh shutting down immigration is um is going to uh decrease the labor supply and that would actually have a should have a positive effect according to >> right and and and sorry just so we're clear with everybody we're talking about illegal immigration not not not our illegal >> no um legal also I mean legal immigrants also um you know uh take um uh um uh uh take jobs. You know, I'm a I'm a legal immigrant myself. And so, uh if I did not come to United States, then one of the native Americans uh people who grew up here would be the professor at the university. So, it's u um it it doesn't matter for from this point of view whether it's legal or illegal immigration. The other thing is that we don't know this tariff thing. I mean this seems to be extremely crude and obviously it is going to create a lot of economic u uh discombobulation in the uh short run but again uh it is portrayed as a way to increase the supply of jobs by bringing them back. So those ideas in fact um they make sense to common people and in fact they they fit with standard economics um uh whether um whether this administration will be able to do it uh that's of course a big question as you pointed out because you just only doing tariffs probably not enough. We need an industrial policy. All right. And uh Trump is not uh Trump is against any kind of uh industrial policies. It really uh it really would make sense to to couple uh tariffs with uh a way to promote uh the creation of jobs within the United States. >> Okay. Um this is so fascinating. And Peter, I feel like I could go for two or three more hours with you here, but I I got to I got to be respectful of your time. Um, so let let me start getting into some brass tax questions and then then we'll wrap it up. Um, I guess with the countries where you have enough data for, um, who are you most concerned about? Who who's closest to the brink? Is it the US or is it some of the other countries that you follow? US definitely because we've started on this road to crisis uh earlier than anybody else and we have proceeded um u further. So Japan for example is a very interesting case uh because um we've delved into uh the power structures of Japan. It has nothing to do with democracy. The you know it's been actually one party state. Furthermore, most of the uh political figures um in uh Japan are actually descendants of one uh individual um who who lived during the major era 1868 and was the first prime minister of Japan. It turns out if you trace um the um the family familial connections of about half of the prime ministers and other u important leaders they actually are descendants or they married into they married a descendant of that particular uh individual. So it's uh it's a very um uh the ruling class of Japan is extremely corrupt and uh and very inept but it has a strangle hold on the society and one thing in Japan that actually work works against um uh increasing the temperatures is that they just don't have that those that many young people. I mean it's young people who rebel or at least they're young people who supply the revolutionary troops that are organized by the elites and Japan has very few young people because their you know fertility rates have been collapsing. So we see actually uh those factors there's huge emiseration in Japan. You know most people don't know that um over the past 20 years the uh real wages of for the you know median wages for the common people for the typical worker has decreased by 25%. Can you imagine that? I mean uh uh this has not happened in United States. It's a tremendous amount. But in Japan, the majority of population is truly emiserated. All right. Uh so that's a big factor driving uh discontent obviously. But there is not enough young people to uh to turn it into more violent forms. So this is going to be a very interesting uh country to watch. >> That's super fascinating. Like I said, Peter, I could talk to you for hours here. So let me um Well, quick quick question with the US. Just want to make sure I understand kind of where we ended the conversation. You're most concerned about it. It it it is the closest to the brink, but do you feel like it is taking a step back or two from the brink or is the momentum still going forward in your mind? Well, as it happens, um I I started a substack um this uh spring and right now I am I am publishing a series of posts on the structural demographic state of America. So I have published two weeks ago the first installment on the wealth pump uh which I explained to you and uh the next one on Friday will be on the well-being and then I'll talk about the literal production. But I can tell you right ahead that none of those uh trends that made me so worried back in 2010 none of them have been reversed. So all the pressures for uh crisis continue to increase. The imiseration is increasing uh edit production is increasing and obviously state uh fiscal fragility uh is increasing. So and until we see the trend reversals um uh there is no we we are going to get uh into more and more trouble and I hope very much that this trouble will be relatively bloodless continue to be a relatively bloodless revolution but the unfortunately when countries are in such fragile situations uh outbreak of serious violence is um is quite likely if if not necessarily uh deter determined. >> Okay. Wow. So, that is sobering. Um, all right, Peter. Just means we're going to have to have you on again periodically to give us updates here. But, um, normally at the very end of the conversation, I ask where folks should go to follow you and your work. Uh, maybe I'll just ask that right now since you mentioned your Substack. Where can people find your Substack? >> Um, it's peter turin.substack.com. So, it's very easy. just um uh just search for turin substack and you'll get to it. >> That's the best. I also have a um a website where I which I update as new uh it's peterin.com. So you can go there and uh you can see uh the new articles um and books I'm working on. Uh so that's uh there and of course um if you want to understand uh what we were talking about today, end times is the place to go. The book uh lays it out in a much more systematic way than I could do. You know, I'm actually better writer than speaker. >> You're doing great, but I understand hard to get everything out in in a in a single hour um when you've been putting years and years of research into it. All right. So, Peter, when I edit this, I will put up links to your Substack, your website. I'll put the book cover up on the screen so folks know where to go. When it comes to buying your books, I presume they're available everywhere books are sold. Do you care whether people get it from Amazon or your website? >> No, I don't care. It's End Times um has End Times actually has been quite um you know, the publisher, which is Random House, Penguin Random House. That's probably the monstrous uh the most monstrous publisher uh in the world, right? They did a great job placing them in li in um uh sorry not libraries in bookstores and um you can buy it from them directly Amazon uh and Apple whatever uh there is an ebook there is audio book so uh all the possible uh versions >> okay great and folks I'll put those links in the description below this video too um all right Peter so um all right so the world watches this video you the US watches this video and says, "You know what? Peter Peter gets it." Um, so we're going to make him temporary emperor to fix fix this to bring us back from the brink. What reforms would you prioritize most highly? Uh first first of all I would not accept uh the uh job of emperor because I would be assassinated probably in lecture you know even um just being an adviser scientific adviser uh that which is I I would accept obviously uh even that is actually quite uh dangerous quite dangerous >> so I would be much more effective as um trying to explain uh the different um uh issues rather than You know, you have to be good politician to uh to bring about positive change. Uh you have to be good politician. You have to be good working with people. I'm a weird person. I'm not good at I'm not a you know, I'm not a people's person. I'm a >> Well, you're you're an academic in the best sense. So So do Okay. But so you're you're the country eagerly awaits your white paper. What are the bullets at the top that says you guys should do this? >> Yeah. Shut down the wealth pump. >> Okay. and and and how what's a reform you'd like to see that >> there is a variety of mechanisms and we can actually use a combination of them. Uh but um some of them have to do with bringing back back the labor unions so that workers have the power uh to bargain for their increasing taxes um on the u rich. Uh it's um u controlling uh immigration which is actually happening right now. Um let's see um uh it's actually actually I had a um an article in Vox magazine where I uh sort of talk more about that. Uh so my point is that um let me just um for formulate it better. My point is that uh we have studied now hundreds of u uh previous uh periods when societies actually emerged from crisis. All right. And they did it in a variety of ways. They all had to shut down the wealth pump and bring the um the well-being of the majority population back on track. Right? But specific um specific um uh methods they used were uh not necessarily the same. All right? And that's why we will have to do it by experimentation essentially. We'll have to try different things until we get it right. >> Okay. Okay. That's okay. I that that's actually really interesting. >> Just keep the the goal we need to keep in mind is to get back the worker uh compensation to go to grow together with the worker productivity. That's that's what we need to accomplish. >> Okay. Great. So you again, not a not a communist style revolution or anything like that necessarily, but it's just something that that gives the worker um I I guess reduces the um imbalance between how much is going to that top 1% corporate elite of the increase in productivity. So the the worker can participate in their own value creation. >> Yes, the worker should get a fair share of uh of the economic growth. >> Okay, so great. And now we just have a huge debate over what is fair share and what are the ways in which we can do that. But we're a large country. We can try a bunch of different things and see what sticks and go from there. That would be the rational way. I know that's not the way that countries generally deal with this. Usually goes >> sometimes they do. We have described several examples where countries avoided revolutions by doing the right reforms. So >> okay. Well, this is one this is one of the reason why why I pushed you for specific ideas because there's a quote of Churchills. believe it's from Church Hill that's always stuck with me which is in the time in a time of crisis the solutions that get implemented are the ones that are already on the table meaning the what you want to do now before crisis arrives is get ideas on the table right so that they're there when people reach for them in desperation >> right I agree with that >> okay all right well look Peter this has been um just a fantastic discussion thank you so much for making the time to do this um I've very much enjoyed it and if if your schedule allows in the future. We'd love to have you back on in a quarter or two to give us an update. >> Thank you, Adam. I also enjoyed our conversation. >> Thank you so much. All right, and everybody else, thanks so much for watching.
Is Violent Societal Unrest Now Inevitable? | Peter Turchin
Summary
Market Outlook: Peter Turchin highlights that the pressures leading to societal crisis have not reversed since 2010, indicating a continued path toward instability, particularly in the United States.Economic Insights: The discussion emphasizes the role of economic inequality and elite overproduction as significant drivers of societal unrest, with the U.S. showing high levels of both factors.Societal Dynamics: Turchin introduces the concept of "cleodynamics," which uses historical data and mathematical models to analyze societal cycles and predict potential periods of instability.Investment Implications: The potential for societal unrest and revolution could impact market stability, suggesting investors should consider geopolitical risks and societal health in their strategies.Global Comparisons: While the U.S. is highlighted as being closest to a crisis, other countries like France and Japan also face challenges, though they are at different stages of societal pressure accumulation.Policy Recommendations: Turchin suggests reforms such as shutting down the "wealth pump," which involves increasing worker compensation in line with productivity and addressing elite overproduction to stabilize societies.Key Takeaways: The conversation underscores the importance of addressing structural issues within societies to prevent potential unrest, which could have significant implications for global markets and investments.Transcript
None of those uh trends that made me so worried back in 2010, none of them have been reversed. So all the pressures for uh crisis continue to increase. The adviseration is increasing uh production is increasing and obviously state uh fiscal fragility uh is increasing. So and until we see the trend reversals um uh there is no we are going to get uh into more and more trouble and I hope very much that this trouble will be relatively bloodless continue to be a relatively bloodless revolution but the unfortunately when countries are in such fragile situations uh outbreak of serious violence is um is quite likely if if not necessarily uh deter determined. >> Welcome to Thoughtful Money. I'm its founder and your host, Adam Tagert. On this channel, we spend most of our time talking about the economy, markets, and money, which are all very important, no doubt, but they exist in service to society. If society itself reaches a point where it starts unraveling, then our portfolios start to matter a lot less when compared to safety and survival. Today's guest expert is Peter Turchin, project leader at Social Complexity and Collapse: Complexity Science Hub in Vienna. Dr. Church's written a number of best-selling books on the current precarious state of Western society, including End Times: Elites, Counter Elites, and the Path to Political Disintegration, War and Peace and Peace and War, the Rise and Fall of Empires, Ages of Discord, and most recently, the Great Holene Transformation, what complexity science tells us about the evolution of complex societies. So, what does he see as mostly likely ahead for us? Well, we'll ask the man himself, Peter. Thank you so much for joining us today. >> Glad to be here. >> Thank you, Peter. It's a real honor to have you on. I know you have a busy schedule. Um, but I very much appreciate you taking time out of it to talk to to me and our audience here at Thoughtful Money. Got a number of questions for you based on your work, but if I can just start with a really broad one, if you don't mind, >> of course. >> Is what is your current assessment of our so social fabric? Um and where does America sit on the timeline of empire in your estimation? Well, um in my book end times which was published uh two years ago, I uh suggested that United States has entered a period of um uh a revolutionary situation when um a revolution was um quite possible to happen within the next uh uh you know short period of time. Well, since um uh inauguration, since the beginning of the second term of President Donald Trump, I argue that United States is now in a uh true revolution. Fortunately, it's not as violent as the types of revolutions we uh you know think about such as the French Revolution, the Russian revolution. Yes, people are not getting guillotined ex instead uh they are fired from government jobs. So why do I think that United States is in revolution? Well, there are two types of revolutions. First of all, this those are revolutions of the elites. That's when uh a new counter elite and I can explain what I mean by counter elites. when a new counter elite comes to power and attempts to replace u uh the previously established elites all right uh by taking over various power positions right so that is a revolution of elites and that's one type of revolution but um many of such revolutions are also could be transformative revolutions when the new powerh holders attempt to change the the cultural makeup of the society. And that and by that definition, what is happening right now in the United States also to me counts like a transformative revolution. At least it's an attempt. We don't know yet how it will all play out because revolutions typically take uh many years to remake societies but we are in the process of such a remake I would argue. >> Okay. So um it seems like watching from the cheap seats here not a political analyst. Um the new administration is definitely engaging in the former type of of revolution which is the new party comes into power and it really tries to disassemble u not not just the prior party but but the establishment and and one might call this even the deep state but but basically the the the Trump administration is is definitely cleaning house a lot but they are you know dismantling department of education I mean other programs like that they welcomed indo Doge TBD to see how much that's really going to impact it's going to have. It seems to have had a lot less than they initially thought it might. But still there really was a sense of like look we are trying to get rid of what we see as sort of a created bureaucracy that's that's not useful and try to replace it with something else. That seems more like the first one. When you talk about trying to on the transformation side change the cultural makeup of society. Can you give me some examples of of elements of that that you think are underway? >> Sure. So for example, let's think about um DEI, right? This has been developing over the over the past many years two three decades at least uh started as um as wokeness maybe and then uh had taken root u in uh the a variety of governmental organizations including the US army uh and uh many other arms of the government. And so now that is being rooted out quite ruthlessly by the mega movement that came uh to power. >> Mhm. >> Right. So that's one example. Another example is that United States has been has become a um um uh a global power since 1945 and really the most um consequential uh power uh and created an order, an international order that suited it. Um perhaps it suited its elites uh the American ruling class more than common people but certainly it has remade the international order over the past 60 years well actually 70 years now. So um what is happening now is that uh uh the Trump administration is um is dramatically changing the role of environment of of of uh excuse me dramatically changing the role of United States that it plays in the international arena specifically whether on purpose or not. It's very it's sometimes hard to to to tell what are the uh motivations of Donald Trump, but I'm not a psychologist. I just look at the results of his actions and his administration. It is in fact the results are that the previous order is being destroyed whether intentionally or not but it is destroyed. United States is um is pulling out um of uh you know from its previous um um uh commitments, right? especially with with respect to Europe uh for example and it is uh changing uh the um uh the previous geoeconomic order with the u somewhat um u somewhat uh inconsistent um tariff policy, right? But uh the tariffs uh that uh that uh Donald Trump tried to um impose may change you know 100% 120% then it's back to 30%. But the effect of it is that that uh that pre previous geoeconomic order is being destroyed and gradually dismantled. So here uh we have two examples um how the cultural genome so to speak of United States is uh being changed by the present administration. And let me just add it's uh the the um coming to power the especially the second uh uh second um um uh administration of Donald Trump is much more than uh that uh the change from Republican to Democrats that we have seen over the previous you know century or even more. It is much more revolutionary because previously uh Republicans would would um replace Democrats but the um well what's called what's called as deep state right established elites bureaucracy and even uh much not just only bureaucracy but much of the political class would would be uh preserved and certainly if you look at the policies u that United States had pursued food they would change only um uh on the margins. In fact, many people who are not you know people living outside the United States in China, Russia and even uh Western Europe, they uh would not even see that much difference between a Republican or a Democratic administration, >> right? Because so much of the political machinery didn't change. It was just career people in their same same jobs. Okay. And thank you. I I I now have a much better understanding what you mean by transformative. And I agree. You know, in terms of certainly international trade, America's role in the world, it's much more sort of, you know, America first these days. Uh pulling out of NATO is a big deal. um you know but but getting involved when when when it thinks it needs to involve need it needs to get involved again to advance both Americans interests but also the interests of its its allies. Uh the Iran bombing uh nuclear actor bombing probably a pretty good example of that something that probably wouldn't have happened under many previous administrations. I totally get the ideological change on DEI. um you're probably getting a a a good perch of that uh in in uh higher education because that's been something that's sort of been a target uh ideologically of the current administration as well. Sort of trying to clean house and change the ideologies that our our many of our universities have. And again, I'm not trying to paint a good or bad on this. I'm trying to just state what is. I think you do the same thing. Um okay, so um let's get to the heart of what you do, Peter. um you've deeply studied and please correct me if I'm not pronouncing this the right way. Um cleoddnamics. >> Yeah, that's how I prefer to say cleamics. >> So cleynamics which is as I understand it the history and math of societal cycles. You've really studied the past 5,000 years. Um and looking at your work, um one of the things that it seems that you have concluded from your work is that um social unheal is often uh accompanied with something that you call elite surplus. Uh that often times is concurrent with inequality. And um I'd love to I'd love to sort of understand the wise of that. But you know hearing that makes me nervous because it seems that much of the west currently scores uncomfortably high on both right now at least on a relative basis. Um so how how concerned are you about that? >> Yeah let's step back. Um essentially uh large scale complex societies organized as states um as the one in which we live and in fact the ones that have taken over the world. They're actually quite recent in our evolutionary history. The human species has been around for maybe 200,000 years, but it's only the last 5,000 years when the first state appeared and then took over the world. So when we start um studying the dynamics of uh such uh societies, we observe that there there is a very clear rhythm. All right? It's not perfect periodicity. One may think about boom bust dynamics but essentially such u state level societies they can uh function reasonably well for maybe a century or so. All right. Sometimes longer, sometimes less. But then uh at least in the past, inevitably they would get into periods of high social turbulence, political conflict uh and even disintegration and in some u extreme cases even collapse whatever is understood by that uh term. So the question is why why do um states um go get into such periods of uh instability and possible um uh vulnerability to collapse. That's what my research group and my colleagues have been studying over the past 25 or 30 years. And we use um the methods of cleoddnamics. So what is cleoddnamics? Cleo is simply the muse of history >> in Greek um um uh history and u dynamics is the science of change. All right. So it is essentially historical dynamics. It's uh uh looking at history through the lens of complexity science which means that uh if we want to understand why things change, we first have to translate our verbal ideas into mathematical models and then uh most importantly we want to test the predictions from mathematical models with uh historical data. So the empirical part is very important because there are many uh historians and sociologists and thinkers in the past have proposed many explanations for why things happen. You know for example why did the Roman Empire collapse right uh one German historian counted over 220 uh hypothesis and since then this number of hypothesis has even grown. So it's a strange situation the numbers of hypothesis multiply right unlike in uh physics or biology but um but there is no rejection of uh some hypothesis in favor of others and that's what creodnamics attempts uh to do. So we are um really a companion to traditional history. We are not trying to replace uh traditional historians but we uh are attempting to u start moving some of the many existing theories to the cemetery of uh theories. All right. And so that's uh that's uh the big one of the big question is why do this uh periodic um uh times of um well end times happen and there are many many uh possible explanations and so what we've been doing is we've been modeling them these dynamics and testing different explanations using historical data. >> I think that is so fascinating. Uh so you're basically taking history and its lessons out of the realm of opinion, maybe even a highly educated opinion, and bringing it into the world of data. Um and finding, you know, correlations, uh and and things that you can really hang your hat on because the data is so the data is revealing. So um okay, so uh I want to get to this um elite surplus and inequality in just a moment. Um, I'm guessing though that your models allow you to put in inputs like this is what's going on in the US, this is what's going on in Europe, this is what's going on in China, etc., and give you almost kind of like a heat map of who's doing well and who's who's maybe approaching endstages uh of their 100 year 100 plus years of of society. Um, true. And if so, what does the heat map look like right now in the world? Who's in trouble? Well, let's yeah, let's talk about uh the um the drivers of uh such uh periods of instability because that will uh tell us what you know think about it's like you know climatologists they uh when they wants to study global weather systems they need uh to uh measure the temperatures and pressures right across the world. So think about it. We need to to do a similar thing. We need to measure temperatures and pressures that result in things like hurricanes or well earthquakes uh and uh things like that. All right. But now we're talking about social quakes of course. So um what are the temperatures and um and pressures that uh we need to measure? Uh this uh is uh a result of testing different explanations. Each explanation proposes its own set of variables that are drivers of crisis, right? And so by collecting data on both the potential drivers and then quantifying instability we uh can and we we have been testing those different explanations. And the results are that uh one particular theory structural demographic theory that was uh proposed by sociologist Jack Goldstone around 1990 and that uh he and um my group and many others are have been studying. It turns out that this theory is the best uh empirically supported one of um of many. All right. It doesn't say that of course human societies are complex and any particular uh any particular outbreak of internal uh warfare uh can have many uh causal factors but we are looking at what are the general factors and these general factors uh are um three-fold. First of all, it's um quite um obvious that when the well-being of people of the majority of the population starts to stagnate and then even decline, this uh creates a lot of popular discontent which can be translated into mass mobilization potential that uh that could provide the raw energy for overthrowing the um ruling classes. and established elites. So that is easy to understand and many theories actually take that into account. But it turns out that just having popular discontent is not enough because um you need somebody has to organize it. All right, it takes organization and who um is who um can do that. That's where the role of elites becomes very important. So who are the elites? Uh we use a neutral sociological definition simply power holders, people in power. So one small proportion of population 1 2 3% who occupy power positions in um uh politics in um uh armies and um police uh in economics and also ideological uh positions. And so um the established elites are those who are already in those positions. All right. Uh now we need to think about um the long term. How are the elites uh reproduced? All right. Uh of course there's always more people because elite aspirants. These are elite wannabes. There are more elite wannabes than there are positions with them. And that's normal and that's fine because some competition is good for selecting better uh potential uh leaders. However, uh situations uh sometimes happen when there is just too many uh elite aspirants for positions. It uh you start with maybe two um candidates for a position then it goes to three, five, 10. You can imagine that when competition begins to be so fierce, then um you have much greater numbers of frustrated elites, right? Those who were not who were denied positions and some of those decide to use nonregular or illegal methods to try to advance their careers. So these are the counter elites. counter elites are those um elite aspirants who decide to attempt to overthrow the established elites uh and uh occupy their positions. So to make this quite concrete you know think about u vadiman and the bolsheiks all right or hidel castro and his loss barbudos and of course the maga movement led by Donald Trump. Donald Trump is a classical uh keep in mind that all counterits are also people who wield power, right? The revolutions are not made just by some random peasant or worker. They're always organized by counter elites like the Bolsheiks for example. Um and so these are uh people who build uh social power because they lead those uh parties or revolutionary parties or movements and um uh if they are successful then they end up leading the state. All right. So these are two. The third um condition is uh the um this the um the fiscal health and general health of the state of the state um of the bureaucracy political um organizations and uh things uh like that. So we look at uh specifically you know u money is what drives uh politics and and much more beside that. So turns out that when states get into spend some much more than they uh garner in taxes uh that those um situations they become much more fragile and liable to being overturned. So for example the French revolution uh happened because the French u an regime in the previous uh elites the the state was broke. Same thing with the English revolution in 1642 and many other revolutions and the other part of uh the state health is how much um the population actually believes in the state. How much legit legitimacy does it have? So when states lose legitimacy they become also extremely vulnerable to being overthrown. So those three drivers are the temperatures and pressures that we need to uh measure and um um in back 15 years ago uh 2010 um let me just step back. So by 27 or 28 um I and my research group has been studying historical societies and we and we essentially developed uh further the theory I was explaining to you the structural demographic theory and uh I didn't want at that time to study contemporary societies but every time I gave a talk people would ask me hey so where are we and so I decided to okay uh let's take a book, let's take an start collecting data on those indicators and I was uh shocked actually uh when I discovered that we were well on the road to crisis. And so in 2010 I in fact published um a short um article in uh one of the best um uh science journals called nature where I uh uh you know published this forecast for the next 10 years that by 2020 2020s really uh United States uh would be in a highly unstable situation and uh after that it was like being on a train wreck. you know, you just uh you know moving moving towards the precipice, you know, and finally it all um happened actually. >> Wow. Okay. So, let me just make sure I took good notes here. So the the key pillars for a society approaching revolution are um inequality where basically the the majority of the masses are feeling like their prospects are either stagnating or diminishing. Um it's having um surplus elites or you know a lot of elites to the point where you have members of the elite class that aren't really in power and are frustrated by that. Right. And and these I think as you said these are the folks that tend to be the leaders of of the revolution. Um, and then you have to have some sort of um, sense that the state isn't going to write itself. Meaning, hey, this country is falling into insolvency or a new leaders come in that just none of us have faith in. And that's sort of like the the the Tinder that gets lit by the uh, the elite revolutionary that the masses then then migrate to. You're nodding as I'm saying all this. Okay. So, you said you were kind of kind of taking address those issues. That's about right. But um let me um clarify that um for us the in inequality is not a driver rather it's a good proxy for other processes which are drivers. Think about it. Uh in fact the common person even you know you and I how do we know that inequality has increased right? It's um you know what does genie uh index mean? Uh what drives um uh what uh drives people's attitudes it's is actually what happens to them. So >> right it's the whole it's a recession if your neighbor loses their job. It's a depression if you lose yours. Right. You're just whatever happens to me is what I care about. >> Exactly. So when people when uh people see that they live worse than their parents, right? >> Yeah. >> That is that is um what uh drives uh their discontent, right? And and the same thing when we see too many elites, all right, um vying for positions. For example, we have too many wealthers, all right, and still the fixed number of political positions that some of them want to occupy. So this overp production of uh elites um together with imiseration that's what creates um um uh measures of inequality. Right? >> So uh it's a good measure um to have but it's not the driver. The driver is actually imiseration and u creation of counter elites massive creation of counter elites and the state uh legitimacy. for example the state losing a war right so that's what led to the revolution of 1905 in Russia losing the war with Japan or you know we can give many other examples of that so uh losing state legitimacy is often a trigger either that or sudden uh fiscal collapse the state loses control of the coercive force right and then all hell uh breaks uh loose because the different elite factions now start fighting it out amongst themselves. So those are the three most important things and plus of course many other factors you know uh geoeconomic things like sudden uh change in the price of um food for example or >> you could have a massive drought that that all of a sudden makes food scares climate change. So there are many other factors that uh that work together with those three main ones but those three minus ones are the general factors that we see in the uh on the road to crisis and that's what precisely what I saw in back in 2010. >> Okay. Yeah. So to me, and correct me if this is a bad analogy, but these three things together are like the cocktail of nitrog that makes nitroglycerin where it it's it sits there, right? You've got to have some sort of stimulus that that causes it to explode, whether it's a lost war, whether it's a famine, whatever, right? But but once you have those three things together, then you have the prospects for the explosive revolution. >> Exactly. So the power of adminiseration creates the raw energy. The counter elites provide organization and then the triggering event is often uh some kind of catastrophic failure at the state level which uh in fact allows all this to uh to break out and the explosion to proceed. >> Okay, good. So I want to I want to start talking about a couple different countries or regions with you to get your opinion. But I got to say, as you were sort of describing what could really make all this go go go south for a country, the country that was popping most of my mind was Iran. Um, and I'm not an expert on Iran, but you know, Iran basically just went through, you know, a fairly humiliating uh uh, you know, series of developments on the world stage where, you know, they were basically, as I understand it, sort of the chief funer of of a lot of the antagonism versus Israel. Over the past two years, a lot of the their infrastructure in their proxy countries has been dismantled by the Israelis largely. And then the US came in and took out Iran's nuclear facility there. And so, you know, they're kind of on their back heels right now as best I can tell. It seems to me that if you were looking for a country that was rich in these three things, Iran might score really highly on the list. Well um in order to do that um u we cannot just go on uh you know what we read uh in newspapers especially if these are you know um western newspapers that tend to present a very slanted story often times what we need to do is to actually go ahead and collect data we need to collect data on a variety of proxies for imiseration um literal production and state weakness we have not done that for Iran So that's why I cannot speak about Iran. But uh here's the good news. We just recently learned that we got a big grant uh from a European uh funding agency and Iran is the is one of the 12 countries that we will be uh studying using this approach. So ask me in maybe three years. All right. But uh so far we have done such um um uh detailed work and I can speak uh much more um solidly about United States, France, Japan, um uh UK. Uh so those are the countries for which we have collected data on their pressures and temperatures and >> Okay. Well, let let's go to those then and I'd love to hear your thoughts, but I'm I'm going to just make a guess. You can correct me. I'm gonna say France is in real trouble. >> Less so than United States, believe it or not. >> I don't I don't believe. Wow. >> Yeah. So, for example, um on the uh in terms of popular imiseration, France actually does not score very highly. Uh because uh the uh state there, it's quite paternalistic state. Uh of course, you know, half of 50% of you know what people earn is they paying taxes. that until recently the state has been actually pretty good at um you know but at maintaining the well-being of common citizens. Yes, of course there is still some discontent and of course the yellow vest movement um is a factor but remember that yellow vest movement did not lead anywhere right they just kept u you know protesting for you know I think more than a year uh and then nothing happened there was nothing like 1789 you know in uh Paris which lead to the French revolution so um so France is um has certainly a serious problem elite over production and uh our French colleagues have documented that. All right. And of course uh the state fragility there uh is obvious. All right. Uh and u specifically the fiscal uh health. I mean uh they are essentially broke but on the but there is not enough raw energy from the masses so to speak. Okay. Sorry to interrupt, but just in your answer, can you include the impact and this will be for a lot of other countries, but the impact of of any issues around migration because my understanding is is that's a becoming a big flashoint issue in in in lots of European countries, but France has been dealing with some really big um assimilation issues with some of its its migrants for a long time that seem to only be getting worse. >> Yeah. So um migration um has um a uh especially massive migration um has um a very uh uh strong effect on uh imiseration and the way it works is a fairly standard economic uh mechanism. You if you over supply labor right then uh you drive down its um uh its costs which means the wages. So we saw that happen in United in the United States where we had pretty massive migration from um starting in the late 60s and especially um in more recent decades. Uh we see um uh similar uh effects in Germany um and United Kingdom. All right. And and in France. So uh but because um you know because um the um this uh iron law of economics right when over supply of something uh leads to decreasing uh price of it can be actually managed by extra economic things by the political uh instruments and so if workers workers are protected against such pressures as happened in many social democratic countries especially like Denmark for example, but also France, right? Then um uh migration will not have such a huge effect um in on on immeasureration of the population. But of course, migration also has a big effect on on cultural um characteristics and divisions within country and that has been of course quite important in France. But let me just say basically France is not as in dire state as many other countries uh in Western Europe and especially North America like United States. That's what's interesting. >> It is interesting. And okay, I'm I'm I'm happy to be wrong there. Um to your point about um that there's got to be some sort of social um what do you want to call it? um you know cra uh we'll just call it social support I guess for for workers whose jobs are getting impacted by low wages for immigration. Um I guess that's got I guess I understand the criticality of that because I imagine and I think I'm seeing this in countries like Canada um where and you know where um if you are feeling personally emiserated right I lost my job because this migrant came in and totally undercut me right um not only is that imiseration of you personally but doesn't that also lead to your third point of of um legitimacy issues with the government which is like hey the government seems to care more about this Johnny come lately to my country than actual citizens or people who are naturally born here right so isn't that a dangerous part of the cocktail >> exactly so in the United States um we were a fairly standard socially democratic country from the new deal period until 1970s and after that uh those protections for workers that were pl in placed during the new deal they were dismantled one by one and that is why massive immigration in the United States resulted in rather contributed to imiseration. It was not not the only factor but it was a fairly major factor. And so that is why uh also in our theory why um the um uh support for the political institutes in the United States has started to unravel also about the same time from 1970s and has reached really uh uh you know the supporter has reached very low values by uh this point. So it's a combination of those things. But also keep in mind that elite over production leads to much more um uh conflict amongst the elites and that decreases the uh state efficiency because instead of trying to solve problems, right, the different elite uh groups and parties are fighting each other and that further uh diminish diminishes uh state legitimacy. So these factors really work together and very in a synergistic way. >> Okay. So it's interesting. Um it sounds like you just described the US political system but also I think probably all the other western countries you just mentioned there too. Um we seem to be at a point right now where bipartisanship it just doesn't even seem to be a credible option anymore. >> Yeah. Exactly. And but keep in mind that again using um inequality as a proxy for these uh pressures right uh you can see that United States was actually pioneer we started um increasing uh inequality which means imiseration and production >> by 20 years earlier than say in Germany and maybe 30 years earlier than in France and these pressures need to accumulate before they result in an explosion so that's another reason why uh uh you know France for example is not quite as advanced on this road to crisis as >> although with France the skeptic in me wants to push back and say yeah for now but until the country really starts like defaulting on debts and stuff like that then all bets are off. >> Well exactly. So for example right now uh the um the ruling party uh in France basically wants to increase imiseration instead of u uh we we know that in France um uh billionaires pay uh about 25% of their income in taxes whereas middle class pays 50%. >> Mhm. >> All right. So that seems like uh a basic unfairness and uh some people are trying to write this but the present government wants to solve the budgetary crisis by um putting all weight of it on common people. All right. And so by doing that they will be they will be increasing imiseration and eventually this is uh what will uh result in in an explosion if if they persist in this uh in this way. >> Okay. All right. Well, let's head over to the US which you've said a number of times is in pretty bad shape. And um yeah, I I I don't want to talk too much, but this, you know, this this growing divide between the heads h haveves and have nots in America is something I talk an awful lot about. And you know, I'm not I'm not a polyiana. I know that in any any society, you're going to have a top 20% that does better than the bottom 80%. Um you know, that that that's just um the paro principle to a certain extent. Um, but in America at least, you know, kind of the the social contract is that anybody has the ability to change their station, right? And when people start giving up on the belief in that social contract, I think that's when bad things happen. I think that's probably what we you would your work basically shows. Um so I guess my question is is in America specifically what are the things that are worrying you the most on these risk factors as you see them right now? >> Yeah. So all um uh complex societies they uh they have a lot of inequality. So what's important is you know United States back in 1960s also had a lot of inequality. But at that time uh a CEO of a typical 500 uh Fortune 500 company would earn maybe 35 times uh as much as the typical worker. Now it is uh 400 times as much. So what's happening? You have to look at this in the dynamic in the in the dynamical um from the dynamical point of view. um uh up to 19 uh late 1970s the you you've seen this uh famous graph the productivity of American workers and their compensation they were going together and then suddenly productivity continued to increase but compensation stagnated and even declined >> so I call this in end times I call it the wealth pump because all that extra all those fruits of economic uh growth did not go to the 90% right the right it went to capital labor. Yeah, >> exactly. They went not not on the capital. No, it went to the higher um you know to high paid um professionals, you know, and uh u many cos um retired with golden parachutes and things like that. So, it's really not u uh labor versus capital. It's really um the 1% versus the 99%. >> Okay, that's a good way to think of it. But but the way that I just help correct me here because I think like if you're in the top 1% or the top 10% you still hold the vast majority of the capital. Like there's very little below that. Well, you know, many highly paid uh corporate lawyers, for example, they are u they uh they they're just very highly paid uh and they may buy buy into buy uh into the stock exchange or something, but that's not really the source of their wealth. They're there. It's not like they are um invested capital and are living off the of its proceeds, right? They are earning those monies themselves. It's very important not to miss that group of highly very highly paid um workers. >> Okay. So, so, so you would maybe maybe a better way to describe it is is the the corporate um elite is are the ones who were hoovering up, you know, the vast majority of the spoils. >> Exactly. If you look if you look at where the newly wealthy people came from, the majority of them are not old wealth, but they are the newly created wealth. Some of them coming from very modest uh backgrounds and becoming billionaires. Well, Elon Musk, for example, you know, he he's not he his family was not particularly wealthy. >> Okay. So, totally get it. All right. So I interrupted you but but um we are having this increasing divide between the corporate elite and and kind of everybody else. Um and I I presume it's at some level now that you think is sort of dangerously near the boiling point. >> Yes. In fact we have been at that boiling point since 2016 essentially. >> Okay. Well let me ask you this. Um so you know what happened in 2016 right? we we had two darkhorse candidates um get a lot of popular support in the election cycle, which is kind of interesting. They were on opposite ends of the political spectrum, right? So, you had Donald Trump uh on the right and you had Bernie Sanders on the left, right? And and I'm not going to get into but some could say Bernie was sort of pushed out to get the establishment candidate Hillary on the ticket or whatnot. But both Sanders and Trump were, I think, manifestations of the populace saying, "Hey, look, the status quo is not working for me. So, I want to go with somebody who's not status quo." Um, so you're nodding as I'm saying this, and obviously Trump got in in 2016. Um, let me ask you this. Uh, and I'm I'm I'm I'm not asking this from a partisan standpoint, but, you know, let's look at Trump's second, uh, administration so far, right? very much make America great again. We're going to reshore our jobs. We're going to close the border to illegals. We're going to deport a bunch of the ones that got here. Um it it is very much a Main Street over Wall Street message. You know, we want to repair this country and the damage that have been done to the middle class. Now, people can debate whether that's really how it's being executed or whether it's being executed successfully and all that stuff, but are are Are are those actually starting are those measures that will bring down the temperature here because they seem more populist? >> Yeah. So, first of all, let's compare Donald Trump to Bernie Sanders. Donald Trump was a true counter elite because he he he was willing to break rules right from the very beginning. All right, that's that's his success. And Bernie Sanders was more of a dissident elite and you know everybody now pretty much agrees that he was unfairly excluded from uh in 2016 and he meekly exceeded to that. So, so that is a very big difference between true revolutionaries, right? Uh, you know, who don't exceed like thinking again Fidel Castra, right? He was willing to go into the hills and start, you know, a civil war. So, um, so so those are very important differences, but what uh what is common with them is populism. Uh now populism now in nowadays is used in a porative u uh way but actually you know uh if if you define populism as trying to improve the condition of the majority of the population what's wrong with that? In fact that's a very good way to stabilize societies. In fact, all um societies when they exit from crisis, they rebalance themselves in such a way that that uh the they improve the conditions of common people. Right? So, so that's um one thing. Now, specifically um the mega movement has several ideas which actually make sense from the populist point of view. So one of them is uh shutting down immigration is um is going to uh decrease the labor supply and that would actually have a should have a positive effect according to >> right and and and sorry just so we're clear with everybody we're talking about illegal immigration not not not our illegal >> no um legal also I mean legal immigrants also um you know uh take um uh um uh uh take jobs. You know, I'm a I'm a legal immigrant myself. And so, uh if I did not come to United States, then one of the native Americans uh people who grew up here would be the professor at the university. So, it's u um it it doesn't matter for from this point of view whether it's legal or illegal immigration. The other thing is that we don't know this tariff thing. I mean this seems to be extremely crude and obviously it is going to create a lot of economic u uh discombobulation in the uh short run but again uh it is portrayed as a way to increase the supply of jobs by bringing them back. So those ideas in fact um they make sense to common people and in fact they they fit with standard economics um uh whether um whether this administration will be able to do it uh that's of course a big question as you pointed out because you just only doing tariffs probably not enough. We need an industrial policy. All right. And uh Trump is not uh Trump is against any kind of uh industrial policies. It really uh it really would make sense to to couple uh tariffs with uh a way to promote uh the creation of jobs within the United States. >> Okay. Um this is so fascinating. And Peter, I feel like I could go for two or three more hours with you here, but I I got to I got to be respectful of your time. Um, so let let me start getting into some brass tax questions and then then we'll wrap it up. Um, I guess with the countries where you have enough data for, um, who are you most concerned about? Who who's closest to the brink? Is it the US or is it some of the other countries that you follow? US definitely because we've started on this road to crisis uh earlier than anybody else and we have proceeded um u further. So Japan for example is a very interesting case uh because um we've delved into uh the power structures of Japan. It has nothing to do with democracy. The you know it's been actually one party state. Furthermore, most of the uh political figures um in uh Japan are actually descendants of one uh individual um who who lived during the major era 1868 and was the first prime minister of Japan. It turns out if you trace um the um the family familial connections of about half of the prime ministers and other u important leaders they actually are descendants or they married into they married a descendant of that particular uh individual. So it's uh it's a very um uh the ruling class of Japan is extremely corrupt and uh and very inept but it has a strangle hold on the society and one thing in Japan that actually work works against um uh increasing the temperatures is that they just don't have that those that many young people. I mean it's young people who rebel or at least they're young people who supply the revolutionary troops that are organized by the elites and Japan has very few young people because their you know fertility rates have been collapsing. So we see actually uh those factors there's huge emiseration in Japan. You know most people don't know that um over the past 20 years the uh real wages of for the you know median wages for the common people for the typical worker has decreased by 25%. Can you imagine that? I mean uh uh this has not happened in United States. It's a tremendous amount. But in Japan, the majority of population is truly emiserated. All right. Uh so that's a big factor driving uh discontent obviously. But there is not enough young people to uh to turn it into more violent forms. So this is going to be a very interesting uh country to watch. >> That's super fascinating. Like I said, Peter, I could talk to you for hours here. So let me um Well, quick quick question with the US. Just want to make sure I understand kind of where we ended the conversation. You're most concerned about it. It it it is the closest to the brink, but do you feel like it is taking a step back or two from the brink or is the momentum still going forward in your mind? Well, as it happens, um I I started a substack um this uh spring and right now I am I am publishing a series of posts on the structural demographic state of America. So I have published two weeks ago the first installment on the wealth pump uh which I explained to you and uh the next one on Friday will be on the well-being and then I'll talk about the literal production. But I can tell you right ahead that none of those uh trends that made me so worried back in 2010 none of them have been reversed. So all the pressures for uh crisis continue to increase. The imiseration is increasing uh edit production is increasing and obviously state uh fiscal fragility uh is increasing. So and until we see the trend reversals um uh there is no we we are going to get uh into more and more trouble and I hope very much that this trouble will be relatively bloodless continue to be a relatively bloodless revolution but the unfortunately when countries are in such fragile situations uh outbreak of serious violence is um is quite likely if if not necessarily uh deter determined. >> Okay. Wow. So, that is sobering. Um, all right, Peter. Just means we're going to have to have you on again periodically to give us updates here. But, um, normally at the very end of the conversation, I ask where folks should go to follow you and your work. Uh, maybe I'll just ask that right now since you mentioned your Substack. Where can people find your Substack? >> Um, it's peter turin.substack.com. So, it's very easy. just um uh just search for turin substack and you'll get to it. >> That's the best. I also have a um a website where I which I update as new uh it's peterin.com. So you can go there and uh you can see uh the new articles um and books I'm working on. Uh so that's uh there and of course um if you want to understand uh what we were talking about today, end times is the place to go. The book uh lays it out in a much more systematic way than I could do. You know, I'm actually better writer than speaker. >> You're doing great, but I understand hard to get everything out in in a in a single hour um when you've been putting years and years of research into it. All right. So, Peter, when I edit this, I will put up links to your Substack, your website. I'll put the book cover up on the screen so folks know where to go. When it comes to buying your books, I presume they're available everywhere books are sold. Do you care whether people get it from Amazon or your website? >> No, I don't care. It's End Times um has End Times actually has been quite um you know, the publisher, which is Random House, Penguin Random House. That's probably the monstrous uh the most monstrous publisher uh in the world, right? They did a great job placing them in li in um uh sorry not libraries in bookstores and um you can buy it from them directly Amazon uh and Apple whatever uh there is an ebook there is audio book so uh all the possible uh versions >> okay great and folks I'll put those links in the description below this video too um all right Peter so um all right so the world watches this video you the US watches this video and says, "You know what? Peter Peter gets it." Um, so we're going to make him temporary emperor to fix fix this to bring us back from the brink. What reforms would you prioritize most highly? Uh first first of all I would not accept uh the uh job of emperor because I would be assassinated probably in lecture you know even um just being an adviser scientific adviser uh that which is I I would accept obviously uh even that is actually quite uh dangerous quite dangerous >> so I would be much more effective as um trying to explain uh the different um uh issues rather than You know, you have to be good politician to uh to bring about positive change. Uh you have to be good politician. You have to be good working with people. I'm a weird person. I'm not good at I'm not a you know, I'm not a people's person. I'm a >> Well, you're you're an academic in the best sense. So So do Okay. But so you're you're the country eagerly awaits your white paper. What are the bullets at the top that says you guys should do this? >> Yeah. Shut down the wealth pump. >> Okay. and and and how what's a reform you'd like to see that >> there is a variety of mechanisms and we can actually use a combination of them. Uh but um some of them have to do with bringing back back the labor unions so that workers have the power uh to bargain for their increasing taxes um on the u rich. Uh it's um u controlling uh immigration which is actually happening right now. Um let's see um uh it's actually actually I had a um an article in Vox magazine where I uh sort of talk more about that. Uh so my point is that um let me just um for formulate it better. My point is that uh we have studied now hundreds of u uh previous uh periods when societies actually emerged from crisis. All right. And they did it in a variety of ways. They all had to shut down the wealth pump and bring the um the well-being of the majority population back on track. Right? But specific um specific um uh methods they used were uh not necessarily the same. All right? And that's why we will have to do it by experimentation essentially. We'll have to try different things until we get it right. >> Okay. Okay. That's okay. I that that's actually really interesting. >> Just keep the the goal we need to keep in mind is to get back the worker uh compensation to go to grow together with the worker productivity. That's that's what we need to accomplish. >> Okay. Great. So you again, not a not a communist style revolution or anything like that necessarily, but it's just something that that gives the worker um I I guess reduces the um imbalance between how much is going to that top 1% corporate elite of the increase in productivity. So the the worker can participate in their own value creation. >> Yes, the worker should get a fair share of uh of the economic growth. >> Okay, so great. And now we just have a huge debate over what is fair share and what are the ways in which we can do that. But we're a large country. We can try a bunch of different things and see what sticks and go from there. That would be the rational way. I know that's not the way that countries generally deal with this. Usually goes >> sometimes they do. We have described several examples where countries avoided revolutions by doing the right reforms. So >> okay. Well, this is one this is one of the reason why why I pushed you for specific ideas because there's a quote of Churchills. believe it's from Church Hill that's always stuck with me which is in the time in a time of crisis the solutions that get implemented are the ones that are already on the table meaning the what you want to do now before crisis arrives is get ideas on the table right so that they're there when people reach for them in desperation >> right I agree with that >> okay all right well look Peter this has been um just a fantastic discussion thank you so much for making the time to do this um I've very much enjoyed it and if if your schedule allows in the future. We'd love to have you back on in a quarter or two to give us an update. >> Thank you, Adam. I also enjoyed our conversation. >> Thank you so much. All right, and everybody else, thanks so much for watching.