Misconceptions of Collapse

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There is always talk, especially among libertarians, of the looming crisis that will lead to a kind of economic collapse. The unfixable debt crisis, weakening dollar, and bureaucratic mess are certainly reasons to suspect some upcoming major collapse. And for these reasons there likely will be a collapse of some sort in the not-too-distant future, when the spending simply cannot be sustained any longer and hyperinflation becomes the only option.

This is not limited to the United States, of course. A US crisis of this magnitude would ripple throughout the entire world. And even if this didn’t occur, many other states are in worse shape than the US. The United Kingdom, France, Brazil, and Canada are a few examples of countries with a public debt-to-GDP ratio about as bad as that of the US. Meanwhile, Japan and Greece’s public debt-to-GDP ratios are twice as bad as America’s. 

Since this problem is pretty much impossible to fix, many of us are just waiting for it to happen so that we can get it over with. The sooner the collapse, the sooner we can ‘rebuild.’ Some accelerationists are looking forward to things getting worse so that things can get better afterwards.

But that’s not necessarily how things will go. Things can get much worse, and they can stay that way for quite a long time. The metaphorical phoenix rising from the ashes of the fallen state may not happen, or it might be a slow crawl that spans decades or even centuries. A revolutionary force might rise up during the collapse. It might be American, or it might be Russian.

What we do know is that everything will fight for survival, whether it will be an animal or a massive government entity. If the Leviathan state crumbles, it will grab onto anything to maintain itself. It will take hold of any institution or organization within reach and tear it down with it if need be. Or, if it has a strong enough grasp, it will hold on for as long as it possibly can. We’ve already seen the collapse in Venezuela. But the state is still there, in control of its people. Where is the phoenix?

The structures of society are becoming more centralized and more aligned with the state. If there is an economic “collapse,” the state has plenty of means of trudging along, Venezuelan style.

This means that the here-and-now really does matter. Whatever follows the collapse must already its foundation laid today. We cannot wait to rebuild. That must happen now. 

Millions of people are entirely dependent on the state. Millions of families, small communities, and institutions are reliant on the state in some form. This means that if the state begins to crumble, they will either look for something else that can fill the void of government, or, if nothing exists, they will give anything and everything to maintain the state. 

The task now is to separate. Build institutions and communities that are as out of reach as possible from the grip of the state. Cryptocurrencies and precious metals are not merely good investments or safehouses for wealth. They are currencies that exist independently of the state. If the dollar crashes, these currencies will remain standing. They are forms of collaboration. They are societal structures that are separate from the state.

We should not encourage the sinking of the ship if there aren’t any life rafts available. The sinking of the one and only ship does not mean that another is guaranteed to rise. Before the ship sinks, we must work to build rafts, and we must make sure they will not be pulled down with the ship.

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Nathan A. Kreider is author of the Misconceptions column for Being Libertarian, and has written for the Austrian Economics Center, the Foundation for Economic Education, and the Liberalists. He also occasionally publishes a blog and video content, including short book reviews, which can be found on his website, nkreider.com. He can be contacted by email via [email protected]