Mechanisms of Societal Control and Discord: Pensions and Inflation
The social and political dynamics in the Western world are currently in a holding pattern. Despite the fact that most politicians are universally hated, only partially masked by pollsters ignoring unlikely voters (id est, those discouraged or disaffected by the current system), the same people continue to get re-elected. The United States congress is the classic example with overall approval ratings hovering around 28 percent, yet incumbent advantage is the most significant determinant of re-election. These ratings may, of course, be an artifact of political fandom. The “he’s my favorite player because all other fanbases hate him” type of attitude so often witnessed in professional sports, but you would think a Democrat would have broad appeal to Democrats and a Republican would have broad appeal to Republicans, and this fandom would not be entirely localized given the nature of congressional rhetoric (where the local yokels are often ignored for the party grand strategy).
It seems more likely that what we are witnessing is the corruption of the democratic process. As one commentator stated, these people do not act like they are afraid of losing the vote. There are many reasons that could be, like massive and organized bipartisan election fraud, but I will not speculate on that fact — rather, I will just point out that the corruption of the democratic process is to be expected.
One of the great innovations of the Romans was the institutionalization of the pension system. August Caesar gave pensions to Roman soldiers, ostensibly as a reward for sacrifice of their military class, but realistically because pensions are the ultimate form of social control. Suddenly, the soldierly class had a large incentive not to rebel and war spoils no longer were the main guarantor of a future. Instead, soldiers had to serve a full term (that could be elongated to the age where soldiers are generally not dangerous) in order to received the promised benefits of war.
Of course, pensions may have lowered performance of the military overall. A soldier that needs to survive for 25 years is less likely to take risks than one that needs to win a battle in order to get paid. Whether that effect was stronger than the increased discipline that likely resulted is entirely up for debate. What it did prove to be is the most effective form of social control ever invented. So effective that governments and businesses still make use of the pension system today; even expanding the same premise of the pension system to social security. The same mechanisms that prevented soldiers from taking risk prevent members of modern society from taking risks.
If one were to wonder why, say, people do not revolt given terrible politicians, we only need to look at the $200 trillion in unfunded liabilities, most of which is set aside for future pensions. It does not matter, strictly speaking, whether the government has the ability to pay for those pensions. Only the illusion that people will be taken care of later in life, so long as they are well behaved, matters. The political class is so successful in control because they have minimized societal risk.
But let us imagine a scenario where the pension system is no longer the ultimate mechanism of social control. Even better, let us tie this to a system that does not even have short term benefits for most of society. Inflationary conditions are just that scenario. More specifically, periods where it is not entirely clear what level of inflation can be expected. Inflation that is consistent can be adjusted for by guaranteeing pensions or wages that keep up with inflation — cost of living increases when they exist usually result in 2% wage increases every year or two. When inflationary conditions are uncertain, as is the case today, people are unlikely to be satisfied with an annual increase in wages or pensions. Such a scenario creates social anxiety, crime, labor disputes, and general economic chaos. In other words, it increases society’s propensity to take risks.
Right now, the central banks have lost the narrative on inflation. Statistical organizations that are responsible for creating consumer price indexes have adjusted their numbers to keep the perception of inflation down, but people are still noticing. Labor disputes are becoming more and more common. Business surveys for awhile, and indeed long before the central banks lost the narrative, have been showing concerns about increases to input costs and projecting price increases across the board. We are in a situation where people are going to be more willing to take risks.
The political class still plods along ignoring the situation, not that there is anything people so inept could do, but they would be wise to prepare. Inflation is often recursive: in short, inflation leads to more inflation. The main fear would be hyperinflation as it leads to a situation where the lower class cannot be differentiated from the middle class cannot be differentiated from the upper-middle class. Once you have class ambiguity, people are going to take more and more risks. These risks will manifest into widespread social unrest. Those who seek to control society would be wise to take this matter seriously. They can denigrate their citizens all they want until normal circumstances but what happens if their main lever of control breaks?