Bloomberg view decided that this was a good time to recycle this column, first published in 2013.
Past waves of political instability, such as the civil wars of the late Roman Republic, the French Wars of Religion and the American Civil War, had many interlinking causes and circumstances unique to their age. But a common thread in the eras we studied was elite overproduction. The other two important elements were stagnating and declining living standards of the general population and increasing indebtedness of the state.
He argues that the surplus of law school graduates indicates elite overproduction. The other elements seem to be here as well. On the stagnation issue, Tyler Cowen cites research into cohorts that sounds more convincing than the usual analysis of means and medians.
Recall that I wrote about Turchin a couple of months ago.
Imagine that the job market is a hilly terrain and water is rising in the lowlands. The rising water represents technological unemployment, outsourcing, offshoring, what have you. If you want to escape the water you have to climb. To climb to the higher tiers of the hills requires special passports-and you may need to borrow a lot of money to get them. This demand for passports becomes so great that even some of the folks living near the shore need them to keep from getting wet. As time goes by the remaining land is much steeper than before and covers a smaller area despite there being more people. But, in this land, supply creates its own demand and there is a highly structured business in granting the increasingly valuable passports. As a result, talent and merit increasingly goes to low value added occupations which do little to enhance the material well being of most people. Is this bad? I don’t know. It seems like a lot of people are fooling themselves into believing that we are not playing an incredibly absurd game.
My presumptive reaction to a story involving ‘overproduction’ is something like the free-market economists instinctive recoil from stories involving ‘shortages’. A complaint about a ‘shortage’ seems to have some implicit model where something nefarious is holding back the supply curve, but is often hard to differentiate from a complaint that the market price of some resource where the supply and demand curves naturally meet is higher than the complainer would like it to be.
An ‘overproduction’ of ‘elites’ is analogous to ‘shortages’ of ‘affordable’ housing. Besides the trouble with ‘shortage’, the typical Socratic-method inquiry of, “what do you mean ‘affordable’?” is like the question of, “what do you mean ‘elite’?”
The best definition of elite for Turchin’s purposes is probably something like, “Smart enough to stir up trouble.” ‘Overproduction’ means there is a critical mass of these people who, due to economic conditions, have the motivation to try.
Obviously throughout much of history most smart people were living in destitute conditions with low social status and performing tasks which didn’t require much human capital.
Yes, it seems clear that these days a lot of smart young people are dissatisfied and disaffected since they are not getting the pay, positions, prestige, and power they feel entitled to receive. (Many former manufacturing workers feel the same way now that the domestic sectors demands so many fewer laborers). And yes, this has been politically destabilizing. And an Average is Over world means the economy will pick a smaller proportion of high-productivity superstars rather than a larger fraction of ordinary-smarties.
But there is also the question of whether cultural forces are exacerbating the problem by encouraging such unrealistic and eventually dashed hopes in the first place. It is neither socially desirable nor profitable for anyone to tell a marginally smart individual that they shouldn’t take a long shot and try for law, medical, or graduate school. Probably the only good answer is to make it unprofitable to create additional educational supply for that deluded student. Requiring educational institutions to be sureties for student loans in case of default for lack of adequate income would help provide that incentive.
I agree with the previous commenters; the whole thing sounds like a just-so story. Every generation has people jockeying for status, power, money, etc. I will concede that the intensity of the competition waxes and wanes over time, and I can think of many factors which would influence this and “elite overproduction” seems like a relatively minor one.
If one takes a deep dive into Turchin’s Well Being index and Elite Overproduction index, it becomes clear that he is to a large extent trying to make two indexes which reflect relative labor scarcity. The wellbeing index goes up with median wage and relative labor scarcity, and the elite overproduction goes down as a matter of the math. It comes from the way he has defined the terms. He then combines them into a chart which shows uncanny inverse correlation. I can get the same effect by take any historic trend and forming two indices, one using the trend in the denominator and the other in the numerator.
He misses the other indicators of over-elite production. That is the creation of places to put the spare heirs. In the Anglo-Saxon period, this was monasteries, where daughters and extra sons of the elite became abbesses and abbots, but also collected great wealth, which the Vikings found convenient in the early period. For a time, the spares went into business or during the English empire, colonial service. Today, it seems more and more are entering the non-profit arena via family foundations and “Lifestyle” charities.
http://www.coyoteblog.com/coyote_blog/2016/08/the-lifestyle-charity-fraud.html