The problem is thus: A society increases social complexity to solve problems, and gains some benefit thereby. But at some point, the marginal return on investment declines to the point of going negative. Then, as noted in the Charles Hugh Smith review, the institutions which generate this complexity transition from problem solving to self-preservation (this phenomenon is studied in the dismal science under the name “Public Choice Theory” and makes a great deal of intuitive sense, at the very least). We thus find ourselves in a society with excess social complexity – that is, wildly out of scale – but the institutions which provide this excess have no interest in rolling themselves back.

This would also explain the paradox of capitalism, to wit, that free markets are such powerful engines for economic growth, and yet, capitalism seems to inevitably result in large corporations doing significant societal damage. If one accepts that – to corrupt Clarke’s third law – any sufficiently advanced business is indistinguishable from government, then clearly large companies become part of the network of corrosive complexity, working right alongside governmental organizations to raise the standard of misery (Exhibit A: The Economic Crisis, the bailouts, and the aftermath).

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