Our Institutions
Perhaps it would make it easier to sleep at night if there was evidence of an intellectual and professional class capable of dealing with the consequences of fragility. Unfortunately, there is no evidence for that. The public schools and the universities have been largely taken over by ideology and the need for rectification of social injustice. The students produced by this system and indoctrinated in this ideology now form the ruling class. They are overwhelmingly represented in government bureaucracies and the media.
The consequences are straightforward. The last two decades in the United States have been marked by one institutional failure after another, most notably when the financial crisis revealed the failures of government bureaucracies tasked with regulating the financial sector and when the pandemic revealed the public health bureaucracy as devoid of leadership, knowledge, or general competence. These failures are caused by the fact that U.S. institutions no longer select for competence, capability, or intelligence. The ideology has so permeated society that it is now a central characteristic of the ruling class. One’s position in the regime and broader society is dictated by adherence to the regime’s ideology. Institutions select for those who can utter the correct shibboleths.
The implications are important. Catastrophe can occur even without inherent fragility in the system. Unknown unknowns cannot be anticipated, by definition. Regardless of the source of catastrophe, capable and competent leadership can potentially bring a state through the difficulties and even make it stronger on the other side. There is no sign that this is even a possibility at present. Time and again, these institutions demonstrate that they are populated by those unprepared, unqualified, or otherwise incapable of dealing with catastrophe.
Our Fragility
We have now arrived at a moment in which the international monetary system is intensely fragile and the domestic financial system has encouraged risk-taking while minimizing any consequences to large financial players whose big bets do not pay off. U.S. foreign policy is incoherent and over-extended. The public schools, universities, and bureaucracies captured by ideas that are detached from empirical evidence or historical experience. Each of these outcomes by itself is enough to cause concern that some small shock to the system could have the potential for catastrophic outcomes and yet we are faced with the combination of multiple sources of fragility.
Any attempt at American renewal needs to be aimed at reducing the fragility that has been introduced into the system. The task is daunting. It requires re-thinking the international monetary system, reintroducing market incentives into domestic financial markets and banking, holding our national security apparatus to account, overhauling our public schools, radical reform to our universities, and dismantling the bureaucracies operated by credentialed mediocrities who see themselves as part of an enlightened ruling class. The work will be difficult, and no one is coming to save you. But at least the problem has been identified.