Ten Signs the US and Canada are Failing States

Belize beach
Last year I reported on Jeff Vail’s analysis of Mˆ©xico as a ‘failing state’. The signs he reported included the presence of independence groups (the Zapatistas) who have just given up on the dysfunctional government, the collapse of key economic resources (agriculture and oil), vast disparity of wealth, cynicism about the purpose of voting and other democratic behaviours, the use of ‘manufactured’ crises and fear to distract the people from government incompetence and impotence, and the growing prominence of organized crime and corruption.

These same signs are prevalent in Belize, and I witnessed them all last week, since an election there is on the horizon. It confirmed my sense that the nation-state has largely outlived its usefulness and is on its last legs everywhere as our unsustainable civilization nears its inevitable collapse. Outside of Europe, which has problems of its own, the balanced-economy model that allows both government and individual enterprise to each do what they do best, seems to have been given up as hopelessly idealistic. And that got me thinking about whether the US and Canada are likely to follow Mˆ©xico quite quickly into disintegration and anarchy as the central authority simply no longer offers enough to the people to warrant its continued support. Here are the ten reasons why this just might happen, and sooner than we think:

  1. Crushing debts and trade deficits: Argentina a few years ago was the latest textbook example of what happens when a country borrows vastly more money than it can ever hope to repay. The US has the largest national debt and largest trade deficit that the world has ever known, and both of these are still growing at an alarming rate. Canada is arguably even less self-sufficient than the US (when bad economic news is reported in the US, the $US rises in value relative to the Canadian dollar, because of Canada’s total trade dependence on the US). Any collapse of the US currency and hence the US economy (rated even by the conservative Davos economists, last week, as the global threat with the highest combination of probability and severity) will be immediately followed by a similar collapse in Canada. It has just been far too easy for Canada to extract and export its raw materials to the US, adding little or no value to the natural wealth we inherited and are now stealing from future generations, destroying our environment in the process.
  2. Poor service: You know your economy is in trouble when:
    • It becomes cheaper to throw things out and replace them than to repair and maintain them
    • It makes sense to sell you car and house and buy a new one because repair costs exceed depreciation
    • Health care reaches the point that the majority resort to alternative medicine and self-care
    • Infant mortality is at third-world levels and the rates of chronic environmentally-caused diseases are soaring past the point of affordability to treat them
    • People expect poor service both before and after they buy a product
    • Public education has declined into a dysfunctional and expensive child care and unemployment deferral system.
  3. Lineups (‘Queues’): Long lines are a symptom of demand greatly outstripping oligopoly-constrained supply, of systems that have grown too large to function, and of production and distribution systems that belie the myth of the ‘efficient market’. Markets work when they respond to public needs affordably. Today’s North American markets increasingly serve only the wants of the rich, and make the rest line up for manufactured scarcity. Choice among poor quality, undifferentiated Tweedledum and Tweedledee products is no choice at all — it’s just oligopoly brand propaganda.
  4. Zero ‘value-added’ production: Almost all of the cost of commercial breakfast cereal is advertising. Most of the cost of ‘brand name’ jeans is the markup that the brand owner applies without doing anything more than licensing the label to the Chinese manufacturer, and hyping the brand. Most of the cost of almost everything now is the exorbitant profit that shareholders and obscenely overpaid executives demand for their oligopoly goods and services, for virtually no value added. Oligopoly power and intellectual property ‘rights’, bought inexpensively from, and enforced by, compliant governments, prevents small and innovative competitors from entering their markets. Nothing of value is done: labour is all expended pushing paper, suing people, and trying to persuade people that products are worth far more than they actually are.
  5. Soaring inequality of wealth: The income disparity (Gini) index in the US, and increasingly in Canada as well, is comparable to that in the world’s most corrupt struggling nations. Such wealth inequality can only be sustained by deliberate and ruthless means — theft, bribery, corruption, cheating, lying, anti-competition conspiracy, relentless propaganda and suppression of dissent. The poor are made to feel guilty and ashamed of their poverty, their illness and their unemployment, when they should be angry
  6. An economy dominated by (in)security: Defense is now the #1 industry in the US (by a huge margin), and is moving up fast in Canada. A sign of a failing state is one that spends more protecting the property, security and interests of the rich than it spends on the health, education and welfare of the mainstream population. In most struggling nations, there is not enough money to do both. In Canada and the US there is, but there is a growing expectation that this will be short-lived. So those that already ‘got theirs’ are obsessed with security, as it becomes increasingly clear that there will soon not be enough of anything to go around, and as the inequality of income and wealth is increasingly seen not as enterprising, but as egregious
  7. Crumbling infrastructure: The soaring cost to repair and replace decaying infrastructure — water and sewer systems, pipelines, utilities, roads, bridges, dikes, communications etc. — has reached trillions of dollars, and governments and corporations have abandoned some of these and are waiting until others reach crisis situations, far beyond their intended useful lives. When the consequences of this negligence — flooded cities, chronic blackouts, poisoned wells, collapsed bridges, exhausted reservoirs, ruptured pipelines — wreak havoc, we are unlikely to have the funds to fix them or the preparations to mitigate their effects.
  8. Spending beyond the means of repayment: North Americans, encouraged by artificially low interest rates, fraudulent credit card promotions, and the ability to charge consumer purchases against their inflated home values, are now spending more than they earn. It’s not enough that none of the externalities — the cost of debt and waste and pollution we are pushing off on poorer nations and future generations — are ‘counted’ in our extravagant spending. Now, even excluding these expenditures, our per capita net worth (other than that of the tiny rich elite), is plummeting. We are staggeringly vulnerable to a drop in housing values, or currency values, or a spike in interest rates or commodity prices. And the entire economy depends on increasing spending by already over-extended citizens.
  9. Hugely unpopular governments and cynicism about the value of government: In healthy nations, the role of governments as regulator in areas where the ‘private’ sector cannot be expected to self-regulate, and as investor in infrastructure and services in areas where corporations lack the motivation or competence to provide it, is appreciated and respected. Successful states have always been those that get the public-private balance right. And while everyone is skeptical about government, it usually only in failed states that that cynicism is so deep that citizens have given up on government’s ability to do anything competently or honestly. We’re moving quickly toward that stage in Canada and the US.
  10. Rampant corruption: The gerrymandering, crfiminally deceptive electioneering, pork-barreling and overt bribery that prevails in the US, and that country’s inability to provide any assurance that its elections are free and fair and reflect the will of the people, are astonishing to us Canadians. But I fear we are not far behind. The ultra-conservative Harper government now governs through US-style propaganda press releases, and will no longer accept questions at press conferences unless there is a pre-scripted ‘talking points’ response for them. Harper, like Bush, believes he knows better than the voters what is good for them, and, to the dismay of many of us, most Canadians seem acquiescent to this arrogant style of government.

The answers are obvious, but probably beyond the political will of our dumbed-down, disenfranchised, propagandized electorates. Like other failed states, we will wait for the collapse to occur before we act, belatedly and inadequately. Our biggest challenge in North America will be that, unlike most struggling nations, we lack the self-sufficiency to live without institutional education, employers, technology, experts to do all the basic things we’ve forgotten or never learned to do, doctors with their drugs,packaged, imported foods, and cheap oil. The Long Emergency is coming, and we’re the least prepared people in the world to cope with it.

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5 Responses to Ten Signs the US and Canada are Failing States

  1. Nathan Shepperd says:

    The trouble with the idea of a “Failed State” is that it presumes a successful one is possible. It has always seemed to me that you are proposing something close to an anarchist view of society, but you often come back to complaining that governments aren’t doing a good job when you appear to have accepted the collapse as inevitable.In my view, your ten points demonstrate the problems with the state as a concept, and how it is not directed at serving anyone but those with power. It’s all working very well for the people who are making all the money, but it won’t last of course.

  2. Michael says:

    I suppose I am stating the obvious here, but all those symptoms of failing economies be observed in any system with a built-in, uncompensated-for positive feedback loop. In this case, the escalating mechanism of rent/compount interest effectively ensures eventual collapse of the mechanisms and entrenched habits of redistribution as they run out of new room to grow into. Easy, obvious, and in a way totally funny and sad that most people seem to fall for it and think they can win in this game. I wonder if and when humans will one day figure it out.

  3. Paul says:

    States take a long time to fail. The ruling class (oligopolists) find states, even corrupt and inefficient ones, very useful for their purposes. Russia was failing after the Soviet Union broke up, and it’s still failing, but it will go on for decades. And so many citizens identify with their “nationalities”. It’s hard to give up reining fictions!

  4. Paul says:

    Reigning, that is.

  5. The heart of a state is collective decision making, how the people govern themselves. In a democracy sometimes the other guy wins. But how much of this can be fixed by a few good governments? Much of it, I believe.And while democracy is a great idea it is time to move on to a more sophisticated form. First past the post and electoral college were two interesting experiments to learn from. We may have to question deep assumptions to make the kins of improvements we are looking for.

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