I believe that all societies (governance systems) will eventually fail because of a unique quirk of human behavior, but one which is also necessary for the evolution and survival of our species; thus, the fate of our societies is built-in. But, the first question is: why do we need governments at all?

Anarchy (the absence of a specific ruler), can’t exist in real life for the simple reason that there is no one to enforce it! This sounds paradoxical, but the absence of a specific authority does not mean the absence of power centers. People being what they are, someone will decide that having a number of others under their sway is a good thing and will act to make that happen. So, one or more of these groups will emerge, and without some countervailing force, there will eventually be violence and the emergence of at least a local warlord. The period of the Warring States in China is a good example of this. The only way to effectively maintain some sort of order in society is to have a central government(s) with defined areas of influence. The extent of this central authority depends upon geography and effective lines of communication, but within its realm, only it can legitimately claim to wield the threat of (or actual) violence. This central authority can exist by itself or can be a subdivision of a larger polity (think duchies, states, cities, etc) to which it is responsible. This, however, says nothing about the scope of governments and how they should be structured.

Libertarians suggest that governments should be minimal and only exist to prevent private violence and enforce consensual agreements between free citizens (a ‘civil’ society, a protection of private property, etc). This would probably work quite well if the citizens themselves were all libertarian, but human nature being what it is, there is always ‘rent seeking’ behavior which will cause one group to attempt to subvert the laws for their sole advantage. How to prevent this is the conundrum which all governments face, and there have been any number of attempted solutions.

On the opposite ideological pole from the Libertarians, a government run by collectivists (socialists, communists, ‘progressives’, etc) would work well if all the citizens thought it was a good idea for them to work hard to support an ‘intellectually elite’ governing class while simultaneously being burdened by an immense layer of ideologically imposed baggage. The recent example of Venezuela demonstrates how well that can work out… That does not mean that some variety of this type of government can’t work for a while, as seems the case with China, but that is an experiment whose results may not be clear for some time.

Western ‘democratic’ governments occupy a middle ground between these two extremes, and one would think that they might be better able to balance the needs of their citizens, but one must keep in mind that all societies have rentiers looking to game the system, and they tend to be smarter and more capable than the average citizen. To analyze these issues, I find it particularly useful to think of a government as a specialized class of organized criminal enterprise.

An organized crime group (Mafia, etc) exists to extract resources from the community but also serves to prevent ‘unauthorized’ extractions (invasions by another group, free lance robbery), not necessarily because it is the ‘moral’ thing to do but because it infringes on their own prerogatives. Although it is theoretically better to not have such a group at all, in the real world it is a question of balance; it is better to have only one group stealing from you if the extractions are less than what would happen in their absence. Historically, they (Mafia) have also provided some public services, such as feeding some of the poor – it is just good public relations, if nothing else. Thus, in effect, a Mafia is a local, self-selected governance group. If it were not self-selected but instead voted into office (or inherited, as in a monarchy), would it behave much differently? The particulars of its behavior might be a little different and the public’s acceptance may or may not be affected, but the net effect would be identical – resources (taxes) are extracted for the promise of peace and stability.

Aside from moral aspects of this type of ‘governance’, a small ‘tithe’ to that type of group may actually enhance the well-being of the society at large – as long as the balance of extraction/protection is favorable. One must keep in mind that the organization (State) produces nothing of value itself, but can only (hopefully) help create conditions for its citizens to create value. Therefore, a problem arises as the governing organization inevitably grows larger than the paying population. To retain the same revenue/member, the governing organization has to either increase the size of its territory (invade something) or increase the taxation/citizen. Neither of these choices is likely to enhance the welfare of the host population, but why do we assume such governance structures will always grow?

Humans seem to always seek novelty (avoiding boredom), whether in new foods, new sexual experiences, new places to explore, etc., and this drive has resulted in the expansion of humanity all over the globe. If it were not for this key trait, we would still be living in caves (or be extinct). If people are looking for a change, the overwhelming chance is that they will look for something ‘more’ or ‘better’, not ‘smaller’ or ‘poorer’. Whether or not the search is successful, the ratchet is one-way – always more/better. When you have a group of people in a criminal enterprise, or government, or bureaucracy, individual dynamics drive the group, so there is always a push for expansion. Have you ever heard a bureaucracy claim that they needed fewer resources or fewer employees, that a crime family needs a smaller territory or fewer ‘subjects’? Therefore, all human institutions are heavily biased toward ‘growth’, and this has a pernicious effect.

Even fulfilling the core functions of the State (peace, stability) involves a certain dead-weight loss on society and its economic activity (regulations, taxes), but it is presumed that these losses are at least offset by the gains. However, as the bureaucratic mass inevitably increases, there is rarely a commensurate increase in economically useful functions, so the additional dead-weight cost results in a net loss for society as a whole. This growth may be because of Imperial ambitions (more vassals) or popular demand (more ‘free stuff’) to effectively expand the ‘core functions’ of the State. Since the State itself cannot create wealth but only extract wealth from its citizens, such expansion always acts to impoverish society as a whole, although certain groups in that society may be (temporarily) advantaged.

In well-off societies there is a constant clamor for all people to be housed and fed, all diseases treated, jobs to be made for everyone and any privations ended. As shown before, this necessarily force-feeds the bureaucracy, and as the bureaucratic arms of the State grow larger, the relative dead-weight loss increases, if only because the personnel required to manage other personnel (all of whom produce nothing of value) proliferate at an ever-increasing rate. Unfortunately, this ratchet effect is always in operation (larger empire, more ‘free stuff’), so productive society is bled at an ever-increasing rate. The end result is inevitable but the timing is impossible to predict.

At some point, the society’s standard of living can’t be maintained (or grown) by wealth creation due to the accretion of the unproductive overburden. The usual response to this is for citizens to undertake debt to maintain living standards and/or for the State to debase the currency (printing money) to create a wealth effect. Both solutions are temporary at best, and the system eventually collapses in some type of a crisis. At this point, many States choose to start a war or undertake other drastic action to maintain their hold on the populace.

The only way I see that this scenario can be avoided is for a population to control not only its growth but its aspirations and accept an economy which is relatively slow growing, eventually becoming static – and also avoiding any of the Four Horsemen. Knowing human nature, I am afraid the odds of this are very long indeed. The best that one may hope for is to be fortunate enough to live in the ‘good period’ or be able to foresee and dodge the falling debris when things come apart.