27. VIII 2017
For the last sixty years, the seventh summer of each decade has treated us with special types of excitement delivering events that would sometime put a stamp on the entire decade:
1967 — summer of love (Jimi Hendrix sets his guitar on fire)
1977 — summer of Sam, disco, and Studio 54
1987 — Alan Greenspan becomes the Fed chairman (it takes exactly twenty summers to experience the full impact of his nomination)
1997 — Asian crisis
2007 — summer of subprime (conditionally insolvent become unconditionally illiquid and all hell breaks loose)
2017 — summer of hate (Donald Trump sets his “guitar” on fire)
Summer of 2017 highlights an acute case of cognitive instability — a cumulative erosion of traditional frames of reference, changes in interpretive frameworks and proliferation of intersecting narratives. At the core of current political developments lie the structural changes, which after years of brewing in the background, have hit the center stage and became dominant drivers of everyday politics and market functioning. But, as dramatic as these developments have been, market reaction remained restrained throughout — markets still appear to be complacent, but that complacency feels less uncomfortable than before. The verdict is not yet in regarding significance of the summer of 2017. However, it is becoming increasingly clear that it announces deeper political changes. Still in their formative stage, these changes, while not having significant short-term impact, could affect the society in a profound way.
Although the current political landscape appears highly volatile and unpredictable, it is neither new nor extreme by historical standards. It is merely a phase of a well-defined pattern of developments during periods of transition between two paradigms. These patterns capture how political bodies are damaged by ideas, which are invented to perpetuate this damage.
As this transition process has clear path dependence, in order to fully understand its underlying dynamics, one has to start from its trigger event, the 2008 financial crisis – the true event in the sense that it changed both the reality itself and the way we perceive it. No matter how hard we tried, the aftertaste of 2008 is not only not going away, but its echoes only seem to be growing louder with time. Last ten years or so have been like a persistent pneumonia that, despite all the treatment, just wouldn’t go away indicating deeper problems suggestive of a failure of the immune system or even a terminal disease. Unlike previous crises, its depth has been so severe that it has triggered a social change. As the existing modes of social organization alone (such as electoral democracy) can no longer safeguard the economic interests of a growing fraction of the population, economic initiatives are no longer effective and a quest for social change takes center stage. Social stability defines equilibrium and social transformations represent a change of equilibrium. When international trade agreements are under possible revision, interplay between technology, labor and capital is poorly understood, the role of welfare state is being reexamined, borders being closed – when everything that defines a social system is on the table – this is the most challenging environment where explanatory power of traditional macroeconomics is the weakest. These transformations are always disruptive and have the appearance of discontinuous processes. Unlike economics, which provides effective description of reality around a well-defined social equilibrium, a social change corresponds to a change in equilibrium – a paradigm shift to which economics needs time to adjust.
During these transition periods, old values, beliefs, concepts, institutions, and authorities as well as traditional frames of reference lose their power. This creates a state of cognitive instability. Nothing functions according to established (or any known) rules. Cognitive instability spontaneously creates the urgency for stabilization. There is too much new information, and not enough understanding. This “agitates” society. There is an open contest for a narrative — not necessarily the most accurate, but one capable of providing the best fit — that would restore stability. The challenge consists of constructing from amorphous mass of unintelligible information, tendencies, and speculations an acceptable narrative that restores equilibrium.
These transition situations bring to the surface a wide range of characters and organizations, which become new participants in the political discourse. Not all of them are serious contenders, but history reminds us that there exists a greater proximity between laughable and dreadful than calmer times would admit. The underlying narratives play an important role in the ability of the governments to shape consensus, which breaks with the tradition, the past, and sometime reinvents it to self-aggrandizing end. The fragility of the local equilibrium makes especially alarming and uncomfortable the fact that abnormal and delusional are not cut from a different cloth than what counts as “normal” or mainstream. Under special circumstances some of the fringe narratives infiltrate affective realm and interests of broader social circles and create intellectual ferment for a perceived mode of change. In the end, the most successful narrative will be the one that offers a description of reality, which helps articulate otherwise inarticulate experience by translating diffusive emotional states like fear, identity or cultural belonging into slogans that admit strong affective charges. As such, it will stamp a mode of description that seeks recognition in ever-greater circles until it is accepted as the “official” social self-image.
The political developments of this summer are suggestive of a transition process between two paradigms with the old one not completely dead, but without clear contours of the new one. Effectively, what is currently on the political table is an alternative between two undead modes of social organization: the old one (centrist democracy) is still too alive to be dead, and the “new” one (a Turkmenistan-style electoral dictatorship proposed by the current administration) too dead to be alive.
In the bidding stage for the new narrative the goal is not so much to post immediate victories, as it is to re-center the dialogue in such a way that it creates advantages in the mid- and long-run. Small gains now could convert into larger gains later. Consequently, in the near term things could remain “boring”, relatively speaking — a continuation of the status quo mostly due to diminished ability to produce political consensus. However, beyond 2017, things could get quite a bit more exciting. Political leaders, who bear dual burden of imperative of stability on one side, and the urge to change, on the other, are themselves running an enormous risk. They are tempted to counter the confusion of the present with will for order and, in that process, often increase the very chaos which they pretend to oppose, often risking to fall themselves victims to spiraling disorder of their own creation.
The key to our future (or its absence) lies in the very definition of chaos — when the present determines the future, but the approximate present does not approximately determine the future. Chaotic systems are hypersensitive to initial conditions – tiny disturbances have enormous consequences. We are not only heading in an unknown direction, but the path itself is unknown, and not only are these things not known, but they are also unknowable. Nothing what we know will be of use any more.
 A. Koschorke, The Poetics of National Socialism, MIT Press (2017)