Collapse step-by-step.
Stage 1: incomes get eroded but people don’t cut expenses. They think it will pass. (People’s brain need to cheat themselves not to despair.)
Stage 2: It dawns in people that this is a collapse and they have been caught unaware. Wife blames husband and he blames wife back, kids get upset by the loss of their activities. Family related problems increase. Young women start getting married in droves. They see the pool of males going to go down and decide to hook one while the going is still good.
Stage 3: People lose income and start to make a few on the side and corruption (wayo and cheating) increases. People at higher echelons see it coming and decide to have a go at it to make some money since the unavoidable is coming soon. (Enron, Wcom recently and real estate in East Germany mid-90s, are cases in point
Stage 4: People no longer care what the neighbors, working colleagues or relatives say. It is survival time. They start selling the lots, second houses, changing the cars to cheaper ones; wife starts small business or gets a job. Poor people revolt: Zapatista in Mexico, MST in Brazil, Ogoni in oil production area in Nigeria, Indonesians: Acehnese, Ambon, Borneo people. Government tries to cope with block formation. Bartering since no credit is available. Build Operate and Transfer deals are exploited during this stage.
Stage 5: Government defaults. Collapse has ravaged the society. People are driving the ten-year old car. The cityscape shows how dilapidated the area has become. Illegal immigrants depart the country in droves. The whole country’s infrastructure is in ruins: pot holed roads, old airplanes, brown outs, black outs, telecoms kaput. Gated communities grow. Professional students proliferated since they don’t get jobs after graduating, and keep in university as long as possible and are living with their parents. Birth rates by then have plummeted.
Stage 6: Beyond collapse:
Two ways:
1) Liberal Government privatizes to get money to finance the state. Privatization, de-regulation liberalization becomes the word du jour. Open economy.
2) Populist or religious opportunist appealing to the populace: Nationalizes, kicks out multinationals and foreigners. Raise salaries of the military and civil servants, hands out to the poor people.
Collapse makes attitudes and behavior to change forever. Collapse strikes fear in people who went to the edge of abyss and came back different persons. How long did it take for Germans to forget the Deutschemark collapse and the following unfolding events? Note how much foreign reserves Japan still keeps even though it don’t need. US case: how people changed after 1929 bust and the Great Recession and still feared it decades after it ended.
Collapse strikes fear and motivate people. People get motivate to do things they have never contemplate before. Fear is the best motivator of all and collapse gives a lot of motivation to do things they’ve never thought capable of doing before. |
