30 Mar Entropy

“Entropy is the second law of thermodynamics … and of geopolitics, religion, race, economics, climatology, children, etc.” – The Lonely Realist

Entropy is a cornerstone concept of physical science … with broad societal applications. Entropy is “a lack of order or predictability” or “a gradual decline into disorder.” The scientific exemplar is the universe, which started with an ordered point of energy that exploded, releasing energy that caused the universe to expand and send it hurdling into disorder. The same is true of man and the works of men. Human progress has been accelerating at unprecedented speed following a breakdown in order and with increasing unpredictability. The post-WWII era witnessed an American-led, economically expanding global world order …, the key word being order. Religious and racial controversies were muted. Deaths and privations due to war, disease, natural disaster, man-made catastrophe and poverty declined. Health and welfare spread to all corners of the Earth. Everyone benefited from unprecedented technological progress. And democracy and individual rights flourished. That enormous, multi-dimensional expansion has bred disorder, entropy-in-action.

Take geopolitics. TLR in October reported on Ray Dalio’s thesis that America is “progressing towards the perfect [entropic] storm.” His research into historical patterns led him to conclude that the five cyclical forces that boosted humanity following WWII have run out of energy their course. The orderly growth in each of the five has become disorderly and we are approaching the end of a Big Cycle. Dalio predicts that “the odds of some sort of a devastating war within the next 10 years are high and people are positioning themselves with that possibility in mind, which itself is very damaging.” That positioning is the essence of disorder. Dalio’s pattern analysis is mirrored in the writings of Neil Howe, George Friedman, Peter Turchin, and John Mauldin …, all of whom use differing metrics, analogues and analyses to predict a rising retreat from order and predictability – entropy.

Under the umbrella of Pax Americana, humanity experienced an unprecedented period of peace and growth – the Golden Age of Man. Wars abated and violence steadily declined. Deaths from disease decreased precipitously and life expectancy entered an era of unparalleled expansion. Poverty declined and levels of education and knowledge saw similar impressive gains. That orderly evolution now has entered its next disorderly entropic phase.

Dalio most recently warned that China is confronting a “100-year storm” that has the potential to spread havoc across the world. With the backdrop of a broken Pax Americana, China is America’s foremost adversary in an increasingly disorderly hazardous competition for global domination. It is the leader of an Axis of America’s enemies that has arrayed itself against Western political, economic and cultural interests. With unparalleled global ambition, a domestic population of 1.4 billion, the world’s largest armed forces and the world’s second largest economy, China is a formidably dangerous opponent. Today’s China, however, is faced with weakening economic growth, increasing inequality, demographic decline, and rising international tensions, the destabilizing ingredients for increased disorder.

There are numerous additional examples of entropy. The retreat from anti-Semitism and racism that characterized Pax Americana has come to a screeching halt … and been replaced by expanding anti-Semitism, anti-Zionism, Islamophobia, and the rise of racism, tribalism and “replacement theory.” What was orderly human progress now is dangerously chaotic. And this is true not only in America. Democracy, the rule of law and tolerance for differences are in decline in Europe, Asia, and South America as well.

The eroding value placed on education provides a more nuanced example of entropy. The 20^th Century’s advances in learning and the accumulation of knowledge have crashed headlong into outdated educational methods, materials and incentives compounded by social media’s distortion of facts. The result has been a fracturing of educational standards, declining test scores, underachievement, and increasing disorder (discussed by TLR here). [ED. NOTE: “If you think education is expensive, try ignorance.” – Derek Bok.]

Although GDP growth and global wealth continue to expand, so too have income and wealth inequality disparities. TLR has highlighted the accelerated growth of national debt, parallels with 1930s’ turmoil, and the rising risks of economic and social chaos. Each is a natural consequence of entropy. Periods of disorder create instabilities that trigger revolutionary change (technologically, politically, economically, climatologically and otherwise) that are followed by periods of order/stability and evolutionary progress. That is entropy which, after all, is the natural order of things.

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Finally (from a good friend)