Empire, ‘Overstretch,’ and the Joys of Collapse

Many people take social theory to be a fortress held by the left. In many respects this is true. This is not, however, a good reason to eschew social theory. As much as I admire the late Russell Kirk, I do not think that his constant refrain against reason was much help in addressing the questions confronting us. Anyway, there is a tradition of social theory compatible with classical liberalism, or libertarianism – liberalism was founded on it – and the tradition was extended by Austrian school thinkers from Menger to Rothbard.


I have already mentioned the usefulness of Marxist works which, unawares, carry on laissez faire liberal political-exploitation theory. Leaving the Marxists aside, other good works appear, now and then, despite our general expectations about the "social sciences." One such useful work is The Collapse of Complex Societies by Joseph A. Tainter,1 who seeks to account theoretically for the collapse of large and complex societies. He casts aside, as moralistic, mystical, and metaphorical, the work of Spengler, Toynbee, and Kroeber in favor of macro-structural explanations. He sees collapse as “a rapid, significant loss of an established level of sociopolitical complexity” as with the Western Roman Empire, the Western Chou, the Olmecs, the Mayans, the Hittites, Minoan Crete, and the Mycenean city-states. A large state undergoing collapse may break down into the original units – "states, ethnic groups, villages" – out of which it was made. (So it does take a village, after all.) Staking out a middle ground between "conflict" and "integration" (functionalist) theories of government, he writes that "bad government is a normal cost of government.” (See pp. 4, 38, 72.)

In this view, societies are "problem-solving organizations" whose "sociopolitical systems require energy." Growing "investment" by rulers in "complexity" brings on higher costs per person and eventually reaches "a point of declining marginal returns" (p. 93). This might be true, broadly, but it leaves out the strong possibility that, while some human institutions do solve problems, states might be causing most of the problems they supposedly solve. The phenomenon under discussion, collapse, might bear witness to that. Conflating civil society and state would thus block our vision.


Nonetheless, Tainter gathers much useful material on important cases of collapse, including evidence for his proposition about declining marginal returns. Everything from cocoa and wheat to dairy farming and individual caloric consumption is implicated. The net is cast a bit wide, but (as one might have foreseen) the most striking graphs and statistics deal with activities belonging to the state or heavily penetrated by the state. Thus he notes the shocking decline in the rate at which Americans patent useful inventions, somewhat grudgingly citing Fritz Machlup’s attribution of the decline to U.S. government takeover of most Research and Development (p. 100) – a point made by a number of writers for the period under discussion.2

Tainter looks at rising costs of British naval bureaucracy, 1914-1967 and concedes that C. Northcotte Parkinson had a point (pp. 106-107). “As surprising [!] as it may seem,” Tainter says, "there has been a precipitous decline in returns to American education" (p. 102). Indeed, the graph for state expenditures on education (1940-1960) is almost the reverse of that for (a declining) “development of professional expertise” in the US (p. 106). (The spending rise is slightly steeper.) My personal favorite is the graph showing declining returns (in terms of costs) to US health care, 1955-1982 (p. 103). This line plunges! And what an interesting choice of years, especially in relation to growing federal "help" in that industry.


Declining returns is a useful concept unless one runs off the road with it by making no distinction between states and markets. Of course returns don’t increase forever. What is important is the different way states and markets handle that reality. To put it simply, an over-expanded private firm will try bringing costs in line with income; states will try commanding increases in their income, while decreasing their alleged services. Or, as Guido Hülsmann writes, states attempt annexation of new territory to obtain revenues to offset their bankruptcy.3 So war, one might say, is built into the state system and not the mean old market.

Tainter sketches the growth and specialization of bureaucracies. As bureaucratic solutions pile up, the picture resembles the “locked-in-ness” described by Forrest McDonald’s The Phaeton Ride,4 in which institutional decisions (mainly governmental) leave society with no solutions and no way out. Problems accumulate, forcing the state into greater outlays to sustain its legitimacy, maintain order, and guard frontiers (p. 115).

As its institutions ossify, the state "invests" more and more in its complex order, an order whose returns – to the general public – are in decline. The state robs both current productive capacity and savings allocated to future output, crippling the economy, just when the its felt need for income is rapidly growing. With "marginal returns" to society sinking, "complexity" (=large state) is no longer a boon to the many. Devolution of power to localities looks better and better.

Tainter writes: "As marginal returns deteriorate, tax rates rise with less and less return to the local level. Irrigation systems go untended, bridges and roads are not kept up, and the frontier is not adequately defended" (p. 121). Faced with growing numbers of would-be dropouts, "the hierarchy [has] to allocate still more of a shrinking resource base to legitimization and/or control" (p. 121). Some of this will sound familiar.


Of the collapses which he describes, Tainter’s discussion of the Western Roman Empire is the most interesting, perhaps because it is the best-documented (pp. 127-52). The Roman Empire was initially successful because stolen goods from each conquest financed the next one. The broad logistical limits of the process were reached by the time of Augustus. Thereafter, territorial changes were minimal. Without further loot (a sort of primitive accumulation of statist capital), Roman rulers had to defend vast territories out of current revenues drawn from a contracting economy. In general, the Roman state crippled and ruined the developed east (Greece, Egypt) so as to hold onto the less productive west. Making citizens of all free men in the Empire (212 AD), in order to tax them, acknowledged the decline.

Faced with rising costs and declining revenues, emperors debased the coinage while trying desperately to extract taxes out of a demoralized people. But by the third century, taxes were eating up citizens’ capital and savings. In the following two centuries, further imperial inroads brought about "a drop in actual output" (p. 150). Later emperors, from Diocletian onwards, undermined society’s capacity to pay at all. Some of these things, too, will sound familiar.

Collapse loomed, but collapse had definite advantages, as shown by its aftermath. The Germanic kings who replaced the empire in the west were better at defending their (smaller) territories against invaders and could do so more cheaply than the overextended empire. In North Africa, the Vandals (victims of a bad press) lowered taxes and economic well-being grew, until Justinian brought back Roman rule and, with it, imperial taxes (p. 151). "Investment" in this lower level of political "complexity" paid for itself, so to speak, by being less costly (pp. 88-89). Collapse is not all bad: a disaster for the state apparatus may not be one for people as a whole. Devolution of power to smaller geographical units is "a rational, economizing process that may well benefit much of the population"(p. 198).


Putting this in the American idiom, the government got too damned big and reaped its just reward. A certain clarity could be gained by integrating Tainter’s line of inquiry with insights from classical liberal exploitation theory and Austrian economics. For that sort of analysis, one must turn to the late Murray N. Rothbard, who sought to create a unified "science" of liberty – a synthesis of classical liberalism, Austrian economics, critical sociology of states, revisionist history, and other elements. Rothbard saw that states achieve unchallenged control over civil society by seizing "command posts" over society – by regulating communications, monopolizing the issuing of money, controlling education, and asserting a monopoly of providing defense, security, and law.5

Seeing politics as essentially plunder, Rothbard would not have been surprised to hear that Rome’s western successor states were cheaper – that is, got by on less plunder than the empire. Nor would he have taken seriously the idea that decentralization precluded high levels of economic development. As he (among others) emphasized, it was precisely the absence of European political unity – or the converse, pluralism within one civilization – that permitted liberty, the market economy, and industrialization to emerge. It is from Rothbardian and related premises that we can best come to grips with such matters as imperial over-extension and bureaucratic hypertrophy. (I put off discussing Rothbard’s views in detail, until I can devote an entire column to them.)


Some may ask, with justice, What is the relevance of Roman precedent and big theories about collapse? What, indeed.

Marxists argue among themselves whether the Roman empire answers to the "Asiatic mode of production" or a "tributary mode of production"[!]. Certainly, it rested on agriculture and was hardly an advanced market economy. As Michael Mann notes, most of the long-distance trade within the empire was precisely the result of forcible unification of territories and amounted to moving goods around to supply the Roman army and pay for its "protective" services.6 The Roman economy answered to politics, not the mode of production (surprise, surprise). In such matters we should follow a suggestion of Rothbard’s and work out the logic of "hostile action" (war and politics), including an economic, "praxeological/"means-ends" analysis of the means of predation or coercion.

The Founding Fathers, as republican theorists, dwelled on political questions, of course, and took the decay (or rise) of the Roman republic into empire very seriously as a cautionary tale. If there are structural limits to political action over time and space, as there appear to be, we would be advised to follow their lead. On the other hand, empires differ from one another and it pays us to understand how. Attacking relatively free Britain, Thomas Paine wrote, "the portion of liberty enjoyed in England, is just enough to enslave a country by, more productively than by despotism; and… as the real object of all despotisms is revenue, a government so formed obtains more than it could do either by direct despotism, or in a full state of freedom, and is, therefore, on the ground of interest, opposed to both."7

This is very familiar, indeed. Here we have the Law and the Prophets, as far as mercantilism and empire go. Hans-Hermann Hoppe makes the same point, that relatively liberal societies, by permitting economic activities which generate greater overall wealth, have a much higher potential "rake-off" at hand, and therefore, can establish armies, navies, and weapons of mass destruction far beyond the means of hopelessly backward despotisms, however big.8 The British and American empires come to mind, along with the Americans’ late rival, the Soviet Union.


Worse luck, the American empire has discovered seemingly unlimited resources of rhetorical imposture and, perhaps more importantly, has an ability to inflate its own – and therefore the world’s – money supply in ways the British empire, committed to a hard-money standard (only partly overcome by the Bank of England) could not. This is truly a formidable command post and a source of short-run income that turns the Mexican state oil monopoly green with envy. Inflation, Mises says somewhere, is the bulwark of militarism. It allows a state a free hand in spending without running into short-run political opposition. In the longer run, it can end in severe economic depression.

All this suggests that liberal empires may have more staying power, in some ways, than their clunky agrarian predecessors, which did in fact look a lot like an Asiatic mode of predation. Above all, the "liberal" empire stands athwart that "full state of freedom" mentioned by Paine. One might wish it to go away.


Am I advocating collapse? Am I anticipating collapse? Not really. Arnold Toynbee points out that periods of collapse can be hard to live through. When the dust settles, you get epic poetry written by people with a very foggy notion of what really went on. With our luck, we wouldn’t even get a good epic.

Besides, this is a federal republic. The term "United States" is plural grammatically as well as by original intention. There is no mystery whither to devolve power, if the political will existed to do so. Nor, in the present stage of international economic life, is there any reason to anticipate a reversion to subsistence economics, if the loosely federated micro-states of one hypothetical future have sense enough to trade with the outside world.


  1. Joseph A. Tainter, The Collapse of Complex Societies (Cambridge: Cambridge University Press, 1988).
  2. See, for example, Charles E. Nathanson, "The Militarization of the American Economy" in David Horowitz, ed., Corporations and the Cold War (New York: Monthly Review Press, 1969), pp. 205-235.
  3. Jorg Guido Hülsmann, "Political Unification: A Generalized Progression Theorem," Journal of Libertarian Studies, 13(1997), pp. 81-96.
  4. Forrest McDonald, The Phaeton Ride (Garden City, N.Y.: Doubleday & Co., 1974).
  5. Rothbard, Egalitarianism as a Revolt Against Nature (Washington: Libertarian Review Press, 1974), ch. 3, "Anatomy of the State," pp. 34-53.
  6. Michael Mann, "States, Ancient and Modern," Archives Européennes de Sociologie, 18(1977), pp. 262-297.
  7. Thomas Paine, "The Rights of Man" in Richard Emery Roberts, ed., Selected Writings of Thomas Paine (New York: Everybody’s Vacation Publishing Co., 1945), p. 282.
  8. Hans-Hermann Hoppe, "Banking, Nation-States and International Politics," Review of Austrian Economics, 4 (1990), esp, pp. 75-78.