2016 Financial Theme #1: The Loss of Great Power Leverage

civilCharles Hugh Smith – A number of systemic, structural forces are intersecting in 2016. One is the decline of Great Power leverage.

Once a nation’s civil society–broadly speaking, the institutions of social cohesion–has been shredded so that power rests in the hands of the few, the nation becomes exquisitely vulnerable to coups and regime change.

As the seminal book Coup d’État: A Practical Handbook (1968) explained, coups are a function of the concentration of power: if political power (and by extension of that leverage, economic/financial power) has been concentrated into the hands of a few, changing governments (and indeed, entire systems of control) is greatly simplified: kill, imprison or exile this handful of insiders, and the pyramid below will be yours.

This vulnerability makes any nation run by a small clique a very tempting target to Great Powers and neighboring nations seeking to become regional powers.

Nations with diverse civil societies–by definition, societies with a tolerance for dissent and multiple circles of civil, political, religious and economic power–cannot easily be captured by coups, as power is too diversified to be consolidated in a few hours by a tiny clique or the agents of a foreign power. Continue reading