The Storm Before the Calm: America's Discord, the Coming Crisis of the 2020s, and the Triumph Beyond

by George Friedman

The most important fact to bear in mind is that the United States was an invented nation; it didn’t evolve naturally from a finite group of people over thousands of years in one indigenous region, as did, for example, China or Russia. More than that, the United States was an intentionally and rapidly invented nation.

Unlike other governments, it had no past. This government came into existence through design, architecture, and engineering.

The machine was built on two principles. First, the founders feared government, because governments tended to accumulate power and become tyrannies. Second, they did not trust the people, because the people—in pursuing their private interests—might divert the government from the common good. Government was necessary, and so of course were citizens, but both had to be restrained in such a way that the machinery of government limited their ability to accumulate power. The founders had created such a machine.

The founders were trying to invent a machine that restrained itself, thereby creating a vast terrain in American life that wa...

Happiness is the emotional engine powering the United States. It is the only country to make the pursuit of happiness a fundamental right.

The idea that emerged from both the New Deal and World War II was that a state managed by experts dedicated to solutions without an ideology would do for the country what it did for the war: it would breed success. But of course, this became a principle, the principle became a belief, and the belief became an ideology. The ideology created a class who felt entitled to govern and who were believed to be suitable to govern.

The institutional crisis is rooted in two things. First, the governing class, and the technocrats, accumulate power and wealth, and they begin to shape the institutions to protect their interests. The second problem is that the expertise that won World War II and built the postwar world is now encountering its own problem of inefficiency—diffusion.

The crisis is this: institutions built on expertise are no longer working.

The federal government is increasingly diffuse and entangled and cannot operate in a timely or efficient manner.

As for the technocrats of Google and Goldman Sachs, the vast accumulation of money that increasingly could not be efficiently reinvested, but still created a vast gap in wealth that had been alleviated to some extent after World War II, has become a defining characteristic of society.

The accumulation of wealth by experts, combined with the decreasing efficiency of technocracy, is creating this third institutional crisis.

The United States is looking for a new framework for dealing with the world, but can’t readily do so in the framework of the third institutional cycle. In this cycle, the federal government was constantly engaged in both foreign and domestic matters. That constant entanglement under the guise of management cannot be sustained.

A political and cultural crisis arises, and what had been regarded as common sense is discarded. The political elite insists that there is nothing wrong that couldn’t be solved by more of the same. A large segment of the public, in great pain, disagrees. The old political elite, and its outlook on the world, is discarded. New values, new policies, and new leaders emerge. The new political culture is treated with contempt by the old political elite, who expect to return to power shortly, when the public comes to its senses. But only a radically new approach can solve the underlying economic problem.

Hayes had succeeded in generating massive investment through a stable currency. But the problem was that he had succeeded too well. The industrial plant of the United States outstripped the ability of the American and global markets to consume what it produced. Increasing savings would not address the problem. The solution was to increase consumption.

The Reagan cycle succeeded so well that there is now a massive surplus of capital. Interest rates, which had been extremely high at the beginning of the cycle, plunged later. This was the result of a massive investment boom that generated substantial returns that, given tax rates, accumulated in the hands of investors.

There is a great deal of money searching for and not finding investment opportunities. The cash is being held in very safe assets, depressing interest rates dramatically. Even retirees who have planned their finances with care did not expect to be getting almost no interest for their wealth. The dislocation of industrial workers, coupled with the damage done to prudent savers by low interest rates, has begun to generate an economic crisis. Inevitably, there follows a social crisis.

The social problem that flows from this economic crisis is the tension between the declining class, the industrial working class, and the coalition that has in some way benefited from the rise of what we might call the technological class—entrepreneurs and investors.

When Donald Trump emerged as the winner of the American presidency, I was in Australia. The announcement came shortly before noon, and I spent the day—and the visit—being asked in various conferences and by perplexed media hosts how Trump could have won and what it would mean. The election was taken as seriously in Brisbane and Sydney as it was in Cincinnati or New York. Already working on this book, I tried to explain that the focus should be not on the man but on his place in the cycle. It did not go over well, because the fascination was with his personality. That remains the case, but I will argue that that is a mistake.

The current institutional model has been increasingly unable to function successfully, and the key lies in redefining the relationship of the federal government to itself. The economic and social crises have created a massive decline in the condition of what had previously been a pillar of American society: the industrial workers.

It was really not the loathing of Trump or Clinton that was driving the discord; that was merely a symptom. The true problem was the division within the country, which was struggling mightily with real social, economic, and institutional dysfunction that drove the tensions.

The federal government is doing so much and is divided into so many parts that creating a coherent military strategy or a comprehensible health-care reform bill becomes impossible. It is a structure that can no longer focus on the problem or conceive of the solution.

President Obama’s health-care act was around 897 documents with over twenty thousand pages of regulations to explain it. Compare this with the original Social Security law, which was twenty-nine pages long.

Effective power (as opposed to elected, or intended, power) was passed to a vast army of managers and civil servants who defined the regulations, and therefore could redefine the intent of Congress, not intentionally, but simply because no one person could comprehend the whole. Making the regulations consistent with the law, and even with themselves, became impossible.

In a democratic society, being unable to petition or understand the federal government—except if one has the ability to maintain a staff of professionals—creates an inherent distrust of government.

Donald Trump won the election by grasping the alienation of broad sectors of society, not only from the federal government, but also from those who serve in it. There was a collision between the federal technocracy and those who had experienced and distrusted it.

The argument for expertise as the basis for political authority depends on the experts’ success at managing both their small niche and society as a whole.

If they fail, their claim to authority and their justification to rule dissolve. When the technocrats become a ruling faction, they have a unique requirement to do well.

What the rest of the Republican field failed to understand was the degree to which the conventional politician was by this point held in contempt.

In the 2020s, regardless of whether President Trump is reelected, indifference coupled with cynicism will dominate. The crisis of this decade will spring from very real problems but will also be a crisis of faith in the Republic itself.

Let’s begin with the institutional cycle. The first cycle created the federal government, the second redefined the relationship of the federal government to the states, the third cycle redefined the federal government’s relation to the economy and society, and the fourth cycle will redefine the relationship of the federal government to itself. By this I mean redefine how the federal government sets priorities, how it focuses on achieving the priorities, and how it is held accountable.

The federal system has been built, since World War II, on the assumption of expertise, and for a good part of that time it functioned effectively. But accepting the idea that expertise can result in failure will require a stunning shift in the public’s perspective, even though holding the government in contempt has long been part of the culture. This is a key threat to the institutional structure of the third cycle and the technocracy that controls the institutions.

The source of the problem is the idea that because expertise is essential, it should govern. Government by experts (the meaning of technocracy) consists mostly of experts approaching problems through their own prisms, hoping that the many prisms created can be brought together in a single whole and comprehended by the public.

The federal government wasn’t designed by World War II to manage power of the sort it had, and the inclination to use military power as a first response has proven unsustainable. This is not the case where a new policy is needed, but rather a new institutional structure to manage a global interest vastly different from World War II. And in the context of this change, other institutional dimensions, domestic as well as international, will have to shift. The problem of foreign policy is a dimension of the general crisis of institutions. The institutional shift will weaken the credibility of the technocracy heading into the 2028 election.

The difficulty in bringing closure to our wars, and the difficulty in adjusting to our new status, flow from the same source. We are governed by people who know a great deal about narrow subjects, but few who can see the whole.

The federal government has become the domain of hedgehogs, urgently needed people but profoundly insufficient. It is wisdom that is lacking, and there is no civil service code for the wise.

By their very incoherence, government actions increase the likelihood that projects will fail, or that they will succeed at an unacceptable cost, or that in succeeding, they will undermine the success of another project. There is no standpoint from which to visualize the whole, and the experts embedded in the nodes of the system are not foxes, nor have they access to the complexity. The result is, from foreign policy to health care, that the convolution of the issue is addressed through solutions that are even more complicated and therefore less understandable.

An impenetrable federal government has produced the sort of mistrust the founders wanted to avoid in creating a democratic republic where the public elects representatives and those representatives oversee the functioning of the government.

The problem is, as we close the third cycle, the representatives of the public are unable to supervise the operation of the federal government in detail. Four hundred and thirty-five representatives can’t possibly understand what is happening, and neither can the office of the president.

Supreme Court today. None of the judges have ever held political office. None had ever run a business or farm. All attended either Harvard or Yale Law School (one started at Harvard but transferred to Columbia). All are experts in the law, or, more precisely, all are experts in the current technical controversies over law. They are technicians of law educated at schools that are superb at educating technicians.

The rigidity of the Supreme Court therefore is that it is a legal and political institution, now run by technicians, utilizing seemingly nonideological methods for ideological ends. This is a problem that permeates the federal government and makes it increasingly unable to govern.

Certainly, experts are indispensable. They cannot govern, however, because their perspective is limited by their expertise. But as a class they have come to rule the federal government’s relation to the United States.

Over the 2020s, this growing conflict will not be confined to government. The technocracy is as much a social class as a governing body. For example, journalists for traditionally trusted newspapers, which used to be called the prestige press, have lost their standing. A Gallup poll in 2017 showed that only 27 percent of respondents trusted newspapers to any degree.

The federal government, part of the technocracy, sided with and even led this assault on their values, treating the declining industrial class as having little to offer economically or socially. Trump’s election was not the important thing, nor actually were the laid-off workers. Much of this has to do with the systemic shift in economies.

The selection process at the best schools is presently designed not to find the best minds but rather to find minds already shaped to the culture and ideology the universities regard as being able to benefit from their education.

As we reach the end of these current institutional and socioeconomic cycles, the universities have reconstructed the walls that existed before the GI Bill and the New Deal.

After World War II, Harvard welcomed a generation that could never fit in to its crowd. Now Harvard is once again looking for the right sort of fellow, as in an F. Scott Fitzgerald novel.

My point is not to trash the university. It is indispensable. It is also unsustainable in its present form. The cost of higher education can no longer be sustained.

The university is the battleground of the crisis of the 2020s because it is the system that fuels the broad social bureaucracy. If the social bureaucracy is going to change, it must first happen with a change in the universities.

As we enter the sixth socioeconomic cycle, the political battle will be between the now frayed and reactionary technocrats, who will continue to assert that their expertise, credentials, and merit make them the morally legitimate power in the United States. Their challengers will be a coalition that comprises the heirs of the dispossessed of the prior cycle, who will move beyond the ethnic divisions that dominated the previous cycle.

Transforming universities will be as important as finding a new governing principle for the federal government. Most universities are subsidized in some way by the federal government, the most lavish being federally guaranteed student loans. The existence of these loans permits the universities to increase tuition and other costs knowing that student loans will scale with them.