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The end of the market economy

I'm an ardent reader of the Archdruid's blog. Both his latest post and his previous one have focused on parasitic intermediaries and what happens to them in an era of irreversible civilisational decline. An excerpt from his latest:

What history shows, as already noted, is that the complex systems that emerge during the heyday of a civilization are inevitably scrapped on the way back down. Market economies are among those complex systems. Not all civilizations have market economies—some develop other ways to handle the complicated process of allocating goods and services in a society with many different social classes and occupational specialties—but those that do set up market economies inevitably load them with as many intermediaries as the overall complexity of their economies can support.

It’s when decline sets in and maintaining the existing level of complexity becomes a problem that the trouble begins. Under some conditions, intermediation can benefit the productive economy, but in a complex economy, more and more of the intermediation over time amounts to finding ways to game the system, profiting off economic activity without actually providing any benefit to anyone else. A complex society at or after its zenith thus typically ends up with a huge burden of unproductive economic activity supported by an increasingly fragile foundation of productive activity.

All the intermediaries, the parasitic as well as the productive, expect to be maintained in the style to which they’re accustomed, and since they typically have more wealth and influence than the producers and consumers who support them, they can usually stop moves to block their access to the feed trough. Economic contraction, however, makes it hard to support business as usual on the shrinking supply of real wealth. The intermediaries thus end up competing with the actual producers and consumers of goods and services, and since the intermediaries typically have the support of governments and institutional forms, more often than not it’s the intermediaries who win that competition.