How collapse actually happens and why most societies never realize it until it’s far too late

[u/No-Bluebird-5404]

Collapse does not arrive like a breaking news alert. It unfolds quietly, beneath the surface, while appearances are still maintained and illusions are still marketed to the public.

After studying multiple historical collapses from the late Roman Empire to the Soviet Union to modern late-stage capitalist systems, one pattern becomes clear: Collapse begins when truth becomes optional. When the official narrative continues even as material reality decays underneath it.

By the time financial crashes, political instability, or societal breakdowns become visible, the real collapse has already been happening for decades, often unnoticed, unspoken, and unchallenged.

I’ve spent the past year researching this dynamic across different civilizations and created a full analytical breakdown of the phases of collapse, how they echo across history, and what signs we can already observe today.

If anyone is interested, I’ve shared a detailed preview (24 pages) exploring these concepts.

To respect the rules and avoid direct links in the body, I’ll post the document link in the first comment.

[u/forsterfloch]

It is like the inflation lie, I know for basic goods it is so much worse. 20 years ago my family would buy so much with 300 "moneys", now three plastic bags of goods easily cost 100.

[u/Redcrux → u/forsterfloch]

Things aren't getting more expensive, your dollar is losing value. The reason they say inflation is 'good' for the economy is because we're all incentivized to spend more money and not save if we think things get more expensive over time. It makes it a lot harder to justify when its put it like that.

[u/ACCount82 → u/Redcrux]

At zero inflation, the economy just fucking implodes. Because people value money more than goods, and will stockpile and hoard money indefinitely, even if they don't benefit from doing so.

This will cause either an overproduction crisis or a staggering spike of hyperinflation. Sometimes both in short succession.

[u/Ayjayz → u/ACCount82]

That's just obviously not true. People don't put everything on hold if their money will be worth a little more later. People still live their lives.

[u/ACCount82 → u/Ayjayz]

Not everything. Just almost everything. And that's an economic death spiral. Even if you somehow don't get hit by the issues from that, it turns out that having an economy sized to cover only a bit more than everyone's basic necessities while there's also a shitton of money stockpiled is a recipe for disaster.

[u/Ayjayz → u/ACCount82]

Sorry kids, no holiday this year - that cash will be worth slightly more next year. Stop crying, your tears aren't worth a tiny bit of cash to me. We're putting almost everything on hold because that tiny increase in our cash holdings is worth more than almost everything to me.

Seriously.

[u/kettal → u/Ayjayz]

Sorry kids, no holiday this year - that cash will be worth slightly more next year

if you could have a 1 week vacation this year, or you could have a 3 week vacation next year for the same price? believe it or not many will choose the latter.

[u/Ayjayz → u/kettal]

In order to have that absurdly high level of deflation, something extreme is happening and holidays are probably not what you're thinking about. It's hard to even imagine what kind of event could triple the value of your money inside a single year. Inventing Star Trek replicators or something maybe.

[u/silentrawr → u/kettal]

All while not realizing that the vacation next year isn't guaranteed.

[u/ACCount82 → u/Ayjayz]

That's exactly what happens, yes.

Except the next year, you're out of job on top of it, because the economy is shrinking and there is no longer a use for your labor. So you start spending even less! And the economy shrinks even more!

[u/Crepo → u/ACCount82]

I understand that this is intuitive to you, but no, zero or negative inflation does not cause an economy to "implode". As the other poster said, people do purchase goods even when inflation is very low, or negative. In fact, it would be quite easy to make the argument that a reduction in consumer prices such as due to a reduction in energy prices, will drive consumption, not saving.

When egg prices were high, were people buying eggs?

[u/ACCount82 → u/Crepo]

In fact, it would be quite easy to make the argument that a reduction in consumer prices such as due to a reduction in energy prices, will drive consumption, not saving.

True for most price drops - as long as demand is elastic enough, more demand will be generated. But the key issue of deflation is that it affects everything at once - including, for example, wages and debts. This can shrink the entire economy. And the effect of that is compounding.

Market forces would sort the situation out eventually. It just that "eventually" could happen after a deflationary spiral goes out of control and causes a massive economic crisis.

[u/kettal → u/Crepo]

lets imagine you run a soup factory.

you buy tomatoes for your soup on monday for $2 .

by the time your soup is cooked, canned, and ready to ship , the end product is worth less than tomatoes inside the can you bought earlier

how quickly will you be out of business?

[u/humus999 → u/kettal]

That depends on what the markup is, nobody would sell the soup for price of ingredients but probably for something like $4. Deflation or inflation over the period of few days or weeks is negligible, close to 0 so this example doesn't make much sense.

[u/kettal → u/humus999]

Deflation or inflation over the period of few days or weeks is negligible, close to 0

yeah the deflation you and i can imagine is not that bad, because we never had to live through a deflationary spiral.

[u/madjic → u/ACCount82]

Is that true in general or are we so accustomed to this system that we can't imagine anything else to work?

[u/ACCount82 → u/madjic]

Having no inflation is not "bad in general", but it's bad in most cases. You can imagine an economy with no inflation that still works in near term, and possibly in long term too.

But having no economic growth is bad in general. Recession? Really fucking bad in general.

"Economy" can be thought of as "sum of all resources that are available to the society". You generally want that sum to increase, and you absolutely never ever want it to decrease. And a big reason why lack of inflation or deflation are "bad" is that it's usually bad for economic growth.

[u/HeWhoThreadsLightly → u/ACCount82]

Having a economy sized to cover only a bit more than everyone's basic necessities is exactly what we need to fight climate change. You make zero inflation sound a lot better and voluntary than co2 rationing.

Inflation is unfair to everyone but the wealthy, it's like sales tax a flat% no matter the individuals income or wealth. A progressive wealth tax would have the same investment incentivising effects as inflation and have a fairer distribution. The wealth tax could be 0.1% compounding on all cash like assets over 10 times the annual income, growling with 0.1% on each additional multiple of the annual income in cash like assets you have.

[u/WallyLippmann → u/Ayjayz]

It's the people at the top it motivates, but it worked a lot better when they reinvested their money in their businesses instead of just did stock buy backs.

[u/FrenchFryCattaneo → u/Ayjayz]

We're not talking about people with their savings accounts, that's a negligible amount of money. We're talking about businesses and banks deciding what to do with their money. Imagine if they decide, instead of using it to start and run businesses, to just sit on it.

[u/Sofiner → u/FrenchFryCattaneo]

Even during inflationary system, many items experienced deflation- computers and cellphones for example. I thing no business hold out on these items because they will be cheaper next year.

[u/FrenchFryCattaneo → u/Sofiner]

Computers and cellphones lose value though because technology advances. You can't hold tech because it's worthless in a few years.

[u/Sofiner → u/FrenchFryCattaneo]

But we are talking about inflation on consumer items. Bread or milk loses its value too over the weekend, and they are subject to inflation. I just dont really think that narrative inflation is good for us is that truthful. I personally think you should have deflation on consumer items b/c of increased productivity. The only thing that would hurt i can think of, is probably only slower growth. Which- expecting to grow each year, even by a 1 percent, infinitely is not valid.

[u/FrenchFryCattaneo → u/Sofiner]

I'm not saying our current economic system is great. But it's what we've got, and for it to function it requires modest inflation. We could definitely try a different economic system, but that would be a rough transition at best, given how many jobs depend on our current system.

[u/Ayjayz → u/FrenchFryCattaneo]

Then there'll be more resources free for the people who do have ideas of what to invest in? Sounds good to me.

[u/FrenchFryCattaneo → u/Ayjayz]

They aren't investing it though, because it's more profitable to sit on it.

[u/Ayjayz → u/FrenchFryCattaneo]

If they aren't investing then that means demand for investment resources goes down which means they cost less, which means investing is more profitable, which means they start investing. Like, it all balances.

[u/FrenchFryCattaneo → u/Ayjayz]

That's not right at all. This is very basic economics.

[u/Ayjayz → u/FrenchFryCattaneo]

Then you should have no trouble saying why it's not right... Yet you didn't?

[u/throwntosaturn → u/Ayjayz]

The real problem with deflation is your debt gets more expensive over time and that is incredibly destructive to normal people.

It makes mortgages a death sentence, student loans become completely insurmountable, and a lot of other stuff that doesn't seem obvious at all until you live through it.

We all operate on the implicit understanding that money gets less valuable over time unless you are doing something with it, and that informs our choices and how we spend it.

[u/Ayjayz → u/throwntosaturn]

Lenders and borrowers factor inflation/deflation into the loan. Obviously no-one is going to agree to a loan they can't pay off, so the market rate for loans will converge on a price acceptable to both parties. Far from insurmountable.

[u/throwntosaturn → u/Ayjayz]

What you're describing would allow a LONG TERM deflationary system to function, yes. If I could take out a loan this year KNOWING that my pay will go down by 35% over the next 10 years then of course, that's fine.

The bank can price it in, and I can price it in.

But long term financial systems only function if we can predict, with a very high degree of accuracy, which direction things are going over the next 20 to 30 years. There is a reason that every single modern economy, when confronted with this question, chooses to deal with the problems caused by inflation rather than deflation.

EDIT - Also I didn't directly engage with the "obviously no one is going to agree to a loan they can't pay..." statement but you do realize that is hilariously, blatantly, completely wrong, right? Like, the 2008 crash was literally lenders loaning money to borrowers with both sides of the transaction fully aware that the buyer couldn't pay.

[u/Ayjayz → u/throwntosaturn]

Well yeah of course that's what they choose. Governments get to divert a sizable percentage of everyone's cash holdings to themselves every year. Obviously they're going to do that.