In this post I would like to borrow an idea from Taleb’s “anti-fragile” book. Basically, Taleb states that certain systems become stronger if subjected to periodic stress. For example, bones and muscle mass grow stronger if you exercise rigorously in a gym, and stress them with heavy workloads.
According to Taleb, the same can be said for instance about the political system in Italy. On the first glance, the system is clearly dysfunctional- Italians change their governments as frequently as a magician in circus changes cards he holds in front of the audience. Yet, this nonsensical behavior has an unexpected benefit- the people are used to various political shocks, and do not put that much trust in their elected busybodies, being sure that they will be gone by the next year. The politicians are aware of this attitude and behave accordingly.
Compare this for instance with any Arab regime that got toppled during the Arab Spring. The rigidity came with a lack of stress on the system. The trust of citizens in the ability of the regimes to provide them with a certain standard of living has failed, and the government was pretty sure it could handle the situation. A quite predictable clash ensued.
The sudden event tests the trust of the system in its ability to deal with the matter. In my opinion, the incapable and incompetent governments, have a thing or two going for them, as no one seriously expects them to cope with the problem once it arises. Trust of the population has already been eroded, and the people have learned to do without the bumbling bureaucrats. Now, obviously, the danger of people deciding to do entirely without the government still exists, but as far as the threats go, this one was always in the background.
However, if we will have a perceived strong state (say, pre “yellow vests” France) and people with “socialist mind set”, where they feel entitled to the good stuff, we are going to have a major crisis. People will be unable to receive their entitlements, as the government will be unable to provide them, and they will not be able to do without them. In that case, I think this combination will prove to be a very explosive one with potentially drastic consequences.
Obviously, in a proper capitalist state (but where I can find one?), the issue of trust in the system does not exist. The state is not expected to babysit you. Thus, the stress of caring out for yourself is put mainly on the individual and several entities, which lessens the systemic impact of the crisis (limited spill over).
Conclusion, which seems likely to tested by Corona, is that capitalist states will prove to be more robust in face of a massive crisis, and the societies of “somewhat failed” socialist states will fare better than the society of strong socialist states.
On gold and trust 