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Ok, so assuming this model captures some important truths, and acknowledging that this is uncharted territory, if the internet has fundamentally broken society by eroding trust and social cohesion beyond a tipping point, then what prediction can we make (if any) about how society is going to devolve from now?

What should we expect in this case? What would be the warning signs? What would be a plausible sequence of events (maybe played over a century or so) that will mark the transition towards a simpler and perhaps less advanced form of society? How do we return to middle age institutions? can we?

And the converse reasoning also might help to shape thoughts, that is we could ask ourselves what are the signs that we are instead overcoming this shock and adapting towards a better form of society? Though I think in this latter case predictions might be really futile because the territory is even more uncharted.

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It's a very good question, which I need to think about more. The second part strikes me as a little easier: we should expect to see the emergence of new communities which in some way facilitate the solving of collective problems (or new energy and activity among existing communities geared toward this end). On the first, I guess the question is should we be trying to think about where we depend most upon this sort of distributed information processing and focusing in on those areas as potential trouble spots, or does a reduction in our information-processing capacity instead show up as a more broad-based deterioration in society's ability to generate good outcomes. Or maybe we should try to think about where in society institutional function is most/least responsive to changes in trust, beliefs, etc at the individual level? I'm not sure; I'll think on it.

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One thing to consider is that trust among the intra-tribe members would probably not decrease that much, not sure how important it is.

Anyway I tend to think that -barring an unexpected huge disaster- there won't be a single "breaking point" followed by a quick collapse, but rather a slow decrease in the standard of living, especially in rural places. Things will break down and won't be repaired, public-interest stuff won't get done, court sentences will take forever and start going the wrong way, more people won't get proper education and therefore earn less, new businesses will have harder time to thrive, and so on.

Basically trust in institutions is social capital, and a decrease in social capital imposes (or maybe reinstates, depending on the point of view) costs that slowly drag societies towards what we call "third world". But it will take generations (and probably few will still be able to keep or increase their standard of living anyway, as indeed it's the case in the global south).

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That being said, the question of whether there are particular "trouble spots" (good way to put it) that are more sensitive to a lack of trust is an interesting one.

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Interesting timing as the briefing on Latin America in The Economist just came out. Anyway I was thinking that the decline of the Soviet Union (although it was not a democracy) might also offer a textbook example here:

Declines in productivity and living standard (with respect to other countries at least) were intertwined with declines in trust to the point that at the end nobody believed or cared to defend anything anymore. This left the system vulnerable to a shock, so when the shock came it paved the way for institutional collapse, which in turn, followed by other shocks, let to the rising of a former elite member to dictator status.

So perhaps the rise of day-to-day corruption and (for democracies) dysfunctional politics are the canaries in the coal mine that signal what is to come.

By the way, this has sent me to a rabbit hole looking at some papers from Safa Motesharrei and Peter Turchin on social complexity and dynamics, some using predator-prey quantitative models. Apparently the "stretching of resources due to the strain placed on the ecological carrying capacity" and the "economic stratification of society into Elites and Masses" are two recurring themes in much of the literature of societal collapse.

Anyway, one concluding thought is that if (big if) China will be able - through censorship, propaganda, and a few good forward-looking decisions every now an then - to maintain trust in the institutions better than other countries, then the logical consequences are sobering, sad, and perhaps a bit ironic.

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