Rich Countries Are the Most Likely to COLLAPSE | Aaron Bastani Meets John Rapley
What this covers
John Rapley, a political economist at Cambridge, sits with Aaron to argue a counterintuitive proposition: that developed Western nations, for all their wealth and technological sophistication, are more fragile than developing countries when confronted with major shocks—pandemics, climate disruption, economic stagnation. The conversation ranges across economics, history, and political psychology to support this claim, drawing on Rapley's recent book Icarus Economics. The core argument is structural: the very growth model that built Western prosperity has generated both external feedback loops (zoonotic disease, ecological collapse) and internal ones (atomized communities, state dependency, complacency) that erode a society's ability to withstand crisis. Meanwhile, poorer nations retain social resilience born of proximity to scarcity and risk.
The discussion traces this fragility to specific, irreversible conditions. The post-war growth boom of 1948–1973 rested on one-time factors—mass electrification, the transition to secondary education—that cannot be recreated; developed economies now face chronic near-stagnation disguised by inflated asset prices and debt-fuelled GDP figures. Rapley argues that Western liberalism, structured around an eternal present and individual choice, makes long-term thinking and collective sacrifice politically impossible, leaving governments unable to address unsustainable pension promises or unaffordable housing. Where formal state systems weaken, developing countries activate spontaneous community networks and behavioral practices (hygiene, mutual aid, disease awareness) that wealthy, state-dependent societies have allowed to atrophy. The conversation also addresses how China's experience of the Cultural Revolution shaped corporate resilience, why Western entrepreneurship claims mask high barriers to entry, and how the young have been locked out of housing and family formation by deliberate policy choices that preserve older generations' wealth.
Rapley argues that the very wealth and technological emancipation from nature that defines rich Western societies is itself a source of fragility, so that developing countries' social resilience may leave them better placed to weather 21st-century shocks like pandemics and climate change.
- Rapid economic growth generates external feedback loops (zoonotic disease, climate) and internal ones (weakened community, complacency) that reduce resilience.
- The post-war growth surge rested on one-off factors (electrification, mass secondary education) that cannot be repeated, so chronic near-stagnation is the new normal for developed countries.
- Western reliance on formal state systems creates fragility when those systems are overwhelmed, whereas poorer societies retain social and behavioral resilience born of proximity to nature.
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The exceptional growth of the post-war period (roughly 1948–1973) cannot be replicated because it rested on a one-off confluence of one-time technologies—especially the spread of electrification—and the diminishing-returns leap from a primary-educated to a mass secondary-educated workforce; further education yields only small productivity gains, so those incremental gains are exhausted.
“we went from essentially relying to a very considerable degree on what nature provides... to suddenly the discovery that you can release all this stored energy from within the planet”
The triple lock on pensions and private pension promises are unsustainable and politicians know it; they continue to lie about preserving them while shifting the burden onto the young through unrepayable student loans, budget cuts, and—crucially—an inflated money supply that pumps up asset values 6–7% a year to fund retirement promises, which in turn prices young people out of housing.
“the triple lock will go one day. It will go because it will collapse under the weight. And everybody knows that... So, essentially they're lying. And what they're doing is, of course, they're shifting the burden onto young people.”
Solving the West's resilience and intergenerational problems requires the left to break with liberalism understood as a politics consisting purely of individual fulfillment and the renunciation of all non-voluntary obligation and duty—not a break with social liberalism, but with the atomized individualist epistemology underlying end-of-history triangulation politics.
“what it is going to require, particularly for people on the left, is just a break with liberalism. And I don't mean social liberalism... But a break with liberalism as a politics that consists purely on the fulfillment of the individual and a complete renunciation of obligation and duty unless they're voluntary”
High-GDP Western countries that loudly champion entrepreneurship are in practice among the least entrepreneurial societies because prohibitively high real estate and rent costs raise barriers to entry; in lower-cost developing or middle-income countries, low rents make it feasible to start small businesses, pay workers less while also charging less and serving more customers.
“these very high GDP countries, which talk about fostering entrepreneurship all the time... are the least entrepreneurial societies. By design, they don't allow it because every business when you walk down the high street is owned by asset managers”
Western wealth, rather than being purely a source of strength against 21st-century challenges, is itself a source of fragility: the wealthier a country becomes the more crises its rapacious growth model generates (e.g. zoonotic spillover) while simultaneously reducing society's aptitude to address those risks.
“What if in fact our wealth, comparatively anyway, in the West was in fact a source of fragility? What if being so wealthy was a vulnerability, an exposure, a problem?”
Where states are weak, societies tend to be strong: in the absence of reliable state services, spontaneous community and neighborhood self-help organizations (often religious) form to provide welfare and mutual aid, constituting a form of social resilience that wealthy, state-dependent Western societies lack.
“when you have a weak state, you tend to have a strong society is the way I would put it.”
Liberalism has a unique understanding of time as an eternal present in which the future and past are mere extensions of the present, which makes it structurally difficult for Western societies to think long-term, be 'good ancestors,' or build things meant to outlast a single generation—unlike the medieval builders of cathedrals who worked for eternity rather than the next quarter.
“liberalism has this unique understanding of time, which means it's impossible for us actually to think in the long term, to be good ancestors”
Nearly all major historical pandemics—diphtheria, Ebola, HIV/AIDS, the Black Death—are the result of zoonotic spillover, and the increasingly rapacious relationship of capitalist economies to nature is driving more frequent spillover events, as evidenced by three novel coronaviruses in roughly 25 years.
“all of these pathogens are all a result of zoonotic spillover. So, diphtheria... Ebola, obviously, HIV, AIDS, the Black Death... And of course, we've had three novel coronaviruses in the last what, 25 years?”
Just as periodic exposure to pathogens primes the immune system (the hygiene hypothesis), a society subjected to periodic, moderate adversity may stay 'primed' and resilient, whereas a 'shallow existence' that eradicates all forms of adversity may leave a society less dynamic and more vulnerable to shocks—though excessive repeated stress can cause collapse.
“A so-called shallower existence characterized by material abundance and large-scale eradication of all forms of adversity... may actually make society less dynamic and resilient and therefore more vulnerable to shocks coming from nature.”
Young people today face a worse inheritance than previous generations not primarily because of technological or economic change but because of deliberate policy choices that reserve benefits to older generations—heavy student debt, an unforgiving job market, and unaffordable housing—and one consequence is declining childbearing because the young cannot start households or families.
“a lot of it is policy choices we've made in order to reserve those benefits to a certain share of the population at the expense of the others”
Developing countries on average came through the COVID pandemic better than the official narrative predicted because of their social resilience: people in poorer countries with prior disease exposure spontaneously practice social distancing, hygiene, and masking, whereas Western complacency (and even resistance to masking) was a luxury enabled by the assumption that hospitals would save them.
“all of us had a strong sense that actually developing countries were on average going to pull through the pandemic better for a lot of reasons because of essentially their own social resilience. And that in fact turned out to be the case.”
The experience of the Cultural Revolution shaped the mindset of some of China's most successful companies, making them risk-averse, wary of overly complex supply chains, and focused on loyalty, leadership and collective identity—an antithesis to Western just-in-time supply chains and isolated individualism.
“if you read a book more recently called Mao and Markets, the experience of the Cultural Revolution massively shaped the business mindset of some of the most successful companies in China. They're risk-averse. They're terrified about overly complex supply chains”
The best politicians possess intuition and the visceral ability to connect with and listen to people more than high educational attainment; Donald Trump's 2016 victory demonstrated how raw intuitive 'vibe-reading' destroyed the Democrats' data-science, polling, focus-group, triangulation model.
“the way in which he completely destroyed the model the sort of the data science triangulation approach that the Democrats were so convinced... and this guy's just going before big crowds and talking off the cuff and picking up what the vibe is.”
The information-technology and AI revolutions have not produced commensurate gains in economic productivity; instead they have radically changed how we communicate and live while concentrating the gains of growth into a shrinking number of very wealthy hands.
“AI will transform society in the same way the internet has but a lot of the transformation in society of the internet hasn't actually led to an increase in economic productivity.”
Aggregate economic figures mask a recession that is real for a large share of the population; because people judge inflation by the daily purchases that matter to them (gas, heating, groceries, taking children out) rather than by official monthly indices, the headline 'economy is fine' narrative fails to capture lived experience, and economists' 'vibe' explanations miss that ordinary lives genuinely aren't improving.
“for a substantial part of the population, it is in recession. When we use aggregate figures... you could say the economy is in very good shape. But when you look at public opinion surveys... there's a great deal of gloom there.”
Climate change and ecological disruption will return pathogens to the West—tropical diseases migrating to temperate zones, archaic pathogens released from melting permafrost, and antibiotic resistance—and these challenges will not be solvable simply by expanding the health care budget; cash-strapped Western states facing rising defence commitments will be unable to provide the kind of financial assistance they did during COVID-19.
“we will be continually exposed to new diseases, in particular tropical diseases migrating to temperate zones because of climate change”
Increased labor mobility driven by rapid economic growth weakens family and community bonds, and political movements like Brexit and MAGA were partly motivated by a desire to preserve community and local life rather than by their stated policy solutions.
“one of the effects on family life of very rapid growth is it does weaken family mainly because of increased labor mobility... the vote for things like Brexit, the vote for MAGA, there was a motivation of just trying to preserve life within communities.”
Within even very low growth (half a percent to 1% per capita), an enormous amount can still be achieved; the political problem arises not from low growth itself but from having premised promises to one group on unrealistic growth rates (e.g. 5%), which then requires taking resources from others—principally the young.
“you can do an awful lot within this growth of even half a percent per year... The problem is if you promise one group, 'Well, your growth, your expectations will be premised on growth of 5%.' That means you have to take that from someone else.”
A cashless economy reduces resilience because digital payment systems are vulnerable to power and internet failures, malware, or the withdrawal of private providers; a resilient society therefore needs a certain percentage of the money supply held as physical cash, and there is a generational and class divide in cash dependence.
“if you want a resilient society that's actually capable of withstanding these kinds of shocks, a certain percentage of the cash supply is going to have to be something that people have in their hands.”
Mid-crisis, people become willing to recognize their mutual dependence and to accept sacrifice for the collective good, as evidenced by Canadians' response to Trump's annexation threat and the brief moment when Boris Johnson conceded 'there is now such a thing as society'—but Western leadership generally fails to seize and sustain this willingness.
“Canadians are saying, 'Well, you know, we have to go off in an entirely different direction. This will entail sacrifice.' And there seems to be a willingness”
US economic growth is largely illusory because it is debt-fuelled: the economy grew by roughly $6 trillion between 2020 and 2024 while its debt increased by about $12 trillion, a ratio only justifiable if a future technological takeoff supercharges productivity—which Rapley doubts.
“the US economy grew by, I think, 6 trillion between 2020 and 2024, but its debt increased by 12 trillion.”
Right-populist politics is internally inconsistent and cannot solve the structural problems it identifies: parties like Reform want to end immigration (which functions as a Ponzi-like mechanism to fund future pensions) while simultaneously promising to keep the triple lock, an unworkable combination.
“you want no migration, which even if you think that's a Ponzi scheme to pay off pensions in the future, which kind of is... but you're going to keep the triple lock. How?”
A 19th-century French doctor observed that his noble and bourgeois patients had more illnesses than peasants, who were more resilient because living closer to nature exposed them regularly to pathogens and built stronger immune systems.
“a French doctor who actually discovered that his patients who came from the nobility or from the urban bourgeoisie were coming in with a lot more illnesses than peasants who just seemed to be more resilient”
China and the US are pursuing fundamentally different AI strategies: China invests in embodied, practical applications and in preparing students to use AI, whereas the US pursues the 'holy grail' of artificial superintelligence, driving electricity bills up around 8% a year and natural gas prices higher, which is likely to provoke a populist anti-AI backlash.
“the Chinese, which are going in for a different model of artificial intelligence, which is much more practical applications and embodied technology. The Americans are going headlong into the pursuit of the holy grail of this artificial superintelligence. And as a result, electricity bills are going up to 8% a year”
South Sudan entered the COVID pandemic with only three ventilators, illustrating the formal-resilience disadvantage of poor countries.
“South Sudan had entered the pandemic with three ventilators. And literally three, not 300, not 3,000, but three ventilators.”
Investors are beginning to call time on the AI investment boom, with a recent shakeout in leading AI-sector companies as investors demand to see the promised productivity gains, and Rapley predicts the US economy will slow over the next year or two to converge with other Western economies.
“there's been a sort of a shakeout in the AI sector... Investors are starting to back away and saying you keep promising this revolution... Show us the money.”
Rich economies have been slowing to near-stagnation since the financial crisis, with growth of barely 1%, and the dominant narrative that wealthy countries are best placed to handle climate change—and that the poor will suffer most—may be wrong.
“they have been slowing to the point that they're almost stagnant. growth of barely 1%.”
A highly developed, bureaucratized society emancipated from nature loses resilience: when its systems suddenly fail (e.g. the 2003 North American grid failure), social order can begin to collapse within 24 hours, whereas societies accustomed to power failures have backup plans and ordered improvisation.
“in a society that is highly developed and bureaucratized and highly in a sense emancipated from nature, when it suddenly finds itself thrust back in at its mercy, it was sort of like within 24 hours, you kind of felt social order was collapsing.”
Kim Stanley Robinson's novel Aurora is a useful corrective to figures like Elon Musk who imagine colonizing Mars, because it dramatizes how humans cannot escape their biological dependence on Earth's specific ecology.
“it's just such a useful corrective to people like Elon Musk who say, 'Well, we just colonize Mars.'... no, our relationship to nature is nothing like that.”
Increased health care spending yields diminishing returns: after 2020 the UK substantially increased health care spending yet outcomes did not improve much, refuting the post-war left/center-left assumption that more health spending is always straightforwardly better.
“after 2020, there is a really big increase in health care spending in this country... And the outcomes aren't very good... the argument... is just well, the more you spend on health care, the better. Well, yeah. I mean, to a point.”
We are living in what will be seen as a kind of dark age, marked by pornography, gambling, children on phones, polarization and ugly buildings, partly because the assumption of perpetual growth made people willing to demolish beautiful buildings and run roads through cities on the belief that anything lost could simply be rebuilt.
“I think people are going to look at this period in the future as a period of really a dark age... all this pornography, all this gambling, all these kids on their phones all the time, all this polarization, all these ugly buildings.”
Historically, the peoples on the boundaries of the Western Roman Empire would have been more resilient to pandemics than the empire itself, because of lower population density, less globalization (and thus less exposure to imported germs), and constant exposure to conflict that primed them to cope when order collapsed—whereas the sheltered empire was unprepared.
“it would be the empire against the peoples on its boundaries... they would be more resilient to pandemics... In part, that would have had to do with population density... they were less exposed to the germs that are coming in from all over the empire”
We had a great conversation a couple of years ago that got around 600,000 views.
“I think that's got maybe 600,000 views.”
The book Why Empires Fall is about 150-160 pages while Icarus Economics is slightly longer in presentation but not in word count.
“This is 150, 160 pages... this one, Equator's Economics, is slightly longer. Actually, in words, it's not”