How’s this for social unrest?

October 18, 2011
Phnom Penh, Cambodia

In his seminal work The Rise and Fall of the Third Reich, William Shirer recounts how the struggling Weimar Republic printed its way out of reparation debt from World War I. Out-of-control printing caused the German mark to fall from 75 per dollar in 1921, to more than 4 billion just 3-years later.

Talk about chaos. After a brief period of credit-fueled economic respite, the onset of the global depression in 1929 had people in the streets clamoring for change. Hitler’s National Socialism promised the world… and under such economic distress, people believed him.

There are two important lessons here. First is that hyperinflation comes very quickly. Confidence languishes for months, even years… until one day the currency begins to slide, slowly at first, then exponentially.

The second is what followed. Economic disaster begets social unrest, the two are inextricably linked. Populist rebellions and roving gangs became a constant presence in the republic.

It’s at this point, when people are really hurting, they’re the most impressionable. They’re looking for somebody, anybody, to lead them out of the turmoil. What they got was a charismatic leader with a grand plan.

Here in Cambodia, a similar story unfolded in the 1970s.

Years of constant American B-52 bombing campaigns during the Vietnam War took its toll on the country. Over 500,000 tons of bombs were dropped on Cambodia during the war.  By the time the last US forces withdrew from Vietnam in 1975, nearly three-quarters of Cambodia’s agrarian economy was destroyed.

Malnourishment and starvation were rampant, and Cambodians were ready to follow anyone with a plan.

Pol Pot’s agrarian socialism struck a chord. After years of civil war, Cambodia’s economic ruin opened the door for his communist forces to take over the country.

Just like Germany in 1930, economic hardship swayed just enough people to allow a criminal madman’s rise to power. Neither case required a popular majority, but merely a critical mass of vocal activists. The rest of the country either fell in line or was exterminated.

Under both regimes, people never got what they expected. Pol Pot waged mass genocide on his own people, murdering as much as a third of Cambodia’s population. Teachers, doctors, students, artists… anyone who could possibly pose a threat was neutralized.

I’ve had the opportunity to learn first hand about many of these cases during my times here. And not far from Phnom Penh, the infamous killing fields are still littered with human remains.

History is full of examples of governments taking draconian action in times of economic-fueled social turmoil. Faced with terrible circumstances, people cry out for their governments to ‘do something’. Politicians happily oblige.

It’s concerning right now to see the early stages of economic decline spawning populist uprisings; most are being met with unconscionable force by the police state.

Mark Twain used to say that while history may not repeat itself, it certainly rhymes. I’d encourage you to think clearly about what’s really happening in the world, and not simply write off such events as temporary aberrations.

Let me be even more clear: it’s not crazy to have a plan. You’re not a lunatic for considering your international options. In a world fraught with so much uncertainty, it’s the only sane choice.