Defensive Pessimism: Growth, Culture, and the Survival of Evidence

Abstract

Successful systems standardize, but standardization can eliminate the living alternatives by which failure would later be recognized. I study a growing credit economy in which safeguarded real contracts operate outside a dominant monetary network. Each contract supplies recovery capacity, a matched comparison that identifies structural failure, and apprenticeship in the alternative practice. The efficient reserve expands in absolute size but vanishes as a population share. This mass-share wedge makes evidence increasingly valuable yet its custodians politically negligible. Private cooperation supplies only bounded readiness, while cheap drills preserve recovery without preserving diagnosis. Cultural investment and political survival reinforce one another, generating exposed and protected equilibria. Population-share protections therefore unravel even when alternative capacity grows without bound. A service-indexed charter can survive growth. I characterize its least-cost implementation through verified procurement, apprenticeship support, and safe-real collateral that funds replacement if a future majority cancels the original institution.