The next mode of decay of the state to look at is the one where the government gradually loses day-to-day control of some areas, and other organisations take its place.
The problem with treating this phenomenon as a collapse is that it is obviously already happening. The usual alternative governments are racially-aligned criminal gangs, such as the one described by Sudhir Venkatesh in Gang Leader for a Day, or the pre-war Italian and Irish mobs in America’s major cities.
I think this is roughly what John Robb means when he writes about the hollow state.
He also includes under this label much of what neoreactionaries call the Cathedral, the institutions which have de facto but not de jure state power: lobby groups, NGOs, the legal and banking professions, the universities and so on.
That summary is enough to show why, like insolvency, the hollowing-out of the state is not a mode of collapse. It is, in fact, business as usual. The “Black Kings” are not in principle different from the Federal Reserve — they execute functions which are theoretically under the authority of the arms of government, but in practice are unsupervised most of the time. In both cases, the central government can, with tremendous effort, make a show of force and impose its own will, temporarily. But the costs are high, the benefits are small, and generally the state will negotiate at arms length rather than seek a confrontation. In practical terms, it becomes impossible to draw a clear line between what is part of the state and what is not. The process is a shortcoming of the modern state, and one of the symptoms of its sickness, but it is not the end.
It’s interesting that the examples that come to my mind for this are all American. I don’t see in Britain the kind of territorial domination by gangs that I have heard of in the US. We certainly have as much of the higher-level hollow state — the lobby groups and professional guilds, the “public-private partnerships” that run hospitals and policing policy, and so forth. One key difference between the UK and US is that we have a long tradition of central control — every local government body has always been subordinate to the national government, with power delegated downward as the central government chooses. Extralegal gangs merge into local state bodies, but in a highly centralised state the local bodies can be more effectively controlled, and in the extreme case simply abolished, from the national level. Thus the only serious hollowing out of key state functions in Britain happens in Westminster.
There's not a lot of local control in the US either. States, cities, and counties can whatever laws they want, but they can't over rule what the courts define the law as nor can they stop feds from using their own police forces to do whatever they want.
Our system is simple: Washington collects most of the taxes and sends that money back to the states in the form of grants. If the states, counties, cities, ect do what the feds want, then they receive funding. If they don't, the feds defund them. Thus local policy always resembles federal policy with a 10-20 year delay.