Sunday, August 16, 2009

The Limit of F(x) As x Approaches C(ollapse)

Ooh, a storm is threatnin'

my very life today,

If I don't get some shelter,

Oh yeah, I'm gonna fade away...

– The Rolling Stones, Gimme Shelter

I have previously stated that our present global economic and political systems are breaking, due to a declining resource base and a deteriorating natural environment. I have also stated my belief that the masters of these systems are not interested in fostering or even allowing local, resilient alternatives for ordinary people. Instead, their aim at present seems to be to maintain the present systems at all costs, and to force ordinary people to continue to rely on these systems.

The present economic and political systems are also predatory and catabolic, in that they tend to devour large numbers of ordinary people in order to enrich the masters of these systems. While the enrichment of these masters has also historically come through economic and industrial expansion, the base of natural resources necessary for this expansion has begun to contract, because many of these resources are now used up. Because the base of natural resources is now contracting, there is no longer the opportunity for large-scale economic growth. Therefore, the catabolic, thanatoeconomic character of our present systems will become more prominent, as the rich will only be able to maintain and increase their wealth by jacking increasing numbers of the poor.

I have come to believe that under these circumstances, it is not possible at this time for most people to build truly resilient, permanent communities that are immune to trouble from economic collapse. There are some sectors of the population (such as those who are very well off) that will be able to form such communities. Yet most people will be prevented from achieving this because of crippling loads of personal debt, as well as the desperate attempts on the part of banks and government at all levels to keep prices of essential assets so high that obtaining them requires taking on additional debt. In short, most ordinary people are finding that most of their resources are being taken from them by rich predators, or that most of their resources are going toward defending themselves from these predators. The best that individuals and communities can do is to achieve a sort of “relative” resilience based on having a multitude of skills and strategies for coping with a rapidly changing economic and political situation.

This changing economic situation is increasingly looking like a hard crash. Our present system is unsustainable, yet its masters will not willingly choose a sensible, orderly and equitable transition to a state of lower economic activity and energy use. Rather, they will try to maintain the status quo until they simply can't anymore, and then some things will break down catastrophically. A good question is when that breakdown will occur, and what will be the limiting conditions which force such a breakdown. We might also ask what such a breakdown will look like.

As far as limiting conditions go, there are several authoritative thinkers who have written about these things. Rather than trying to reproduce their work, I'll merely offer my summary two cents' worth. My focus will primarily be the United States and its government at all its levels. The limiting conditions I see are as follows:

  1. Government debt. As debt increases without bound, so does the yearly revenue required to service that debt. (To service debt means to make the regular payments with interest that are required as part of the contract between borrower and lender to pay off the debt.) When the revenue required to service the debt exceeds yearly taxes taken, governments must default. Then, no more debt is issued, the creditors come knocking, and governments collapse or cut their spending drastically.

  2. Post-Peak Oil. Crude oil production is inextricably linked to the output of industrial economies. If the world is post-Peak and oil production is falling, the global economy must contract. This is especially true of the United States. As the American economy contracts due to a declining resource base, the ability of the various levels of the American government to borrow more money or to service existing debt declines. This pushes us further toward default and collapse. (By the way, when estimating the severity of future oil supply constraints, I rely on the German Energy Watch Group's Oil Market Report predictions.)

  3. Food supply collapse – due to climate change and other environmental degradation, and post-Peak Oil. There is a real possibility of food shortages in the First World within the next few years, due to the collapse of agricultural water supplies because of overuse, misuse and climate change-induced drought. (See, and,0,7564338.story for instance.) Famine will also reduce economic activity and hinder the servicing of government debt.

  4. The present, ongoing economic contraction consisting of business failures and hundreds of thousands of people losing their jobs each month. This leads to more loss of income, more loan defaults on private debt and more bank failures. Of course, those who hold the debts of people who have been thrown out of work will not want those debts to become worthless – thus more lenders will call for more “bailouts” (i.e., transfer of bank debt to Government books). Yet the Government is getting closer to being caught in a maxed-out condition where further debt transfers become impossible.

  5. The collapse of the powers of the corporate state. As government access to debt collapses, so will government ability to try to protect big business from incurring loss (no one will be able to afford to pay the bulldozers to knock down abandoned houses anymore, for instance, nor will any government be able to afford to enforce anti-competitive laws against small farms and small food producers).

  6. The pledge of dis-allegiance if the Government tries to increase its ability to service debt by means of an excessive (confiscatory) tax burden on the poor and middle class. Should we tax the rich? Absolutely yes! But so much of the Government's activity of late has been to burden working class taxpayers in order to secure the wealth of the top 5 percent of the American economy. (Think AIG and Goldman Sachs, for instance.) This can go on for only so long.

What will a breakdown look like? I have a pretty good idea of what it will look like at first in many neighborhoods, as it is already starting to happen. First, there will be a rare, small number of people who have prepared quite fully. Chief among their preparations will be the elimination of all debt. (This is why I say they will be somewhat rare. Within the last couple of years, I have met only two other people who have paid off their houses.) These people will increasingly find themselves the odd men out (or odd women out) in neighborhoods where many people's homes are getting repossessed and becoming vacant. Also, those who still have a “job” in the conventional sense will increasingly be a minority. Lots of neighbors will suddenly have lots of unplanned-for “free time.” There will also be more store closures, so that it becomes harder for people in a neighborhood to obtain the things they need. There will be an increase of homeless people as well, and as time passes, an increase of renters or squatters. Neighbor whose house is paid for, meet your new neighbor: the squatter or renter who just moved in next door. In this state of flux, there will be a great need for wisdom, tact, politeness and diplomacy in forming new relationships. For perceptive souls, these conditions may also present opportunities for “culture repair.”

What are effective strategies of personal and group resilience for such conditions? The answer depends on whether one intends to stay in a particular place at all costs, or become a migrant. “Should I stay or should I go?” That depends on what holds you to a place. “If I stay, but if I owe,” what should I do? Develop a suite of alternative gigs in case you get laid off. Make sure that whatever you do, you make enough to pay down your debt. “If you stay and you don't owe,” this gets easier – you just have to worry about utilities and property taxes, as opposed to a mortgage. If you rent, most of this still applies – develop a suite of gigs that earns enough money so that you can pay your bills. In all cases, reduce other expenses so that you have enough money for the essentials. (Note: this will involve learning a fair amount of self-reliance skills.)

Why a suite of alternative gigs? Because the official economy is no longer willing or able to guarantee an income to a person who simply pursues a single career or profession. As an example, this last week, I was riding a MAX train home when I ran into a co-worker from my office. We talked about the fact that both our departments are very, very slow right now, as well as strategies for dealing with possible layoffs. He is a piping designer by profession (as in piping for large industrial plants), but he is also a sports referee. If my office shows him the door, he's got a large number of games lined up where he can referee and get paid for his services.

But are you already out on the street – have you fallen from “respectability” due to loss of income? There are strategies you can pursue for protection and mutual aid. I will have more to say about these strategies in a future post. Some of these will be useful not only for those who are homeless, but for other groups usually targeted by our predatory system.

One thing I must emphasize: I am a Christian. Therefore I believe in an absolute moral standard. I will not therefore ever suggest turning to certain criminal or unethical deeds as a coping strategy.

1 comment:

Aimee said...

This is an astute and intelligent analysis (as I have found all your posts to have been) and I'm sending it on to my family and friends. I am in the enviable position of being a home and property owner who does not hold a mortgage, and moreover, in one of the most resilient areas of the country (I believe). Nonetheless, I have already decided that I must start making preparations immediately for an uncertain future. In my case, these preparations include securing sources of alternative energy and water and learning to provide for most of the food needs of my family. Between myself and m,y husband, we also have a skill set which I believe would remain useful even in a fairly catastrophic collapse (he can fix things; I can fix people.). When I first began to contemplate seriously preparing for collapse - about a year ago - I felt like a crazy person. I sure don't anymore.