Part 1: The Problem

The problem: Growth-based economies

Long before the Industrial Revolution, Western culture has whole-heartedly embraced the idea of a “growth economy.” A growth economy is an economic system where growth is absolutely necessary for the fundamental health of that system. In other words, a growth economy can only do two things: grow or contract.  But a growth economy requires two things to function: massive amounts of unused capital, and massive amounts of natural resources. Growth economies have served us extremely well over the last millennia. During the feudal age, most of the unused capital came from the Aristocracy. After all, how did Christopher Columbus afford his nice new boat? He talked to some Spanish “angel investors,” King Ferdinand and Queen Isabella, who wanted a return on their investment to help fund their war chest. Likewise, the British Empire was largely financed by the aristocracy of Britain, looking for the next good investment in India, North America, or China. Even Shakespeare addresses this economic system in The Merchant of Venice, where poor Antonio has seen his global investment go bad.

This system works very well when there is always another frontier to settle and always another country to colonize. In other words, growth economies work when there is a place to grow to. Even in the past twenty years we’ve seen what the wonders of a growth economy can do. The advent of the internet has created a virtual frontier where the only boundaries lie in the imagination. And we’ve all been witnesses to the exploits of great colonizers (Facebook, Amazon, Yahoo, Google) as they set about to lay claim to vast sections of this new frontier.

There’s only one problem with growth economies. They can’t grow forever. If everything in nature (from ants, to bacteria, to the universe) has a limit of growth, the same must certainly be true for our own human-made systems. Likewise, by looking at nature, we see the results of growth unchecked: collapse.

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In the woods near my house, I often take walks in the wintertime away from the trails and the houses. Nature is relatively untouched there. And every year, I look closely at the tracks in the snow. Besides the moose, the grouse, and the foxes that live near my house, the woods are home to many snowshoe hare. Each year, I look closely at the trails they like to frequent. Some years, they are everywhere. Rabbit super-highways traverse the woods, and every available twig seems to have been nibbled. Walking at dusk, one sees the shadowy white figures of the hares in nearly every stand of alders.

But the next year they are all gone. Their tell-tale tracks hardly grace the woods, and last year’s nibbled twigs show new growth unmolested by any rabbit. This scenario plays out every few years. Their population collapses. There’s no really telling how so many of them die. It might be disease; it might be predators; it might be the weather. But the over-arching fact is that there were too many rabbits and too few resources; there was no way for their population to grow any more, and so it collapses.

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When we talk about growth, we can really use another word that means essentially the same thing: “more”. To grow, we need more houses, more jobs, more cars, more tvs, more manufacturing, more tax base, more roads, more wood, more ore, more food.  But eventually, there is no more. Eventually, we will run out.  And frankly, there’s no telling what we’ll run out of first. It might be oil, but it could just as easily be fresh water. We could run out of the rare-earth minerals we use in our plasma tvs, or we could run out of fish stocks in our oceans. It really doesn’t matter. The fact of the matter is, there will be a limit to growth.It may never happen in our lifetime or even in our grandchildren’s lifetime. But it will happen. Economic growth will not be possible because of the simple arithmetic of too many people and too few resources. As a civilization, we’ve never really encountered this before. There’s always been another well to drill, another field to till, or another forest to cut. It will not be that way forever.

This is the central crisis of our species. If we attempt to grow our economy forever it will collapse and we will collapse with it.  But we don’t know any other way to go about it. What we need to do is figure out how to transition to a “post-growth economy.” We need to find an economic system that derives its strength from stability, not from expansion.

Part 2: The Solution

Discovering a post-growth economy

Innovative communities, virtual networks

In the late 1960s and the early 1970s, many young people formed co-ops and communes. Experimentation was the key, but in the last forty years, we have largely lost this spirit of community innovation. One never hears of groups of citizens moving out into the woods to live experimentally. Those that do seldom report back on the condition of their grand experiments.

These are two of the first problems we must solve in moving forward: a lack of innovation and a lack of data. We need groups of forward-thinking citizens who are not only willing to experiment with the art of living sustainably, but who are also willing to share their data and experiences with the world.  For instance, how much land would it require to feed a family of four in my hometown of Chugiak, Alaska? I have no idea, because no one has tried for 100 years. Even for those who do try to live experimentally have no real way of sharing their experiences with a larger audience.

The first step in creating virtual networks and sharing data is to create centralized locations to share information. Call it Facebook for hippies. It would be a place where people could connect, experiment, and share their data and experiences. For instance, if I know a guy across town is experimenting with intensive broccoli production, I might see if I can grow winter squash here in Alaska. At the end of the summer, we could compare notes online with each other and a hundred other growers in the area. We would have a centralized place to get local data. This sharing of resources could easily go beyond gardening. Citizens could share information on home businesses, building projects, and animal husbandry. Furthermore, these virtual networks would spawn very real results: the creation of a shadow economy.

Shadow Economies

Shadow economies are small, local economies that exist outside of the larger regulated economy. For instance, the government strictly regulates all types of food products. If I make the best strawberry wine in the world, I cannot sell it without a permit and thousands of dollars worth of equipment. Likewise, if I grow happy and healthy chickens for meat, I cannot sell my chickens to anyone, though they are healthier and tastier that any mass-produced, ammonia-soaked piece of poultry.

While the regulations restricting these types of sales may have been originally created with good intentions, the over-all effect is that a huge segment of our traditional economy is put out of reach of everyday citizens. If we cannot sell a loaf of bread or a bottle of wine out of our homes, we have fundamentally lost the ability to sustain ourselves with the work of our own hands.

Virtual networks would foster an economy that exists outside of our conventional structures. If I raise good chickens, and my neighbor is a mechanic, I can easily trade him some of my fresh chicken for his repair work. The government is none the wiser for the transaction, and we have both gained by using our own skills and knowledge. Economic opportunity has arisen where none existed before.

Shadow economies also provide citizens with the ability to rediscover lost trades and activities with a financial incentive. For instance, if I know that I can barter my delicious raspberry-currant mead for any number of goods and services in my community, I am more likely to perfect my mead-making process in order to have more mead to trade, and to ensure that my mead surpasses anyone else’s.  However, because my transactions are technically illegal, I will not begin mass producing my mead with ingredients shipped from all over the world. My craft will remain local and small. There will be plenty of room for other mead-makers to thrive.  Furthermore, as I perfect my process I will have discovered (or rediscovered) important knowledge about the art of fermentation that I can share with others. In this way, shadow economies not only allow for lost trades and lost lifestyles to be preserved, but also provide financial incentive to take up these trades.

The shadow economy is not limited to financial transactions. Entire entities, organizations, and unions can be created that exist outside the boundaries of regulated activities. Let’s say a group of neighbors decides they want to build a communal shed that houses communal tools and supplies. They build the shed straddling a property line, and designate the immediate area around the shed as communal land. They stock the shed with lawnmowers, saws, hammers, ladders, and the like.  In doing so, each member has greatly benefited both socially and financially.

Working within the conventional economy, they would have to create a non-profit, co-op, or LLC. They would have to get permission from the zoning commission. They would have to find a lawyer to define the exact boundaries and definitions related to the word “communal property.” It would take months or years; such an entity would likely be impossible to “legally” create.

Outside of the conventional economy, such a system could be in place in a matter of days. By not officially titling themselves as a legal entity (and by not drawing attention to themselves) they would be able to create a loose association that would greatly benefit each of its members. In this way, then, a shadow economy would allow for experiments in innovative social structures and allow citizens to realize financial benefits that simply do not exist within the conventional economic system.

Shit hits the fan.

At some point, the “shit is going to hit the fan,” as they say. In other words, at some point down the line there will be massive global crises. Maybe oil will become prohibitively expensive. Maybe bankrupt countries will spur global economic collapse. Maybe we’ll run out of the “europium” we need to make our LCD TVs. Chances are, we’ll just wake up to the fact that we have too many people and too few resources. However it comes about, we will face seemingly insurmountable global crises in the future.

When the whole world fears doom and collapse, when politicians and policy makers cannot find a solution, and when the world has lost faith in the institutions of our time, the stewards of these virtual networks, this data, these lost trades, and these shadow economies will step forward. They will explain that the world can no longer support “growth economies”. They will assert, in clear and simple language, that the world must change drastically. Most importantly, they will share with the rest of the world the data they have collected. They will explain that they have been experimenting with post-growth economy for decades. And they will offer solutions and hope in a troubled and desperate time. And after decades of quiet, subversive, and tireless work, the world will listen.

The Last Boom

As the downfall of growth economies become more and more apparent, there will have to be a dramatic shift in domestic and foreign policy. The mantra “everything must grow” will be replaced with the mantra “everything must last.” Americans will realize that the lifestyles they live are not made for “lasting,” but for consuming. They will look at their small patch of lawn and wish for potatoes. They will look at the seas of concrete and asphalt surrounding them and wish for topsoil. Suburbia, urban and suburban sprawl, box stores: they will all look foolish and unusable in the face of serious global crisis. America will begin to understand that they must retool for a new reality. America was never built to be sustainable, and in a twisted way, this will be the silver lining. There will a lot of work to do. There will be no lack of ways (and jobs) to fix America.

This “Last Boom” will be the last period of unfettered growth as the world transitions into a post-growth economy. As the world realizes that growth economies are dying, citizens will use this “last boom” to create the wealth that will sustain their families for generations to come.

The “Last Boom” will have a number of components, some of which are outlined below.

The Great Resettling

Perhaps the best examples of post-growth economies are local agricultural economies. When economies are rooted in local agriculture, the only real “growth” in the economy is the miraculous growth of crops and livestock. While I can expand my garden bed, I cannot expand my gardening operation to China. In a local agricultural economy, balance is key. While I might be able to expand my garden bed, I’ll have to consider how this will affect the size of my goat pasture, my orchard, or my chicken run. As a self-sufficient citizen, I will not do anything to compromise the balance of my own home economy.

By retooling the economy to produce more tangible goods, a sense of stability and balance will be infused into the economy. By dealing in bushels of corn or loaves of bread, capital is being used for real transactions in a real economy. Money that is exchanged in this sort of economy is far more real – and thus far more valuable – than the digital money that is traded, lost, and stolen in abstract “market” transactions. It is being exchanged between real people, for real goods.

Additionally, the work that is done on the farmstead is the type of work that is meaningful and that nourishes the soul. Farm chores at forty below; harvesting with the help of neighbors; sweat from a long day’s work: all these things improve the character and life of the individual. And for most Americans, these acts of meaningful work are entirely foreign.

Reintroducing Inefficiencies

The Great Resettling will be about self-sufficiency, not economic growth. In the process, the “efficiencies” of the current global economic system will have to be dismantled and be replaced with intentional “inefficiencies”. For instance, instead of California producing all of the nation’s lettuce, almonds, and strawberries, these items will be grown in countless garden plots. Instead of mega-farms, the wastelands of the Midwest will be replanted with family farms and small towns. Citizens will realize that in order to live self-sufficiently, they must find a little land and good soil.

This process of resettling rural areas will create countless cottage industries, small businesses, and economic potential. The number of small towns in America will double, and each will need a barber, a café, a mechanic, and a grocer.Intentional inefficiencies will create more economic potential.

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Years ago I visited my grandma’s relatives in rural Germany. They live in a barn build in 1100AD, now converted to a beautiful home. Grape vines climb gracefully over garage door. A tiny pond holds large carp that are fed the left-over bread. They occasionally venture into the woods surrounding their home to collect mushrooms for dinner.

In the nearest town, the downtown district contains houses and a church that have stood for hundreds of years. While there are malls and department stores, there are also bakeries, meat markets, and cafes that have been operating for generations. Each of these local businesses are bustling. While townspeople could more efficiently buy frozen foods at the supermarket, they choose to buy fresh bread from the bakery. They choose to lounge at the local café, drinking espresso. They choose to buy their bloodwurst from the local butcher. And in the process, they choose to create a life that is “inefficient,” and thus more enjoyable and more sustainable.

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Of course, not everyone can live on five acres. Some of the citizenry must live in the city. Cities must exist in order to maintain centers of learning, technology, and shared resources. The world still needs hospitals, universities, and manufacturing. Additionally, cities create a marketplace for those living in rural areas — if you live in an apartment and work in an office, you need someone else to feed you.

The key to the Great Resettling will be the balancing of intentional inefficiencies with a more efficient society.  For instance, our rural new citizens will likely agree that oxen are not the best way to plow their fields. But not every “farm-steader” with 5 acres needs a tractor either. A communal tractor, and communal work with planting and harvesting, would likely be much more economical.

Transportation:

Perhaps the first thing Americans will see, when they wake from their fitful dreams, is that America is covered in asphalt. So much of our land mass is devoted to transportation by personal motor vehicles. Rolling seas of asphalt surround all of our populated areas. Acres upon acres of good farm land lies rotting under blacktop. Furthermore, vehicular transportation can be extremely inefficient. Semitrailers sitting in rush hour and individuals driving monster trucks are, obviously, the product of a cheap-oil economy and are incredibly inefficient.

Rail transportation, on the other hand, is far more efficient and takes up a fraction of the space. A well-maintained rail system connecting population centers would do several things that would benefit society. First, by adding efficiency to the system, necessary goods could be transported with far less fossil fuels. Secondly, as citizens increasingly forego personal vehicles, they would also forgo the disadvantages of having a car: car payments, insurance, gas money, upkeep, and maintenance. Citizens thus need less money to live a high quality of life. Their time can be used in other pursuits instead of having to spend massive amounts of capital on vehicles. Thirdly, a transportation system based on rail travel creates economic opportunity. Goods still need to make it from train station to homes and businesses. The need for rental vehicles, delivery services, and logistical help would create immense economic opportunity. Finally, with a rail-based system of transportation, travel once again becomes a social activity. Traveling with friends or meeting new people become a daily reality. In this way, it can contribute to the cohesiveness of society.

With the suburbs retrofitted, transportation revolutionized, and small town revitalized, the Last Boom will gradually wind down. The society will take another step away from growth economies, and a post-growth economy is ready to take center stage…

Stay tuned for more!