[FoRK] Definancialisation, Deglobalisation, Relocalisation

Stephen Williams sdw at lig.net
Tue Jun 16 21:57:04 PDT 2009

Eugen Leitl wrote:
> (go to the URI for slides with bullet points)
> http://cluborlov.blogspot.com/2009/06/definancialisation-deglobalisation.html
> Tuesday, June 16, 2009
> Definancialisation, Deglobalisation, Relocalisation
> This talk was presented at The New Emergency Conference in Dublin, on June
> 11, 2009.
> 1. Good morning. The title of this talk is a bit of a mouthful, but what I
> want to say can be summed up in simpler words: we all have to prepare for
> life without much money, where imported goods are scarce, and where people
> have to provide for their own needs, and those of their immediate neighbours.
> I will take as my point of departure the unfolding collapse of the global
> economy, and discuss what might come next. It started with the collapse of
> the financial markets last year, and is now resulting in unprecedented
> decreases in the volumes of international trade. These developments are also
> starting to affect the political stability of various countries around the
> world. A few governments have already collapsed, others may be on their way,
> and before too long we may find our maps redrawn in dramatic ways.
> 2. "Sustainability" -- what's in a word?
> In a word, unsustainable. So what does that mean, exactly? Chris Clugston has
> recently published a summary of his analysis of what he calls "societal
> over-extension" on The Oil Drum web site. Here is a summary of his summary,
> in round numbers. I don't want to trifle with his arithmetic, because it's
> the cultural assumptions behind it that I find interesting. The idea is that
> if we shrink our ecological footprint by an order of magnitude or so, that
> should make the whole arrangement sustainable once again. This is expressed
> in financial terms: here we are lowering the GDP of the USA from, say $100
> thousand per capita per annum, to, say $10 thousand. Clugston draws a
> distinction between making this reduction voluntarily or involuntarily: we
> should make it easy on ourselves and come along quietly, so that nobody gets
> hurt. I find the idea that Americans will voluntarily lower their GDP by a
> factor of 10 rather outlandish. We keep the same system, just shut down 9/10
> of it? Wouldn't that make it a completely different system? This sort of
> sustainability seems rather unsustainable to me.
> 3. My plan
> I would like to offer a more realistic alternative. Everybody should have one
> US Dollar, for purely didactic purposes. This way, all Americans will be able
> to show their one dollar to their grandchildren, and say: "Can you imagine,
> this ugly piece of paper was once called The Almighty Dollar!" And their
> grandchildren will no doubt think that they are a little bit crazy, but they
> would probably think that anyway. But it certainly would not be helpful for
> them to have multiple shoe-boxes full of dollars, because then then
> grandchildren would think that they are in fact senile, because no sane
> person would be hoarding such rubbish.
> 4. An unpalatable alternative
> Clugston offers an alternative to the big GDP decrease: a proportionate
> decrease in population. In this scenario, nine out of 10 people die so that
> the remaining 10% can go on living comfortably on $100 thousand a year. I was
> happy to note that Chris did not carry the voluntary/involuntary distinction
> over to this part of the analysis, because I feel that this would have been
> in rather questionable taste. I can think of just three things to say about
> this particular scenario.
> First, humans are not a special case when it comes to experiencing population
> explosions and die-offs, and the idea that human populations should increase
> monotonically ad infinitum is just as preposterous as the idea of infinite
> economic growth on a finite planet. The exponential growth of the human
> population has tracked the increased use of fossil fuels, and I am yet to see
> a compelling argument for why the population would not crash along with them.
> Second, shocking thought this seems, it can be observed that most societies
> are able to absorb sudden increases in mortality without much fuss at all.
> There was a huge spike in mortality in Russia following the Soviet collapse,
> but it was not directly observable by anyone outside of the morgues and the
> crematoria. After a few years people would look at an old school photograph
> and realise that half the people are gone! When it comes to death, most
> people do in fact make it easy on themselves and come along quietly. The most
> painful part of it is realising that something like that is happening all
> around you.
> Third, this whole budgeting exercise for how many people we can afford to
> keep alive is a good way of demonstrating what monsters we have become, with
> our addiction to statistics and numerical abstractions. The disconnect
> between words and actions on the population issue is by now is almost
> complete. Population is very far beyond anyone's control, and this way of
> thinking about it takes us in the wrong direction. If we could not control it
> on the way up, what makes us think that we might be able to control it on the
> way down? If our projections look sufficiently shocking, then we might
> hypnotise ourselves into thinking that maintaining our artificial human life
> support systems at any cost is more important than considering its effect on
> the natural world. The question "How many will survive?" is simply not ours
> to answer.
> 5. What's actually happening
> Back to what is actually happening right now. There seems to be a wide range
> of opinion on how to characterise it, from recession to depression to
> collapse. The press has recently been filled with stories about "green
> shoots" and the economists are discussing the exact timing of economic
> recovery. Mainstream opinion ranges from "later this year" to "sometime next
> year." None of them dares to say that global economic growth might be
> finished for good, or that it will be over in "the not-too-distant future" --
> a vague term they seem to like a whole lot.
> There does seem to be a consensus forming that last year's financial crash
> was precipitated by the spike in oil prices last summer, when oil briefly
> touched $147/bbl. Why this should have happened seems rather obvious. Since
> most things in a fully developed, industrialised economy run on oil, it is
> not an optional purchase: for a given level of economic activity, a certain
> level of oil consumption is required, and so one simply pays the price for as
> long as access to credit is maintained, and after that suddenly it's game
> over. François Cellier has recently published an analysis in which he shows
> that at roughly $600/bbl the entire world's GDP would be required to pay for
> oil, leaving no money for putting it to any sort of interesting use. At that
> price level, we can't even afford to take delivery of it. In fact, at that
> price level, we can't even afford to pump it out of the ground, because the
> tool pushers, roughnecks and roustabouts that make oil rigs work don't drink
> the oil, and there would no longer be room in the budget for beer.
> And so, the actual limiting price, beyond which no economic activity is
> possible, is certainly a lot lower, and last summer we seem to have
> experimentally established that to be around $150/bbl. which is something
> like 25% of global GDP. We may never run out of oil, but we have already run
> out of money with which to buy it, at least once, and will most likely do so
> again and again, until we learn the lesson. We will run out of money to pump
> it out of the ground as well. There might still be a few gushers left in the
> world, and so there will be a little bit of oil left over for us to fashion
> into exotic plastic jewelry for rich people. But it won't be enough to
> sustain an industrial base, and so the industrial age will effectively be
> over, except for some residual solar panels and wind generators and
> hydroelectric installations.
> I think that the lesson from all this is that we have to prepare for a
> non-industrial future while we still have some resources with which to do it.
> If we marshal the resources, stockpile the materials that will be of most
> use, and harness the heirloom technologies that can be sustained without an
> industrial base, then we can stretch out the transition far into the future,
> giving us time to adapt.
> 6. Key points
> I know that I am running the risk of overstating these points and
> oversimplifying the situation, but sometimes it is helpful to ignore various
> complexities to move the discussion forward. I do believe that these points
> are all true, roughly speaking.
>    1. Global GDP is a function of oil consumption; as oil production goes
> down, so will global GDP. At some point, the inability to invest in oil
> production will drive it down far below what might be possible if depletion
> were the sole limiting factor. Efficiency, conservation, renewable sources of
> energy all might have some effect, but will not materially alter this
> relationship. Less oil means smaller global economy. No oil means a
> vanishingly small global economy not worthy of the name.  2. We have had a
> chance to observe that economies crash whenever oil expenditure approaches
> 1/4 of global GDP. Attempts at economic recovery will cause oil price spikes
> that break through this ceiling. These spikes will be followed by further
> financial crashes and further drops in economic activity. After each crash,
> the maximum level of economic activity required to trigger the next crash
> will be lower.  3. Financial assets are only valuable if they can be used to
> secure a sufficient quantity of oil to keep the economy running. They
> represent the ability to get work done, and since in an industrialised
> society the work is done by industrial machinery that runs on oil, less oil
> means less work. Financial assets that that are backed with industrial
> capacity require that industrial capacity to be maintained in working order.
> Once the maintenance requirements of the industrial infrastructure can no
> longer be met, it quickly decays and becomes worthless. To a large extent, of
> oil means end of money.
> Now that the reality of Peak Oil has started to sink in, one commonly hears
> that "The age of cheap oil is over". But does that mean that the age of
> expensive oil is upon us? Not necessarily. We now know (or should have learnt
> by now) that once oil rises to over 25% of global GDP, the world's industrial
> economy stalls out, and as soon as that happens, oil ceases to be
> particularly valuable, so much so that investment in maintaining oil
> production is curtailed. The next time industry tries to stage a comeback (if
> it ever does) it hits the wall much sooner and stalls again. I doubt that it
> would take more than just a couple of cycles of this market whiplash for all
> the participants to have two realisations: that they cannot get enough oil no
> matter how much they pay for it, and that nobody wants to take their money
> even for the oil they do have. Those who still have it will see it as too
> valuable to part with for mere money. On the other hand, if the energy
> resources needed to run an industrial economy are no longer available, then
> oil becomes just so much toxic waste. In any case, it is no longer about
> money, but direct access to resources.
> 7. A reasonable set of objectives
> Now, I expect that a lot of people will find this view too gloomy and feel
> discouraged. But I feel that it is entirely compatible with a positive vision
> of the future, so let me try to articulate it.
> First of all, we do have some control. Although we shouldn't hold out too
> much hope for industrial civilisation as a whole, there are certainly some
> bits of it that are worth salvaging. Our financial assets may not be long for
> this world, but in the meantime we can redeploy them to good long-term
> advantage.
> Secondly, we can take steps to give ourselves time to make the adjustment. By
> knowing what to expect, we can prepare to ride it out. We can imagine which
> options will be foreclosed first, and create alternatives, so that we do not
> run out of options.
> Lastly, we can concentrate on what is important: preserving a vibrant
> ecosphere that supports a diversity of life, our own progeny included. I can
> imagine few short-term prerogatives that should override this - our highest
> priority.
> 8. Managing financial risk
> It will take some time for these realisations to sink in. In the meantime, we
> will no doubt keep hearing that we have a financial crisis on our hands. We
> must do something to shore up the banks, to deal with the toxic assets, to
> shore up our credit ratings and so forth. There are people who will tell you
> that this was all caused by a mistake in financial modelling, and that if we
> re-regulate the financial sector, this won't happen again. So, for the sake
> of the argument, let's take a look at all that.
> Financial management is certainly not my speciality, but as far as I
> understand it, it is mostly about assessing risk. And to do that, financial
> managers make certain assumptions about the phenomena they are trying to
> model. One standard assumption is that the future will resemble the past.
> Another is that various negative events are randomly distributed. For
> instance, if you are selling life insurance, you can be certain that people
> will die based on the fact that they have been born, and you can be
> reasonably certain that they will not all die at once. When someone dies is
> unpredictable, when people in general die is random, most of the time. And so
> here is the problem: the world is unpredictable, but classes of small events
> can be treated as random, until a bigger event comes along. It may seem like
> an obscure point, so let me explain the difference in a graphical way.
> 9. This is (pseudo)random
> Here is a random collection of multicoloured dots. Actually, it is
> pseudo-random, because it was generated by a computer, and computers are
> deterministic beasts incapable of true randomness. A source of true
> randomness is hard to come by. Even very good random noise generators can
> have higher-order effects. Small events are frequent, and therefore we can
> treat them as random, larger events are less frequent and rather
> unpredictable, and some of the really large events put an end to the careers
> of the statisticians trying to model them, and so we never find out whether
> they are random or not. To a layman, this is random enough, but eventually
> you run out of randomness and hit something very non-random.
> 10. This is not random but predictable
> Like this. Now this is not random, even to a layman. This is like oil
> expenditure going to 1/4 of global GDP. That certainly wasn't random. But was
> it unpredictable? We had a few years of monotonically increasing oil prices,
> and the high prices failed to produce much of a supply response in spite of
> record-high drilling rates, investment in ethanol, tar sands, and so on. We
> also have some good geology-based models that accurately predicted oil
> depletion profile for separate provinces, and had a high probability of
> succeeding in the aggregate as well. So this is definitely not random, and it
> is not even unpredictable. So, at a higher level, what sort of mathematics do
> we need to accurately model the inability of our financial and political and
> other leaders and commentators to see it, or to understand it, even now? And
> do we really need to do that, or should we just let this nice brick wall do
> the work for us. Because, you know, brick walls have a lot to teach people
> who refuse to acknowledge their existence, and they are very patient with
> students who need to repeat the lesson. I am sure that the lesson will sink
> in eventually, but I wonder how many more full-gallop runs at the wall it
> will take before everyone is convinced.
> 11. His models mostly work
> One person I would like to have a close encounter with the brick wall is this
> fellow, Myron Scholes, the Nobel Prise-winning co-author of the Black-Scholes
> method of pricing derivatives, the man behind the crash of Long Term Capital
> Management. He is the inspiration behind much of the current financial
> debacle. Recently, he has been quoted as saying the following: "Most of the
> time, your risk management works. With a systemic event such as the recent
> shocks following the collapse of Lehman Brothers, obviously the
> risk-management system of any one bank appears, after the fact, to be
> incomplete." Now, imagine a structural engineer saying something along those
> lines: "Most of the time our structural analysis works, but if there is a
> strong gust of wind, then, for any given structure, it is incomplete." Or a
> nuclear engineer: "Our calculations of the strength of nuclear reactor
> containment vessels work quite well much of the time. Of course, if there is
> an earthquake, then any given containment vessel might fail." In these other
> disciplines, if you just don't know the answer, then you just don't bother
> showing up for work, because what would be the point?
> 12. We love their lies
> The point certainly wouldn't be to reassure people, to promote public
> confidence in bridges, buildings, and nuclear reactors. But economics and
> finance are different. Economics is not directly lethal, and economists never
> get sent to jail for criminal negligence or gross incompetence even when
> their theories do fail. Finance is about the promises we make to each other,
> and to ourselves. And if the promises turn out to be unrealistic, then
> economics and finance turn out to be about the lies we tell each other. We
> want to continue believing these lies, because there is a certain loss of
> face if we don't, and the economists are there to help us. We continue to
> listen to economists because we love their lies. Yes, of course, the economy
> will recover later this year, maybe the next. Yes, as soon as the economy
> recovers, all these toxic assets will be valuable again. Yes, this is just a
> financial problem; we just need to shore up the financial system by injecting
> taxpayer funds. These are all lies, but they make us feel all right. They are
> lying, and we are buying every word of it.
> 13. Fastest way to lose all your money
> Let's face it, these are difficult times for those of us who have a lot of
> money. What can we do? We can entrust it to a financial institution. That
> tends to turn out badly. Many people in the United States have entrusted
> their retirement savings to financial institutions. And now they are being
> told that they cannot withdraw their money. All they can do is open a letter
> once a month, to watch their savings dwindle.
> We can also invest it in some part of the global economy. I know some
> automotive factories you could buy. They are quite affordable right now. A
> lot of retired auto workers have put all of their retirement savings into
> General Motors stock. Maybe they know something that we don't? (Actually,
> that's part of a fraudulent scheme perpetrated by the Obama administration,
> to pay off their banker friends ahead of GM's other creditors.)
> Well then, how about a nice gold brick or two? A bag of diamonds? Some
> classic cars? Then you could start your own personal museum of
> transportation. How about a beautifully restored classic luxury yacht? Then
> you could use the gold bricks to weigh you down if you ever decide to end it
> all by jumping overboard.
> Here's another brilliant idea: buy green products. Whatever green thing the
> marketers and advertisers throw at you, buy it, toss it, and buy another one
> straight away. Repeat until they are out of product, you are out of money,
> and the landfills are full of green rubbish. That should stimulate the
> economy. Market research shows that there is a great reservoir of pent-up
> eco-guilt out there for marketers and advertisers to exploit. Industrial
> products that help the environment are a bit of an oxymoron. It's a bit like
> trying to bail out the Titanic using plastic teaspoons.
> Another great marketing opportunity for our time is in survival goods. There
> are some web sites that push all sorts of supplies to put in your private
> bunker. It's a clever bit of manipulation, actually. Users log in, see that
> the stock market is down, oil is up, shotgun shells are on sale, so are
> hunting knives, and if you add a paperback on "surviving financial
> armageddon" to your shopping cart you qualify for free shipping. Oh and don't
> forget to add a large tin of dehydrated beans. Fear is a great motivator, and
> getting people to buy survival goods is almost a matter of operant
> conditioning: a marketer's dream.
> If you want to help save the environment and prepare yourself for a life
> without access to consumer goods, then doing so by buying consumer goods
> doesn't seem like such a great plan. A much better thing to do is to BUY
> NOTHING. But that is not something you can do with money. But there are
> useful things to do with money, for the time being, if we hurry.
> 14. How to lose all your money (but have something to show for it)
> Most of the wealth is in very few private hands right now. Governments and
> the vast majority of the people only have debt. It is important to convince
> people who control all this wealth that they really have two choices. They
> can trust their investment advisers, maintain their current portfolios, and
> eventually lose everything. Or they can use their wealth to reengage with
> people and the land in new ways, in which case they stand a chance of saving
> something for themselves and their children. They can build and launch
> lifeboats, recruit crew, and set them sailing.
> Those who own a lot of industrial assets can divest before these assets lose
> value and invest in land resources, with the goal of preserving them,
> improving them over time, and using them in a sustainable manner. Since it
> will become difficult to get what you want by simply paying for it, it is a
> good idea to establish alternatives ahead of time, by making resources, such
> as farmland, available to those who can put them to good use, for their own
> benefit as well as for yours. It also makes sense to establish stockpiles of
> non-perishable materials that will preserve their usefulness far into the
> future. My favourite example is bronze nails. They last a over a hundred
> years in salt water, and so they are perfect for building boats. The
> manufacturing of bronze nails is actually a good use of the remaining fossil
> fuels - better than most. They are compact and easy to store.
> Lastly, it makes sense to work towards orchestrating a controlled demolition
> of the global economy. This calls for a new financial skill set: that of a
> disinvestment adviser. The first step is a sort of triage; certain parts of
> the economy can be marked "do not resuscitate" and resources reallocated to a
> better task. A good example of an industry not worth resuscitating is the
> auto industry; we simply will not need any more cars. The ones that we
> already have will do nicely for as long as we'll need them. A good example of
> a sector definitely worth resuscitating is public health, especially
> prevention and infectious disease control. In all these measures, it is
> important to pull money out of geographically distant locations and invest it
> locally. This may be inefficient from a financial standpoint, but it is quite
> efficient from the point of view of personal and social self-preservation.
> 15. Beyond finance: controlling other kinds of risk
> Coming back for a moment to the poor bankers and economists, it seems rather
> disingenuous for us to treat economics and finance as a special case of
> people who generate a lot of unmitigated risk. Do we have any examples of
> risks we understood properly and acted on in time? Are there any really
> serious systemic problems that we have been able to solve?... The best we
> seem to be able to do is buy time. In fact, that seems to be what we are good
> at - postponing the inevitable through diligence and hard work. None of us
> wants to act precipitously based on what we understand will happen
> eventually, because it may not happen for a while yet. And why would we want
> to rock the boat in the meantime? The one risk that we do seem to know how to
> mitigate against is the risk of not fitting in to our economic, social and
> cultural milieu. And what happens to us if our entire milieu finally goes
> over the edge? Well, the way we plan for that is by not thinking about that.
> 16. The biggest risk of all
> The biggest risk of all, as I see it, is that the industrial economy will
> blunder in for a few more years, perhaps even a decade or more, leaving
> environmental and social devastation in its wake. Once it finally gives up
> the ghost, hardly anything will be left with which to start over. To mitigate
> against this risk, we have to create alternatives, on a small scale, that do
> not perpetuate this system and that can function without it.
> The idea of perpetuating the status quo through alternative means is
> all-pervasive, because so many people in positions of power and authority
> wish to preserve their positions. And so just about every proposal we see
> involves avoiding collapse instead of focusing on what comes after it. A
> prime example is the push to develop alternative energy. Many of these
> alternatives turn out to be fossil fuel amplifiers rather than
> self-sufficient resources: they require fossil fuel energy as an essential
> input. Also, many of them require an intact industrial base, which runs on
> fossil fuels. There is a pervasive idea that these alternatives haven't been
> developed before for nefarious reasons: malfeasance on the part of the greedy
> oil companies and so on. The truth of the matter is that these alternatives
> are not as potent, physically or economically, as fossil fuels. And here is
> the real point worth pondering: If we can no longer afford the oil or the
> natural gas, what makes us think that we can afford the less potent and more
> expensive alternatives? And here is a follow-up question: If we can't afford
> to make the necessary investments to get at the remaining oil and natural
> gas, what makes us think that we will find the money to develop the less
> cost-effective alternatives?
> 17. How long do we have?
> It would be excellent if more people had these realisations, and started
> making progress toward making their lives a bit more sustainable. But social
> inertia is quite great, and the process of adaptation takes time. And the
> question is, is there enough time for significant numbers of people to have
> these realisations and to adapt, or will they have to endure quite a lot of
> discomfort?
> I believe that people who start the process now stand a fairly good chance of
> making the transition in time. But I don't think that it is too wise to wait
> and try to grab a few more years of comfortable living. Not only would that
> be a waste of time on a personal level, but we'd be squandering the resources
> we need to make the transition.
> I concede that the choice is a difficult one: either we wait for
> circumstances to force our hand, at which point it is too late for us to do
> anything to prepare, or we bring it upon ourselves ahead of time. If we ask
> the question, How many people are likely to do that? - then we are asking the
> wrong question. A more relevant question is, Would we be doing this all
> alone? And I think the answer is, probably not, because there are quite a few
> other people who are thinking along these same lines.
> 18. It's always personal
> I think it is very important to understand social inertia for the awesome
> force that it is. I have found that many people are almost genetically
> predisposed to not want to understand what I have been saying, and many
> others understand it on some level but refuse to act on it. When they are
> touched by collapse, they take it personally or see it as a matter of luck.
> They see those who prepare for collapse as eccentrics; some may even consider
> them to be dangerous subversives. This is especially likely to be the case
> for people in positions of power and authority, because they are not exactly
> cheered by the prospect of a future that has no place for them.
> There is a certain range of personalities that are most likely to survive
> collapse unscathed, physically or psychologically, and adapt to the new
> circumstances. I have been able to spot certain common traits while
> researching reports of survivors of shipwrecks and other similar calamities.
> A certain amount of indifference or detachment is definitely helpful,
> including indifference to suffering. Possibly the most important
> characteristic of a survivor, more important than skills or preparation or
> even luck, is the will to survive. Next is self-reliance: the ability to
> persevere in spite of loneliness lack of support from anyone else. Last on
> the list is unreasonableness: the sheer stubborn inability to surrender in
> the face of seemingly insurmountable odds, opposing opinions from one's
> comrades, or even force.
> Those who feel the need to be inclusive, accommodating, to compromise and to
> seek consensus, need to understand the awesome force of social inertia. It is
> an immovable, crushing weight. "We must take into account the interests of
> society as a whole." Translated, that means "We must allow ourselves to
> remain thwarted by people's unwillingness or inability to make drastic but
> necessary changes; to change who they are." Must we, really?
> There are two components to human nature, the social and the solitary. The
> solitary is definitely the more highly evolved, and humanity has surged
> forward through the efforts of brilliant loners and eccentrics. Their names
> live on forever precisely because society was unable to extinguish their
> brilliance or to thwart their initiative. Our social instincts are atavistic
> and result far too reliably in mediocrity and conformism. We are evolved to
> live in small groups of a few families, and our recent experiments that have
> gone beyond that seem to have relied on herd instincts that may not even be
> specifically human. When confronted with the unfamiliar, we have a tendency
> to panic and stampede, and on such occasions people regularly get trampled
> and crushed underfoot: a pinnacle of evolution indeed! And so, in fashioning
> a survivable future, where do we put our emphasis: on individuals and small
> groups, or on larger entities - regions, nations, humanity as a whole? I
> believe the answer to that is obvious.
> 19. "Collapse" or "Transition"
> It's rather difficult for most people to take any significant steps, even
> individually. It is even more difficult to do so as a couple. I know a lot of
> cases whether one person understands the picture and is prepared to make
> major changes in the living arrangement, but the partner or spouse is
> non-receptive. If they have children, then the constraints multiply, because
> things that may be necessary adaptations post-collapse look like substandard
> living conditions to a pre-collapse mindset. For instance, in many places in
> the United States, bringing up a child in a place that lacks electricity,
> central heating, or indoor plumbing may be equated with child abuse, and
> authorities rush in and confiscate the children. If there are grandparents
> involved, then misunderstandings multiply. There may be some promise to
> intentional communities: groups that decide to make a go of it in rural
> setting.
> When it comes to larger groups: towns, for instance any meaningful discussion
> of collapse is off the table. The topics under discussion centre around
> finding ways to perpetuate the current system through alternative means:
> renewable energy, organic agriculture, starting or supporting local
> businesses, bicycling instead of driving, and so on. These certainly aren't
> bad things to talk about it, or to do, but what of the radical social
> simplification that will be required? And is there a reason to think that it
> is possible to achieve this radical simplification in a series of controlled
> steps? Isn't that a bit like asking a demolition crew to demolish a building
> brick by brick instead of what it normally does. Which is, mine it, blow it
> up, and bulldoze and haul away the debris?
> 20. Better living through bureaucracy
> There are still many believers in the goodness of the system and the magic
> powers of policy. They believe that a really good plan can be made acceptable
> to all - the entire unsustainably complex international organisational
> pyramid, that is. They believe that they can take all these international
> bureaucrats by the hand, lead them to the edge of the abyss that marks the
> end of their bureaucratic careers, and politely ask them to jump. Now, don't
> get me wrong, I am not trying to stop them. Let them proceed with their
> brilliant schemes, by all means.
> 21. Simpler approaches: investment
> There are far simpler approaches that are likely to be more effective. Since
> most wealth is in private hands, it is actually up to individuals to make
> very important decisions. Unlike various bureaucratic and civic bodies, which
> are both short of funds and mired in social inertia, they can act decisively
> and unilaterally. The problem is, what to do with financial assets before
> they lose value. The answer is to invest in things that will retain value
> even after all financial assets are worthless: land, ecosystems, and personal
> relationships. The land need not be in pristine or natural condition. After a
> couple of decades, any patch of land reverts to a wilderness, and unlike an
> urban or an industrial desert, a wilderness can sustain life, human and
> otherwise. It can support a population of plants an animals, wild and
> domesticated, and even a few humans.
> The human relationships that are the most conducive to preserving ecosystems
> are ones that are in turn tied to a direct, permanent relationship with the
> land. They can be enshrined in permanent, heritable leases payable in
> sustainably harvested natural products. They can also be enshrined as deeded
> easements that provide the community with traditional hunting, gathering and
> fishing rights, provided human rights are not allowed to supersede those of
> other species. I think the lifeboat metaphor is apt here, because the moral
> guidance it offers is so clear. What has to happen in an overloaded lifeboat
> at sea when a storm blows up and it becomes necessary to lighten the load?
> Everyone draws lots. Such practises have been upheld by the courts, provided
> no-one is exempt - not the captain, not the crew, not the owner of the
> shipping company. If anyone is exempt, the charge becomes murder.
> Sustainability, which is necessary for group survival, may have to have its
> price in human life, but humanity has survived many such incidents before
> without descending into barbarism.
> 22. Gift-giving as an organising principle
> Many people have been so brainwashed by commercial propaganda that they have
> trouble imagining that anything can be made to work without recourse to
> money, markets, the profit motive, and other capitalist props. And so it may
> be helpful to present some examples of very important victories that have
> been achieved without any of these.
> In particular, Open Source software, which used to be somewhat derisively
> referred to as "free software" or "shareware", is a huge victory of the gift
> economy over the commercial economy. "Free software" is not an accurate
> label; nor is "free prime numbers" or "free vocabulary words". Nobody pays
> for these things, but some people are silly enough to pay for software. It's
> their loss; the "free" stuff is generally better, and if you don't like it,
> you can fix it. For free.
> General science works on similar principles. Nobody directly profits from
> formulating a theory or testing a hypothesis or publishing the results. It
> all works in terms mutuality and prestige - same as with software.
> On the other hand, wherever the pecuniary motivation rises to the top, the
> result is mediocre at best. And so we have expensive software that fails
> constantly. (I understand that the British Navy is planning to use a
> Microsoft operating system on their nuclear submarines; that is a frightening
> piece of news.) We also have oceans full of plastic trash - developing all
> those "products" floating in the ocean would surely have been impossible
> without the profit motive. And so on.
> In all, the profit motive fails to motive altruistic behaviour, because it is
> not reciprocal. And it is altruistic behaviour that increases the social
> capital of society. Within a gift-giving system, we can all be in everyone's
> debt, but going into debt makes us all richer, not poorer.
> 23. Barter as an organizing principle
> Gifts are wonderful, of course, but sometimes we would like something rather
> specific, and are willing to work with others to get it, without recourse to
> money, of course. This is where arrangements made on the basis of barter. In
> general, you barter something over which you have less choice (one of the
> many things you can offer) for something over which you have more choice
> (something you actually want).
> Economists will tell you that barter is inefficient, because it requires
> "coincidence of wants": if A wants to barter X for Y, then he or she must
> find B who wants to barter Y for X. Actually, most everyone I've ever run
> across doesn't want to barter either X for Y, or Y for X. Rather, they want
> to barter whatever the can offer for any of a number of the things they want.
> In the current economic scheme, we are forced to barter our freedom, in the
> form of the compulsory work-week, for something we don't particularly want,
> which is money. We have limited options for what to do with that money: pay
> taxes, bills, buy shoddy consumer goods, and, perhaps, a few weeks of
> "freedom" as tourists. But other options do exist.
> One option is to organise as communities to produce certain goods that the
> entire community wants: food, clothing, shelter, security and entertainment.
> Everyone makes their contribution, in exchange for the end product, which
> everyone gets to share. It is also possible to organise to produce goods that
> can be used in trade with other communities: trade goods. Trade goods are a
> much better way to store wealth than money, which is, let's face it, an
> essentially useless substance.
> 24. Local/alternative currencies
> There is a lot of discussion of ways to change the way money works, so that
> it can serve local needs instead of being one of the main tools for
> extracting wealth from local economies. But there is no discussion of why it
> is that money is generally necessary. That is simply assumed. There are
> communities that have little or no money, where there may be a pot of coin
> buried in the yard somewhere, for special occasions, but no money in daily
> use.
> Lack of money makes certain things very difficult. Examples include gambling,
> loan sharking, extortion, bribery and fraud. It also makes it more difficult
> to hoard wealth, or to extract it out of a community and ship it somewhere
> else in a conveniently compact form. When we use money, we cede power to
> those who create money (by creating debt) and who destroy money (by
> cancelling debt). We also empower the ranks of people whose area of expertise
> is in the manipulation of arbitrary rules and arithmetic abstractions rather
> than in engaging directly with the physical world. This veil of metaphor
> allows them to mask appalling levels of violence, representing it
> symbolically as a mere paper-shuffling exercise. People, animals, entire
> ecosystems become mere numbers on a piece of paper. On the other hand, this
> ability to represent dissimilar objects using identical symbols causes a
> great deal of confusion. For instance, I have heard rather intelligent people
> declare that government funds, which have been allocated to making failed
> financial institutions look solvent, could be so much better spent feeding
> widows and orphans. There is no understanding that astronomical quantities of
> digits willed into existence and transferred between two computers (one at a
> central bank, another at a private bank) cannot be used to directly nourish
> anyone, because food cannot be willed into existence by a central banker or
> anyone else.
> 25. Belief in science and technology
> One accusation I often hear is that I fail to grasp the power of
> technological innovation and the free market system. If I did, apparently I
> would have more faith in a technologically advanced future where all of our
> current dilemmas are swept away by a new wave of eco-friendly sustainability.
> My problem is that I am not an economist or a businessman: I am an engineer
> with a background in science. The fact that I've worked for several
> technology start-up companies doesn't help either.
> I know roughly how long it takes to innovate: come up with the idea, convince
> people that it is worth trying, try it, fail a few times, eventually succeed,
> and then phase it in to real use. It takes decades. We do not have decades.
> We have already failed to innovate our way out of this.
> Not only that, but in many ways technological innovation has done us a
> tremendous disservice. A good example is innovation in agriculture. The
> so-called "green revolution" has boosted crop yields using fossil fuel
> inputs, creating generations of agro-addicts dependent on just one or two
> crops. In North America, human hair samples have been used to determine that
> fully 69% of all the carbon came from just one plant: maize. So, what piece
> of technological innovation do we imagine will enable this maize-dependent
> population to diversify their food sources and learn to feed themselves
> without the use of fossil fuel inputs?
> I think that what makes us likely to think that technology will save us is
> that we are addled by it. Efforts at creating intelligent machines have
> failed, because computers are far too difficult to program, but humans turn
> out to be easy for computers to program. Everywhere I go I see people poking
> away at their little mental support units. Many of them can no longer
> function without them: they wouldn't know where to go, who to talk to, or
> even where to get lunch without a little electronic box telling what to do.
> These are all big successes for maize plants and for iPhones, but are they
> successes for humanity? Somehow I doubt it. Do we really want to eat nothing
> but maize and look at nothing but pixels, or should there be more to life?
> There are people who believe in the emergent intelligence of the networked
> realm - a sort of artificial intelligence utopia, where networked machines
> become hyperintelligent and solve all of our problems. And so our best hope
> is that in our hour of need machines will be nice to us and show us kindness?
> If that's the case, what reason would they find to respect us? Why wouldn't
> they just kill us instead? Or enslave us. Oh, wait, maybe they already have!
> 26. The need to evolve
> Now, supposing all goes well, and we have a swift and decisive collapse, what
> should follow is an equally swift rebirth of viable localised communities and
> ecosystems. One concern is that the effort will be short of qualified staff.
> It is an unfortunate fact that the recent centuries of settled life, and
> especially the last century or so of easy living based on the industrial
> model, has made many people too soft to endure the hardships and privations
> that self-sufficient living often involves. It seems quite likely that those
> groups that are currently marginalised, would do better, especially the ones
> that are found in economically underdeveloped areas and have never lost
> contact with nature.
> And so I would not be surprised to see these marginalised groups stage a
> come-back. Almost every rural place has its population of people who know how
> to use the local resources. They are the human component of the local
> ecosystems, and, as such, they deserve much more respect than they have
> received. A lot of them can't be bothered about fine manners or about
> speaking English. Those who are used to thinking of them as primitive,
> ignorant and uneducated will be shocked to discover how much they must learn
> from them.
> 27. Beyond planning
> So what are we to do in the meantime, while we wait for collapse, followed by
> good things? It's no use wasting your energy, running yourself ragged and
> ageing prematurely, so get plenty of rest, and try to live a slow and
> measured life. One of the ways industrial society dominates us is through the
> use of the factory whistle: few of us work in factories, but we are still
> expected to work a shift. If you can avoid doing that, you will be ahead.
> Maintain your freedom to decide what to do at each moment, so that you can do
> each thing at the most opportune time. Specifically try to give yourself as
> many options as you can, so that if any one thing doesn't seem to be working
> out, you can switch to another. The future is unpredictable, so try to plan
> so as to be able to change your plans at any time. Learn to ignore all the
> people who earn their money by telling you lies. Thanks to them, the world is
> full of very bad ideas that are accepted as conventional wisdom, so watch out
> for them and come to your own conclusions. Lastly, people who lack a sense of
> humour are going to be in for a very hard time, and can drag down those
> around them. Plus, they are just not that funny. So avoid people who aren't
> funny, and look for those who can laugh at the world no matter what happens. 
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> 9. This is (pseudo)random
> Here is a random collection of multicoloured dots. Actually, it is
> pseudo-random, because it was generated by a computer, and computers are
> deterministic beasts incapable of true randomness. A source of true
> randomness is hard to come by. Even very good random noise generators can
> have higher-order effects. Small events are frequent, and therefore we can
> treat them as random, larger events are less frequent and rather
> unpredictable, and some of the really large events put an end to the careers
> of the statisticians trying to model them, and so we never find out whether
> they are random or not. To a layman, this is random enough, but eventually
> you run out of randomness and hit something very non-random.

Lots of bunk there.  But this is really bad.  There are multiple ways to 
get true randomness.  Not even including lava lamps or capped "digital" 

Even in a post-apocalyptic world we'll have money, production, finance, 
etc.  When oil is finally gone, we'll finally switch to nuclear in a big 
way, and start seriously working on fusion.


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