Post-Agricultural Society

During the Depression many businesses will die, many households will become impoverished or dissolve. The rest will recover. Is the damage done randomly, or are there discernable patterns to who is hurt most?

We would like to present a pet theory today. Our theory is that industrial society, in spite of so much that has only evolved in the past two hundred fifty years, is still largely agrarian in its outlook on economic life.

For example, take such concepts as the steady paycheck, the rent check, the interest payment, the dividend. All of these payments occur on a periodic basis. Yields on investments are calculated as annual returns on investment. All of these conventions derive directly from annual crop yields.

Where annual yields make perfect sense for agriculture, they may not for commerce and industry. It makes more sense for workers and investors to share in the profits of an enterprise, which are uncertain both in timing and quantity. Instead of accepting the variability of the industrial way of life, society has attempted to pound the round peg of industrialism into the square hole of agriculturalism. The results have not been happy. More job and tax 'farms' and 'gravy trains' have been built than can be supported. The imminent disappointment of many auto worker pensioners is testimony to this fact.

If you can thrive with an uncertain yet dynamic income stream, you are more in tune with the realities of the industrial system. If you are a 'rent seeker' or looking for a steady job, you are chasing a fading way of life.

Is Globalisation at Risk?

One of our local 'dollar stores' sells some amazingly good pickled, roasted peppers from Turkey. Not only are they quite good, they are also quite inexpensive - costing far less than 'fresh' peppers at the grocery store (presumably grown somewhere on this continent). Although growing sweet peppers is possible in our Northerly latitude, it could hardly be construed as inexpensive when time and effort are taken into account.

Globalisation, has made its way to our heart via our stomach. Nothing in this world is ever unequivocally good, of course, but we think that having some access to the World's goods and culture generally enriches our lives and is a positive. We understand that this process has been everywhere disruptive, as well, but on balance it feels like progress.

Can globalisation fail? Is it an artifact of cheap energy? And if energy always gets more expensive from here on in, will globalisation decline? Our opinion is probably not. The advent of the Internet and peer-to-peer networks will provide opportunities for division of labour and broadening markets even as transportation costs become dearer. Some more localised production and distribution will gradually have a greater cost advantage if it is otherwise competitive, but as transportation is rarely a significant portion of costs, this is not likely to impede globalisation all that much.

Will the Depression kill globalisation? It certainly may set it back through trade financing problems, and through protectionist and autarkic public policies. However, as long as global exchange presents true efficiencies and opportunities for profit, those setbacks are likely to be temporary or geographically limited. If anything, the Depression will likely reinforce globalisation as marginal, less-efficient enterprises wind down.

There was an protest saw from a prior era: "Think globally, act locally." It is actually not bad advice under the current circumstances, though very far from the original intent. What are you doing to be globally competitive? What resources that you find in your immediate environment can you marshall to produce something for a globally-minded market? If you cannot come up with something, you may find the World passes you by.

Much of the Industrial era to date has consisted of efforts to make the Industrial way of life as much like the Agricultural as possible: the company or government as patronly employer for life; the financial investment dividend as reliable as land rent; and the bizarre experiment of Marxist Communism. These efforts have all failed, or are still in process of failing. What is emerging from the rubble is a much more dynamic and creative way of making one's way in the world.

Globalisation is really only at risk if humanity rises up to turn back the clock. Reactionary elements are now, as always, ever at work to stymie developments that threaten their turf. However it is certainly not in the best interest of the majority to embrace a reactionary world-view.

There are some ideas out there posing as progressive, voiced by intelligent people, which are actually reactionary: globalism is unequivocally bad; small towns are unequivocally good; all economy should be within mostly self-sufficient communities, etc. We know it often difficult to imagine a better and truly new tomorrow when trends in place have delivered so much disruption, but that imagining must be done if society is to avoid stagnation and decay.

U.S. Leadership: Innocent or Guilty?

In his weekly editorial on Monday, James Kunstler laid out his belief that President Obama is a man able to provide the leadership necessary to lead the United States to what he sees as the future of the country: de-industrialised regional agriculture. His view is that, although the President may or many not have an understanding of the situation, Mr. Obama will rise to the occasion when needed. To quote:

"I think, he is going along, for the moment, with a consensus of wishes to prop up life as we know it at all costs.... I also think that circumstances will force Mr. Obama's hand before long -- specifically that a moment will arrive when he goes on TV and tells the American public that things have changed way beyond the scope of what they even imagined when they pulled the levers last fall and voted for an uncharted future."

Perhaps Mr. Kunstler is right, but we think not. The actions of the Obama Administration do not seem to be the actions of a "team" working towards legitimate, rational solutions to the present economic catastrophe. For example, Treasury Secretary Geithner's latest brainchild is eeriely familiar; we think he might have just ripped off some notes that former Secretary Hank Paulson left in the desk drawers.

No, we fear that Mr. Kunstler is hopeful, and not in a good way. He accepted the rhetoric of President Obama at face value, and is perhaps unwilling to address the lack of corrolation between Mr. Obama's words and the actions of the Administration. We feel the President is not the great bringer of change... but, we could be wrong. For instance, we though Geithner's new plan would crash the markets, but lo! it went up! So much for our omnipotence...

But seriously, the same questions we ask about the Administration are beginning to appear in more mainstream sources. Here is an article from, of all sources, the Rolling Stone - Mr. Kunstler's former employer - and from the pen of Mr. Matt Taibbi:

"The real question from here is whether the Obama administration is going to move to bring the financial system back to a place where sanity is restored and the general public can have a say in things[,] or whether the new financial bureaucracy will remain obscure, secretive and hopelessly complex."

We know which side we believe; it only remains to see if the Administration can put its actions in line with its rhetoric. Frankly, we don't think it ever will.

End of the Workers' Paradise

During the 20th Century, the world stage was dominated by a contest between two great economic and political ideologies. One the hand was Communism, state ownership of large-scale capital, and central planning, on the other was Liberal Democracy. In the non-Communist developed nations, some concessions towards central planning and income redistribution were made. The legacy of these concessions include the Income Tax, Minimum Wage, and the Welfare State.

As everyone knows, Communism failed and Liberal Democracy in its modified form survived. Unfortunately, in its efforts to win the people over, Liberal Democracy encouraged the notion that economic security was an entitlement. People imagined that making lots of money was as simple as following a formula: getting a college degree and a career-for-life would fall in their laps; buying a house and watching its value ascend skyward; or investing in the stock market and get reliable dividends and capital gains.

We opine this desire for stable and predictable economic returns is a vestige of agricultural civilisation. Note that the most important and durable Communist Powers, Russia and China, were still agricultural when they went Red. Industrial civilisation works on a less steady basis. If humanity is to embrace the full benefit of industrialisation, it must acknowledge that it not an especially stable system.

The current Depression is partly a result of attempting to force the industrial system to do something it cannot: supply steady, generous paychecks to the entire population. The Depression will be prolonged by governmental efforts to sustain the unstainable with bailouts, and expansions of both the public payroll and the dole. In a bizarre effort to "save capitalism," a grotesque is being created. This state will not last long, and eventually be seen as a tragic waste of resources.