By Karl North | December 9, 2012
A number of students of the energy descent have concluded that the new era will include tipping points where key economic and political institutions suddenly go into crisis. Charles Hugh Smith, for example, describes “snapback” points when increasing divergence between “phantom wealth” and real wealth collapses. In The Case for a Disorderly Descent I described how rising energy prices in the current debt-stressed economies could cause chain reactions leading to a degree of disorder. This disorder would manifest as periods of crisis sufficient to cause governments to convert to emergency modes of operation far different from their normal roles in present-day society.
This response to prolonged crisis is common in history and appears under various labels: a state of emergency, martial law, a war economy, a “new deal” or a whole new political order such as fascism or a partial theocratic system as occurred in early Medieval Europe in response to repeated crises that replaced the social stability of the Roman Empire. It thus suggests a range of possibilities stretching from a forceful repression of the majority in the interest of sustaining the quality of life of privileged classes to an economy that redirects remaining energy and resources to serve the basic needs of all.
If our society is to prepare at the family and local levels for the crises ahead it will be useful to gain an understanding of plausible responses to these crises at different levels of government. This is an attempt to briefly explore some likely scenarios based on the historical record in the US. It will be important to consider which of the scenarios and local responses described here are likely or feasible at different times over the “long emergency” of the energy descent.
At the end of Cities and Suburbs in the Energy Descent: Thinking in Scenarios, I suggested a policy scenario to facilitate the transition of urban areas in these crisis periods.
Governments could proclaim a “wartime economy” and create a program of economic policies that redirects remaining fossil fuels and other nonrenewables to uses that adapt urban areas to a low energy future. If governments were to make appropriate major changes in economic priorities, for a while they could maintain urban populations and supporting levels of urban activity and consumption that are higher than what I have described. Perhaps Departments of Descent would emerge and begin setting economic policy, at least locally.
Whatever the success of a period of legislated economic planning, its main positive function would be to delay the inevitable return to a solar energy economy long enough to help society prepare and adapt.
This scenario would tend to perpetuate the center-periphery social system in which the defining dynamic is a “wealth conveyor” by which a metropole builds and maintains itself on the back of its agrarian hinterland.
At the regional level in northeastern US this would play out by the Bos-Wash metropolitan complex taxing the hinterlands to death. The administration might take various forms: proconsuls the central power assigns to conduct the levies on rural food production, or a new feudal order of vassals that emerges from the agrarian communities themselves but who owe allegiance to the central powers.
Stoneleigh in her paper Entropy and Empire describes a historical period that has the potential to repeat itself in the parallel situation to Rome in which the Western industrial metropolis finds itself today:
Rome eventually hit a net energy limit and could no longer sustain its internal complexity. Efforts to strengthen the wealth conveyor through repression during the reign of Diocletian – an elaborate, highly intrusive and draconian regime of taxation in kind – amounted to feeding the center by consuming the productive farmland and peasantry of the empire itself. This period represented a brief reprieve for a political center declining in resilience, at the cost of catabolic collapse. Regions incorporated into the empire declined to a lower level of complexity than they had attained before being conquered.
Alternatively, resistance from the agrarian “barbarians”, damaging systemic feedback effects of perpetuation of the wealth conveyor, or simply the chaos from the loss of the industrial economic activity that supports the affluence of metropolitan life overwhelms the cities, as eventually it did in the Roman Empire. This is the Kunstlerian thesis. In James Kunstler’s post-oil novel World Made by Hand the protagonist finds the governor of New York sitting helpless in his empty Albany office, all the instruments of his power having disintegrated. He was unable to prevent even his capitol from falling into the hands of diverse mafias, and those desiring a semblance of order must make it themselves. In this case the rural proconsuls or vassals simply become an independent landed aristocracy, or are overthrown by locals who replace them in the new feudal order.
To explore these scenarios it will be useful to think about how governments will respond to the major crisis issues. Many analysts believe the following are major crisis issues likely to require a response from central government:
- Credit crisis – bank failures, consumers and producers lack cash to do business
- Monetary crisis – deflation and loss of purchasing power, or hyperinflation and loss of monetary value
- Supply chain failure – crises provoked, for example, by rising transport costs that weaken the distance economy enough to start poking holes in it
- Failure of the economy to allocate dwindling resources to assure basic necessities, including infrastructure elements like a reliable electrical grid (Duncan’s Olduvai Theory is an argument for grid failure as a major early crisis).
Although there may be various triggering events, the resource depletion problem is the underlying one that tends to bring on these interconnected crises. It has no solution and requires adaptation to what will ultimately be a much lower material standard of consumption. The government could mitigate the difficulties of adaptation by again taking control of key institutions and resources, instituting storm socialism as Christian Parenti calls it: big government to deal with big crises.
The credit and monetary problems could be avoided easily by truly nationalizing central banking institutions. Under full public control, banking could be restructured in ways that would keep credit flowing in the declining economy that will be the norm in an era of increasing energy scarcity. But a declining economy could not support the current system of payment of interest for credit without gradually cannibalizing itself, to the eventual detriment of the rentier class itself. Hence the practice of a rentier class that taxes credit by charging interest would disappear; as in other difficult times payment of rent would again be known as usury.
Governments also could mitigate supply chain problems by taking public control of economic distribution of certain products and services that are basic necessities. This could take a variety of forms depending on the state of power relations in society. The present concentration of wealth and power in a minority class suggests that under government control first priority in the distribution of strategic resources would be to maintain that stratified social order. So internal security and enough support of basic production and transportation infrastructure to provision and otherwise sustain the privileged minority would absorb an increasing share of the dwindling resources that have supported an industrial standard of consumption, with the rest rationed out to the majority.
Organized revolts against this state of affairs could lead to attempts at local control as central power weakened. Historical examples abound, in the wake of the break-up of the Roman Empire for example, varying in scale from monastic communities and walled towns to secession of whole regions from central authority and their reorganization as mostly local economies in many instances of the decline of central power. While these new social entities historically came under a considerable degree of internal hierarchical control, they also usually improved the quality of life of the majority and thus often gained its support.
Local Control of Local Economies
Serious relocalization may need to wait out the current process of self-destruction inherent in the centralized power-over system; then as things fall apart sufficiently in the larger political economy and its unsustainable infrastructure, communities could seize the opportunity that the new political vacuum/chaos presents to reconfigure local policy and economy. Regions that contain significant strategic resources, like fossil fuels or even woody biomass, are likely to remain under central political control for the longest time.
As our society shrinks in complexity, simple loss of the infrastructure which supplies access to local resources may eventually put those resources beyond the control of central powers and thus provide opportunities for local communities to reclaim parts of the commons. The politics of this process could manifest as communities recapturing the commons for the common good, or as warring units of self-preservation evolving toward a new feudalism of local serfs and big shots, or some of both.
The legal means to begin the relocalization of political power are well within reach of state governments. The US Constitution provides for state legislatures to alter that document (to increase state autonomy, for example) in ways that bypass all three branches of the federal government. The Board of State Governors is already on record in their opposition to the nation’s continued military adventures as part of a long-simmering conflict over the use of federal tax funds. Given appropriate triggering events, the states could find the unity and popular support to amend the US Constitution in ways that increase state or regional independence and weaken federal power.
Many efforts toward local economic sovereignty, like municipal bans on factory farming or oil or gas mining, are presently failing because they are premature. But despite being currently crushed by state and federal power, they remain essential consciousness raising activities to build toward future success. In the following example, community members rallied around a dairy farmer who was selling raw milk to neighbors in defiance of state and federal regulations, and in the process strengthened a regional movement.
“Blue Hill is one of five towns that have adopted “local food and community self-governance ordinances” stating that farmers or food processors are exempt from licensing and inspection as long as they sell directly to consumers for home consumption. The four other towns are Sedgwick, Penobscot and Trenton — also located in Hancock County — and Hope in Knox County. The ordinances are couched in constitutional language asserting that people have the “fundamental and inalienable right to govern themselves” and warning against other government agencies attempting to pre-empt the local ordinance.” – Bangor Daily News, Saturday, Jan. 28, 2012.
With enough foresight, local governments can take advantage of the massive
discretionary consumption and outright wastefulness in the present economy to convert it to uses that cushion the transition to a lower energy society. An example would be a policy to manage local biomass use in the best interest of the whole county.
One of the most important changes of the energy descent era that local communities should understand and anticipate as an opportunity is the long-term rising cost of transportation, which raises both the raw material input cost and the product distribution cost of the centralized production economy. At some point local production of many goods will again become competitive with centralized production and distant trade. Meanwhile, as distant trade shrinks, both ocean shipping and land trucking is already experiencing repeated cost-price squeezes that will contribute to eventual supply chain crashes and sudden shortfalls of essential goods in local economies. Local communities that are forewarned can mitigate the distress if they can get ahead of the curve with policies that favor relocalized control of the local economy and natural resources.
Many such policies require little public funding, but would require fundamental rethinking of present local development planning strategy. The simplistic notion of two choices, extreme private or public control, leftover from Cold War ideological battles, is an impediment to thinking here. Restoration of the commons as a mental model can include not just more public enterprises but any economic policy that favors the common good instead of business per se.
Instead of the current pattern of subsidies or tax breaks to both local and external businesses that are so costly in public money, municipalities and county governments can enact laws regarding what businesses can sell, where they can locate, how they can operate, etc. – policies that privilege local, more ecologically and economically sustainable production over distant production. In addition to well known cooperative efforts and land trusting are lesser known but historically proven forms like interest-free investment institutions and craft guilds, and citizen trusteeships and chartering that create a measure of democratic economic control over essential goods and services like energy, food and housing. An example of such local political control of an economic good is Kristianstad, a fossil-fuel-free district in Sweden and a working model of locally controlled energy policy.
Just as countries like the newly independent US in the early 19th century have enacted laws that favored US over foreign business, so can localities find ways to gradually achieve a measure of protection from the shocks of a declining distance economy. To escape current state and federally imposed strictures like interstate commerce laws, localities will need creative policy making. An example is the present attempt to use local zoning rights to block hydrofracked gas extraction.
Beyond legal constraints, most present attempts at local democratic economic decision making run up against the reigning ideology of extreme private control of property and economic activity that is unique to the US even compared to other Western capitalist nations. However, as the economic institutions based on this ideology gradually reveal themselves incapable of addressing the problems of the energy descent, it will be helpful to have different political forms waiting in the wings, and their mental models at least entered into public discourse. Then the obligatory cultural revolution will have a head start on events.
 Korowicz, David. Trade Off: Financial System Supply Chain Cross-Contagion – a study in global systemic collapse(June 2012)
 Lewis, Michael and Patrick Conaty. 2012. The Resilience Imperative:Cooperative Transitions to a Steady State Economy. New Society Publishers.