Tuesday, October 13, 2009

Out of the Ashes

For those of you following this blog over the years (and the growing number of new readers), we’ve pondered a variety of scenarios on how this enormous Potemkin Village of brain dead finance, corrupt politics, hypersensitive factions in government and society, as well as the gutting of household balance sheets will handle the coming conflagration of anger, fear and default.

The short version: badly.

As we scenario plan our way up to the edge of the abyss of the Great Collapse, dystopias abound.

Recalling Nietzsche’s warning to those who stare too long into the abyss, let’s raise our eyes over the yawning chasm into which the hopes and delusions of an entire culture raised up in the warm sunshine of a Grand Supercycle Bull Market will plunge, screaming, and look towards that undiscovered country where those of us that survive the coming decade may find ourselves.

The Challenges

What kind of society will emerge from the hordes of dropouts that will have chosen, or been forced, to go off the grid, to become vagabonds, to go bando (and not this kind of bando, brought to my attention by WL)?

What is the “art of the possible” in working with existing local/county/state government structures to provide some minimal level of services when states and localities will be functionally bankrupt?

What is the nature of your local government? By that I mean, if you and your neighbors team up to install water catchments or move in to “farm” park areas or take over maintenance of abandoned houses – how will the Sherriff’s department or the local cadre of inspectors and enforcement agents respond?

Many of the highest-growth areas in the United States are in formerly “extreme” environments, such as Phoenix, Southern California, the Old South, etc. Without cheap energy and cheap water, how sustainable are those areas?

The fractional reserve system in place since the founding of the Old Republic and its solidification under the Federal Reserve system has required continuous, solid growth for it to thrive. We are entering a long, deep bear market. Can fractional reserve banking survive a long period of slow to no growth? What can replace it?

What sorts of big decisions by entities like the U.S. Armed Forces, FEMA, state National Guards, etc. will be made in the heat of the moment that could later be solidified into ongoing social structures? I use the example of the decay and eventual collapse of the Western Roman Empire – numerous decisions were made, allowing for legions and auxiliaries to draw upon the locals for food and supplies, to house them, etc. that eventually morphed into European Feudalism.

There will be thousands more – everything from the stresses inherent in growing more food locally, to the types of militias that will spring up in response to the waves of violence that are coming our way, to attitudes of the returning soldiers and marines when the U.S. can no longer fund wars in Iraq, Afghanistan and elsewhere (hint – they are already angry and they won’t, in general, be fans of civilians).

Some Assumptions

I will make the following assumptions. Many, especially strict Peak Oilers will take issue with some of the technological assumptions probably. I am going on the assumption that the human “death wish” is way overblown and, once the initial die-off occurs, there will be plenty of motivation and resources available for an intermediate “age” where we can use much of our current technology to sustain and eventually propel a new cycle of growth.

  • The initial die-off will consume the most vulnerable, especially the elderly, as Big Pharma products become tough to get due to budget constraints and supply chain disruptions – this will amount to up to ten million people in the U.S. over an 18 month period, once Primary Wave 3 (per the current EWI count) arrives in force
  • The banking and finance system as we have known it will be shattered, along with the stock/commodity/derivative investment “industry”
  • The U.S. government will default on its debt, converting all short term notes to 30 year bonds, forbidding any transfer of monies offshore and renege on many social “entitlements”
  • Violence against U.S. interests, pipeline bombings, natural depletion of wells, anti-U.S. sentiment and eventually the collapse of the dollar will make access to inexpensive oil (from Saudi Arabia, Iraq, Mexico, Venezuela, et al) prohibitive. The U.S. still produces significant amounts of oil and natural gas, but not enough to provide for the vast petrochemical complex, the ag sector and our car-addicted nation. The supply chain will suffer greatly. Harvests and food distribution will suffer as well. Get ready to eat a lot more local produce. “Grow your own” will take on a whole new, and urgent, meaning
  • Most currently illegal “drugs” will be legalized
  • Several states will attempt to secede during the Great Collapse
  • Ethnic violence will polarize many communities
  • Local violence will increase. Depending on the part of the country you are in, the reaction will be either very strict gun control and regimentation of society by police and paramilitary forces, or a proliferation of personal carry options for handguns and firearms in general as well as a rise in local militias
  • Large segments of the population will “check out” in the early stages of the crisis and never quite recover. They will not be able to mentally handle the vast changes in store for us all. I think a lot of this will be focused in the white collar “work” force
  • All kinds of motivated individuals will quickly begin leveraging technology and playing around with “open source” technologies – and breaking currently proprietary codes open for use. During the crash phase, the true creative destruction that computer processing allows will be felt in force as businesses find ways to bootstrap codes and create new ways for systems to work together – without all those pesky licensing fees imposed by big, centralized corporations
  • Corporations themselves may come under attack as a structure for deploying capital. We could see a reversal of the Supreme Court cases that made corporations such a force during the latest Grand Supercycle Wave III up
  • Walls, fences, hedges, etc. will make a big comeback, both for local protection against non-military types of threats, as well as part of a psychological reaction to the mass wave of negative mood
  • Many formerly very wealthy families will have been persecuted during the Great Collapse and much of their land and property redistributed during the revolution phase
  • Whether from lack of funds, strategic blunder or corruption that eats away at the ability to respond to adversity, the U.S. military will suffer and tremendous setback in either Iraq or Afghanistan. A possible scenario would be an attack on Iran that leads to a backlash in Iraq that isolates U.S. forces for weeks on end, leading to major casualties and possibly withdrawals from some bases. The ongoing budget crisis on top of military setback leads to major withdrawals from most U.S. bases worldwide

This is just a sampling. I think we are in for quite a ride, folks.

Out of the Ashes

Society and culture springs up amongst groups of humans to meet the many challenges we face when dealing with a hostile and brutal world. All eco-ninny crap aside, the natural world is meaner than the streets of Detroit and harsher than the most radical wingnut. We’ll get to re-learn all the old wisdom that serves as the bedrock for strong cultures and build up a new society when the ashes finally settle about us and the smoldering coals die down in the ruins.

The rebound will come, limping out of the darkness of war and poverty.

A society wracked by polarized politics, war overseas, civil war, riots, famine and disease finally finds its feet somewhere around 2017 - 2020. Much has changed in the intervening years.

The borders of the United States have changed, possibly radically. Portions of the former U.S. Southwest have been sheared off to form the quasi-state of Aztlan are not officially recognized as having been lost, but the facts on the ground prove otherwise. Negotiations continue with the Kingdom of Hawai’i, mainly over reparations to the few Anglo survivors of the reinstitution of the kapu system and its zealous enforcement by vigilantes lead by a former UFC champion. Alaska is little more than a series of city-states worried about piracy, with the north slope little more than a series of corporate fortresses guarding the oil production facilities.

What remains of the Union after the Second Constitutional Convention is more akin to the government of the Articles of Confederation – a thin patina of federal governance covering an increasingly vital group of states and free cities.

Some of the states, especially those nearest the smoking ruins of Washington, D.C. – where rebuilding efforts will be ongoing for another decade – and still in reach of the few remaining active Army Divisions have turned to a regimented solution to the troubles. The federal capital shifts between Atlanta in the winter and New York City in the summer, in an attempt to keep the Original 13 stitched together more tightly than the rest of the country west of the Appalachians.

Corporations run most public services in the Original 13. Public co-ops, set up in response to abuses by the corporate entities form a counterbalance in local safety nets and provide for open markets and private money that is backed by agricultural commodities and exchangeable with other co-ops up and down the East coast. The corporate campuses which rose up in the early days of the Great Collapse are no longer Fort Apaches built up to control local resources or protect corporate assets. Some are dwindling as there is no longer a mass “consumer” to profit from. Others, which have managed to secure rapid and secure transportation networks via shipping, air and heavy-lift dirigible thrive and expand, learning to work in a multi-currency and barter world. New currencies have arisen, but most are shunned. After the Great Inflation of 2012, trust in paper money will take decades to rebuild. Local property taxes have been beaten back to allow for small-holders to survive on small plots of land and not be evicted for lack of payment. Local governments have become creative and are allowing payment in kind via hours of service to the community, acceptance of agricultural products at a fixed rate and other creative means of serving their public, not acting as a parasite on it.

Other states, especially those west of the Mississippi were forced by necessity to let the locals devise solutions to their problems. The Second American Revolution was particularly fierce in the Midwest and many major landowners suffered greatly. The vast holdings of the late Ted Turner are still being parceled off as part of the New Frontier program and a lot of former white collar workers are still suffering to learn how to farm and ranch, even with the suite of technological tools and the re-education cadres assigned to assist them.

The Northwest, especially west of the Rockies, is a sea of experimental communities, armed camps and bustling cities. Localized manufacturing has taken off around the world, dampening shipping of manufactured goods to near non-existence. Agricultural products are spurring the rebirth in globalized trade and specialty items are again flowing to Japan, Singapore and the city-states along the Chinese coast. Seattle has rebounded from the early rioting that shook and, along with Vancouver, is serving as a hub of entrepreneurial efforts in North America. Most of these are focused on open-source technology systems to leverage the new wave of local manufacturing operations.

Life is harder for most people, but in many ways, more fulfilling. The “back to the land” movement imposed by most of the state governments has weeded out the weak and incompetent. Former tax accountants and social service administrators are now learning to intensively cultivate the 50 acres deeded to them during the Great Collapse as part of the efforts to cut urban populations in half.

Reclamators are still thriving, harvesting the copper, aluminum, steel and brick from long-abandoned strip malls and office parks. They still come up against armed bands of Greens, who fight to keep vast areas in a “state of nature”. Large battles happen all up and down the Mississippi River valley as river transport has returned to prominence, but the vast network of levees and ditches fell into disrepair during the Collapse and swamplands and cypress forests have reclaimed hundreds of thousands of acres. Much of Memphis, Tennessee, is an urban waterworld, a wet wasteland home to gangs and river pirates that prey on the increasing shipping that plows up and down the Mississippi.

The tech clubs are still important features in communities, though some of the passion has flamed lower since the recovery began. The huge wave of innovation that sprung up during the Revolution and the Collapse is now in the consolidation phase and ability to efficiently manufacture goods locally, as well as to process almost any plant material into edible substances is well-established. With the great corporations broken, the networks of co-ops have stepped in to reclaim America’s reputation as an agricultural and manufacturing powerhouse.

Transportation is still expensive. More and more people live more and more of their lives in a 30 mile radius of their towns. Much focus is still placed on local clubs and service. Local sports teams are beginning to travel again, though the great baseball and football stadiums are still in the hands of local Committees of Public Need and still serve as huge gardens for local produce – vast green bowls of fruits and vegetables that still serve as monuments to the early uprisings against the Man.

Education is widespread and vibrant. The educational system is a tattered shell of the institution it once was. The proliferation of electronic delivery of lectures, of the ability of skilled teachers to build their own content and deliver it to students, of educational forums and online resources have shattered the high school-college model prevalent up until the Great Collapse. Efforts are underway to codify much of this learning and the ossifying efforts of committees to sanction some learning and not others are still strong, though not yet ascendant.

Careers are a thing of the past. Many communities provide large tracts of allotments for local production of food supplies – memories of the Great Famine of 2013 die hard. Local taxes have withered to payment in kind or volunteer service and many people can go weeks without using money to exchange for goods. Much of this is community based and many live in fear of being run out of town – and cut off from the community’s supply of food, medical attention and support. Large areas are still lawless and vagabonds and drifters are not looked upon favorably.

Mercenaries still control the Port of New Orleans, the Port of New York and many of the West Coast ports, extracting taxes to make payments to international bond holders who formed the Gang of Ten back in 2012 to force the U.S. to make good on their treasury obligations. The bombings of the mercenary compounds are few and far between these days and since most don’t worry about foreign commerce, the duties imposed upon good shipped out is just lumped into the general feeling that “they” are still out to get “us,” though the humiliating terms of the Treaty of Dubai are starting to fade a little in the memories of most, though not for former soldiers, sailors, marines and airmen, especially the work crews forced into labor battalions by the U.N. to clean up the radioactive ruins of Tehran.

The empire has fallen. A new day is dawning.

Thoughts?

The country I know best is the U.S., so this “thought experiment” on What Comes Next was focused on the situation in the U.S. For those of you in India, Canada, the U.K., South Africa and the other countries that I get hits from – all I can say is find what applies to your country and take what you can and apply it to your local situation.

This is more of a thought-experiment-in-progress. Please do feel free to point out holes in my assumptions and suggest better alternatives. Many minds make easier lifting of the rubble of the old System that is collapsing on top of us.

11 comments:

Greg B said...

It sounds like it may be a rough decade.

Mentally and physically preparing for a bad YEAR is a manageable task - money can be saved, food can be stored, firewood and seeds can be stocked up on. And the time horizon is short enough that emotionally one can keep saying "It will be better in a X months"

But a DECADE is a whole other story. Too long to hunker in a bunker for, and when you come out of your hideaway it's no longer the same world and you are not prepared to live in it.

So is the best course to live through it day-by-day, to let it reshape you and your habits? I think so. And if one can be prepared to be flexible, can have a few safety nets in place, can be expecting deep changes - then one can have a HUGE advantage.

So the questions are how does someone prepare to be flexible? What sort of safety nets work (and what sorts may entangle you when swift movement is needed)? And what sort of deep changes should we expect?

Thanks Mike for sharing your thoughts on possible deep changes.

David said...

Mike, I offer two observations (neither criticism nor forecast, however):
In the event of a collapse of the size posited, the electronic backbone on which the Internet depends would seem a likely casualty, rendering some microprocessor-based technology into paperweights. The other observation is the tenacity with which people cling to the known, even to the point of still practicing rituals having no lingering value. This suggests to me that much more of the non-value-added aspects of our current existence will perpetuate that may otherwise seem likely. The pieces making up the puzzle of our current life and times will fall off the table one at a time, rather than all at once. To wit: we speak of the dinosaurs dying out in a cataclysm, but in fact it took millions of years from start to finish.

Supercycle wave "a" will take much with it, but the real havoc will likely await supercycle "c" somewhere out beyond 2035 or even 2070. It's difficult to imagine a world war one degree of trend larger than WW II (WW II was a supercycle degree war within a Grand Supercycle rally. As you know, the next one will occur in a GS bear).

Benny said...

I think people tend to underestimate just how crap things can get before the established order loses it's grip. Most people on the planet already live in conditions that would qualify as a vision of the apocalypse to citizens in the West. Even in countries where the vast majority live in poverty and suffer every concievable kind of plague, famine, insecurity etc. you still have functioning governments, enforced property rights, brightly lit enclaves with cocktail bars and financial districts.

I keep on reading these "when the famine hits the government will be forced to sieze land and resettle the unemployed on farms" type of statements. Or they will be forced to legalise drugs or socialise the remaining healthcare facilities. The assumption here is that the authorities are capable of being pragmatic and will disregard property rights and money power in the interests of the majority.
Dream on unless you live somewhere like Scandanavia, Cuba or Moldovia. History shows that wealthy and powerful interests are perfectly capable of cutting the have-nots loose, preserving their claim to the most outrageous luxury even as people literally starve outside the gates. They won't hesitate to use overwhelming force to protect what they see as theirs and while there might be a twinge of concience amoung some of them, most will sleep soundly at night even as millions die.
While the average yuppie/CEO wouldn't last long outside his bubble, they will have the resources to recruit tougher types to guard their walls and secure scarce resources.
"Philosophies" like Objectivism will provide the ideological basis through which they will justify these actions.

Flagg707 said...

@Greg B: Short answer on how to prepare to be flexible? Man, I wish I knew what to say. Learn, be prepared for wild swings in any direction and prepare a variety of safety nets as best we can.

@David: Hmmm, I think you have some very good points there. Have to chew on that. Reminds me of the story in The Age of Arthur - a study of the breakdown of Roman Britain.

@Benny: No question my write-up was on the optimistic side. I can't disagree that ANY philosophy can be warped to serve oppression and that the next decade could see some of the worst overt abuses of the "little people" by "The Powers That Be" since the mid-20th Century. I think there will be years of bad things - especially if you wind up on the losing side of the polarizing climate. That said, I am pinning what few hopes I have on the natural reaction to an age of violence - the desire and ability of the middling classes to establish order, and often a certain amount of freedom - post-conflict.

This doesn't always succeed and the establishment of peace could very well be an attempt at neo-feudalism. But what I think is different now is the change in technology to empower small groups to significant violence. We may have a chaotic future ahead, but I think that enough people will be armed heavily to make it a major breakup/breakdown event instead of a monolithic oppressive fascist government.

One way or the other, we'll see. And we'll see it all too soon...

Benny said...

Just to add on to my thoughts about the ability of the rich and powerfull to hold on to what they have.
Don't picture rugged homesteaders and rural communities banding together to work the land. Picture sharecroppers (or outright slaves) living in barracks and working under armed guard.
Don't picture reduced traffic and people clubbing in for gas to make special journeys, like the monthly farmer's market run. Picture limos escourted by APCs as the only vehicles on the road.
Don't picture a revival of rail travel for the masses. Picture a prison ghetto you can't leave without a permit, while hypersonic 1st class only jets fly overhead.

David said...

Benny nailed it. As an example, the Irish Potato Famine occurred while English landowners continued to export food from Ireland to England. Did the Irish revolt? No, some labored on, some emigrated, and others perished.

Michael writes with a socionomic perspective, which helps us forecast the kinds of social behaviors will occur. We know people will be collectively angry, fearful, and distrustful. What specific events and changes are seen remain unknown. We'll all trip over them as they occur.

It is common and dangerous to forecast too specifically. The changes coming will surprise all of us in their specifics, even those of us who know that big things are coming. History teaches us, however, that people will endure conditions that from an earlier perspective seem impossible.

Flagg707 said...

No disagreement with either of you, really. It COULD get that bad. We are entering a phase of collective mood that will be deeper and uglier than any seen this side of China during their Cultural Revolution.

Yes, enough of the judicial, security and corporate infrastructure could survive to enable the imposition of a "Brazil on steroids" all over North America. I just don't regard that as a foregone conclusion. I don't think the war is lost yet. I think the war has yet to begin and I also think that the High and Mighty will suffer greatly in the coming years - hopefully enough to break the yoke they've shoved down on the neck of my country. Who knows the outcome, but I don't think resignation or despair is the right option to choose just yet.

Benny said...

Well, there's some research out there looking into the angle that depression isn't maladaptive and that it's actually a mechanism through which the brain redirects energy to problem solving. If it didn't shut down the pleasure centres and give you the blues you might run the risk of subtle brain damage. This would explain why depressives are so prone to obsessive thinking and dwelling on percieved problems. If the theory is proven (don't ask me how) getting depressed is probably the healthiest thing to do right now.
That said, the "Brazil on steroids" (catchy title BTW) scenario is definately my bet for the simple reason that it would be appear to be the most common outcome we can see around the world for countries suffering massive economic problems. It makes perfect sense to me. The trend around the world is toward 10-15% rich elite vs. dirt poor remainder anyway thanks to globalisation.
In sudden economic dislocations centralised/established power can be weakened, but chances are that the middle class/poor components of society will be weakened even more.
While I admire John Robb's 4GW ideas very much and read anything I can by him I'm a bit worried that he might be overstating the effectiveness of such tactics against ruthless power.
Whatever you might think of NATO performance in Afstn. vs the Taliban for example, it might pay to keep in mind that the media are watching them. US troops can't exterminate every living thing that moves or implement a total scorched earth policy -not saying your average GI wants to, even if he has been totally brutalised - .
In a collapsed world, fear of causing massive collatoral damage wouldn't be such a constraint.
I wish it wasn't so but there are plenty of Elites in power around the world right now that wouldn't hesitate if they thought they could get away with it.

Adding on to what David said about the potato famine. Pre 20th century the Elites actaully needed the peaseants to work the land for them and produce a surpluss for Elite consumption. The relationship was (mostly) parasitical. In our times the poor are more of a liability/threat than anything else.
If I understand 4GW tactics correctly they depend to a great deal on attrition/death by a 1000 cuts type of strategy as well as blending in with civilian populations. Would they have time to be effective against a sustained systematic genocide?

David said...

Benny, recall Boyd's and Creveld's insight that the moral dimension of war is still the most important. While we can and do speak of "elites," they remain genetically indistinguishably human and only a subset of them are psychopaths. Most simply rationalize away the blood on their hands, just as do Americans today when cheering the flight of the Reaper. All but the psychopaths and inveterate sadists still have limits.

The other point worth making is that it takes a lot of knowledge to support current 1st world living standards. Rub out enough of the educated middle-class worker bees slaving away in Western Civilization and the elites will discover their standard of living can and will decline, too. We owe much to the current finely divided "division-of-labor" economy, and will lose noticeably if (when?) its divisions become more coarse.

I think we'll end up with something between "the simple life" and Maoism. Hopefully a lot closer to the former than the latter, though.

Benny said...

Hmmm, I do very much hope you are correct David.

Perhaps I dwell on that super grim angle because I live in South Africa. Pretty much my whole family was in the Apartheid military. I've spent my entire life listening to my white relatives get smug and cheerfull when they hear about rising infant mortality in the townships and describe things like AIDS as a "gift from God", (99% of Aids sufferers in SA are black). Most whites couldn't give a fuck about non-whites and constantly lobby the government to cut/eliminate welfare, drop trade barriers, labour protection etc. Real income for the majority has fallen 30% since democracy arrived. Life expectancy has dropped 6 years and 5 million jobs have been expported overseas. The finacial sector has grown from 2% of GDP to 21% in the last 15 years. The country was de-industrialising at a rate of 5% per year before the financial crisis. Most "investment" is in property speculation and derivatives.
My relatives can't understand that the corrupt black elites that they moan about are actually their best friends because those vain idiots at least know their bretheren well enough to realise they need to pretend to care about the poor and buy them off with scraps, keep making promises that the miracle will come and SA will become Singapore.
To my relatives it's all just a morality play about lazy, dumb blacks corrupted by marxist ideology. None of them have ever really had to worry about where their next meal is coming from and can't comprehend why illiterate shack dwellers don't just "sort themselves out" and decide to become MBAs or web designers. Every job that goes to china or kid that dies of TB is "what they deserve".
Lots of whites here like to fantasise about just sorting it out once and for all and having a race war - to the finish this time. They are too stupid to realise that they don't control the army anymore and that there are more heavy military weapons in an average sized township than all the whitey gunsafes in the country put together. If there is some kind of collapse of order/Rwanda type situation they would get wiped out in under 10mins.

Personally, my best hope is in fact a Brazil on steroids type situation. My assets amount to a beat up Toyota and a laptop, but in South Africa I am a member of the Elite and there is no way I would be able to "blend in" with the mass if TSHTF.

I certainly don't expect the government in SA to exterminate the poor but harsh oppression is certainly a possibility. The problem is that they are so fucking greedy, even the chairman of the Communist Party (in the ruling coalition) drives the latest AUDI and earns more in week than 90% of blacks earn in a year. They still believe passionately in a fossil fuel intensive, commodity export based economy that has no future and they are spending huge chunks of the budget to build infrastructure to support it (prime example being the 2010 World Cup). Screw food security, renewable energy or schools. We're building $600million stadiums that will get used for 2 weeks. The longer they live with this fantasy the more degraded the population gets and the less chance they have to catch up or make appropriate adaptations to peak oil, climate change etc. Every non-violent avenue for a change in policy that might help remedy the situation has been co-opted by robber-baron style white big business and corrupt black government.
If there is a "snap", I pray the government stays greedy and does whatever it needs to stay in control. It would totally suck for the majority but it's my best chance to get through this.

Blogger said...

eToro is the ultimate forex broker for rookie and pro traders.