The retrofit economy
I’ve suggested several times in these essays that the broad shape of the most likely future facing industrial society, at the end of the age of cheap abundant energy, can be sorted out very roughly into three phases: the age of scarcity industrialism, the age of salvage societies, and – if we are lucky – the ecotechnic age, when new societies based on sustainable high technology will rise on the ruins of our own unsustainable time. For a variety of reasons, any typology of this sort is easy to misunderstand, and it seems worthwhile just now to clarify what I intend to say, and what I don’t, in proposing this model of the future.
The most important point that needs making, it seems to me, is that these three phases are to some extent ideal types, and the forms they take on the ground of actual history will be far more complex, messy, and idiosyncratic than the simple outline suggests. This isn’t simply a result of the fact that none of these phases have arrived yet. The same thing can be said, after all, of the use of economic phases to talk about history that’s already happened.
When a historian suggests that England embraced a mercantilist economic system in the sixteenth century, for instance, she does not mean that the English economy shifted gears all at once on January 1, 1501. Nor does she mean that the English economy in that century lacked important features of the older feudal-agrarian economy or foreshadowings of the capitalist economy that replaced mercantilism later on, nor that the English mercantilist economy was identical to all others. Rather, she means that the traits implied by the term “mercantilism” – an export-based economy geared toward generating a favorable balance of trade with competing nations, foreign policy initiatives pursuing overseas colonies and the expansion of naval power and a merchant marine, and the like – provide a workable sketch of the shape toward which the English economy moved over the course of the century in question.
The same rule applies to the phases I’ve outlined here. The transition from today’s industrialism of abundance to the scarcity industrialism of the near future, for example, will likely be just as slow and ragged a process as the rise of mercantilism. Some nations – Russia, for example – have already implemented the political control of resource markets that I’ve suggested as a core feature of the phase; other nations have barely begun to move in that direction, and other features of the phase are just as unevenly distributed. For that matter, the 1950s-era American autos cruising down the streets of Havana today, repeatedly rebuilt with scavenged and jerry-built parts, show certain core features of the salvage economy already in existence in some parts of the world right now.
Thus the world of a hundred years from now, say, will include nations at many different points along the scale. It will very likely be dominated by nations that have embraced scarcity industrialism, while the powers of today’s age of abundance will be the fallen empires and failed states of that day. Meanwhile, those nations that draw the short straws in the geopolitical lottery may already be well into the salvage society phase, mining the refuse of the industrial age to meet local needs and to pay for whatever foreign trade can still be had. Nations that lack both fossil fuels and valuable salvage, in turn, will either have fallen back to agrarian or nomadic economies or, given plenty of luck and the necessary knowledge base, may be pioneering the first rough sketch of an ecotechnic society. All of this will take place amid the turmoil of ordinary history: that unending and uneven rhythm of crises, struggles, and the rise and fall of governments and peoples whose embarrassingly premature obituary Francis Fukuyama wrote a few years back, and which tends to hide the slower and broader shifts in economy and subsistence from contemporary eyes.
Fast forward another century, when Hubbert’s curve will have finished its trajectory and fossil fuels will be rare geological specimens, and the powers of the age of scarcity industrialism will most likely have collapsed in their turn. Those areas with a wealth of salvageable scrap and the political and military savvy to hold onto them will be the regional powers of a world in which global reach no longer exists, while other areas – the modern conception of the nation-state will probably have fallen into history’s recycling bin by then, to be replaced by some other form of geopolitical arrangement – will have only sustainable resources to rely on; some of those will likely have settled into some nonindustrial mode for the long term, while others may be building on the first tentative foundations of an ecotechnic system. All these changes, once again, will take their shape amid the rough and tumble of historical events, and may be difficult to track against that wildly variable background.
One implication of this vision is that appropriate steps for the present and the near future are not limited to those that have some obvious relationship to the scarcity industrialism of the near future. If, unlikely as it seems, any of my readers belong to the political, economic, or military leadership of one of the world’s leading or rising powers, their attention will be, and indeed should be, riveted to the coming of scarcity industrialism; the nations they lead, not to mention their own positions of influence and privilege, depend utterly on how well they are able to manage that difficult transition. For the rest of us, though, a broader focus and a less limited toolkit has many advantages. The end of the age of abundance industrialism means the end of the trickle-down economy that provided so many economic benefits to the middle classes and raised the industrial world’s working classes out of abject poverty. To some extent, while the political classes will be entering a new industrial order, those outside that circle may just find themselves passing directly into the world of Dark Age salvage societies. What this implies, in turn, is that the skills and habits of the age of salvage may be well worth cultivating right now.
One obvious example unfolds from the implications of the sprawling speculative subdivisions that surround so many American cities just now, in the aftermath of the late housing bubble. For decades now, people interested in sustainable housing have focused their attention on innovative methods of new house construction: cobb and adobe, straw bale, and many more. These are useful and in some cases brilliantly successful technologies, but their application to our present predicament is limited by one overarching factor: here in America, at least, we already have many more houses than we need or can afford, and the economic system we use to pay for new houses is so badly broken just now that it may take a generation or more to get a new one up and running.
That being the case, the dream of sustainable Levittowns of cobb-built, earth-sheltered, solar-heated houses will remain out of reach for a good long time. The possibilities before us are more limited. We can either struggle on with the hopelessly inefficient housing stock we have now in its current state, or we can learn how to rework our existing homes to improve their energy efficiency: that is, we can learn to retrofit.
The word “retrofit” was coined in the 1950s, but its common use is one of the legacies of the energy crises of the 1970s. During those years, a great many homeowners discovered that houses built to take advantage of cheap energy lost most of their advantages when energy stopped being cheap. At the same time, the soaring interest rates and stagflation of that decade made buying a new home a good deal less economically viable than it had been during the preceding years. Many people responded by figuring out cheap, effective ways to improve the energy efficiency of their existing homes. Insulating blankets found their way around hot water heaters, caulk guns traced lines around leaky foundation plates, insulated Roman blinds replaced fashionable curtains, and a surprising number of people discovered that it really is just as comfortable to put on a cardigan as it is to turn up the thermostat on a cold evening.
One of the less noticed phenomena of these same years, in turn, was the emergence of home energy retrofitting as a viable economic sector. In every American city and a great many smaller towns, contractors no longer able to find work building houses found a new niche installing insulation, storm windows, and solar water heaters, while hardware stores found room for a new section of home energy efficiency supplies. It was never a large sector, and its growth came to a sudden stop in the early 1980s in the flurry of political machinations that crashed the price of oil and threw away our best chance for a transition to sustainability, but it was one of the few success stories at a time when most American industries were contracting and most families’ standard of living was slipping year after year.
Many of those same conditions are repeating themselves on a much larger scale as the world stumbles across the uneven plateau on top of Hubbert’s peak. Despite the recent volatility in the futures markets, oil remains far more expensive than it was a year ago; one step down for every two steps upward still amounts to steady upward movement. The approaching Great Recession promises to make the stagflation of the Seventies look mild, but to American families it still poses the same challenge of having to get by with less. Thus it’s tolerably likely that the same sort of retrofit economy will emerge in the next few years, as those homeowners who stayed clear of the blandishments of fast-talking mortgage salesmen, and keep their homes, find that they have no choice but to make the best of the homes they have.
The same considerations apply to other sectors of the economy. The auto industry is facing a similar transition, for example, as mechanics and hobbyists across the country turn used cooking oil into biodiesel, convert hybrid cars into plug-in vehicles, and equip bicycles and scooters with electric motors and batteries. Detroit’s much-ballyhooed electric cars, when they finally get around to appearing on the market, are likely to find themselves eating the dust of thousands of ingenious retrofitters who, unburdened with the institutional inertia of Fortune 500 corporations, are getting products to local markets right now. These retrofits won’t allow what James Howard Kunstler has usefully labeled “the paradise of happy motoring” to continue; on the other hand, they may well enable a great many Americans to deal with the downside of a social geography designed for cars rather than people, during the inevitable lag time while that social geography becomes a bad memory.
A great many more dimensions of American life are likely to need retrofitting in the years to come; nearly every aspect of our economy, culture, and politics depends on cheap abundant energy and will have to be rebuilt to deal with the new reality of energy scarcity. That will apply to little things – for example, plenty of home appliances now controlled by computer chips can be made to work with thermostats, spring-driven timers, and the like, given a little ingenuity and a willingness to tinker – and to much bigger ones as well. In a very real sense, given the sharp limits we face in the near future, our entire lives will need to be retrofitted to deal with the realities so many of us have been trying to avoid for so long. The first job of this foreshadowing of the salvage economy, in other words, will be to haul a viable future out of the scrap heap of the present, and get it back into some semblance of working order while there’s still time to do so.