Keeping local communities alive
As energy becomes harder and more expensive to produce, societies will increasingly become unable to afford its usage. The cheap energy upon which modern societies were built will become a thing if the past and only the highest return, and most essential, uses will be able to consume the increasingly expensive energy. In addition, as climate change becomes impossible to ignore, legislative controls may become a major factor in limiting the usage of fossil fuels. Given the significant reductions required in greenhouse gas emissions to have a chance of limiting climate change, more than 5% per year even if started immediately, such controls may have major impacts on our fossil-fuel dependent societies.
The financial system will also be badly impacted by the bankruptcy of myriads of companies whose business is the extraction of fossil fuels, supplies of cheap fuel for the manufacturing and delivery of products and services, and customers that can only arrive by car. The Carbon Tracker organization has estimated that only 20% of the public and private proven fossil fuel reserves can be utilized to have a reasonable chance of keeping climate change within is a 2 degrees centigrade temperature increase1, a level which an increasing amount of scientists are concluding is not a safe level. The impact of limitations on fossil fuel use, either through depletion or legislative controls, will wipe US$trillions of worth from fossil fuel extractions and fossil fuel dependent organizations. The reduction in income will also greatly impact the ability of such organizations, along with fossil fuel revenue dependent governments, to service their debts. The overall reduction in economic growth will also impact all parts of the economy as assumed revenue and profit growth rates are pared back. The resulting damaged financial system will result in less credit available to fund exports and working capital, and less of the other complex products global companies rely upon. The chaotic behavior of exchange and interest rates will also play havoc with the ability of global organizations to manage risk across multiple currency and interest rate areas. This will intensify the destruction of global supply chains, as managing highly complex global organizations and production networks, becomes more and more difficult. The climates chaotic journey to a new equilibrium will only add to such issues.
As with other times of constrained energy supplies, such as the United Kingdom during World War 2 or the United States during the 1970′s oil crisis, rationing may also become a reality. Such things as emergency services, food production, and the military will be the priority, with what is left being equitably rationed across the rest of society. Rationing by price would create huge social tensions against the wealthy, something that was well understood by the elites in those previous times. Extravagant consumption in the face of general reductions in living standards may become a dangerous activity requiring extensive amounts of personal protection. A brick through the windscreen of a speeding car will have the same effect upon the driver whether they are driving a Ford or a Lamborghini.
The result will be a shrinking of the horizons of our personal experiences and the distances from which goods and services can be delivered to us. Supply chains will shrink as it becomes uneconomic to ship goods over long distances, and increasingly expensive to travel between distant locations. For goods, the first to be impacted will be those with a low ratio of value to weight, where transport costs form a meaningful part of the cost of the good, and those that have to travel long distances from the producer and the consumer. Cheap goods from faraway places may become just a fond memory. The greatest challenge will be to replace the imported food that so many countries now rely upon to feed their populations. Cheap getaways to the Caribbean and other remote locations will also fade into the past, as air travel returns to the domain of the richer members of society. Vacations will be spent much closer to home, with places such as Coney Island in New York City, and Brighton on the English south coast once again becoming desired cheap vacation destinations.
It will become a necessity to rebuild the local providers of goods and services that were destroyed in the past few decades of globalization. The global capitalist system is incredibly efficient at pulling wealth towards its centres of power while distributing the costs (bank bailouts, soiled ecosystems, debt servitude for the young) across all of society. The end result has been the hollowing out of local communities as large corporations move production to the cheapest parts of the globe that they can find. Even the local arts and culture are affected, as the monies spent on mass produced media offerings, such as television programs, movies, and well known musicians, is removed from the local community. If we do not stop and reverse this continual replacement of local providers with globalized ones we may have mere shadows of working communities to fall back upon as the energy and climate crises intensify. Unfortunately “our” governments seem hell-bent on accelerating the globalization process, with new trade agreements being negotiated which include severe limits on the ability of even local governments to support local providers through purchasing rules and financial support. This is a direct attack on the democratic right of communities to utilize their governments to support the health and resilience of their local communities. Instead global private corporations will be able to force local communities to support the ongoing hollowing out of their communities while enriching the corporate elite and large shareholders, an example being the forcing of government of Ontario, Canada, to remove local content rules for renewable energy providers2. Resilience and free trade agreements (a misnomer anyway as they are really agreements to increase private power at the expense of democratic control) are incompatible. Governments must be free to favour local producers and communities so as to increase their ability to deal with the challenges to come.
With governments increasingly hamstrung in their ability to support the health of the local community, our actions as individual consumers and investors become even more important. It would of course be preferable for governments to be driving re-localization efforts, but we cannot wait for the sea-change in attitudes and beliefs required to have them turn away from supporting the globalized providers. In the interim individuals and families must use their own spending to favor locally owned providers as much as is possible. If we do not take the steps to help our local communities and remove power from the behemoths that suck the life out of them, those communities will not be there when we need them. As we go about our everyday lives there are many decisions we can make to remove ourselves from the doomed global system and reinvigorate the local community. These decisions may mean that we have less “things” and will be perhaps a little less “cool”, but will greatly increase the links that we have with our local community and the overall health of that community. In some cases we may even save money.
On a very wintry Sunday evening in Toronto, Canada, I went to a “poetry jam” where people sign up to deliver their poetry on stage with a set of judges scoring them. It was a very enjoyable evening, with an outstanding amount of creativity, honesty, and variety. One of the poets even proposed to his girlfriend at the conclusion of his poem. It cost five dollars to get in plus the cost of a couple of drinks, for one of the more enjoyable evenings I have spent recently. This is genuine, authentic, entertainment with words that are resonant, and many times, touching. Not the manufactured pulp that I may pay $100+ to see with one of the famous acts. Even watching a movie would cost me more. Additionally of course, the money I spent at the poetry jam will mostly stay in my local community, not be sucked away to enrich some entertainment conglomerate together with the famous actors, songwriters, and singers. My New Year commitment is to spend much more of my entertainment budget on local entertainment. An added bonus is that I will probably even save money given the price-gouging habits of the media companies and famous acts.
I recently spent a couple of days working with a group looking at how to keep investment dollars within local communities, in this case Nova Scotia in Canada. As one person put it, “our RRSP <tax sheltered retirement investment vehicle in Canada> money leaves for Toronto and our children follow”. A local investment fund run by some of the local credit unions has a phenomenally low loan loss history and has helped many, many local enterprises to establish themselves and grow. We have been taught by our government and financial institutions to segment ourselves into consumers, workers, citizens, investors and not to connect those parts of ourselves when making decisions. It may be our own investment dollars that are being used to offshore jobs and drive local companies out of business. Those investment dollars may grow but the chance of a local job for us or our families may be reduced and the health of our local communities damaged. We need to reintegrate our roles and make integrated, holistic judgements. Walmart may make things cheaper for us as consumers, as long as you don’t count the tax funded benefits supporting the Walmart working poor, but destroys the local stores and industrial concerns that provide jobs. Also, as the Nova Scotian’s have found out, bribing big companies to create local jobs is a con game as those companies are highly efficient at milking every last dollar of subsidy before moving on to create “jobs” at the next easy mark. Better to keep the money working at home supporting local organizations that help build community depth and resilience.
How about buying less, but stuff that will actually last rather than fall apart? My family needed to buy a bed and we agreed that we wanted to buy local if possible, Canadian wood and Canadian manufacturing. It took us a while but we found the right place. The money stayed with Canada, and no greenhouse gases had to be used to ship the wood across the ocean for manufacturing just to send it back again to Canada. Yes, we may be better off than most but there are always possibilities if you put your mind to it. Also, things may be more expensive but why not have less, better made stuff than all the throw-away crap. When I moved out of a house into a condo a few years ago I was shocked at all the crap I had accumulated in only a few years, much of which had hardly, or never, been used.
Buying food locally will become critically important as transport costs escalate and climate change causes havoc to the vast areas of mono-cropped industrial agriculture. Whether its your local organic food coop (not behemoths like Whole Foods!), produce delivered from local farms, or a farmers market, they all help build the strength and resilience of local food production. If you are really serious and committed you can grow some of your own food, the way the majority of humanity did until only fifty years ago. Even in heavily populated Britain there were 1.5 million allotment gardens used to grow food in 1943, and these provided a very important share of the food supply during World War Two. Since then the number has dwindled to about 330,0003. For many, the advent of cheap mass-produced food made growing one’s own unappealing. As that cheap food rises in price or even becomes unavailable the knowledge gained from working those allotments will be invaluable.
Unless you work for a privately-owned bank there is no reason for you to deal with them. Instead, you can use a credit union which offers most, if not all, of the products you need. Credit unions are owned by their depositors, and thus no part of the earnings is taken up by far away shareholders. Credit unions also tend not to be involved in the most esoteric and riskiest areas of the banking industry, making them less exposed to events outside the communities that they serve. This relative safety was in evidence during the 2008/2009 financial crisis, with the credit unions not requiring the huge bailouts that the banks and other financial institutions did. It was truly a shame that the crisis was not used as an opportunity to break up the large banks into smaller, mutually-owned, entities. In the past couple of decades the opposite has been occurring, with the demutualization of building societies in the United Kingdom and insurance companies such as Manulife in Canada.
As we travel through the economic and social impacts of increasingly expensive energy, food and basic resources, as well as the impact of client change it will become more and more important to keep local money within the local economy, rather than having it sucked up and centralized by huge conglomerates for the purpose of enriching the already wealthy and powerful. Over time the ability of large corporations to operate across wide geographic areas will become more and more difficult, but by the time they release their death-grip upon local communities there may be nothing left to build upon. With our everyday decisions we must remember that the health of our local community is not free, and if we do not help to sustain and grow it there may be no local community left worth saving when we will need it most.
1. n/a (2013), Unburnable Carbon 2013: Wasted capital and stranded assets, Carbon Tracker Initiative & Grantham Research Institute. Accessed at http://carbontracker.live.kiln.it/Unburnable-Carbon-2-Web-Version.pdf
2. n/a (2013), Ontario to change green energy law after WTO ruling, The Globe and Mail. Accessed at http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/ontario-to-change-green-energy-law-after-wto-ruling/article12236781/
3. n/a (2013), Brief history of allotments, The National Allotment Society. Accessed at http://www.nsalg.org.uk/allotment-info/brief-history-of-allotments/
Photo credit: The National Allotment Society.
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