Skip to Content.
Sympa Menu

livingontheland - [Livingontheland] Imagining The Post-Industrial Economy

livingontheland@lists.ibiblio.org

Subject: Healthy soil and sustainable growing

List archive

Chronological Thread  
  • From: "Tradingpost" <tradingpost@lobo.net>
  • To: livingontheland@lists.ibiblio.org, OWL-OldWaysLiving@yahoogroups.com
  • Subject: [Livingontheland] Imagining The Post-Industrial Economy
  • Date: Mon, 14 Nov 2011 21:35:43 -0700


Imagining The Post-Industrial Economy - the unprepared, there’s a whole lot
of people kidding themselves
By Sharon Astyk 14 November, 2011
http://www.countercurrents.org/astyk141111.htm

Here is the single biggest question to consider about the economic, energy
and environmental unwinding we are facing – what will the economy look as we
go? I get more questions about this than about anything else – what should
people do for work, what should they do with savings, how should they begin
to prepare themselves for a lower energy world. What I find, however, is that
among both the prepared and the unprepared, there’s a whole lot of people
kidding themselves. There are those who imagine that there is no economy
outside the world of the stock market and formal jobs – that a crash in those
things is the end of the world, which means to them either that it can’t
happen or they should buy a bunker and some ammo. Others have imagined
themselves “free’ of all economic structures larger than the neighborhood,
cheerfully providing most of their needs or bartering and never again
touching cash. Both ideas fall into the realm of fantasy.

Let us remind ourselves that the informal economy is, in fact, the larger
part of the world’s total economy. When you add in the domestic and household
economy of the world’s households, the subsistence economy, the barter
economy, the volunteer economy, the “under the table” economy, the criminal
economy and a few other smaller players, you get something that adds up to
3/4 of the world’s total economic activity. The formal economy – the
territory of professional and paid work, of tax statements and GDP – is only
1/4 of the world’s total economic activity.

We know from peasant economist Teodor Shanin and others working in the field
that when the formal economy fails people all over the world, they shift into
the informal economy. This explains why, in the former Soviet Union, although
conventional economic models showed that people “should” be starving to
death, they weren’t. This is how people with functionally no income can still
eat – although often not well.

The US has the smallest informal economy in the world as a percentage of
economic activity, but is also one of the single largest informal economies
in the world. Even here, as we all know, it is not at all uncommon to shift
into the informal economy when cast out of the formal one – bartering with
neighbors, doing under-the-table work, or returning to the domestic and
household economy if someone else can provide economic means.

It stands to reason, then, that for many of us thrust out of the formal
economy, or for those who cannot make ends meet in the formal economy,
strengthening the informal economy is essential. We see this all over the
world, in our own nation at present and historically. When times are hard,
gardens flourish, criminalized enterprises spring up, black markets and
barter get new life, people sell out of their homes and work intermittently.

We tend, however, to have an oversimplified view of the informal economy –
oversimplified in several senses. In some cases, we don’t even know it is
there – for example, the “housewifization” of subsistence and domestic labor
mean that we essential overlook and don’t consider the merits of those
forces. In other cases, we underestimate its capacity for support – assuming
that no one can get by on odd jobs or under the table work. In still others,
we diminish its utility without really understanding it.

This is in part due to the fact that the economic stories we tell are
oversimplified – consider, for example, the narrative a basic economics text
will offer about barter. The claim is that barter is unwieldy, and was
enthusiastically abandoned just as soon as someone figured out how to use
cash money. In fact, that’s not the case – barter has had a role in most
economies through most of history, and very complex barter systems have
worked extremely successfully, with clear valuations of goods and services
and complex and successful means of exchange. Consider, for example,.this
account from a Connecticut Tailor’s 18th century ledger of the goods he took
in barter for his labor:

Talcott took credits in food (some wheat, pork and beef, many bushels of
indian corn, pecks of beans and pounds of salmon, molasses and salt) and
beverages (rum and brandy), labor (plowing, sledding, driving animals,
cutting wood, dressing flax, roping onions, carting wood and dung, fence
work, painting, making a coffin and digging a grave, and the unspecified work
of men, boys and teams of oxen), transportation (ferriage across the
Connecticut River and use of other people’s vehicles and horses), farm
supplies, (apple trees, hooks, boards, nails, seeds, hog rings and
pasturage), repairs (harness mending, cooperage, fixing a chimney, bottoming
chairs), specialized services (sheathing a bayonet, hairdressing and cutting,
butchering, blacksmithing, taking inventory and distributing an estate,
drawing a tooth, “bleeding Mrs. Talcott,” building shelves in the tailor
shop, crowning chairs, making a ferrule for a walking stick, grinding corn
and replacing the handle on a pint cup, altering a gunlock, mending a
porringer, setting a razor, rimming and bailing a skillet…” – Our Own Snug
Fireside by Jane Nylander (pp164-165)

The account goes on for another two paragraphs, listing household goods
bartered, tailoring supplies provided and ending with the description of a
coat made for the payment of one puppy, two rolls of thread and nine
shillings cash. It is the clear from Asa Talcott’s accounts that a complex
barter economy existed in his area, because some of the items are exchanged
with others for further barter. It is also clear that while barter is often
used as a substitute for cash by those who have little, it is also preferred
to cash in many cases. Looking over other 18th and 19th century American
account books, there clearly is a perception that one often gets more from
barter than from cash.

Having lived at least partly in the barter economy myself for many years,
that matches up with my own experiences. Because valuations in barter are
imprecise, both parties have a strong wish not to appear to be shorting the
other. In some ways barter economies emphasize not paying the lowest possible
price, but a higher one, rather like those cultures in which prices are set
artificially low and one bargains upwards, rather than down. Barter can also
be a useful way of removing that which is extraneous and replacing it with
that which is useful, ie, “I have baby clothes, you have fresh peas, I get
rid of my baby clothes which I no longer need and get food, which I do need
to feed the growing kids…” Cash has the annoying quality of being something
none of us usually feel all that desperate to get rid of.

At the same time, what one sees from barter economies is that everyone is
able to come to pretty clear expectations and valuations of things – that is,
one knows what a hat is worth compared to eggs or sewing, in much the same
way that I can appoximate a fair cash price for my lamb or garden plants. The
underlying calculations are much the same – they require a knowledge of
marketplace and a participation in the economy as a whole.

Barter is not the only economic activity generally under-rated by
conventional analyses that emphasize only formal economy activity. The same
is true of subsistence activity – one often hears something like “Why garden?
Food doesn’t cost that much anyway?” And taken alone, many things look very
inexpensive – one’s electric bill or one’s grocery bill look wholly
manageable in those terms. Manifestly, however, when economic times get hard,
food pantries and electrical shut-offs demonstrate that it is not the size of
the expense but the number of financial claims upon a person’s income that
really matter.

Things fall by the wayside, and that garden, whose total economic output
seemed small makes an enormous difference. In urban Tanzania, for example, we
know that poor families that garden have the nutritional status of
middle-class families and their children do significantly better in school.
In the US rural south, among the elderly, household gardens make a
significant difference in both health and wellbeing and economic security –
elders with gardens are three times less likely to go hungry during the
course of a month.

When we under-rate or oversimplify the informal economy, we do ourselves a
disservice, because we miss its centrality to our future. Moreover, we also
do a similar disservice to ourselves when we imagine that our future exists
entirely within the informal economy. The formal and informal economies are
intertwined everywhere in the world – money drug dealers make in the criminal
economy gets spent at Target, money made on Wall Street pays for illegal
immigrants to care for the stockbroker’s child. Under the table guitar
playing or cab driving buys groceries and gas. Homegrown vegetables fuel
labor at formal economy jobs. Volunteers make formal economy institutions
like museums viable. Illegally scavenged or stolen construction equipment
gets used in industrial building. Spouses edit and proofread professional
writer’s work. In every regard, the two economies intersect and are one.

I suspect as much as we underrate the informal economy, its size, importance
and persistence, we also underrate the persistence of the formal economy. I
know some people who anticipate an eventual economy that returns entirely to
subsistence, barter and domesticity – but that’s not a likely near-term
outcome. The vision of a world in which you will not need any money, in which
all debts will disappear, in which no one will invest or have to worry about
retirement savings is probably an unlikely one – even if some debts are wiped
out and so are some retirement savings..

We know, for example, that pre-industrial, pre-fossil fueled societies often
had quite complex formal economic systems. While some people may have
participated very little in those systems, they have always existed. The
formal economic system of feudalism, for example, which required carefully
calculated payment in labor, rather than cash, was largely unavoidable for
most people. Reading a diary by a 18th century middle-class Jewish woman in
Germany involves long discussions of letters of credit, banking arrangements
and payments on debt. An understanding of the legal and economic complexities
of a rural village in 17th century Germany would require extensive study, and
involve many familiar formal economy concepts like mortgages, lawyers and
survey boundaries.

American history has taken on as its past icon Laura Ingalls Wilder and her
family who make and build everything of their own, and seem largely
self-sufficient, but it is worth noting both that the narratives that Wilder
wrote work explicitly to conceal some of the inter-dependence of the Ingalls
family (Pa Ingalls, living in the isolated Big Woods was on the local school
board, a school Mary and Laura attended), and that even in the fictionalized
version of Laura’s life, they still depended consistently on stores for salt
pork, cornmeal, shoes, fabric etc…

Moreover, the pioneer life that we imagine as the American historical norm
was really mostly a characteristic of periods of expansion into new
territories – when first settling the colonies or moving westward, Americans
could, indeed, expect to find themselves with little governance, a largely
cashless economy and enormous pressure towards self-sufficiency. Once areas
became settled, however, almost the first institutions to arise were banks
and complex formal economies, debt structures and legal conflicts. Those who
dream of a simpler time are probably kidding themselves.

That does not undermine the merit of a strong informal economy, or of
subsistence, domestic and barter activities within that economy. Consider the
common model of work in 17th and 18th century New England. A tailor like Asa
Talcott, or a cooper, or a teacher like my great-grandfather Edmund White
would also be a farmer in rural areas. Because the economy was localized,
instead of specializing, Talcott farmed during the growing season, sewing
little then, and did the bulk of his sewing work during the winter. The same
would be true of a schoolteacher’s schedule. Rather than specializing as one
did in urban areas, local economies might not be able to afford a full-time
tailor or cooper or teacher – but they could afford a part-time one, and
everyone was better for not putting all eggs in one basket. This had its
inconveniences – if you wanted a barrel made, you might have to wait until
the harvest was over. At the same time, it enabled the formal economy to
partly support those who needed it with enough cash for cash-necessary
activities like paying taxes or debts, and enough barter goods and
self-provided foodstuffs and clothing to keep a whole host of needs entirely
out of the area of the cash economy.

What we do know from pre-fossil fuel eras is that the informal economy, when
strengthened, can strengthen the larger economy as a whole – allowing the
formal economy to support more people in the things that truly require formal
economy tools like currency. We know that people who did know about debt and
currency often found enormous value in informal economy structures – just as
we find value in Craigslist, Freecycle and Ebay to support many of our own
informal economy ventures. We know that before industrialization, a complex
mix of economic activities supported most people – that few people relied
solely on one kind of job or industry.

Thus we can begin to imagine the Post-industrial economy as a kind of hybrid
– just as our industrial economy is a hybrid, but one with different
emphases. It will not consist entirely of exchanges of eggs and vegetables,
nor will it consist entirely of people whose whole economic activity exists
in the realm of a single job for which they are trained and on which they are
wholly dependent. Instead, it may involve a complex mix of formal economy
work to meet formal economy obligations, subsistence labor to provide for
things unaffordable in the new economy, domestic labor to reduce expenses and
provide excess of some material for sale, barter with neighbors for a complex
mix of needs as yet unmet, and perhaps forays into the areas of money work
not legitimized by society as a whole in the criminal or under-the-table
economy.

Debt and markets will continue to exist (which does not mean that some debt
and some markets may not be wiped out or eliminated). Human beings will still
have the habit of making complex their economic transactions. They will also
continue to have the habit of clarifying them, of getting what they need
directly from one another without involving the taxman or middlemen. The
economy may occasionally or frequently descend into chaos without clear lines
of demarcation between obligations that must be upheld and those that can
freely be ignored – but in between those periods, the human habit of economic
organization will continue, and will require investment for most of us in
both formal and informal economies.

Having some kind of realistic picture of an emergent economy on an energy
downslope, of the cusp of a crisis is really important. We have the bad habit
of imagining large chunks of the economy out of existence to suit our own
needs – but we are best informed by as clear a picture as possible.

Be Sociable, Share!

Sharon Astyk is a science writer, teacher, environmental activist and small
farmer who is trying to put her lifestyle where her mouth is, and live in a
way with a future. When not writing books, serving on the board of the
Association for the Study of Peak Oil and Gas, she is running her farm with
her husband, where they raise dairy goats, herbs, pastured poultry, heirloom
vegetable plants, children and havoc




  • [Livingontheland] Imagining The Post-Industrial Economy, Tradingpost, 11/14/2011

Archive powered by MHonArc 2.6.24.

Top of Page