The economic path ahead: four or two things to think about for surviving the future

In this post I reflect on the main things I think will be necessary for ‘surviving the future’, to channel David Fleming. The post was prompted by comments under my last one, especially ones by Kathryn, Steve C and Walter. I was going to write my own comment underneath in reply, but I thought it warranted a somewhat lengthier treatment.

At a high level of generality, I’d suggest on the back of those comments that fundamentally people need to attend to four things in navigating the collapse of our present high-energy, stable-climate, urban-industrial edifice:

1. Skills of practical livelihood-making

2. Physical capital

3. Human relationships

4. Media of economic exchange

At an even higher level of generality, I’d suggest these four things become two:

• Things

• Relationships

I’ll elaborate briefly.

Skills of practical livelihood-making, by which I mean the ability to produce food and fire, shirts and shelter, and so on and so on. These skills mostly have to be learned from other people – hence this is basically a relationship thing.

Physical capital – but livelihood-making ability also requires physical capital. In addition to the requisite know-how it typically involves applying human energy (or that of other organisms, or energy of some other kind) to some physical thing to turn it into something more useful. For example, to produce food you usually need access to some land and soil. The land and soil are things, while your access to them depends on human relationships. Energy availability beyond human/organic physical capacity (which themselves are physical thing or forms of capital) will be less in the future than at present, so a lot of rethinking is required here.

Human relationships – their importance in general surely doesn’t require further comment, but I want to expand on a specific aspect that I was driving at when I wrote “existing structures don’t really allow us to focus on the kind of cooperations that we need to figure out”. Kathryn replied “I think soft skills are moderately transferable”. Yes agreed, and learning the soft skills of managing relationships well (which is hard, not soft!) are a vital and underemphasised aspect of surviving the future.

But to elaborate on what I meant by the ‘cooperations we need to figure out’, I find that too much contemporary discourse is dominated by two over-simplifications of modernist politics and one over-simplification of anti-modernist politics. In combination, they block a lot of the thinking and institution-building that we need to put in place to survive the future well, or at all.

The three over-simplifications are (1) versions of communism/collectivism (we need to abolish private property and organise society on collective lines!) (2) versions of individualism (we need to give people free rein to pursue their own interest and let the invisible hand of the market do the co-ordination!) (3) a version of the ‘gift economy’ (we need to give freely without expectation of return and let the invisible hand of people’s inherent goodness do the co-ordination!)

For reasons I’ve discussed often enough before, both (1) and (2) lead to disaster, while attempts to combine them into a middle ground of some kind also lead to disaster by a slightly longer route, which is roughly where we are now.

In relation to (3), I’ve just started re-reading Marcel Mauss’s classic anthropological analysis of gift economies, first published in 1925. Mauss begins by quoting some verses from the Havamal, otherwise known as ‘Sayings of the High One’ from the Norse Poetic Edda. I’ll quote here a few lines from his longer excerpt, using a more recent translation by Carolyne Larrington, which lays things out a bit more clearly:

With weapons and gifts friends should gladden one another, those which can be seen on them;*

mutual givers and receivers are friends for longest,

if the friendship keeps going well

To his friend a man should be a friend

and repay gifts with gifts;

laughter men should accept with laughter

but return deception for a lie.

* [Translator’s note] those which can be seen on them: the sense seems to be that presents which can be shown off by wearing them on the body will be best received¹

Parsing some key words and phrases from this, I’d emphasise ‘mutual givers and receivers’, ‘if it keeps going’, ‘repay’, ‘laughter for laughter: deception for a lie’, and ‘showing off’. Mauss’s summary is as follows: “In Scandinavian civilization, and a good number of others, exchanges and contracts are made in the form of a gift, in theory voluntary, in reality obligatorily given and received”².

I won’t dwell on all this much further right now, but generally I think we need to pay more attention to what gift economies have really been like outside the modern world of collectivism/individualism or communism/capitalism – not a world in which things were usually given with no expectation of return (an illusion that can probably only be sustained within the modern world and its legacies of communism and capitalism), but a world in which things were given with definite expectation of return, albeit often not a return that’s easily intelligible to modern thinking.

Figuring out such gift economies (real gift economies – not ones based on just giving stuff away) in a collapse or post-collapse scenario seems to me of great importance. But it’s hard to do, and I’m not seeing much creative thinking about it finding its way into most current discussions. It would be good to get ahead of the game. We can learn from the past (and present), but only if we abandon the collectivism – individualism – free-gift optic.

Kathryn makes a good point about the importance of local relationships and a kind of situated knowledge about them that can be called upon in times of difficulty. I fully agree this is important. What I’m emphasizing here, though, is a need not just for the somewhat random pros and cons of the various people in our lives, but for structuring the wider flow of relationships and things in local post-collapse communities more systematically. If you need some garden seeds, or if you need a garden, and your friends can’t help you, how will that work?

Media of economic exchange – One way that such structuring works is through the whole array of relationships described by words like economics, markets, exchange, trade, commerce, and money.

Walter writes:

The last time I suggested that people buy silver coins, I got quite a bit of pushback from rigid thinkers who cannot think outside their particular ideology …. If you are serious about “finding light in a dark age” and “the path ahead,” you just might want to ask yourself this question. “How in the hell am I going to do commerce in this new Dark Age?” Airy-fairy nonsense of growing all your food or not using any kind of money are right up there with a world-wide Kumbaya Moment in the Sunlit Uplands. You will need some currency alongside barter.

I agree with that. Guess I’d prefer a more collegial tone, but to be fair I also explicitly invoked the dangers of Kumbaya thinking in Finding Lights, and effectively I did it again in my comments above about gift economies.

Anyway, yes I agree it’s a good idea to think about how commerce can happen in a new Dark Age, and what the media of economic exchange might be. Economics isn’t particularly my thing, but my first blush thinking about this in response to Walter’s comments is as follows:

First, although currency can be a physical thing (e.g. silver, salt, grain, whisky, shells and feathers, to pick a few historical examples) and it’s often a means of effecting action in relation to physical things, at its core it’s all human relationship. In that sense, all currencies are fiat currencies.

Second, and given the preceding, the alternative means of exchange to currency is credit, which is based on reputation – personal or institutional, local or non-local. Sometimes, too much emphasis on currency can undermine reputation, which might be a more important basis for commerce.

So, third, yes bet hedging is a good idea, especially in a situation of an emerging Dark Age. But the nature of the beast is that it’s hard to know in advance what will turn out to be a good bet. Maybe silver coins, or maybe not.

Fourth, accumulating silver coins may be a good bet as an individual strategy. The more people that reach this conclusion, the higher the price of silver coins, and the less promising for many people will be the calculation on the napkin that Walter mentions. What then matters is reputation, which may or may not turn out to be strongly proportionate to one’s holdings in silver or whatever one’s other bets are. Walter’s remark about the bandit as fool in the Seven Samurai is relevant to this. So are the associations in various political cosmologies (e.g. European and Indian) between the king, the fool and the bandit as different versions of the same political personality.

Fifth, the amount of economic action that can be sustained through bullion is far less than is sustained through credit in the existing global economy. That’s not something to worry about overly in an emerging Dark Age situation of precipitous economic contraction, but perhaps it concentrates the mind on what matters most in this situation: the rapidly changing and unpredictable nature of human relationships and reputation, more than any particular punt on how to objectify human relationships into a specific means of exchange like silver.

Sixth, bullion currencies are creatures of centralized states and scarcely exist without them. John Tutino argues in his interesting book The Mexican Heartland that the modern capitalist world system was principally forged in the silver mines of sixteenth century Mexico, with a dual flow of silver first from Mexico to Spain and thence Europe and its peripheries more widely, and second likewise from Mexico to China. It seems to me easier to understand the importance of bullion in an expanding global economy of strengthening state actors than in a contracting one of weakening state actors.

Seventh, it may nevertheless be that in a coming world of regional strife differing currencies are settled in gold among the BRICS nations. Or it may not. Whatever the case, it seems likely there will be states for a long time to come trying to orchestrate their national economies in respect of each other. And there will be individual people, families and households trying to orchestrate their much more circumscribed economies in respect of each other too, as well as in respect of wider state action. The two levels are different, and I suspect increasingly so in an emerging Dark Age situation. How bullion will operate at each level is beyond my ken. My guess is that, as in the past, most of the bullion will be in the hands of very few actors, and it will probably give them a lot of power. But how much power in relation to those without, and how power will manifest and be objectified among those without seems to me hard to say.

Eighth, in summary I think Walter is right to emphasise the wisdom of bet hedging. Buying silver is one way to do that. I think it’s also wise to hedge any bet one makes on silver.

References

1. Carolyne Larrington (ed). 2014. The Poetic Edda. Oxford University Press, p.18 and p.285.

2. Marcel Mauss. 1925 (2016). The Gift. Hau Books, p.57.