Readers ask for specific recommendations for successfully navigating the post-credit/speculative-bubble era and I try to do so while explaining the impossibility of the task.
As the bogus prosperity economy built on exponential growth of debt implodes, we all seek ways to protect ourselves, our families and our worldly assets. There are any number of websites, subscription services and books which offer two basic "practical recommendations:"
1. Buy gold (and/or silver) and don't worry about timing the market as everything else will become worthless.
2. Establish a heavily armed and well-supplied hideaway before everything implodes.
My problem with these suggestions is that they are predicated on a decisive "end of the world as we know it" collapse of civilization.
While I am alive to the possibility of this cataclysm, an analysis of the many feedback loops which will slow or counteract such a decisive collapse suggests other alternatives are even more likely: my term for the slow, uneven decline of the credit/speculative-bubble era is devolution.
I cover feedback loops, historical cycles and why a lengthy devolution is as least as likely a scenario as abrupt collapse in my book Survival+
(free downloadable version is linked below).
In other words, I do not see planning for eventualities as "either/or." I look at it in terms of three levels:
1. Plan A: dealing with devolution: government services are cut back, prices for essentials rise over time, fulltime paid jobs become scarce, the State (all levels of government) becomes increasingly repressive as it pursues "theft by other means," i.e. the stripmining of private assets to feed its own fiefdoms and Elites; most assets fall in purchasing power (value) as the system's financial props erode.
2. Plan B: When things become rationed/unavailable, services become sporadic, pensions stop being paid in full, spontaneous homeless encampments arise in heretofore "nice" areas, cities go bankrupt, small businesses go underground to survive the ever-higher taxes being levied on the few remaining productive enterprises, etc.
Plan C: if things fall apart: either move to communities where you or your family have roots (tough luck for all the millions of rootless Americans shifted around by corporate "relocations" the past 50 years) or turn to your neighborhood, town, friends, family, church and other social networks for cooperative strength.
The problem with putting all your resources into a "bug-out" strategy (Plan C) is that it might not come to pass, in which case you've misallocated your assets.
This is why I focus Survival+ on structuring a prosperity which will work on all levels.
This prosperity has five basic parts:
1. Prepare for hybrid work by developing multiple skillsets, interests and contacts and understand that being productive and reciprocal is more important than getting paid (as I put it: "to take care of Number One, first take care of numbers 2 through 9.")
2. Develop sustainable, overlapping social networks (self-organizing networks) in which you have more than one place to interact with the same person, i.e. at church or in the neighborhood. I call these non-State, voluntary networks transparent non-privileged parallel structures because they are independent of the State and Monopoly/Predatory Capital Elites.
3. Cut expenses to the bone so you no longer need a large income to "survive." Consider lowering your taxable income by working less so you're no longer working so hard just to pay taxes generated by high incomes. (Thanks to correspondent Stephen A. for noting that barter that results in gains is generally taxable. As always, check with the I.R.S. or a licensed tax advisor to confirm what income is taxable/nontaxable.)
4. Reach a new understanding of "prosperity": health and social wealth are the "treasures" which money cannot buy. Yes, we all need some money, and preserving/growing whatever capital you do have will be difficult and time-consuming. There is no easy "one size fits all" solution.
5. Understand the importance and strength in building and maintaining personal integrity, the one asset we each control in totality and that no one can take from us. All reciprocal networks (financial, political, religious or social) depend entirely on trust, and the bedrock of trust is complete personal integrity.
Much of the devolution we now face is a direct result of the degradation of integrity. This moral/ethical component of financial implosion is glossed over by the corporate media because the Power Elites have implicitly undermined integrity and morality as a means of soldifying their control of the media and of the national income.
Yes, I know this all sounds wonderful, but how do you do it in real life? Well, life is and always has been a do-it-yourself affair. With 200 million+ employable people in the nation, what advice or recommendations can I possibly give to any one individual, when only that person knows their own interests, strengths and potential customers, clients, allies, competitors and mentors?
Let's start with one simple truth: nobody knows the future. Thus everything we discuss now is contingent on a number of unpredictable interactions. To base our planning on one scenario is to risk misallocating our scarce assets and resources.
Now let's hear from two readers and then I'll pick up the narrative.
Correspondent Mac posed this question--one which millions of other citizens should also be interested in:
As a 56-year old watching his company lay off more and more... are there more books/blogs that give advice/information on post-credit/speculative-bubble economy livelihood?
Reader Marc M.W. offered this insightful critique of general advice:
If I may be permitted to make a subjective (and friendly constructive) comment about your essays in general: I am having somewhat the same problem that I have with all such writings by assorted authors: superb analysis of what's wrong with the current American situation, but not much detail on what individuals can DO about it--money, job, choice of place to live--in arranging one's life for a future likely to be very different from both the present and the past half-century.
So I get to the end of my David Korten ("The Great Turning") or my Jim Kunstler ("The Long Emergency") and I find a lot of GENERALITIES about "building a fine-grained, earth-centered, decentralized and localized community," and I have difficulty translating that into CONCRETE actions in our personal lives. (That situation is aggravated by the fact that my wife and I are in a sprawly, car-centered Sunbelt place where she loves her job but where we might not otherwise have chosen to live--but the need to translate glittering generalities about the future into concrete actions would exist no matter where we lived.) . . .
It is particularly difficult to decide what to DO to prepare for the future we see, when so few other people around us see it. We feel quite alone. Most of the people we know have a definite interest in living an ethical and environmentally less damaging life, but they are still focused on recycling, fair trade coffee, and finding a way to run cars and the suburban lifestyle on something other than gasoline.
Talk to them about "a fine-grained, earth-centered, decentralized and localized community," or talk to them about co-housing or some sort of mutually cooperative/supportive living arrangement intentionally chosen by a group of people, and they look at you as if you have just spoken in some obscure foreign language. . . .
We also have trouble figuring out what to do with our MONEY for this world ahead, as the day will come when we stop working (at least for regular wages), so exactly what kind of "retirement" future are we supposed to be preparing for, and what are we to do with our savings in the PRESENT if saving money is still a good idea at all but the "consensus trance" assumptions about the FUTURE are about to become "inoperative"? . . .
We think of moving to other places--but don't know how to evaluate them in terms of a future which is just now beginning to form. Our current fallback definition of such a place is: "university town with Amtrak service, good local public transit and/or walkability/bike-ability, relatively benign climate not dependent on oil for household heating, and good agricultural land with locally selling growers of food (for humans, not herd animals) nearby.
Would certainly appreciate more online commentary from persons as perceptive as yourself about what people should DO to position themselves for the economy and living patterns appearing on the horizon. In other words, somewhat less analysis of "what is" and somewhat more "how to" guidance on positioning one's own life for it.
Reasonable questions/suggestions: thank you, Mac and Marc.
Here are some concrete suggestions which flow directly from the Survival+ framework.
1. Join existing networks based on your interests and locale. A church can be an amazing organization, and if you find the right church, the one where you feel comfortable with the congregation, the pastor/minister/priest, it is a rewarding experience.
Yes, people are still petty and annoying, but there are strengths which cannot be duplicated on one's own.
It is possible to start your own networks of like-minded people, but it's a lot easier to join an existing one. Most community groups (recycling, conservation, hunters, religious, political action, education, etc.) are desperate for people willing to contribute some time/energy.
My own view is that history suggests that any environment, be it violent inner-city ghetto or near-wilderness, is more survivable if you have multiple layers of social reciprocity working for you.
2. Your neighbors/neighborhood are already a community. You don't have to agree with their politics or lifestyle, but you already share an interest in keeping the street safe and attractive.
Now here's the thing that's completely, utterly lost on the Internet. Any fool can diss someone else and insult them on the Web because it's anonymous. Real life is not anonymous.
In a real community (something many suburban Americans may never have experienced, sadly), you can't make "enemies" because you're going to see that person on your street, in your church/synagogue/temple, and in the grocery store--or you'll see their brother, sister, husband, kids, etc. These multiple layers of interaction make it too risky to alienate someone over some petty difference.
(Plus in real life, someone who gets insulted might just beat the living heck out of the smartass. Word associations: "having manners," and "live and let live because it's not worth alienating someone.")
3. If there really is no group or people who you can relate to, then by all means find a locale with people who have similar interests and are rooted. Rootless zombies who move every two years and who spend their time being "entertained" in the Cone of Silence in their McMansion will have little to offer in the way of reciprocity until they find they are in need themselves.
But as the Chinese saying goes, "If you wait until you're thirsty, it's too late to dig a well."
3. I am a believer in the Peach Pie strategy. When we have a bounty of peaches, we make dozens of pies and share them with neighbors, friends, and customers/clients. We don't expect anything back, but the gesture is appreciated. Networks get built by someone offering something freely. Our corrosive environment of Predatory Capitalism has created a culture of "first I get mine" rather than "what can I do for you?"
It's not being "generous"--it's building a base for reciprocity, which is the foundation of sustainable networks/communities.
In the book, I use the Hawaii-based organization called a Kumiai as an example.
4. OK, work/jobs. I anticipate the continuing erosion of fulltime paid work. The "factory model" of employment (the monolithic State or Corporation as employer) will be replaced by hybrid work which is an adaptable, flexible mix of paid and unpaid work, private enterprise, community work, creative endeavors, etc.
In hybrid work, what's important is being productive and building experiential capital. The other goal is to develop multiple sources of income so you're no longer dependent on one skillset (or one network/business).
I'm going to do a brief brain-dump here on hybrid work. Yes, I speak from experience because I've been pursuing the hybrid work model for several decades, even before I understood the concept. Many of you have done so, too.
The point of hybrid work is to reduce the vulnerability created by relying on one source of income or skillset. (Nowadays this is called "antifragile.") The goal is adaptable, dynamic stability, and relying on one job/skillset is like sitting on an inverted pyramid: it's inherently unstable. So the goal is to flip the pyramid over and have a base of multiple income streams/interests/skills.
No one can parse out another's interests or talents. That's up to you to figure out.
We do have one clue: we are what we do every day.
If you think you like doing some sort of work, but you never seem to have the time to pursue it, maybe you like the idea of the work more than the actual work.
I would caution anyone who is confident that the "gummit" (State) will never fold up/stop paying its employees/beneficiaries. As I say in the book, the State has various means to evade its obligations.
For instance, you might receive your $4,000/month pension as "promised," but then a loaf of bread will cost $2,000. That's probably not what you thought was "promised," but strictly speaking, the State will have met its obligation to you.
Important point: skillsets and networks cannot be depreciated like money. They cannot be stolen.
As I also explain in Survival+
, I am a fan of gold/silver for the simple reason they cannot go to zero value like stocks, bonds, derivatives, and paper money.
But I also point out that gold is a capital trap. It is not a productive investment like digging a well or installing a solar panel. I submit that controlling as much of the FEW (food, energy, water) assets as possible has some intrinsic value which gold does not have. Yes, gold might buy those resources in the future, but that's a different proposition than saying gold will not go to zero. The relative price of various assets comes into play, and since we can't know future relative prices, then it behooves us to spread our bets and to trade in and out of assets as they rise to absurd valuations and then fall to the mean.
In other words, since the future is unknown, owning a mix of non-correlated productive assets offers better probabilities for dynamic stability.
It would be easier for all of us if the "checklist" was as easy as, say, this:
1. buy and secure gold
2. learn to make decent beer
Now these are perfectly good ideas for the right person, and they are certainly a good backstop, combining a mix of skillset capital, means of exchange (gold and beer), store of value (gold) and an instant network ("anyone want a taste of my homebrew beer?" Hint: it must be good beer to be effective.)
But it isn't that easy, because we're each a unique mix of interests, talents, tropisms, etc.
Last important point. Some things cannot be outsourced to distant lands. These include most medical care, fitness, cooking, gardening/yardwork, childcare, caring for the elderly, fixing actual physical objects and software /networks for local enterprises, repairing appliances, installing solar panels on your house, selling at the farmers market, making sales contacts in your town/city, and having a good time.
As a result, finding some overlap of your own interests and the above enduring needs of human communities might suggest some opportunities for hybrid work and new skillsets/experiential capital to acquire.
The best way to learn is by doing with others--a mentor, a group, a friend. The best way to get paid for work is to start out offering to do it free, to show you can do it and that you're trustworthy.
This is not a tidy checklist but then life is not tidy, and the future will likely be even more untidy than the present.
A completely free abridged version of the book is available (85,300 words) in PDF: free version of Survival+ If you decide afterward to buy the book to put a few bucks in my pocket--thank you.
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