A Shrinking Trust Horizon -- And Hard Times In The City

By: John Rubino | Sun, Jan 29, 2012
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Nicole Foss, who under the pen name Stoneleigh co-edits the Automatic Earth website, just did a long-form interview with an Italian magazine where she lays out her peak energy, societal collapse thesis in the coherent, accessible way that fans of her writing have come to expect. One part was especially interesting:

When you have economic contraction you also have a substantial contraction of the trust horizon. This deprives political institutions at the national and international level of the trust that would give them political legitimacy. They become stranded assets from a trust perspective. People no longer internalize the rules that those institutions are attempting to impose. The response is typically surveillance, coercion, and repression. This picture basically suggests that it is pointless to look for solutions from the top down. It is not solutions that will come from the top down but more problems.

So politicians typically make a bad situation worse as expensively as possible. The systems that we have established have become sclerotic and unresponsive, hostage to vested interests with no ability to adapt quickly to give people abilities to cope with rapid change. I don't look for solutions from them. The people who are part of that system are typically the people who have gained significant amounts from the status quo. These are the last people who are likely to change things, so I don't look for political actions.

In many parts of the world, especially in parts of Europe, people always ask me if they should take political action, change their policies at a national level to solve these problems. And I tell them unfortunately not because there isn't any mechanism for these large bureaucratic institutions to offer anything that would realistically help, and that they're far more likely to try to maintain their own existence by sucking even more resources out of the periphery in order to maintain the center.

This is a bit like when a body becomes hypothermic, not enough heat. It shuts off circulation to the fingers and toes in order to preserve the body temperature of the core. That's what we can expect politicians and political systems to do. Unfortunately for us, we are the fingers and toes and we have to look after ourselves. Nothing is coming from the top.

My solutions, such as they are, are grassroots solutions. We have to build things from the bottom up. Our centralized life support systems will fail over time because they're critically dependent on tax revenues that won't be there and cheap energy that won't be there. These centralized systems won't be able to deliver the goods and services we've come to rely on.

What we need are alternatives that come from the bottom up. The reason these work is because they operate within the trust horizon. They don't have to stay small. They can grow to whatever size the trust supports and that can be different in different places. The crucial thing is that they come from the bottom up, they're small and responsive and not bureaucratic, they make the best use of very small amounts of resources because they don't have enormous administrative overhead.

It's amazing what can be done at a very small scale. It wouldn't replace what the centralized services have given us, but we can cover the basics. The key point is that we have to do it right now because we don't have much time before we start to see centralized systems failing to deliver what they have delivered in the past. The amount of money in the system can contract very quickly. That undercuts what these centralized systems are capable of delivering in the next few years. So we must start right now building grass roots initiatives, and community is crucial to that.

We need to begin at the individual level because if we are on a solid foundation ourselves we can then help others. If we are not then our attempt to help others is fundamentally weakened. So we have to get our own house in order but then we have to think much more broadly. We must build community. Relationships of trust are the foundation of society. So we need to work with our neighbors, we need to know our neighbors and we need connections with family and community so we're less dependent on money.

In many parts of the world where people really don't have any money anyway, their society functions on barter and gifts, working together, exchanging skills. This works as a model. It doesn't get you a large fancy sophisticated industrial society because it doesn't scale up that well. But it works very well at a small scale, and this is the kind of structure that we need to rebuild.

In some parts of the world there's a lot more of that than in other parts. So it's actually interesting to think that it's not necessarily the places that are the wealthiest at the moment that will do best in the future.

The analogy I use is that if you're going to fall out of a window how much it hurts when you hit the ground depends on how many floors up you were at the time. If you were on the hundredth floor and you do nothing to prepare before you fall it's going to be fatal. If you're much further down it's less painful. If you fell out of a ground floor window you might not even notice. You just pick yourself up, dust yourself off and not very much has changed.

So the places that will do best are the places where there is already a lot of trust at the foundational level, where people are used to working together, where people are not that far removed from the land. Places where there's an enormous disconnect between resources that are available in that area and what resources that are actually used, where societies are highly atomized and used to a very high standard of living, those places will see enormous shock to the system because those people don't have any skills or connection to land or family to fall back on.


Some thoughts

Viewed through a "trust horizon" lens, a lot of global and national institutions are indeed becoming "stranded assets". Who outside of the New York Times editorial department trusts the European Union or the Federal Reserve these days? How many people still think the companies selling processed food or advertising prescription drugs on TV have their customers' welfare at heart? Virtually no one who can read.

If you need an excuse to get to know your neighbors or generally get involved in the local community, this is it.

Big modern cities are the 100-story windows in Foss' analogy. Life there is going to get very hard very fast if her systemic failure predictions come true. Conversely, small towns with thriving farmers markets and lots of roof-top solar panels will find the next couple of decades relatively less stressful. As Foss says later in the interview, "If you psychologically prepare for a much lower material standard of living in advance, it doesn't have to be anywhere nearly as painful."

Here's the full interview:


 


 

John Rubino

Author: John Rubino

John Rubino
DollarCollapse.com

John Rubino is author of Clean Money: Picking Winners in the Green Tech Boom (Wiley, December 2008), co-author, with GoldMoney's James Turk, of The Collapse of the Dollar and How to Profit From It (Doubleday, January 2008), and author of How to Profit from the Coming Real Estate Bust (Rodale, 2003). After earning a Finance MBA from New York University, he spent the 1980s on Wall Street, as a currency trader, equity analyst and junk bond analyst. During the 1990s he was a featured columnist with TheStreet.com and a frequent contributor to Individual Investor, Online Investor, and Consumers Digest, among many other publications. He now writes for CFA Magazine and edits DollarCollapse.com and GreenStockInvesting.com.

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