The Downshifters Guide to a Resilient Future

RetroSuburbia: The Downshifters Guide to a Resilient Future

by David Holmgren

Melliodora (2020)

 

The online version of the book is available for pay-what-you-feel at http://online.retrosuburbia.com/ https://retrosuburbia.com/

With the global economic crash predicted to result from the COVID-19 lockdown, the publication of RetroSuburbia earlier this month is a happy coincidence.

This book is based on the premise that our current globalized economic system is inherently unstable. Although the exact mechanism that will topple global capitalism is impossible to predict, Holmgren believes it will most likely relate to one (our more) of the following three crisis points: 1) major resource depletion (oil, water, topsoil, phosphate, collapsed fishstocks, etc); 2) catastrophic climate change; or 3) the collapse of a massive real estate or share market bubble (as occurred in 2008).

Under any of these scenarios, the vast majority of us will experience a reduced standard of living. As jobs disappear and personal income declines, people will have no choice but to downsize their consumption levels. As it becomes harder and harder to rely on the capitalist system to meet basic needs (food, water, energy, Internet, postal service, health, security, etc), they will need to become more self-sufficient and rely more on family, friends, and neighbors. As they downsize their lifestyles, more extended families and even friends and neighbors will live together in the same households and produce most of their own food.

Holmgren predicts this catastrophic event may occur so suddenly that people will have no time to prepare. Securing a fertile rural homestead won’t be an option for most of us. For the most part, we will be stuck with the land and house we live in now.

In essence, RetroSuburbia is a manual we can use to “retrofit” the space we currently occupy to help us better cope with what he describes as “our energy descent future.”

Holmgren seems to have thought of everything, covering a range of topics, including how to assess a property for optimal food production, heating your home off-grid, water harvesting, gray water systems, recycling human waste, the mechanics of shared living, soil fertility and contamination, seed saving, sustainable transport, managing our own health and security, raising self-reliant resilient children, and conflict resolution.

Holmgren is the co-originator of permaculture* technology, in my view Australia’s most important export.

---

*Permaculture is a set of design principles centered on whole systems thinking, simulating, or directly utilizing the patterns and resilient features observed in natural ecosystems. It uses these principles in a growing number of fields including regenerative agriculture, rewilding, and community resilience

Understanding the Current Economic Crisis

The ABC’s of the Economic Crisis: What Working People Need to Know
Fred Magdoff and Michael Yates

Monthly Review Press (2009)

Book Review

In the ABC’s of the Economic Crisis, Magdoff and Yates use stagnation theory to explain the origins of the current global economic crisis. Karl Marx predicted that overproduction and stagnation would be inevitable under monopoly capitalism once market demand has been saturated. Magdoff and Yates use the auto industry as an example. Immediately after World War II, consumers bought a lot of cars and trucks which were unavailable between 1941 and 1945. By 1970 there was a surplus of cars – all the Americans who wanted cars and trucks had already bought them. Meanwhile the world’s poorer nations didn’t have a mass market large enough to reduce this surplus.

The same was true of other durable goods (refrigerators, washing machines, dishwashers, vaccuum cleaners, etc). And as consumer buying slowed, so did profits and GDP growth.

Why Capitalism Didn’t End With the Great Depression

Many Marxists (including John Strachey in The Coming Struggle for Power) believed the Great Depression signaled end stage stagnation and the imminent death of capitalism. According to Magdoff and Yates, it was only the massive economic boost of World War II military spending that saved capitalism in the thirties and forties.

There was also a brief post war boom in the fifties and sixties, as consumers rushed to buy goods that were unavailable during the war. When the sixties ended, stagnation set in again, accompanied by a marked slowing of profits and growth. However neither declined to 1930s levels, thanks to the “financialization” of the US economy.

The Financialization of the US Economy

The term “financialization” describes the process of creating profits without producing products or services. In the US, finanancialization injected money into the economy in three ways: via massive government spending and indebtedness (to private banks), via massive consumer indebtedness and via an explosion in the trade of derivatives and similar financial products.

Between 1980 and the 2008 crash, the banking, insurance and investment sector became the largest growth sector of the US economy. Beyond financing unprecedented levels of consumer, business and government debt, this sector also engaged massively in speculation (ie gambling).

Financialization: A Giant Ponzi Scheme

As Magdoff and Yates describe, the enormous “wealth” created by the financial sector helps to drive the “real” productive economy. The main problem with financialization is that it’s basically a Ponzi scheme – it can continue only so long as economic growth continues. If it goes on too long, the speculative bubble will burst, resulting in financial collapse, as it did in 1929 and 2008.

The Link Between Declining Profits and Low Wages

Despite the life support provided by “financialization,” economic stagnation continued between 1970 and 2008. As Magdoff and Yates point out, GDP growth dropped from 4.4 to 3.3 percent in the 1970s, to 3.1 percent in the eighties and nineties, and 2.2 percent between 2000 and 2008.

A significant decline in wages and purchasing power accompanied this decline in profits and growth. In order to keep workers consuming, the corporate sector compensated by giving them credit cards – lending them money at 18-20% interest they were no longer paying in wages.

Economic Justice: the Rolling Stone Version

(This is the first in a series of posts about ending the right of private banks to create money.)

In January Jesse Myerson, writing in the Rolling Stone, called for five seemingly radical economic reforms in an article entitled Five Economic Reforms Millenials Should be Fighting For:  guaranteed jobs for everyone, Social Security for all (a guaranteed Universal Basic Income for all citizens), Land Value Tax (which I blog about in Progress and Poverty ), creation of a Sovereign Wealth Fund (enabling government to buy back and own public assets), and a state-owned bank (like the Bank of North Dakota) in every state.

Personally I found the article disappointing and a little sad. Myerson seems to deliberately overlook the most pernicious problem in our present economic system:  the power we give private banks to issue and control our money supply.

Contrary to popular opinion, the government doesn’t issue money, except for a limited amount of notes and coins. As the film below explains, 97% of the money supply is electronic and created by private banks when they issue loans.

A lot of people have the mistaken impression that banks use other depositors’ money when they loan us money to buy a house. What actually happens is that the bank creates the money out of thin air by entering numbers into a computer.

Another common erroneous belief is the the Federal Reserve, which serves as the US central bank, is a government agency. It’s not. It’s a consortium of private banks.

97% Owned (Positive Money 2012) makes the case that the only solution to the current economic recession is to ban private banks from issuing money. They argue for making money creation publicly accountable by restoring this function to government (ironically this is where most people mistakenly believe it lies). Until we make this happen, private banks will continue to use their control of the monetary system to undermine genuine economic and political reform.