The Question Nobody in Government Is Asking

Tim Watkins, writing in The Consciousness of Sheep on 2 November 2026, concludes his article A Matter of Taxonomy by raising what may be the most important economic question of our time.

In a world without economic growth, how should we allocate the remaining surplus energy and material resources?

It is a remarkable question because it challenges almost everything upon which modern economic and political thinking is based.

For more than two centuries, governments have assumed that economic growth would provide the means to improve living standards, finance public services, repay debts and support an expanding population.

Political arguments have largely concerned the distribution of the benefits of growth. The underlying assumption that growth would continue has seldom been questioned.

But what happens when growth ends? More importantly, what happens when the economy begins to shrink?

This is no longer simply a theoretical question. There is growing evidence that the economic arrangements developed during the industrial era are becoming increasingly difficult to maintain. Yet governments continue to behave as though another period of economic expansion is just around the corner.

The Importance of Surplus Energy

Watkins identifies surplus energy as the foundation of economic activity. Energy is not simply another commodity which can be bought and sold. It is what enables everything else to happen.

Agriculture, manufacturing, transport, construction, healthcare and communications all depend upon energy. But what matters is not merely the amount of energy available. It is the energy remaining after we have obtained, processed and delivered that energy.

This surplus is what enables a society to support activities beyond the immediate necessities of survival.

During the industrial era, enormous quantities of relatively inexpensive fossil-fuel energy made possible an extraordinary expansion of economic activity. The result was a society characterised by increasing specialisation, centralisation, technological complexity and dependence upon long supply chains.

It also enabled the development of the welfare state, modern medicine, mass education and the enormous administrative structures of government.

But as the energy cost of obtaining energy increases, the surplus available to support these activities comes under pressure. The consequences are not necessarily immediate shortages of energy. They are more likely to appear initially as rising costs, declining affordability, falling profitability and the inability to maintain existing infrastructure.

The End of the Growth Economy

Our financial arrangements were developed for an expanding economy. Businesses borrow money in the expectation that future revenues will enable them to repay their debts. Governments borrow in the expectation that future economic activity will generate sufficient taxation to meet their obligations.

Households take on mortgages and other debts on the assumption that their incomes will remain adequate. All of these arrangements become increasingly difficult when the real economy ceases to expand.

A government may still report growth in monetary terms. But higher prices and increased borrowing do not necessarily mean that more useful goods and services are being produced. Indeed, the opposite may be happening.

A shrinking economy can continue to display increasing monetary transactions while delivering declining material prosperity. This distinction is fundamental.

The question is no longer simply how to generate more money. It is how to maintain essential activities with diminishing real resources.

The Problem of Allocation

This brings us back to Watkins’ final question. Who should decide how the remaining surplus energy and material resources are allocated?

At present, much of this allocation takes place through markets, prices, borrowing and government expenditure. Those with the greatest purchasing power can generally command the largest share of available resources. But purchasing power is not necessarily related to social usefulness.

Consider the difference between maintaining a local water supply and constructing another large entertainment complex. Or between providing basic healthcare and operating an energy-intensive financial trading system. Or between producing food locally and transporting discretionary consumer goods halfway around the world.

In an expanding economy, society may be able to support all these activities simultaneously. In a shrinking economy, choices become unavoidable. Some activities will have to contract so that others can continue.

This is the central political and economic challenge of the coming decades.

Why Central Government Cannot Provide the Whole Answer

Modern governments have become accustomed to managing economic activity through taxation, borrowing, regulation and public expenditure. These mechanisms can influence the distribution of money. They cannot create additional surplus energy or physical resources.

Nor can they readily determine the particular needs and capabilities of every locality. A government department in London cannot know, in sufficient detail, the available land, water, skills, workshops, buildings and practical requirements of thousands of different communities.

Even if it possessed this information, attempting to direct every activity centrally would create an enormous administrative burden.

There is also a deeper problem. Centralised systems themselves consume substantial resources. They require offices, communications networks, transport, specialist personnel, computer systems and increasingly expensive infrastructure.

As the economy shrinks, the cost of maintaining these systems becomes a growing burden upon the productive activities they are intended to support.

The question is therefore not simply how central government should distribute diminishing resources. It is whether some of the activities presently organised centrally should instead be undertaken locally.

Localism Provides Another Approach

Localism begins with a different question. Rather than asking how a national economy can continue expanding, it asks how people within a locality can provide for their essential needs using the resources available to them.

This changes the whole approach to economic organisation. Food production, water supplies, basic repairs, personal care, education and many other activities can be organised much closer to the people who depend upon them.

The advantages are not limited to shorter transport distances. Local knowledge becomes more important. Existing buildings and equipment can be reused. Skills can be shared. People can exchange services without every activity requiring a formal employer, employee or financial intermediary.

A retired carpenter may repair a neighbour’s furniture. A gardener may exchange vegetables for help maintaining a roof. A small workshop may repair equipment which would otherwise be discarded. A local bakery may supply nearby households using ingredients produced within the locality where practical.

These activities may contribute little to conventional measurements of economic growth. Nevertheless, they provide genuine economic value. Indeed, as the formal economy becomes less affordable, such activities may become increasingly important.

A Different Understanding of Work

Another important feature of Watkins’ article is his criticism of the conventional division between employers and employees. The modern economy contains many different arrangements.

There are employees, self-employed tradespeople, small business owners, part-time workers, people combining employment with benefits, and others undertaking informal work. As the industrial economy contracts, these distinctions may become even less useful.

We may see increasing numbers of people supporting themselves through several different activities rather than depending upon a single employer. Some may grow food, undertake repairs, provide care or exchange services. Others may establish small businesses operating from their homes.

This does not mean that conventional employment will disappear. It means that employment may cease to be the principal means by which every household obtains the goods and services it needs.

The informal economy could become an increasingly important part of everyday life. Such an evolution would also challenge the existing systems of taxation, benefits and economic measurement.

Governments may find themselves attempting to regulate an economy which is becoming progressively less dependent upon the institutions they understand.

Essential and Discretionary Activities

A shrinking economy will force a distinction between essential and discretionary activities. Food, water, shelter, sanitation, basic healthcare and essential communications must receive priority.

Many other activities, however desirable, will become increasingly difficult to support. This does not mean that all discretionary activities will disappear. Rather, their scale and complexity will be determined by what society can afford after essential needs have been met.

The distinction also helps us understand why localism is likely to emerge progressively rather than through a single political decision. As centrally organised services become unaffordable or unreliable, people will seek alternatives.

Some alternatives will be commercial. Others will be cooperative or informal. What matters is that the activity continues, even if the institutional arrangements surrounding it change.

The Two Levels of Economic Organisation

Localism does not require the disappearance of national government. Certain functions will remain national because their nature demands coordination over large distances or across many localities.

Defence, major rail connections, strategic healthcare, national communications and the administration of justice are examples. But many everyday requirements can be provided locally.

The challenge is to distinguish between activities which genuinely require national organisation and those which have become centralised simply because economic growth made centralisation affordable.

This distinction could become increasingly important as resources diminish. A smaller national economy would concentrate its remaining capacity upon essential functions which cannot sensibly be provided locally.

Localities would assume greater responsibility for everyday production, services and mutual support. This would not necessarily be the result of a planned political reform. It could emerge naturally as existing arrangements become too expensive to maintain.

The Political Problem

There is a fundamental difficulty facing today’s political leaders. They have been educated, trained and elected within a system which assumes that economic growth is both desirable and achievable.

Their policies are designed to encourage investment, increase productivity, expand employment and generate additional taxation. They have little experience of governing an economy which must operate with diminishing material resources.

Acknowledging this would require a profound change in political thinking. Instead of promising more of everything, governments would have to explain why some activities could no longer be supported.

Instead of encouraging consumption, they might have to encourage conservation, repair and reuse. Instead of concentrating economic activity in ever-larger organisations, they might have to facilitate smaller and more local arrangements.

Perhaps most difficult of all, they would have to accept that national government cannot solve every problem. For politicians accustomed to announcing national programmes and ambitious targets, this would be an uncomfortable admission.

Yet the alternative may be continued promises of growth accompanied by progressive deterioration in the services and infrastructure upon which people depend.

The Evolution Towards Localism

There is another way of understanding what is happening. The industrial economy developed because the conditions necessary to support it existed.

Abundant surplus energy enabled increasingly complex economic and social arrangements. As those conditions change, the arrangements themselves must change. This is not necessarily a matter of political ideology. It is a process of adaptation.

Just as living organisms adapt to changing environmental conditions, economic and social systems must adjust to changes in the resources available to sustain them.

Some institutions will survive. Others will become smaller, simpler or disappear. New forms of cooperation and production will emerge.

Localism can be understood as one possible outcome of this process. It offers a means of reducing dependence upon costly centralised systems while making better use of the resources and capabilities available within each locality.

It is not a guarantee of prosperity or an escape from the difficulties of economic contraction. But it may provide a more practical foundation for maintaining essential living standards than continued dependence upon growth which can no longer be assumed.

The Question That Really Matters

Tim Watkins ends his article by asking how society should allocate the surplus energy and material resources remaining to it. That is surely the right question.

But perhaps it needs to be taken one stage further. Rather than asking only who should allocate these resources, we should ask at what level should the decisions be made?

Some decisions must remain national. Many others could be made within the localities where people live, work and understand their own circumstances. This is the essential argument for localism.

The industrial era encouraged us to organise economic life from the top down because abundant energy made large, complex systems possible. A shrinking economy may increasingly favour arrangements which develop from the bottom up.

The political challenge is not to design every detail of this future. It is to recognise what is happening and remove unnecessary obstacles to people organising their own essential activities.

The most important question is no longer how we can restore economic growth. It is how we can organise society to live successfully without it.

And that may be the question which finally brings localism into the centre of political debate.

Inspired by Tim Watkins, “A Matter of Taxonomy”, The Consciousness of Sheep, 2 November 2026.

For several years I have been writing about the end of economic growth and the emergence of localism. During much of that time, it has been a rather lonely occupation.

Almost everyone, from politicians and economists to business leaders and the media, has continued to assume that economic growth will return. Recessions are temporary. Financial difficulties can be overcome. New technology will create new prosperity. With the right policies, Britain can once again enjoy the rising living standards to which we have become accustomed.

I have increasingly come to believe that this entire way of thinking belongs to the past.

Economic growth has ended. What we are experiencing is not a temporary interruption to an expanding economy, but the early stages of a long period of economic contraction.

Now, importantly, I find that others are increasingly reaching similar conclusions.

Nate Hagens and the End of Growth

Nate Hagens, whose work on energy, ecology and the economy I have followed with interest, has published a discussion entitled 7 Ways Growth Ends.

Hagens has long argued that our economic system is fundamentally dependent upon energy and natural resources. Money, financial markets and government policies cannot escape the physical limits of the world in which we live.

His work, particularly through The Great Simplification, examines the consequences of humanity’s dependence upon an economic system that requires continual expansion.

The significance of his latest contribution is not simply that growth might eventually end. It is that we must confront the mechanisms through which the growth-dependent system reaches its limits.

For me, this represents an important change in perspective.

We no longer need to ask only what might happen if growth ends. We need to examine what is already happening as the foundations of growth weaken.

The Economy Is a Physical System

The central misunderstanding of modern economics is its treatment of the economy primarily as a financial system.

Governments measure economic performance through GDP. They adjust interest rates, taxation and public expenditure in the hope of encouraging investment and consumption.

Yet none of these activities creates the energy or physical resources upon which economic activity ultimately depends.

The industrial economy developed because humanity discovered how to exploit enormous quantities of concentrated energy, particularly coal, oil and natural gas.

These energy sources allowed machines to replace human and animal labour. They supported the development of factories, mechanised agriculture, global transport, modern medicine and the enormous expansion of cities.

For more than two centuries, increasing access to usable energy supported an extraordinary expansion of economic activity.

But there is a fundamental difference between the availability of energy and the availability of surplus energy.

Energy must first be expended to obtain energy. As the cost of obtaining and delivering usable energy rises, less remains available to support the wider economy.

This is the importance of the Energy Cost of Energy, or ECoE, emphasised by Tim Morgan and others.

An economy can continue to produce and consume large quantities of energy while having progressively less surplus energy available to support prosperity.

That distinction is essential to understanding what is happening today.

The Evidence Is Already Around Us

We do not have to wait for an official announcement that the era of growth is over.

The consequences are increasingly visible in everyday life.

In Britain, public services are struggling with rising costs and competing demands. Local authorities face severe financial pressures. Roads, bridges, water systems, hospitals and other essential infrastructure require investment that is increasingly difficult to finance.

Businesses are finding it harder to remain profitable. Households face continuing pressure on their disposable incomes. Discretionary activities, including hospitality, leisure and non-essential retailing, are particularly vulnerable.

The labour market is changing. Established employment arrangements are becoming less secure, while opportunities for small-scale, informal and self-employed activity may become more important.

Meanwhile, governments continue borrowing in the expectation that future economic growth will make today’s financial commitments affordable.

These developments do not individually prove that growth has permanently ended. But taken together, they are consistent with an economy encountering increasingly severe physical and financial constraints.

The mistake is to treat each problem as an isolated difficulty requiring its own solution.

I believe they are different expressions of the same underlying change.

Why Growth Cannot Simply Be Restarted

Political leaders continue to promise renewed economic growth.

They propose investment in infrastructure, new factories, artificial intelligence, renewable energy and other technologies.

Some of these developments will undoubtedly provide useful benefits. But technological progress does not automatically produce greater prosperity across the economy.

Every new factory requires materials and energy. Every data centre needs electricity, cooling and maintenance. Every new transport system must be built, operated and eventually replaced.

The question is not whether these activities are technically possible.

It is whether society can afford the resources required to sustain them.

An economy experiencing declining surplus energy cannot necessarily restore prosperity by constructing more energy-intensive infrastructure.

Nor can borrowing indefinitely overcome physical limitations.

Financial promises are claims upon future production. If that production cannot expand as expected, the promises become increasingly difficult to honour.

The result is growing pressure upon governments, businesses and households alike.

This is not a problem that can be resolved simply by electing a different government or changing economic policy.

It is a change in the physical conditions upon which the industrial economy was built.

The End of Growth Changes Everything

Once we accept that the economy is contracting, many of our assumptions about the future must change.

We can no longer assume that governments will have steadily increasing tax revenues. We cannot assume that all existing infrastructure can be maintained indefinitely. We cannot assume that every public service can continue to be delivered through increasingly large and centralised organisations.

Nor can we assume that the employment patterns of the industrial era will survive unchanged.

The implications extend far beyond economics.

They affect where people live, how food is produced, how water is supplied, how people travel, how communities organise themselves and how essential services are provided.

Above all, they challenge the belief that bigger organisations, larger markets and greater centralisation necessarily represent progress.

In a contracting economy, the opposite may increasingly be true.

Localism Is Already Beginning to Emerge

This is where my argument about localism becomes particularly important.

For years, localism has generally been discussed as a desirable alternative to excessive centralisation. I believe it is becoming something much more fundamental.

Localism is emerging as a practical response to the declining affordability of the industrial economy.

As centralised systems become increasingly expensive to maintain, people will have to find ways of meeting more of their essential needs closer to home.

Food production provides an obvious example.

The existing food system depends upon extensive transport networks, industrial agriculture, chemical fertilisers, refrigeration, packaging and large retail organisations.

It is remarkably productive, but also dependent upon energy, capital and complex supply chains.

As those systems come under increasing pressure, local food production becomes more important.

Gardens, allotments, smallholdings, orchards, local bakeries and small food-processing businesses can contribute to a more resilient food supply.

Similar changes can occur in other activities.

Small workshops can undertake repairs that would otherwise require expensive replacements. Local arrangements can provide some care and practical assistance. Informal exchanges of goods and services can supplement declining monetary incomes.

These activities will not replace the entire industrial economy. National systems will remain essential for defence, major transport links, specialised healthcare and other functions.

But the balance between national and local provision is likely to change substantially.

Instead of expecting centralised organisations to provide almost everything, localities will increasingly have to provide more for themselves.

This is not a romantic return to the past.

It is an economic response to changing circumstances.

The Importance of Recognising What Is Happening

Perhaps the greatest obstacle to preparing for this future is our continued attachment to the expectation of growth.

Governments are elected on promises of greater prosperity. Businesses borrow and invest on the assumption of expanding markets. Pension systems depend upon future income and investment returns. Property values reflect expectations about future purchasing power.

The entire financial structure of modern society has been built around expansion.

Acknowledging that this expansion has ended is therefore profoundly uncomfortable.

It challenges political promises, business plans, financial expectations and personal ambitions.

It is much easier to believe that another technological breakthrough or another economic policy will restore the familiar pattern.

But delaying recognition does not prevent the consequences.

Indeed, it may make them worse.

If governments continue investing scarce resources in infrastructure designed for an expanding economy, they risk creating further financial burdens that future generations will struggle to support.

If communities continue waiting for national solutions, they may lose valuable opportunities to develop their own capabilities.

The sooner we recognise the change, the more opportunities we have to respond constructively.

From Isolation to Recognition

I began by saying that writing about the end of growth has sometimes been a lonely occupation.

That has been particularly true because the argument is so different from the assumptions that dominate public discussion.

When almost everyone expects growth to resume, suggesting that the industrial era has reached its limits can appear unnecessarily pessimistic.

But pessimism is not the same as realism.

I do not welcome economic contraction. It will create serious difficulties, particularly for people who already have little financial security.

Nor do I imagine that localism will emerge without hardship, conflict or mistakes.

My argument is simply that we must begin with an understanding of the circumstances we actually face.

The growing contribution of thinkers such as Nate Hagens, Tim Morgan and others is important because it helps establish a different understanding of the economy.

Their analyses are not identical, and they do not all claim that permanent global economic contraction has already been demonstrated. But they share a recognition that energy, ecology and physical resources place fundamental limits upon economic expansion.

Hagens has recently described a possible future of resource-constrained economic depression, while exploring what evidence might change his assessment. natehagens.substack.com+1

For me, the evidence has become sufficiently compelling to change the question I ask.

I am no longer asking whether economic growth might end.

I am asking how society will reorganise itself now that the growth-dependent industrial economy is encountering its limits.

The Future Is Already Arriving

History rarely announces the beginning of a new era.

The changes usually become apparent gradually, through the failure of old arrangements and the emergence of new ones.

The industrial era did not begin on a particular day. Nor will its ending be marked by a single announcement.

Factories will continue operating. International trade will continue. Governments will continue promising growth. New technologies will continue appearing.

But beneath these familiar activities, the economic foundations are changing.

Increasingly, the question will not be how to expand an existing system, but how to maintain essential functions with fewer resources.

That is a very different challenge.

It calls for smaller organisations, simpler arrangements, greater cooperation and a renewed importance for the locality.

It also calls for a different understanding of prosperity.

Prosperity in the future may depend less upon the quantity of goods and services we consume and more upon our ability to meet essential needs reliably, affordably and close to home.

A productive garden, a functioning local workshop, a dependable water supply and neighbours willing to help one another may become more valuable than many of the activities currently counted as economic progress.

This is the future towards which I believe we are already moving.

The task is no longer simply to warn that the era of growth may be coming to an end.

It is to recognise that the change is under way, understand its consequences and begin building the local arrangements that will enable us to live within the resources available to us.

For me, that is what localism has always been about.

And I am increasingly encouraged that I am no longer alone in recognising the direction in which we are heading.

What KasiNomics Reveals About Localism and the Shrinking Economy

An Economy Growing Beneath the Surface

While economists, governments and financial institutions concentrate upon GDP, employment figures, investment and economic growth, another kind of economy is developing beneath the surface.

In South Africa, it is already enormous.

In his book KasiNomics Unleashed, GG Alcock describes a world of small traders, household businesses, food producers, repairers, transport operators and countless other enterprises operating outside much of the conventional corporate economy.

These businesses are not generally the products of government economic development programmes. They have emerged because people need to earn a living, obtain essential goods and provide services which conventional businesses often fail to supply.

What makes Alcock’s account particularly interesting is that it describes an economy developing from the bottom upwards.

This is remarkably close to the process which will become increasingly important as the British economy begins to shrink.

There is, however, a fundamental difference. Alcock sees the informal economy as an enormous opportunity for growth. I see similar developments as a likely consequence of the end of sustained economic growth.

The same economic behaviour may therefore arise for quite different reasons.

The Failure of Conventional Employment

For generations, economic development has been associated with the movement of people into formal employment.

People left the land, abandoned household production and entered factories, offices, shops and large organisations. Their livelihoods became increasingly dependent upon employers, wages and the wider monetary economy.

The process was made possible by abundant energy, industrialisation, mechanisation and increasingly complex systems of production and distribution.

It also created enormous dependence.

Most households in Britain today produce very little of what they consume. Food, clothing, heating, transport and almost every other necessity depend upon an elaborate network of businesses, infrastructure and public services.

Employment provides the money required to purchase these essentials.

But what happens when conventional employment becomes less available?

South Africa offers one possible answer.

People do not necessarily remain economically inactive. They find other ways of earning money, producing goods and exchanging services.

A person may repair machinery, prepare food, sell vegetables, transport goods or undertake building work without becoming an employee of a conventional business.

Some activities are registered and taxed. Others are informal or only partially recorded.

The distinction between employment and economic activity becomes increasingly important.

An economy can contain a great deal of useful work which is not adequately represented by conventional measures of employment and business activity.

What the South African Experience Reveals

Alcock describes an extraordinary variety of small enterprises.

Many require little capital. They operate from homes, backyards, roadside premises or small workshops. They serve customers who live nearby and whose requirements they understand.

Their strength lies in simplicity, flexibility and their ability to respond directly to demand.

They do not necessarily require expensive offices, elaborate management structures or extensive advertising.

Personal relationships and local knowledge are often more important.

This does not mean that such businesses are prosperous. Many provide only modest incomes and little financial security.

Nevertheless, they demonstrate something important.

Economic activity does not have to be organised through large corporations and conventional employment.

People can organise production and exchange for themselves.

That is one of the essential principles of Localism.

The Shrinking Economy Changes Everything

My argument is that the modern growth economy is approaching fundamental constraints.

Industrial civilisation developed through access to increasingly abundant and relatively inexpensive energy.

Coal, oil and natural gas made possible mechanised agriculture, mass production, motor transport, aviation, modern communications and the enormous infrastructure upon which society now depends.

But obtaining usable energy requires energy.

As the energy cost of obtaining energy rises, the surplus available to support the rest of the economy comes under pressure.

This is the importance of the Energy Cost of Energy, or ECoE.

The relationship is not simple. Technology, renewable energy, resource quality and investment all influence the outcome. Nevertheless, an economy cannot indefinitely increase its complexity without sufficient surplus energy to sustain it.

My expectation is that increasing energy and infrastructure costs, combined with debt and other resource constraints, will make sustained economic growth progressively more difficult.

The first effects will be experienced in discretionary activities.

Households struggling to afford food, energy, housing and essential services will reduce spending upon holidays, entertainment, restaurants, luxury goods and other non-essential purchases.

Businesses serving these markets will contract.

Employment opportunities will decline.

Governments will find it increasingly difficult to maintain public services and infrastructure at their present scale.

The result will not necessarily be a sudden collapse. It may be a long, uneven process of economic contraction, interrupted by temporary recoveries.

Within this process, people will have to find different ways of supporting themselves.

And this is where the South African experience becomes particularly interesting.

Localism Will Not Need to Be Invented

There is a tendency to imagine that a new economic system must be designed, legislated for and introduced by government.

I believe this misunderstands how Localism is likely to emerge.

It will develop because people find it necessary.

A redundant office worker may begin repairing household equipment.

A family with suitable land may grow vegetables for sale or exchange.

A former delivery driver may establish a small local distribution service.

A household may produce bread, preserves, clothing or furniture for neighbours.

Someone with practical skills may exchange labour for food, fuel or assistance.

Initially, these activities may supplement conventional employment.

As economic contraction continues, they could become increasingly important sources of livelihood.

There need be no grand plan.

People will respond to circumstances, using whatever resources, skills and opportunities are available to them.

That is precisely the kind of spontaneous economic organisation which Alcock describes.

Localism, in this sense, is not an ideology which must be imposed upon society.

It is a possible outcome of people adapting to changing economic conditions.

But There Is an Important Difference

South Africa’s informal economy still depends heavily upon the wider industrial economy.

A small shop may sell goods manufactured hundreds or thousands of miles away.

A local delivery business may depend upon imported vehicles, diesel, replacement parts and telecommunications.

A food trader may depend upon industrial agriculture, refrigeration and national wholesale distribution.

The enterprise is local, but much of its economic foundation is not.

This distinction becomes crucial in a shrinking economy.

If energy and transport become progressively more expensive, many existing informal businesses will face the same pressures as conventional enterprises.

Simply replacing a supermarket with a small shop does not eliminate dependence upon distant suppliers.

A more fundamental change will be necessary.

Production itself will have to become increasingly local wherever this is practical.

Food production, repair, maintenance, basic manufacturing, building materials and some forms of energy supply may need to be organised much closer to the people who use them.

The future local economy may therefore resemble the South African informal economy in its organisation, but differ considerably in the methods and resources it employs.

It may be less dependent upon manufactured goods arriving from distant factories.

It may use more human labour and less machinery.

It may make greater use of wood, water, locally available materials and equipment capable of being repaired rather than replaced.

Above all, it will have to concentrate upon essentials.

The Return of the Household Economy

One of the most important consequences may be a change in the economic role of the household.

Before industrialisation, many households were places of production as well as consumption.

Food was grown, preserved and prepared. Clothing was made and repaired. Tools and household equipment were maintained. Small workshops operated alongside domestic accommodation.

Industrialisation progressively separated employment from the home.

The household became principally a place where wages were spent rather than goods were produced.

Localism could reverse part of this process.

Homes, gardens, outbuildings and small plots of land may become economically productive once again.

This will not be possible for everyone. Many households lack land, suitable premises, equipment or the physical ability to undertake such work.

Consequently, the local economy will also need shared facilities, small workshops, communal growing areas and arrangements through which people can contribute according to their abilities.

The important change is that production and everyday life may become more closely connected.

What Happens to Government?

An expanding informal economy raises difficult questions for government.

Modern taxation and regulation have developed around identifiable employers, registered businesses, property ownership and recorded financial transactions.

An economy containing growing numbers of small, irregular and partly informal activities will be harder to administer through these arrangements.

This does not mean that taxation, safety standards or legal protections become unnecessary.

It means that the cost and complexity of applying existing systems may become increasingly difficult to justify.

Government may have to distinguish between functions which genuinely require national organisation and those which can be undertaken more simply within localities.

Defence, national communications, specialist hospitals, taxation and certain major transport systems will still require national coordination.

But much everyday economic activity may become increasingly local.

The essential task will be to allow useful grassroots enterprise to develop while maintaining proportionate safeguards.

An attempt to force every small household activity into the administrative structures designed for large businesses could discourage precisely the economic adaptation which society needs.

Will Britain Follow South Africa?

Britain is not South Africa.

The two countries have different histories, institutions, levels of wealth and social arrangements.

It would be misleading to assume that Britain’s future will simply reproduce South Africa’s present informal economy.

Nor should informal enterprise be romanticised.

Poverty, insecure incomes and the absence of social protection are serious disadvantages. The objective should not be to recreate these conditions.

Nevertheless, Alcock’s account provides an important demonstration of human adaptability.

When conventional economic arrangements fail to provide sufficient opportunities, people develop alternatives.

They make use of local knowledge, personal relationships, practical skills and modest amounts of capital.

They organise economic activity without waiting for instructions from government.

This is the process which I expect to become increasingly visible in Britain as the growth economy comes under pressure.

It may already be beginning, although changes in official employment statistics alone cannot establish that this is happening.

The Economy Beneath the Economy

Perhaps the most important lesson is that the formal economy is not the whole economy.

Economic activity is not confined to salaried employment, registered companies and transactions recorded in national accounts.

People can produce, repair, exchange and support one another through arrangements which conventional economic analysis does not always describe adequately.

In an expanding industrial economy, such activities may be regarded as marginal.

In a shrinking economy, they may become central.

The significance of KasiNomics Unleashed is therefore greater than its account of South African entrepreneurship.

It invites us to consider how economies organise themselves when conventional institutions do not provide sufficient livelihoods.

Alcock sees an enormous economic opportunity.

I see evidence of a capacity for grassroots economic adaptation which may become increasingly necessary.

The difference is one of circumstances and expectations.

What is developing alongside the conventional economy in South Africa may help us understand how a future local economy could emerge in Britain.

Localism will not necessarily arrive through government policy, economic planning or political reform.

It may arise gradually, locality by locality, as people discover that the most reliable way to obtain essential goods and services is increasingly to produce and exchange them closer to home.

The economy of the future may be smaller, simpler and less wealthy in conventional monetary terms.

But it need not be devoid of economic activity, enterprise or human ingenuity.

Indeed, the need for those qualities may become greater than ever.

And perhaps that is the most important lesson to be drawn from GG Alcock’s book.

Tim Stanley, writing in The Daily Telegraph on 19 October 2026, argues that France’s growing disorder is a warning of what may soon happen throughout Europe, including Britain. He sees the violence, political extremism and loss of social cohesion as symptoms of something much deeper: the collapse of the moral and philosophical foundations of Western society.

He may well be right about the direction of events. But there is another explanation, one that goes beyond philosophy and politics. What we are witnessing may be the early social consequences of an economic system that can no longer deliver what people have been taught to expect.

And that raises a much more important question. If the existing system is becoming unsustainable, what will replace it?

The Economic Foundations of Social Disorder

For generations, Western societies have been organised around the assumption of continuing economic growth. Governments have promised better public services, rising living standards, expanding welfare provision and greater opportunities for each succeeding generation.

These promises depended upon an expanding economy.

Growth made it possible to increase public spending without taking too much from existing taxpayers. It allowed governments to borrow against anticipated future prosperity. It supported an increasingly complicated society in which growing numbers of people worked in administration, finance, regulation and services rather than producing life’s essentials.

But the foundations of this arrangement are weakening.

The economy depends upon energy. More precisely, it depends upon the surplus energy remaining after the energy industry has met its own requirements. As the energy cost of obtaining energy (ECoE) rises, the surplus available to support the wider economy comes under pressure.

This does not mean that energy is physically running out. It means that maintaining the energy supply, and the increasingly complex systems dependent upon it, becomes more costly.

Technology may offset some of these pressures, but it cannot abolish the underlying requirement for energy and materials.

The result is an economy struggling to maintain commitments made during a period when continuing growth seemed assured.

Governments respond by borrowing more, raising taxes and attempting to preserve institutions that have become increasingly expensive to operate.

But borrowing cannot create the real resources needed to sustain an economy indefinitely. It merely transfers financial obligations into the future.

Why Young People Are Angry

Stanley attributes much of the violence in France to destructive philosophies and the loss of traditional values.

There may be something in this. But it is difficult to separate attitudes from economic circumstances.

Young people have grown up being told that education, hard work and ambition will bring prosperity. Yet many face expensive housing, insecure employment, limited prospects and public services under increasing strain.

They see older generations possessing houses and assets that they themselves may never afford.

At the same time, governments continue to promise improvements that they seem increasingly unable to deliver.

The resulting disappointment creates fertile ground for political extremism.

None of this excuses violence or the destruction of property. But simply condemning the attitudes of those involved does little to explain why discontent is spreading.

There is a deeper problem. Society continues to promise the rewards of economic expansion when the material foundations of that expansion are becoming less secure.

This contradiction cannot be resolved by changing political parties or adopting a different philosophy.

The Limits of Central Government

France and Britain have something important in common. Both have developed highly centralised systems of government.

Decisions affecting everyday life are increasingly made by institutions far removed from the communities experiencing their consequences.

National governments attempt to manage housing, education, health, transport, energy, employment and welfare through complicated administrative systems.

As economic pressures increase, these arrangements become harder to finance and maintain.

Governments then face impossible choices. Higher taxation weakens household purchasing power and businesses. Reduced expenditure provokes opposition from those who depend upon public services. Additional borrowing increases future obligations and debt-servicing costs.

Every proposed solution seems to create another problem.

Political parties offer different ways of distributing the available money, but few confront the possibility that the amount of real economic activity available to support the system may itself be contracting.

This helps explain why political dissatisfaction persists regardless of which party holds office.

The problem is becoming structural rather than simply political.

The Breakdown of Complexity

Modern Western societies have become extraordinarily complicated.

Food travels enormous distances. Energy depends upon extensive networks. Essential goods require international supply chains. Public services depend upon layers of administration and specialised technology.

All of this requires energy, materials, skilled labour and money.

Complexity is affordable when the economy generates sufficient surplus to maintain it. When that surplus contracts, complexity becomes a burden.

Infrastructure deteriorates because maintenance is postponed. Public services become less reliable. Businesses close because their costs exceed what customers can afford.

Governments struggle to maintain the systems upon which people have become dependent.

The consequences are not necessarily sudden. Economic contraction may appear first as declining quality, longer waiting times, reduced services, higher prices and increasing debt.

Only later does the underlying deterioration become unmistakable.

Social unrest may therefore be a consequence of economic shrinkage rather than its principal cause.

Localism: The Alternative to Breakdown

Towards the end of his article, Stanley suggests that people may withdraw from failing national institutions and form close communities capable of preserving social order and traditional values.

This is perhaps the most interesting part of his argument.

He is approaching, from a philosophical direction, something remarkably close to Localism.

But Localism need not be a deliberate political or religious movement. Nor does it require people to abandon society and establish isolated communities.

It can emerge naturally as economic circumstances change.

When long-distance distribution becomes more expensive, local production becomes more attractive. When large organisations can no longer afford their administrative structures, smaller arrangements become more practical. When national services become less reliable, people increasingly depend upon those living and working nearby.

Food production, maintenance, repair, care and other essential activities begin to acquire greater importance.

The distinction between economic and social life becomes less pronounced. People increasingly know those who produce their food, maintain their buildings and provide everyday services.

The locality becomes more than a place of residence. It becomes an increasingly important economic and social unit.

This does not mean that everything must become local.

Defence, telecommunications, specialist hospitals, national railways and certain other functions will continue to require national organisation.

But much of everyday economic activity could become more local because this would reduce the energy, transport and administrative costs associated with maintaining complex national and international systems.

Localism would not necessarily be chosen through political debate. It could develop because economic circumstances increasingly favour it.

The Return of Mutual Dependence

One of the greatest changes brought about by industrialisation was the separation of people from the communities upon which they had previously depended.

Employment drew people away from their families. Large organisations replaced many local arrangements. Shops and services became concentrated in distant centres. Increasing mobility made it possible to live without knowing one’s neighbours.

Economic growth made this possible.

People could purchase services that earlier generations had provided for one another.

But as household purchasing power comes under pressure, this arrangement becomes less secure.

Families may increasingly need to live closer together. Neighbours may share equipment, skills and responsibilities. Elderly people may depend more upon local networks of assistance. Small businesses and workshops may become important sources of employment.

Such developments will not eliminate hardship or conflict. Nor should we romanticise the difficulties of earlier rural and urban communities.

Nevertheless, mutual dependence can provide a stronger foundation for social cohesion than reliance upon distant institutions.

A society in which people contribute directly to the wellbeing of those around them may have less need for the elaborate administrative structures that have grown up during the age of economic expansion.

Britain May Be Next, But Not Necessarily in the Same Way

France has a long tradition of public protest and confrontation. Britain has generally expressed dissatisfaction differently.

There is no certainty that the violence seen in France will be repeated here on the same scale.

But Britain faces many of the same underlying pressures.

Public debt is enormous. Essential infrastructure requires substantial expenditure. Local authorities face financial difficulties. Housing is increasingly unaffordable for younger people. Public services are struggling to meet expectations.

Meanwhile, political debate remains dominated by arguments about how to restore economic growth.

Very little attention is given to the possibility that sustained growth may no longer be achievable in the form upon which the present system depends.

If that possibility becomes reality, the political arguments of today will increasingly lose their relevance.

The central question will no longer be how to distribute the benefits of growth.

It will be how to organise society when those benefits are no longer available.

Collapse or Evolution?

Tim Stanley’s article ends with a bleak assessment of Western civilisation.

But fiscal and societal breakdown need not mean the end of organised society.

It may mean the end of a particular form of organisation.

The highly centralised, energy-intensive and financially dependent arrangements developed during the age of industrial expansion may gradually become unaffordable.

As they contract, other arrangements will emerge.

Some will undoubtedly be difficult and disorderly. Economic shrinkage is unlikely to be painless. There will be resistance from those whose livelihoods and expectations depend upon preserving the existing system.

But there will also be opportunities to rebuild economic and social relationships on a smaller and more sustainable scale.

The danger is that governments will devote their remaining resources to maintaining institutions that can no longer be afforded, rather than allowing and supporting practical alternatives to develop.

Localism offers a different perspective.

It does not promise to restore the prosperity of the past. It recognises that a shrinking economy will require a different organisation of everyday life.

It places greater emphasis upon essential production, practical skills, local employment, mutual assistance and reduced dependence upon distant systems.

Most importantly, it recognises that the future need not be designed and imposed from above.

It can evolve from below, locality by locality, as people adapt to changing economic realities.

Stanley may be right that Britain is following France towards fiscal and social breakdown.

But he leaves unanswered the most important question.

What happens afterwards?

The answer may not be another political ideology, another government programme or another attempt to revive economic growth.

It may be the natural emergence of Localism as the economic and social organisation of a post-growth society.

And, unlike the political movements that seek to preserve an increasingly unaffordable system, Localism does not have to wait for permission from government.

It can begin wherever people live.

Britain’s political leaders are promising a new age of industrialisation. Yet the factories described in the Telegraph’s report are closing, reducing production or struggling to survive. The promises point towards an expanding industrial future. The physical evidence points in the opposite direction.

The demolition at Llanwern is a powerful image of this contradiction. Buildings that once represented industrial strength are being dismantled while politicians promise to restore that strength.

But the deeper question is whether the conditions that supported the industrial era can be restored at all.

The argument that the industrial era is over does not mean that every factory will close. It means that industrial expansion can no longer be assumed to provide the organising principle of our economy and society.

The Conditions Have Changed

Industrialisation depended on abundant energy becoming available at a cost that allowed production to expand. Coal, followed by oil and gas, enabled machinery to replace human and animal effort on an extraordinary scale.

Factories produced more. Transport carried goods further. Larger markets supported larger businesses. Rising incomes allowed households to buy what those businesses produced.

This became a reinforcing process. More energy supported more production, more consumption and further investment.

Politicians still expect that process to resume. Their proposals assume that investment, technology and government encouragement can set it moving again.

But investment is a financial commitment. Production is a physical activity. Money cannot remove the need for affordable energy, materials, functioning infrastructure and customers who can pay.

The Telegraph’s account repeatedly returns to these constraints. Energy costs undermine production. Overseas competition squeezes margins. Factories operate below capacity. Government support runs up against strained public finances.

These pressures are evidence of Britain’s industrial difficulties. They do not, by themselves, prove that industrial expansion has ended everywhere. Nevertheless, they expose the weakness of promising a return to industrial prosperity without explaining how its physical foundations will be secured.

Moving Production Does Not Remove Dependence

For decades, Britain could lose factories while continuing to consume manufactured goods. Production moved elsewhere. Imports filled the shops.

This made deindustrialisation appear manageable.

But an economy dependent on imported goods still depends on industry. It also depends on international transport, reliable suppliers and sufficient income to pay for those imports.

Calling Britain a service economy does not release it from these requirements.

Financial services, consultancy, administration and digital businesses all operate within a material world. They need electricity, buildings, equipment, food and transport. Their customers must have money to spend.

As households devote more of their income to essentials, some discretionary services face the same affordability pressures as manufacturers.

Changing the description of the economy does not change its foundations.

Technology Cannot Promise the Old Prosperity

Advanced manufacturing will remain valuable. Britain needs medicines, electrical equipment, machinery and other essential products. Research can improve their production.

But successful specialist factories cannot automatically recreate the employment once provided by mass industry. Automation may increase output while requiring fewer workers.

Nor does electrification abolish the energy question. Electric furnaces and automated production still require dependable power. New generating capacity, networks and equipment must themselves be built and maintained.

Technology can change what is possible. It cannot guarantee that everything technically possible will also be affordable.

Preserve What We Need

The end of the industrial era calls for a different purpose for industrial policy.

The priority should be to preserve the capabilities needed to sustain everyday life. These include food processing, medicines, water equipment, essential transport, repair and the production of durable tools.

Some require substantial national organisation. Others can operate closer to the people they serve.

Public support should therefore be judged by the essential capacity it protects. A subsidy may be justified where losing a factory would create a serious vulnerability. That does not make every struggling business the foundation of a new growth era.

We must distinguish maintaining necessary production from attempting to recreate an economy built around continually increasing consumption.

The Opening for Localism

As distant systems become more expensive or less dependable, meeting needs within a locality becomes more valuable.

Repair, food growing, building maintenance, care and small workshops can provide useful work. They can also reduce some transport requirements and extend the life of existing possessions.

This will require skills, premises, access to land and customers with sufficient purchasing power. People leaving discretionary employment will not become successful local businesses merely because work elsewhere disappears.

But these practical foundations deserve more attention than another promise to restore the industrial past.

The industrial era is over in the sense that its central expectation, continuing expansion supported by cheap energy and rising consumption, can no longer safely guide our future.

Industry will remain. Its purpose must change.

The task is to organise production around what people need, preserve the capabilities we cannot afford to lose, and allow local economies to develop around the work of sustaining life.

Written in response to “Burnham wants to revive British industry. This is why he’ll fail”, by Matt Oliver, Emma Taggart and Szu Ping Chan, published in the Telegraph on 4 October 2026.