Localism, however, will not be taking a holiday. While I am away, I shall continue watching for those small but significant signs that the formal economy is weakening and local life is quietly beginning to change.
Normal blogging will resume when I return, hopefully with fresh observations and new ideas.
Recent warnings from Government ministers that artificial intelligence could threaten employment and even undermine the welfare state may be seen by many as a crisis. Yet viewed through the lens of localism, they may also be an indication of a profound economic transition already underway.
For over two centuries, society has been organised around paid employment. People travelled to work, earned wages, paid taxes and relied on national systems for welfare, healthcare and pensions. Economic growth provided the fuel that kept this arrangement functioning.
However, if AI increasingly replaces human labour, that model begins to weaken. Government concerns are focused on the loss of tax revenues and the increasing cost of supporting people who are no longer employed. The result could be growing pressure on public finances and on the welfare state itself.
Localism suggests a different interpretation.
As employment opportunities decline, people do not simply cease to be productive. Instead, many begin to redirect their time and effort into activities that are useful within their own locality. Food growing, home maintenance, repair services, care for older people, local trading networks, community enterprises and small-scale self-employment become increasingly important.
Much of this activity may not appear in GDP statistics and may not generate significant tax revenue, but it still creates value. Indeed, throughout history many communities functioned successfully with far less dependence on formal employment than is common today.
The growing number of unemployed people may therefore become one of the drivers of localism. Rather than being entirely dependent upon national welfare systems, localities may gradually develop stronger networks of mutual support and practical economic activity.
This does not mean that national government disappears. Essential services such as defence, railways, specialist healthcare and national infrastructure will still require central organisation. However, the everyday economy of food, care, maintenance and local services may increasingly move closer to home.
In this sense, the rise of AI and the prospect of technological unemployment may accelerate a trend that is already visible. As the growth economy weakens, local economies become more important.
What appears to be a problem from the perspective of the national economy may also be a sign that society is evolving towards a more localised form of economic life.
The unemployed may not simply be the casualties of technological change. They may become the pioneers of the next stage in the development of localism.
As large-scale systems lose the ability to describe reality, the future belongs to small systems that preserve feedback.
As the formal economy that shaped the last two centuries begins to contract, many Canadians are quietly shifting toward local solutions. This isn’t driven by nostalgia or a rejection of modernity. It’s a pragmatic recognition: small-scale systems often perform better when large ones start to falter.
The core advantage of localism lies in preserving feedback. It keeps decisions close to their consequences and anchors activity in observable reality. In a contracting world, small scale isn’t optional—it’s structurally superior for resilience, accountability, and honest adaptation.
A quick hat tip to Chatting About Localism. Their clear explorations of scale and place have sharpened how I think about these dynamics.
How Scale Actually Works
In localism, scale isn’t just a buzzword; it’s the physical and social size at which decisions are made. It answers a basic question: How big is the system doing the deciding?
Localism doesn’t insist that “small is always better.” Rather, it makes a precise claim: many activities have been pushed far beyond their appropriate scale. This shift has replaced practical judgment with bureaucracy and systemic resilience with narrow efficiency.
Small Scale (The Localist Edge)
Proximity: Decisions are made where their effects are felt.
Knowledge: Producers and users often know one another personally.
Speed: Feedback arrives quickly; mistakes are visible and corrected before they compound.
Examples: Food grown and sold within a region; housing shaped by local materials; care networks built on neighborhood trust.
Large Scale (The Institutional Trap)
Distance: Decisions are made far from consequences.
Rules: Systems depend on formal procedures, centralized targets, and metrics.
Cascades: Failures aren’t contained—they ripple across the entire system.
Examples: National planning regulations that ignore regional climate; centralized food supply chains vulnerable to distant disruptions.
Why Small Systems Stay Honest
This structural difference becomes critical as formal systems weaken. Large organizations don’t merely become less efficient—they become structurally prone to losing touch with reality.
The reason isn’t individual dishonesty; it’s the effect of scale on feedback.
The “Ostrom” Factor
The late Elinor Ostrom’s research on common-pool resources (fisheries, irrigation, grazing lands) proved this. In thousands of cases, small, self-governing groups consistently outperformed centralized management. They didn’t function because the people were unusually virtuous—they functioned because dishonesty was visible, costly, and immediately damaging.
As discretionary spending contracts and formal institutions struggle to respond, large systems grow more fragile. They require ever-greater simplification to function, and simplification slides into distortion. Targets supplant reality; “invented facts” become the lubricant to keep the machine running.
Local systems, by contrast, don’t “scale up”—and that’s precisely their strength. Their limited size keeps them tethered to observation and personal responsibility.
Localism isn’t a nostalgic retreat. In an era of strained housing, volatile energy prices, and brittle supply chains, it is the structural precondition for accurate description and effective adaptation. It is how we stay connected to reality when the “official” version of reality no longer makes sense.
Join the Conversation
Where in your own life or community do you see small-scale arrangements already outperforming distant ones? What practical steps could help shift more of our everyday needs toward an appropriate, local scale?
Modern science has revealed a picture of the universe that differs sharply from the mechanical view we inherited from the industrial age. The world of atoms and particles, once imagined as hard little objects bouncing about in empty space, has dissolved into a web of relationships. Nothing exists in isolation. Everything is defined by its interaction with everything else.
Quantum theory shows that at the smallest scale of nature, separation is an illusion. A particle has no fixed position until it interacts with another; its properties are not its own, but part of a larger pattern. The same lesson appears in the living world. A forest, for example, is not a collection of trees. It is a continuous exchange between soil, fungi, roots, air, and light. Each element draws its life from the rest.
Human societies follow the same law. Communities thrive not through competition but through relationship — through the sharing of work, knowledge, and care. In that sense, localism expresses in social form what physics and biology reveal in nature: that coherence arises from connectedness.
When economies grow beyond the reach of personal understanding, coherence is lost. The global market may seem efficient, yet it often weakens the bonds that hold life together. The shift towards localism can be seen, then, as nature restoring balance — the social equivalent of the universe seeking stability through renewed connection.
In a local economy, producers and consumers know one another. The exchange of goods and services is also an exchange of trust. Each action ripples through the small web of the locality, as energy ripples through the web of nature. The result is not perfection but balance — a kind of social harmony that mirrors the natural coherence of the physical world.
The quantum world teaches humility. It reminds us that reality is not built from separate parts but from relationships that our minds can barely grasp. Local life brings that understanding home. It allows us to live within the pattern, rather than trying to dominate it. In doing so, we rediscover the truth that health — of people, places, and the planet itself — depends on connectedness
The conclusion of this piece, in relation to the future of diesel for freight transport, is that “The future will be increasingly localized, with much less product variants and with much simple lifestyles.” Yet another reason for a future of localism.
The world economy is grappling with a gradually worsening diesel shortage. In fact we might have already passed peak diesel in 2023, already. Despite claims to the contrary the world is still fed, moved, mined and built using this extremely energy dense fuel, thus its increasingly tight availability is starting to become a limiting factor to the growth of the world economy. The question poses itself: can the electrification of transport and mining ease the pain somewhat, or is it yet another myth?
World oil and natural gas supply is about to peak, then begin its long decline in the years ahead. While this statement stirred great controversy two decades ago, today it seems to be normal news. Almost too normal — as if the world no longer needed oil. Looking at the prices alone West Texas Intermediate at $65 per barrel seems to be a bargain, especially when compared to the price of gold or other commodities. Surely, if we needed more petroleum its price would be much higher, right? Well, as usual, things are a bit more complicated than that. In fact, I argue, the collapse of oil prices foreshadow a much greater than expected fall in oil supply, but let’s not get ahead ourselves just yet.
Oil is not just another commodity. It is still the lifeblood of this civilization thanks to its immense energy density, portability, low weight and widespread availability. Despite the fact that its use is a major contributor to climate change, we still heavily depend on it for agriculture, mining, long distance transport and construction. Yet, as the image below (taken from the same Ember document we discussed last week) shows: transitioning to an electricity driven transport system takes longer than expected. To be on the optimistic side I could say we just have to wait another century. Or two.
I’m not here to spread unwarranted optimism, though. We simply don’t have time till the end of this century to make a dent on fossil fuel use in road transport — and not primarily because of climate concerns. Diesel fuel availability worldwide is already on a high plateau, even as we add more and more unconventional oil and natural gas liquids to the mix we euphemistically call ‘oil’. Before 2014 every barrel of oil added to world supply resulted in a proportionate increase in diesel fuel consumption: the conversion ratio hovered around 30% (i.e.: one third of each barrel of oil was turned into gasoil). After 2014, however, this tight correlation started to break down: diesel consumption could no longer keep up with growth in oil supply. While prior to 2014 diesel supply grew at a steady 2% year-over-year, after 2014 that annual growth rate virtually collapsed by an order of magnitude to 0.28%. What’s that all about?
Diesel fuel consumption worldwide is already at a high plateau, even as we add more and more unconventional oil and natural gas liquids to the mix. R values represent correlation between diesel consumption growth and increases in world oil supply. The closer this correlation is to 1 the better the match between the two data sets are. Data source: Energy Institute / Chart: own work
As we have seen from the ratio of electricity use in road transport, that abrupt slow-down in diesel consumption growth could not come from truck drivers switching to batteries all of a sudden. If we take a good hard look at the source of “oil” supply growth since 2014, however, we might quickly realize that not all that glitters is gold — i.e. not everything is “oil” in that ever growing mix. Production growth of conventional onshore and shallow water crude — the best inputs to make diesel fuel from — began to stall in the middle of the 2000’s already, with almost all new sources of oil coming from unconventional wells ever since 2015. These new sources of petroleum, especially tight oil (oil trapped in low-permeability rocks like shale and limestone) and natural gas liquids (hydrocarbons extracted from raw natural gas during processing, including components like ethane, propane, butanes, and pentanes), however, contain very little if any diesel compounds (1). Sure, refineries could and did make a lot of plastic and gasoline out of this new found “oil”, but very little truck fuel. You see, this is the problem with trying to “replace” conventional oil with all kinds of liquids produced by the petroleum industry: most of it is unsuitable for use in trucks, excavators, ships, locomotives, combined harvesters and the rest (2).
Note how the peak oil movement in the early 2000’s was right: conventional onshore plus shallow water crude oil did peak in 2005. Adding deepwater oil into the mix pushed out this peak by two years only. These conventional oil sources are on the decline ever since, with natural gas liquids, extra-heavy and tight oil being the sole sources of growth these days. Source: IEA
What does the future hold, then? Well, not more conventional oil, that is for sure. According to the forecasts prepared by Rystad Energy and used by the IEA, we have 2–3 years till both oil and natural gas production peaks worldwide, then begins to decline. And if you take a look at the chart below, you can see that conventional oil production will experience an especially steep decline, despite additions from investments in existing and approved projects. Unconventional oil production will continue to expand into the future, but it will be unable to offset the decline from traditional oil fields, let alone make up for the fall in diesel fuel production.
Diesel availability can thus be expected to drop precipitously in the decades ahead, foreshadowing serious problems in road transport, mining, shipping and mechanized agriculture.
Oil companies will not sit idle, and watch their market collapse, though. They will do everything to at least mitigate that catastrophe ahead. According to the IEA analysis linked above:
“After a primary recovery period, during which oil and gas is produced via natural reservoir drive mechanisms, operators can deploy a variety of measures to boost production or to slow decline. This includes infill drilling of both vertical and horizontal wells, pumping and lifting, large-scale injections such as water flooding, and enhanced recovery techniques. In practice, these activities can occur in sequence or in combination according to suitability, availability and economics of the technology, and in accordance with a company’s reservoir management practices.”
However, these techniques are not without their own risks:
“Once well density is maximised and infill drilling slows, production decline may accelerate above the rates observed before the new drilling was undertaken.”
To put it bluntly: enhanced oil recovery can buy us a little time, but at the cost of an abrupt decline in the end. Not the most reassuring news, if you ask me. Switching fuels sources will be of little help either. Encouraging home owners to change to electric or gas heating from oil, will not solve anything since both are dependent on a non-renewable resource equally prone to peak and decline just like oil (40% of US electricity is still generated by natural gas). The same goes to trucks, buses and agricultural machinery powered by CNG or LNG: since worldwide gas production is about to peak together with oil, switching between the two energy sources will not improve the situation the slightest.
Electrons to the rescue!
That leaves us with one thing to pin our “hopes” on: the rapid electrification of road transport and mining. And why not agriculture or container and bulk shipping? — one might ask. Well, weight is already a huge issue when it comes to agricultural machinery. Soil compacted by tractors can absorb less moisture and plant roots do not develop properly in them. Ocean shipping, often covering thousands of miles, is also “hard” (read: impossible) to electrify — no battery would last a month long journey across the Pacific. And while wind sails and solar panels could reduce fuel consumption by a couple of percentage points, they cannot completely eliminate it. That leaves us with using batteries in road transport, thereby saving fuel for agricultural use and shipping where heavy batteries and electrification is still not an option.
So what are the trends in heavy-duty electric vehicles? According to the EIA’s Global EV Outlook 2025 electric bus sales have already reached an invisible ceiling (around 60% of all units sold) in China, while other regions are still dominated by diesel bus sales. Demand for electric trucks, on the other hand, is still in the 1–5% range — even in China. No wonder, despite the optimistic sentiment shared by the EIA and some other organizations, long distance (500 km range) battery electric trucks are still two to three times more expensive than regular ones, and require multi-hour long stops to recharge. Using a fast charger, on the other hand, would degrade the battery much faster than regular charge, so the cost of replacing batteries much more often would quickly negate the benefits of not having to wait several hours for each recharge. And while battery swapping could be an option, building continent wide networks of standardized battery swapping stations is still a pipe dream. Consequently electric trucks seem to remain stuck in the niche of short distance milk runs, parcel deliveries, or drayage (the transport of shipping containers over a short distance to their final destination).
Battery electric trucks are ideal for cycles with combinations of lower daily mileage, lower speeds, and predictable routes, not for long distance delivery consuming the vast majority of diesel fuel worldwide.
Then what about electric vehicle trends in mining? Well, apart from some promising experiments, the market for battery electric mining equipment is virtually non-existent at the moment. Even the most optimistic analysts admit, that there are serious productivity concerns when it comes to switching to battery electric mining trucks: “Currently, electric trucks cannot match the uptime of diesel trucks, which require only about 10 minutes of refueling per day compared to the 1 to 2 hours battery charging.” And not only that. “Battery technology remains a key obstacle, with current advancements from suppliers like CATL, ABB, and Northvolt only recently meeting the high demands of haul trucks. The lack of a unified standard in battery designs and chemistries complicates the selection of the optimal solution for mining applications.” From where a 32% compound annual growth rate (unprecedented in any other business) would come from then, remains a mystery for me. And remember, if Rystad’s calculations are correct, we are looking at a nosedive in conventional oil production in the years ahead. We don’t have decades to develop and to ramp up new battery technologies.
The little time left to ramp up electrified mining and road transport is not the only limitation, though. While battery technologies could and most probably will improve in the future, generating the megawatts of electricity needed to fast charge these huge batteries will require a massive expansion of the electric grid, or necessitate a similar scale power generation on site. Since grids are overloaded already — and because most major mines are far away from civilization — this latter, however, could only mean natural gas turbines. “Renewables” could only provide some auxiliary support, as a mine cannot be shut down just because its overcast outside or the wind isn’t blowing. (The same goes to long distance trucking, just sayin’.) This continued reliance on fossil fuels begs the question, though: what’s the point of electrification if we just swap one fast depleting fuel (diesel) to another one (natural gas), or in the case of China: coal?
Economic reality
Finally this takes us back to the economics of extracting and making these fuels. As we have seen above, demand for diesel was not dented by electrification or alternative fuels. As a result the world is already grappling with a serious diesel shortage, evidenced by record high refinery margins made on making and selling this type of fuel. Ever since 2022 (the failed return to growth after the pandemic and Western sanctions completely upsetting diesel supply in the EU) there is a chronic shortage of the right kind of oil to make diesel from. And with relentless attacks on Russian refineries, diesel export capacities are dwindling as well. Adding all sorts of liquids from unconventional sources, on the other hand, have only resulted in a decline in oil prices, and a widening gap between desires and reality. After ten years of struggling conventional oil (and consequently diesel) supply, the penny has dropped: real, productive economic growth could no longer continue. Something got to give: the Chinese building boom had to end, and Europe’s prosperity had to be sacrificed on the altar of continued financial expansion — lest we wanted to risk tipping the entire system over.
Perhaps the best indicator of this combination of demand destruction, mounting recession fears and flight to safety is the gold to oil ratio, representing how many barrels of oil you can buy with one ounce of gold. You see, the price of oil is the first to plummet during a recession, while gold is seen as a safe haven to protect “wealth”. Whenever this ratio blows out, it indicates a flight to safety and prevailing market caution. As shown on the chart below, we are well past anything we have seen in the past — except for the 2020 health crisis, which resulted in negative oil prices. Such low prices, however, virtually guarantee the outcome laid out by Rystad and the EIA above: oil at $65 or below is simply too cheap for most of the drilling companies to go after. The material costs of drilling ever deeper, less and less productive and ever faster depleting wells simply does not worth the expenditure at these low prices. And soon, not even at $95 a barrel.
Gold to Oil Ratio — Historical Chart. Source: Macrotrends
Conclusion
Based on these premises electrification can only slow the decline in transport and mining volumes somewhat, but not considerably. As the looming diesel crisis becomes acute, the price of this fuel could skyrocket — but only for a very short time. Since our entire world economy with its six continent supply chains and high material intensity relies on cheap fuel to operate, should such a price spike occur businesses would go bankrupt in droves. A slow but steady rise in the price of diesel, on the other hand, could make anything mined, transported or built by oil so expensive, that people could no longer afford them, leading to a deflationary crisis. Either way demand for diesel would fall in tandem with supply, leaving us with less and less stuff manufactured then brought in from far away. Eventually all the benefits of globalization would be eliminated: no more cheap clothes made available by cheap labor in Cambodia, or battery minerals mined in the Congo, copper in Chile and nickel in Indonesia.
The future will be increasingly localized, with much less product variants and with much simple lifestyles. Remaining diesel supplies will be diverted entirely to maintain agriculture and food delivery, focusing on plant based foods (animal husbandry requires a lot more fuel than growing peas and beans). For the average citizen this will translate into higher food and skyrocketing meat prices, leaving little to no budget to buy anything else than a shirt or a pair of shoes every now and then. (Especially so, if you consider the effect of forced localization raising the cost of doing anything as opposed to just importing stuff from the cheapest source.) Infrastructure projects will be abandoned, just like major housing developments as these activities take a lot of fuel to complete.
How our complex, self-adaptive world economy would react to such a shock as a withdrawal of its prime source of energy, is anyone’s guess. We are looking at a highly volatile situation ahead, lasting decades into the future. Currency crash, inflation, deflation, stagnation and decline are all in the cards. Once the initial part of the crisis is over, we will be looking at a totally different economy though. Many companies will go bankrupt, and the workforce hence released would have to find jobs in agriculture and local workshops, as the demand for cheap labor could only increase with less and less affordable fuel to drive machinery. Adopting a much less materially intensive lifestyle could, however, match the availability of diesel supply, and together with a persistent fall in birth rates could ensure a smooth landing towards the end of this century when oil finally runs out. Yes, I know this might sound messy and pessimistic for those pinning their hopes on this technological civilization going on forever and a day… I have to ask, though, how exactly did you expect ‘infinite growth on a finite planet’ to play out then?
For those who live in country areas where mains water supply may turn out to be a problem
Here’s a helpful schematic showing how a typical gravity-fed domestic rainwater harvesting system works in the UK—perfect for giving you a visual starting point as we dig into the details.
Rainwater Harvesting for UK Homes (DIY-friendly Guide)
1. Why Rainwater Harvesting Makes Sense—and Might Become Essential
Cost-conscious resilience: By reusing rainwater for toilets, laundry, outdoor use, and gardens, households can significantly reduce mains water bills—an increasingly attractive benefit during economic uncertainty or rising utility costs.
Environmental & infrastructure relief: Harvesting rainwater eases pressure on mains supplies and helps manage stormwater runoff, mitigating flood risks in urban areas. Standards like BS EN 16941‑1:2018 and the SuDS Manual guide system design and functionality (Total Water Systems, Wikipedia, Wikipedia).
Legality & regulation: Rainwater collection is legal in the UK. You don’t need abstraction licences for systems that collect only roof rainwater and don’t tap natural watercourses (GOV.UK, The Sun). That said, strict rules ensure that non‑potable rainwater remains completely isolated from mains drinking water—requiring features like an air‑gap separation (valves alone aren’t enough) (RainHarvesting).
Growing focus on sustainability: With water stress rising and bills expected to climb, rainwater systems are increasingly seen as both eco‑friendly and cost‑smart improvements for UK homes (Homebuilding, Ideal Home).
2. Core Components of a DIY Rainwater Harvesting System
Here’s what your system needs to work safely and effectively:
Catchment & guttering Rain falls onto your roof and is directed through gutters and downpipes.
First‑flush diverter & basic filter A diverter prevents the first, dirtier rainwater (with debris and dust) from entering the tank. A primary mesh filter adds extra protection (Wikipedia, GRAF UK).
Storage tank (rain barrel or butt)
Above-ground tanks (water butts) are the most DIY-friendly and cost-efficient for gardens and non‑potable uses (The Eco Experts).
Below-ground tanks are more discreet and higher capacity but require excavation and wetter-weather considerations (Wikipedia).
Pump & delivery path Gravity can feed garden or external taps, but a pump may be needed for pressure or internal uses like flushing toilets or washing machines. Separate pipes labelled clearly (e.g. black pipe with green stripes labelled “RAINWATER”) are legally required to avoid cross-contamination (The Spruce, GRAF Website).
Mains backup with air‑gap A clever system ensures that when the tank runs dry, mains water supplements—but via an air‑gap system (not a mere valve) to maintain total separation and hygienic safety (RainHarvesting).
Overflow & environmental compliance Excess water should overflow safely without affecting rivers or requiring abstraction licences (GOV.UK).
3. DIY: Step-by-Step Installation for a Basic Water Butt Setup
This is the most accessible DIY route, ideal for gardeners or those starting small:
What you’ll need:
Water butt (plastic or decorative options available)
Air-gap mandatory: Non-potable water systems must not risk contamination of mains drinking water; always use an air-gap, and never rely solely on check/ball valves (RainHarvesting, GRAF Website).
Labeling & color coding: Pipes carrying rainwater must be clearly marked (e.g. black with green stripes, labelled “RAINWATER”) and taps must also be labelled to prevent future mistakes (GRAF Website).
No licence needed: Pure roof-harvested rainwater for domestic use doesn’t require abstraction licensing—so long as it’s not mixed with surface or ground water systems (GOV.UK).
Check with your water supplier: It’s wise to inform them of your plans—especially if you want to be sure about local water fitting requirements or guidance (Wikipedia).
5. Summary Table for Quick Reference
Stage
DIY Steps & Tips
Catchment
Use clean gutters; add first‑flush diverter and mesh filter
Storage
Choose above‑ground butt or buried tank depending on needs & budget
Distribution
Use separate, labelled piping; add pump if needed for indoor use
Back-up
Install mains supply via air‑gap system
Safety
Adhere to Water Fittings Regs and building regs; label visibly to avoid cross-use
Maintenance
Annually clean, clear debris, check structure and pumps
6. Final Thoughts: Start Small, Scale Wisely
Beginning with a simple water butt installation is both cost-effective and easy to manage—and very timely, especially amidst potential hosepipe bans or rising water prices (The Eco Experts, GRAF Website, RainHarvesting, Ideal Home). As time and budget allow, you can scale up to more elaborate systems that serve your home’s internal demands—always respecting the regulations and air-gap safety standards.
ChatGPT says: If you’d like help choosing components, sizing your tank, budgeting, or tackling deeper installations (e.g. underground tanks or full domestic systems), I’m here to help!
We are clinging to a dangerous fantasy – the belief that we can simply replace fossil fuels with something else and carry on as before. That wind, solar, nuclear, or hydrogen will allow us to keep our cars, our flights, our global supply chains, and our high-energy lifestyles. This is not just naïve – it’s reckless.
The hard truth is that there is no substitute for the scale, convenience, and density of energy we once had in oil, coal, and gas. Even nuclear power, often presented as the big solution, cannot sustain our way of life. It is part of the picture – but nowhere near the whole picture.
We must abandon the idea of energy substitution and face what really lies ahead: radical energy descent.
This means reducing our use of all forms of energy – not by a little, but by a lot. It means stepping off the treadmill of endless demand. It means redesigning our lives to need far less.
Not just fewer cars – but fewer journeys. Not just greener homes – but smaller, simpler ones. Not just different production – but less production. Less heating, less cooling, less lighting, less powering.
This is not a message that wins elections or sells products. But it is the message that truth demands. The world is entering a long emergency – of resource limits, climate instability, and economic contraction. More energy won’t save us. Only using less will.
The challenge is no longer technical. It is civilisational.
And so we come to localism – not as a political slogan, but as a survival strategy.
Localism works because it cuts energy demand at the root. It shortens supply chains. It eliminates unnecessary travel. It reduces the need for global logistics, mega infrastructure, and remote bureaucracy. It rebuilds community, relocalises food and work, and makes life slower, simpler, and supportable.
We cannot keep powering the industrial scale of life. But we can power the local.
Localism is not a utopia. It is a pathway through collapse – a way of contracting with dignity. A way of living that fits within the limits of the Earth and the energy it offers.
We don’t need a new fuel. We need a new way of living. That means less of everything – and closer to home.
In today’s post by Tim Morgan he concludes that in our situation, intensifying competition for dwindling resources is likely to drive a disorderly rather than a structured and organised transition to a post-growth social realignment.
Not sure what a post-growth social realignment entails, I sought the advice of ChatGPT:
A post-growth social realignment refers to the broad and often fundamental changes in society that occur when an economy moves away from the goal of continuous economic growth and begins to prioritise well-being, sustainability, and resilience instead. This shift affects not only economic policy but also cultural values, social structures, and political power dynamics.
Key elements of a post-growth social realignment:
New values and priorities
Societies begin to value quality of life over quantity of goods.
Success is measured less by GDP and more by things like health, community strength, environmental integrity, and time affluence (free time).
Restructuring of work and livelihoods
Paid work may become less central; informal work, care work, and community activities grow in importance.
More people might work part-time or in subsistence, local, or cooperative economies.
Decentralisation and localisation
Power and resources may shift from national or corporate centres to local communities.
Local food, energy, and social networks become more important as globalised systems contract or prove unreliable.
Change in consumption patterns
Reduced emphasis on material consumption and status goods.
Simpler lifestyles, reuse, repair, and local exchange are favoured.
Social and political shifts
Governments and institutions may be forced to adapt by supporting more equitable resource distribution, local decision-making, and ecological limits.
New alliances form around common interests in health, fairness, environment, and security.
Redefinition of prosperity and progress
Prosperity is seen as the ability to live well within ecological limits.
Progress is measured by regeneration, not expansion.
In short, a post-growth social realignment describes how societies reorganise themselves socially, politically, and economically when the underlying assumption of infinite growth is abandoned. It is both a consequence of ecological and economic necessity and a conscious reimagining of what a good life and fair society look like.
Throughout history, great civilisations have been undone not only by war or natural disasters but also by the failure of their money systems. Currency, after all, is a collective belief – a token of trust that what we give today will be repaid tomorrow. When that belief falters, the consequences are rarely gentle.
Today, the UK stands at an uneasy crossroads. One path leads to deflation – a slow economic contraction marked by falling prices, wages, and demand. The other is hyperinflation – a rapid and chaotic collapse in the value of money itself. Though opposite in mechanics, both have similar outcomes: uncertainty, insecurity, and a breakdown in the smooth operation of the formal economy.
But perhaps more importantly, both also point toward the same direction for recovery – a turn toward localism.
1. The Deflationary Spiral: Cold Collapse
Deflation emerges not from a single shock but from a gradual unravelling. As demand falls and prices drop, people delay spending. Businesses postpone investment. Wages stagnate, jobs are lost, and the economy contracts viciously. Debts, fixed in nominal terms, become heavier in real terms. Borrowers default, lenders withdraw, and credit dries up.
In the UK, where the economy has long depended on consumer spending, housing wealth, and imported goods, deflation would squeeze every sector. Government tax receipts would shrink. Council services would become harder to maintain. Younger households, already unable to get a footing in the housing market, would see even fewer prospects. The economy, in effect, would start to freeze.
Yet, amid the decline, something curious could happen. As large-scale retail contracts and discretionary markets wither, informal economies may begin to grow. Villages and neighbourhoods could rediscover self-reliance. People might produce more for themselves and each other. Unused buildings could be repurposed. Gardens turned into food plots. Skills once undervalued – fixing, mending, growing – could become vital again.
Deflation, while painful, might open space for new values to take root.
2. Hyperinflation: The Fast Burn
Whereas deflation is a slow implosion, hyperinflation is a firestorm. Prices rise daily, then hourly. Wages cannot keep pace. Savings vanish. Imports dry up. The pound becomes confetti. The entire monetary system loses credibility.
Hyperinflation often stems from government desperation – attempts to paper over fiscal gaps by printing more money. But once trust is broken, no amount of ink can restore it. In such a scenario, the UK might face food shortages, fuel crises, and a collapse in public service provision. Those on fixed incomes – pensioners, carers, those reliant on benefits – would be devastated. The NHS, schools, police, and the power grid could all struggle to function.
Yet, amid the chaos, the seeds of local resilience might also stir. Without functioning money, people fall back on what they have and whom they trust. Barter returns. Local currencies or time credits may emerge. Informal markets bloom. Communities regroup to feed and protect themselves. What had seemed outdated – the allotment, the shared kitchen, the mending shed – becomes essential.
The new economy would not be built on speculation or consumption but on use, purpose, and mutual reliance.
3. Government and Community: Parallel Paths of Response
In both extremes, the national government will try to hold the line. In deflation, it may pump money into the system through quantitative easing or even direct cash payments. It may attempt to stabilise with new currencies, emergency rations, or foreign loans in hyperinflation. But these top-down efforts, while necessary, often arrive late and fail to reach everyone.
The real story may play out not in Whitehall but in back gardens, village halls, and street corners.
Local Councils: Adapting to Survival
Local councils may find themselves adapting in ways never anticipated. Rather than enforcing outdated planning codes or fiscal targets, they might become enablers of land access, food co-ops, energy collectives, and barter markets. Their power would not lie in budgets but in convening, coordinating, and legitimising local action.
Communities: Reclaiming Economic Life
Communities would have to recover the practical skills and habits of resilience: growing food, sharing tools, looking after the elderly, teaching the young outside formal schools, and managing without money. These are not romantic ideals—they are necessities in economies where cash no longer works.
4. The Local Economy as a Stabilising Force
In deflation and hyperinflation, the breakdown is not just economic but social. The price system and the shared sense of what matters and how to meet it fail. This is where localism finds its role: not as a nostalgic retreat from modernity but as a modern response to a failed industrial growth model.
Localism does not mean isolation. It means groundedness. This means that more food, energy, care, and housing are organised within local reach. It represents the re-emergence of informal systems that once sat alongside the formal economy, now rising to meet needs as formal mechanisms falter.
This is not a theory. It has happened before – in Britain’s wartime rationing, in the communal responses to 1980s unemployment, in the resilience shown during the COVID-19 pandemic. When systems break, people adapt. They step up. And often, they do so locally.
5. A Choice Before the Storm
The UK may not yet face full-blown deflation or hyperinflation, but both conditions are in place. High public and private debt, declining productivity, overstretched services, global supply shocks, and fragile consumer confidence form a volatile mix. Whether the economy slows to a halt or runs off a cliff, the result may be the same: the end of business as usual.
We cannot prevent all shocks. But we can prepare for them. The true resilience of the UK economy will not lie in interest rates or bond yields. It will lie in whether people can eat, shelter, warm themselves, and live lives of dignity – even when money fails.
Above all, it may depend on how strong our local economies are when the real test comes.
6. Two Roads, One Destination
Whether the UK slips into deflation or hyperinflation, the outcome is the same: the formal money economy becomes unreliable, and people must turn to other ways of meeting their needs. In both cases, the path forward points to localism – not as a fallback but as the new foundation. Local economies, grounded in real goods, trusted relationships, and mutual care, offer the only reliable base when abstract financial systems fail. The shock may differ, but the response converges: a return to place, people, and the practical work of building resilience from the ground up.
The article, “The Perils of Extremes,” by Tim Morgan offers a thoughtful critique of modern economic and energy systems, emphasizing the risks inherent in polarized and unsustainable strategies. At its core, it highlights three interrelated issues: the overdependence on debt to sustain growth, the diminishing returns from energy resources, and the dangers of ideological rigidity in shaping policy.
Economic and Energy Realities
The article underscores the limits of the debt-driven growth model, which has been central to global economies for decades. This model, while initially effective in fueling expansion, has reached a critical point where the benefits no longer outweigh the long-term costs. The author connects this to declining energy returns, particularly in fossil fuels. As energy becomes harder and more expensive to extract, the economic model built on cheap, abundant energy falters, leading to increased volatility.
Polarization and Ideological Extremes
A significant theme is polarisation’s impact— political, economic, or social. The article warns that extremes, whether advocating unbridled growth at any cost or demanding radical contraction without preparation, are detrimental. It calls for balanced policies that acknowledge resource limitations while fostering innovation and resilience.
Sustainability and Pragmatism
The article argues that the path forward lies in adopting a sustainable approach that integrates economic policy with ecological realities. It advocates transitioning away from the growth paradigm toward one that values equilibrium and community well-being. This requires a nuanced understanding of the challenges and opportunities presented by energy and resource constraints.
Commentary
The article is powerful in its systems thinking, linking disparate elements like energy economics and social stability into a coherent narrative. It challenges readers to question the status quo and consider how moderate, informed policies could mitigate crises. However, the solutions presented, while compelling, rely heavily on theoretical shifts in governance and behaviour, which may be challenging to implement in practice.
Professor Sir Dieter Helm’s essay, The Fracturing of the Net Zero Consensus (October 2024), offers a critical perspective on the challenges and shortcomings of current net-zero strategies, particularly in the UK. He argues that the existing policies oversimplify the complexities of decarbonization and underestimate the associated costs, leading to a fragile consensus that risks eroding public trust. Key issues include renewables’ intermittency, infrastructure inadequacy, and unrealistic timelines for transitioning to a low-carbon economy.
Helm highlights that, while crucial, renewables like wind and solar are insufficient to replace the UK’s heavy reliance on fossil fuels without substantial backup systems, often powered by fossil fuels themselves. The push for rapid transitions, such as electrifying transport and heating, adds to infrastructure costs, which have been downplayed in public discourse. He also criticizes the environmental costs of technologies like electric vehicles and heat pumps, pointing out their dependence on resource-intensive supply chains.
Helm also warns that neglecting transitional fossil fuel strategies and long-term energy storage solutions risks significantly undermining energy security as demand rises in a digitalized economy. His critique suggests that a more realistic, phased approach, accounting for energy security and economic impacts, is necessary to sustain public and political support for net zero.
While Helm’s insights are compelling, some might argue his critique downplays the urgency of immediate climate action and the potential for innovation to address these challenges. Nonetheless, his call for greater cost transparency and a balanced approach between decarbonization and energy security is highly relevant.
James Lovelock’s Gaia hypothesis transformed the understanding of Earth as a self-regulating, living system where the interplay of life forms and physical components work together to maintain conditions that support life.
This profound perspective has implications beyond ecology, extending to how we conceptualise economies. As ecosystems evolve independently and sustain themselves through natural feedback mechanisms, economies can develop and thrive through similar organic processes. This extended exploration delves deeper into how Lovelock’s ideas align with the theory that economies evolve naturally, with minimal government intervention, and discusses policies that best facilitate this natural progression.
Economies as Self-Regulating Systems Lovelock posited that Earth operates as an interconnected organism that self-regulates to maintain equilibrium.
Applying this concept to economies, it follows that economic systems act as self-regulating networks driven by the interactions of individuals and businesses. Supply and demand, price mechanisms, and market competition function as economic feedback loops that naturally adjust and stabilise the system.
Economic self-regulation is evident in historical and modern examples:
The Spontaneous Rise of Marketplaces: Markets in medieval Europe emerged not because of state mandates but through the mutual needs of traders and consumers. These markets grew as people adapted to their circumstances, fostering trade routes and economic hubs without significant governmental oversight.
Industrial and Technological Transformations: The Industrial Revolution and subsequent technological booms were mainly driven by individual inventors and entrepreneurs whose innovative actions spurred economic growth. While governments later stepped in with regulations, the core impetus for progress was organic and independent of state direction.
These examples highlight that economies, like ecosystems, have intrinsic capabilities to adapt, innovate, and self-correct in response to environmental shifts and crises.
Interconnectivity and Resilience Lovelock’s assertion of interconnectedness in the Earth’s system parallels the economic principle of interdependency. Economic health relies on the seamless interaction of different sectors, each influencing and reinforcing the others. This interdependence fosters resilience, allowing economies to withstand shocks and recover from disruptions.
The COVID-19 pandemic showcased this resilience. When formal systems were disrupted, informal and local economies adapted rapidly:
Local Production and Distribution: Small businesses and community-based networks pivoted to meet local needs when global supply chains faced interruptions. Food producers shifted to direct-to-consumer models, and local services stepped up to fill gaps left by larger enterprises.
Digital Transformation: Individuals and small companies accelerated digital innovations to continue operations, often outpacing government support or regulation.
This adaptability illustrates how decentralised and informal economic interactions create a robust safety net that complements formal systems, a feature mirrored in how ecosystems maintain balance through diverse interactions.
Emergence Without Centralised Planning The concept of emergence in Lovelock’s Gaia hypothesis emphasises that complex order can develop without a central authority. Similarly, economies often grow and self-organise through countless independent decisions. While governments may enact policies to regulate or guide these processes, the foundational growth usually occurs organically.
For instance:
The Internet Economy: The rise of the digital economy was fuelled by technological advances and creative entrepreneurship before significant government involvement. Companies like Google and Amazon began as small, independent ventures that expanded due to market demand and ingenuity, not because of state-directed strategies.
Cryptocurrency and Decentralised Finance: Bitcoin and other blockchain-based technologies emerged as grassroots responses to perceived inefficiencies in the formal financial system. This movement demonstrated how new economic sub-systems could form independently, driven by collective interest and decentralised trust.
These phenomena remind us that while governments may impose structure, the initial sparks of economic innovation often stem from organic, collective action, analogous to ecosystems evolving new adaptations to survive and thrive.
Adaptive Cycles and Economic Resilience Lovelock’s work detailed how ecosystems undergo growth, collapse, and renewal cycles to maintain balance. Economic systems show similar patterns: booms lead to periods of overextension and subsequent contractions, fostering innovation and adaptation. This cycle is essential for long-term financial health, promoting resilience through renewal.
Economic Downturns and Renewal: While devastating, the 2008 global financial crisis spurred significant innovation as businesses adapted to new financial realities. During this period, the rise of Fintech, the sharing economy, and micro-enterprises illustrated how economies can regenerate through bottom-up initiatives.
Grassroots Problem-Solving: Informal networks step in when formal systems face collapse or fail to address urgent needs. Community projects, local cooperatives, and volunteer-driven initiatives filled gaps left by traditional economic structures during crises, which mirrors how natural systems recover from disturbances through the emergence of new growth and diversification.
Policies That Align with Organic Economic Growth If economies share traits with self-regulating ecosystems, then policies should aim to support this natural evolution rather than impose rigid control. Effective policy should facilitate the creation of an environment where economic systems’ natural, adaptive qualities can flourish.
Decentralised Economic Policies: Governments can encourage localism by devolving power and resources to local communities. Policies that support local production reduce red tape for small businesses, and promote cooperative models can help economies grow from the ground up.
Support for Informal Economies: Recognising and legitimising the role of informal economies can help harness their strengths. Legal frameworks that allow for more flexible business models, such as mobile markets or home-based enterprises, can support economic diversity and resilience.
Flexible Regulation and Adaptive Frameworks: Policies should be adaptable to changing circumstances, promoting innovation without stifling it. Regulatory sandboxes in the tech sector, which allow companies to test new ideas without total regulatory constraints, are a prime example of this approach.
Sustainability as a Core Principle: Drawing from Lovelock’s environmental insights, policies integrating ecological sustainability with economic incentives encourage long-term stability. Tax incentives for green technologies, support for regenerative agriculture, and investment in renewable energy reflect the interconnected nature of ecological and financial health.
Investment in Digital Infrastructure: Digital resilience proved crucial during recent economic disruptions. Investing in broadband access, tech education, and open-source platforms can democratise participation in economic growth and encourage organic development.
The Value of Localism and Small-Scale Initiatives Lovelock’s later work emphasised decentralised approaches to coexistence within the Earth’s limits. In economic terms, this translates to fostering small-scale, community-focused initiatives. Encouraging local markets, supporting farmers’ markets, and investing in village cooperatives and repair networks enable communities to build self-sufficient systems to buffer more significant economic shocks.
Conclusion: A Harmonious Economic Ecosystem
Integrating James Lovelock’s Gaia hypothesis with economic theory provides a powerful way to view economies not as rigid systems requiring constant governmental steering but as living, adaptive networks capable of self-regulation and renewal.
Just as the Earth’s systems evolve to maintain balance, economies thrive when they can develop organically, with policies that facilitate rather than dictate. Recognising this natural evolution can lead to a more resilient, inclusive, and sustainable future, where local and informal networks are celebrated as vital components of economic health.
Understanding and applying these principles in policymaking fosters growth and harmony between economic activity and the environment, reflecting Lovelock’s ultimate message of interconnected sustainability.
If we want to prepare for potential shocks and disruptions, we must envision a future shaped by sudden, severe reductions in critical resources.
What if tomorrow’s 50% cut to the UK’s electricity, petrol, and diesel fuel supplies coincides with an abrupt financial crash that renders formal lending systems obsolete?
How would society adapt when conventional systems falter and people are forced to rely solely on one another for support and survival?
This thought experiment, though grim, allows us to think creatively about resilience and preparedness in a world where traditional infrastructures can no longer be relied upon.
Visualising such a future helps illuminate the deep interdependencies between energy, finance, and social structures. It urges us to consider unanswered questions:
How would communities provide for their most vulnerable members?
Could local networks step into the vacuum left by institutional failures?
By exploring these scenarios, we can identify which strategies, skills, and resources might make the difference between societal fracture and newfound solidarity.
Planning for a future marked by drastic cuts is not merely about survival; it is about ensuring that communities are adaptable and resilient. It compels us to look beyond the reliance on centralised systems and develop local responses prioritising mutual aid, resource sharing, and decentralised innovation. This type of foresight can inform how policies are shaped and how communities organise themselves today to mitigate the harshest impacts of a potential crisis tomorrow.
Imagine the UK in Crisis – Energy Shortages and Financial Collapse
Imagine that in 2025 the UK faces an unprecedented crisis: a sudden 50% reduction in electricity supply and petrol and diesel fuel availability, compounded by a concurrent financial crash that disrupts formal borrowing.
Without pre-planning or government support, this crisis reshapes the nation’s economic, social, and demographic landscape.
Immediate Economic and Energy Impacts
The combined energy shortage and financial crash would severely constrain the formal economy. Government and institutional actors, unable to borrow or fund large-scale projects, would see their capacity to support the population significantly reduced.
As centralised solutions falter, the response will shift to localised, community-driven initiatives. Informal borrowing between individuals and small community groups will become the primary means of funding adaptation efforts, spurring the growth of local networks and cooperative systems.
Adaptation Through Localism
With traditional financial systems paralysed, communities would adapt through grassroots resource-sharing and local solutions. Informal peer-to-peer lending, barter, and trade would become common. For example, individuals with technical expertise might trade labour for food, while households pool resources to establish shared solar panels or energy storage systems. This adaptation would intensify localism, where communities become more self-reliant, relying on mutual aid to meet basic needs.
Social and Demographic Shifts
The crisis would bring significant changes to the UK’s population dynamics:
Life Expectancy: Life expectancy would decline due to several factors:
Healthcare Challenges: A strained NHS with limited access to electricity would lead to delays in treatments and a decrease in the quality of medical care, increasing mortality rates.
Food and Nutrition: Disrupted supply chains and higher prices would cause food insecurity, leading to malnutrition and related health issues.
Harsh Living Conditions: Reduced heating in winter and cooling in summer would increase deaths among vulnerable populations.
Birth Rate: Economic uncertainty typically leads to lower fertility rates. Couples would delay or decide against having children due to affordability concerns. This could result in a significant drop in birth rates—potentially a 20–40% decrease from current levels—leading to long-term demographic shifts such as an ageing population and fewer young people entering the workforce.
Population Decline: Over 5–10 years, the cumulative effect of increased mortality, decreased birth rates, and emigration could lead to a population decline of 3–8%, translating to approximately 2–5 million fewer people. This decline would be driven by:
Higher Mortality: Increased deaths due to poor health conditions and exposure.
Net Emigration: Emigration of skilled individuals seeking stability abroad, while reduced immigration would slow population growth.
Economic Behaviour and Resource Management
With no formal lending, individuals would turn to informal networks for financial support and resource sharing. Local cooperatives could emerge to pool funds or resources, enabling small-scale renewable energy projects, tool-sharing libraries, and communal food production. Alternative currencies or trade tokens might facilitate exchanges within communities where traditional cash is scarce.
Social Stratification and Inequality
Economic hardship would exacerbate existing inequalities. Households with more savings or assets would fare better, being able to invest in off-grid energy solutions or secure better living conditions. Poorer households might rely on labour exchange or community aid, creating uneven levels of resilience across regions.
Multigenerational households would become more common as families consolidate resources, adding stress and fostering intergenerational support. Community-driven projects would provide some relief, but gaps in resilience would remain, deepening social stratification.
Public Health Implications
The deterioration of public health would be a serious concern:
Resurgence of Preventable Diseases: Poor living conditions and limited healthcare access could lead to a return of diseases once controlled, such as respiratory illnesses.
Mental Health Strain: Chronic stress and uncertainty would exacerbate mental health issues, further impacting physical well-being.
Pathways for Recovery and Stabilisation
Some communities would demonstrate remarkable adaptability, leveraging local knowledge and shared resources to create micro-scale renewable energy and food production systems. Informal problem-solving could lead to the rise of cooperative energy networks and self-sustaining projects. However, recovery would be uneven, and areas with weaker social cohesion might face prolonged hardship.
A Fragmented Future
This scenario outlines a challenging future where local adaptation becomes vital to survival amid reduced state intervention and formal financial collapse. The UK population would experience significant demographic shifts, with reduced life expectancy and birth rates driving population decline. While innovative local solutions could emerge to mitigate some impacts, deepening inequality and public health challenges would create long-term consequences that reshape the nation for decades to come.
Comparing the Future Scenario with the UK in the 1920s and 1930s
The scenario of severe energy and financial disruptions in 2025 evokes striking parallels with the economic hardships faced by the UK during the 1920s and 1930s.
Following World War I, the UK grappled with debt, a struggling industrial sector, and significant social unrest.
By the 1930s, the Great Depression had swept across the globe, bringing economic stagnation, widespread unemployment, and a profound impact on society’s fabric. However, the future scenario envisioned here layers additional complexities that make it unique: energy shortages and a collapse of formal lending systems.
In the 1920s and 1930s, economic decline was marked by deflation, high unemployment rates, and social discontent, particularly in industrial areas heavily reliant on coal, steel, and textiles.
Communities adapted by tightening family structures and relying on informal support networks, reminiscent of the localised responses projected in a future crisis where state intervention is limited. However, the 2025 scenario would amplify these challenges through severe energy shortages that would not only hamper industrial output but disrupt modern life at its core, affecting everything from healthcare and food distribution to communication.
Moreover, while the economic downturn of the 1930s saw the government eventually stepping in with relief programs and policy interventions—such as public works projects to alleviate unemployment—the imagined future situation posits a collapse so deep that the formal government response may be insufficient or nonexistent.
Instead, resilience would come from grassroots community action, echoing but intensifying the interdependence seen in the 1930s. Just as the Great Depression fostered a shift toward localised self-reliance and informal economies, this future would demand a radical expansion of these strategies to include energy production, food security, and peer-to-peer financial networks.
In both eras, hardship could bring ingenuity. The 1930s saw a revival of local crafts, cooperative efforts, and an appreciation for frugality and resourcefulness.
The future scenario projects these adaptive behaviours evolving further—compelled by economic need and the imperative of surviving in a low-energy, resource-constrained world. Yet, unlike the 1930s, where WW2 created a recovery with growth and expansion, the future may lead to a more permanent shift toward a decentralised, local-focused way of life driven by necessity rather than choice.
Further to my post on How Things Are this post on Tim Watkins’s blog “The Consciousness of Sheep” explains why discretionary doings are declining.
… hospitality sector trade bodies are calling for nothing short of root and branch reform of the taxes and costs levied on them. In particular, the outdated business rates system – which taxes businesses on the basis of the estimated value of the buildings they trade from – from which pubs have been sheltered since the pandemic, could leave pubs facing a 400 percent increase from next year. There are also calls to reduce both alcohol duty and the rate of VAT. Other proposals from the sector though, would be counterproductive. Holding down the minimum wage, for example, would mean younger people have even less discretionary income to spend on discretionary items… like a night down the pub with their mates.
For the moment, the hospitality sector is just one part of the discretionary economy – albeit a visible one – which is facing pressures of this kind:
Rising input costs,
Increased taxation, and
Decreasing income (demand).
Government – which is increasingly drawn from an insulated professional-managerial class – on the other hand, continues to behave as if the whole of the UK, rather than just the City of London and a handful of top-tier university districts, is still prospering. That being the case, the attempt to impose additional taxes on discretionary goods and services will result in the worst of all worlds – businesses will go bust, workers will be fired, tax income will fall, and government spending on health and welfare will be forced up… but then, nobody within government – or, indeed, the opposition parties – is prepared to contemplate the alternative.
The decline of the discretionary economy in the UK will become unavoidable as we encounter a range of structural, environmental, and economic pressures that render it increasingly unsustainable. In a society where economic growth has long been prioritised, the discretionary economy—the sector comprising non-essential goods and services such as dining out, tourism, fashion, and luxury goods—has thrived on the back of expanding consumer spending. However, this model faces unprecedented challenges that will inevitably curb its scale and influence.
Shrinking Disposable Incomes
As the UK navigates an era marked by stagnant wage growth, rising inflation, and economic instability, fewer households can afford discretionary spending. Over the past decade, the gap between wages and the cost of living has widened, exacerbated by Brexit and global supply chain disruptions. The pandemic further strained personal finances, causing many to prioritise essentials over luxuries. As energy prices continue to rise, disposable incomes will likely shrink further, leading households to redirect spending from non-essential goods and services to core necessities.
Environmental Constraints and Changing Consumer Preferences
With growing awareness of climate change and environmental degradation, UK consumers increasingly seek products and services prioritising sustainability and low environmental impact. This shift is not only consumer-driven but also reinforced by government policies and incentives that aim to reduce waste, limit emissions, and promote renewable resources. The discretionary economy, often reliant on fast fashion, travel, and non-essential consumer goods, is at odds with these values. As the UK moves towards a low-carbon economy, discretionary sectors that cannot align with sustainability imperatives will likely experience contraction or forced transformation.
Shift to Local and Informal Economies
There is a growing movement towards localism and informal economies that prioritise resilience, local production, and mutual support over mass consumption. With its heavy dependence on mass retail, online shopping giants, and global tourism, the discretionary economy struggles to compete with the appeal of local goods and services that meet community needs directly.
In regions of the UK where the cost of living crisis has hit hardest, informal economies emerge as a practical solution, with communities sharing resources, skills, and services in ways that bypass traditional economic models. These local and informal systems will likely expand as trust in formal economic structures declines, especially among younger generations.
Economic Recession and Global Instabilities
Economic recessions, driven by domestic and global factors, have historically reduced discretionary spending. The UK’s ongoing economic vulnerability, exacerbated by recent geopolitical tensions, has left little room for expansive growth in discretionary sectors.
Dependence on international tourism, for instance, made the sector vulnerable to disruptions like the COVID-19 pandemic and, more recently, inflationary pressures worldwide. With the potential for sustained economic shrinkage, the UK’s discretionary economy faces fewer domestic consumers and an unpredictable international market.
The Rise of Social Value Over Economic Growth
The discretionary economy also faces a challenge from shifting societal values, particularly as social happiness increasingly gains importance over consumer-driven growth. Many in the UK, including policymakers, are re-evaluating the quality of life and community well-being as more meaningful goals than GDP growth or consumer spending. This shift could prompt policy changes prioritising housing, healthcare, education, and renewable energy investments over tax cuts or subsidies for non-essential sectors.
The UK’s focus on social value, an ageing population and rising demand for essential services could limit the scope for discretionary economic activity.
No More Discretionary Spending
The discretionary economy’s decline in the UK appears inevitable and logical within the context of evolving consumer priorities, environmental limits, and financial constraints.
As households prioritise necessities, communities lean into local and informal systems, and the government focuses on sustainable and equitable policies, the landscape of the UK economy will likely undergo a fundamental shift.
The question, therefore, is not whether the discretionary economy will contract but how society will adapt as it does, forging a path towards an economy that favours resilience, sustainability, and shared well-being over consumption.
Think of the formal economy as employed people undertaking discretionary and essential activities in a system where discretionary activities are declining.
Discretionary activities are becoming increasingly unaffordable because the energy cost of obtaining energy is increasing, and prosperity is declining.
People in the formal economy undertaking discretionary activities must move to the informal economy.
The informal economy refers to activities outside the formal, regulated systems, such as government oversight and taxation. This sector includes small-scale, unregistered family-based businesses, casual labour, self-employment, barter systems, and non-monetary exchanges.
The informal economy will increasingly play a crucial role in the future by fostering entrepreneurship, sustaining communities, and providing essential goods and services outside traditional business channels, leading to the emergence of interconnected local economies.
The formal economy will still exist, albeit shrinking relative to the informal economy, because the informal economy will be self-sufficient and have less need for services previously provided by the formal economy.
An outstanding question in this view of the economy is the rate at which these changes will occur: This depends on the growth rate or shrinkage of the whole economy.
The recent budget set by the UK government contained policies that were wholly dependent on achieving growth. Alternatively, Tim Morgan’s Surplus Energy blog demonstrates that the economy is shrinking.
Whichever proves to be correct, the eventual disappearance of discretionary activities in the formal sector and the growth of the informed economy are inevitable,
We are heading towards a future similar to the 1950s.
Homelessness has increasingly become a pressing issue in the UK, with visible impacts in urban centers and smaller communities alike. In cities, where thousands pass through train stations, shopping centers, and landmarks each day, the homeless population is more visible. But behind the scenes, there’s a hidden and worsening crisis.
The YouTube video link offers a poignant example of this reality. It captures the daily struggles, the humanity, and the challenges of people experiencing homelessness. Viewers see the deeply personal stories that statistics often overlook, and this visibility is crucial for understanding the depth of the problem.
Living in Another World: The Social Exclusion of Homelessness
For those without a fixed address, the essential tools of participation in society are out of reach. Without an address, they cannot open a bank account, often a prerequisite for claiming welfare benefits or securing employment. Homeless people exist, in many ways, outside of normal society, living a parallel life without access to the financial and social systems most of us rely on. Living without money means they are forced to survive without conventional spending or support. In the UK any temporary shelter they manage to create or occupy—a tent, a shed, or even a homemade structure—is bound to be unlawful, underscoring the precariousness of their situation.
Rising Numbers and Complex Causes
According to recent figures, the number of people facing homelessness has risen over the last decade. This increase is attributed to various factors: rising rents, job instability, mental health issues, and lack of affordable housing. The shortage of social housing and ongoing economic pressures are exacerbating the crisis, pushing even those with stable jobs to the brink.
UK Planning Development Control: Standards and Challenges
UK planning development control plays a significant role in shaping living conditions across the country. These regulations ensure that all new constructions and renovations meet specific standards before planning permission is granted. The aim is to maintain minimum safety, environmental, and aesthetic standards, ultimately preventing situations where people are forced to live in makeshift shelters, sheds, or substandard “homemade hovels.”
While development control helps maintain the quality and safety of housing, it also presents a challenge in the context of homelessness. People with limited financial means who might consider creating unconventional, low-cost living arrangements often find themselves constrained by these regulations. This can lead to further housing scarcity and highlight the need for innovative, affordable solutions within the bounds of planning policy.
Systemic Gaps and Solutions
Although designed to support vulnerable individuals, the UK’s welfare and housing systems often fall short due to bureaucratic hurdles and limited resources. Many who seek help are met with waiting lists or complex application processes. While charities and local organizations are essential in providing immediate relief, systemic changes are necessary to offer sustainable solutions.
A Path Forward
Addressing homelessness in the UK will require both short- and long-term strategies, from increasing social housing stock to reforming welfare policies that better accommodate those in need. Additionally, societal attitudes toward homelessness must shift from viewing it solely as an individual problem to recognizing it as a societal responsibility.
The video linked above reminds us of the human faces behind homelessness—individuals with hopes, struggles, and potential.
Addressing this crisis requires policy changes and a shift in how we manage planning development control. Moving from the formal, centralised system to a more localised, informal model could allow homeless individuals to access free-to-inhabit land where they can safely park caravans, build shanties, or create campsites.
Localism would empower communities to determine how the land can best serve their vulnerable members, fostering creative solutions that traditional standards often overlook. By rethinking planning control, we could pave the way for a more compassionate, inclusive society where everyone has a place to call home—even if that home is modest, temporary, or unconventional.
For centuries, economic growth has been a cornerstone of human advancement. Industrialisation, urbanisation, and technological leaps have all promised to increase prosperity, improve lives, and shape a better world.
But today, we are coming face-to-face with the unintended consequences of unchecked economic growth: environmental degradation, alarming inequality, and an economic system stretched to the breaking point. This relentless drive for economic expansion has been so deeply ingrained that it has become a fixed mindset that sees growth solely in terms of GDP, profit margins, and productivity, often at the expense of the resources that sustain us. To save our world, we must shift from this economic growth mindset to a regenerative growth mindset that prioritises resilience, harmony with nature, and sustainable well-being over mere financial gains.
The Downside of the Economic Growth Mindset
The economic growth mindset is rooted in the idea that human progress is synonymous with financial gain and material accumulation. In this mindset, success is measured by numbers: stock prices, GDP, productivity rates. This view has led to a world where environmental exploitation, consumerism, and resource depletion are accepted and encouraged in the name of progress. Forests are razed for profit, oceans are filled with waste, and societies face growing divides as wealth concentrates at the top. In short, our growth has come at a tremendous cost to people and planet alike.
In psychology, a fixed mindset refers to a rigid view of one’s abilities and intelligence, creating a fear of failure and a tendency to avoid challenges. Similarly, the economic growth mindset is fixed on the belief that more is always better and that economic expansion must continue unchecked. This perspective sees no value in limits, viewing them as obstacles rather than boundaries to respect. But we are reaching the limits of what Earth can sustain, and this mindset is driving humanity towards a dangerous future. We need a shift from fixed, exploitative growth to a more flexible and regenerative approach, one that truly values and safeguards life.
The Promise of a Regenerative Growth Mindset
A regenerative growth mindset is about shifting priorities and redefining what it means to grow. In this view, growth is no longer measured by financial gain or the sheer quantity of what we produce and consume. Instead, regenerative growth prioritizes knowledge, resilience, compassion, and a deep understanding of our interconnectedness with nature. This mindset acknowledges natural limits, understanding that true progress means respecting and working within them, not overcoming them at any cost.
Where the economic growth mindset encourages material accumulation, regenerative growth enables us to cultivate qualities that strengthen our communities, enrich our relationships, and regenerate the natural world. This means prioritizing local ecosystems, creating circular economies where resources are reused and waste is minimized, and investing in social and emotional well-being rather than purely material wealth. Growth is measured by our ability to thrive within nature’s boundaries, not by our ability to exploit them.
Practical Steps for a Regenerative Growth Mindset
We must first challenge the self-limiting beliefs deeply rooted in the economic growth mindset to make this shift. These include assumptions like “the economy must keep growing” or “we need more to be happy.” By questioning these beliefs, we open ourselves up to the possibility of a world where quality matters more than quantity and where prosperity is measured in happiness, health, and ecological harmony.
Embracing a regenerative growth mindset means adopting new practices that support sustainable progress:
Embrace Ecological Limits: Regenerative growth values nature as a partner rather than a resource. Policies and practices emphasising ecological awareness, conservation, and sustainability help us live in harmony with our environment, recognizing that nature’s health is directly tied to our own.
Focus on Resilience over Expansion: Instead of aiming for endless expansion, we can prioritise building resilient systems that adapt to changing circumstances. This shift from expansion to resilience makes our communities and economies better able to withstand crises and challenges, fostering stability and continuity.
Value the Process, Not Just the Outcome: A regenerative mindset finds worth in learning, adapting, and improving, not just in reaching financial goals. By celebrating progress rather than results, we redefine success as the ability to live meaningfully within nature’s limits.
Invest in Well-being: Social happiness, mental health, and community welfare must be prioritized over productivity and consumption. True prosperity is rooted in well-being—meaningful work, vibrant communities, clean air, safe water, and food security.
Build a Culture of Regenerative Growth: Changing individual mindsets is essential, but this shift must also occur at societal and institutional levels. Governments, businesses, and communities must adopt regenerative principles and implement policies prioritising sustainable well-being over profit maximization.
Why This Shift is Essential for Saving Our World
The challenges we face—climate change, biodiversity loss, social inequality—are consequences of a system that prizes growth above all else. If we continue with an economic growth mindset, we risk further degradation of our planet and deepening of social divides, undermining the very foundations of life. But if we embrace a regenerative growth mindset, we can create a world that values harmony with nature, resilience, and true happiness.
This transformation will not be easy, requiring a fundamental rethinking of what we value and how we live. But it is within our reach. Changing our mindset from economic to regenerative growth prioritises a future in which all forms of life can flourish, not just for today but for future generations. By choosing regenerative growth, we are choosing to safeguard our world, redefining progress as the ability to create a future in which humanity and nature thrive together.
Most people in employment have a vested interest in economic growth, as their livelihoods, pensions, and sense of security are often tied to a thriving economy. When engaged in work, they rely on economic expansion for job stability, salary increases, and the promise of a comfortable retirement. Growth, for many, represents opportunity and security. However, this mindset often changes in retirement, when individuals shift from income-generation to income-preservation. At this stage, they may be less concerned with growth and more focused on the quality of life, sustainability, and community well-being.
With no direct ties to career advancement or corporate profitability pressures, retirees can gain a clearer perspective on the actual costs of relentless economic growth. They may come to appreciate the values of a regenerative growth mindset. This shift in outlook reveals a paradox: while economic growth has been a driving force throughout their working lives, retirees may question its necessity and look for more profound, more meaningful ways to measure prosperity.
The latest post on Tim Watkins excellent blog The Consciousness of Sheep is very relevant at the present time.
… hospitality sector trade bodies are calling for nothing short of root and branch reform of the taxes and costs levied on them. In particular, the outdated business rates system – which taxes businesses on the basis of the estimated value of the buildings they trade from – from which pubs have been sheltered since the pandemic, could leave pubs facing a 400 percent increase from next year. There are also calls to reduce both alcohol duty and the rate of VAT. Other proposals from the sector though, would be counterproductive. Holding down the minimum wage, for example, would mean younger people have even less discretionary income to spend on discretionary items… like a night down the pub with their mates.
For the moment, the hospitality sector is just one part of the discretionary economy – albeit a visible one – which is facing pressures of this kind:
Rising input costs,
Increased taxation, and
Decreasing income (demand).
Government – which is increasingly drawn from an insulated professional-managerial class – on the other hand, continues to behave as if the whole of the UK, rather than just the City of London and a handful of top-tier university districts, is still prospering. That being the case, the attempt to impose additional taxes on discretionary goods and services will result in the worst of all worlds – businesses will go bust, workers will be fired, tax income will fall, and government spending on health and welfare will be forced up… but then, nobody within government – or, indeed, the opposition parties – is prepared to contemplate the alternative.
The decline of the discretionary economy in the UK will become unavoidable as we encounter a range of structural, environmental, and economic pressures that render it increasingly unsustainable. In a society where economic growth has long been prioritised, the discretionary economy—the sector comprising non-essential goods and services such as dining out, tourism, fashion, and luxury goods—has thrived on the back of expanding consumer spending. However, this model faces unprecedented challenges that will inevitably curb its scale and influence.
Shrinking Disposable Incomes
As the UK navigates an era marked by stagnant wage growth, rising inflation, and economic instability, fewer households can afford discretionary spending. Over the past decade, the gap between wages and the cost of living has widened, exacerbated by Brexit and global supply chain disruptions. The pandemic further strained personal finances, causing many to prioritise essentials over luxuries. As energy prices continue to rise, disposable incomes will likely shrink further, leading households to redirect spending from non-essential goods and services to core necessities.
Environmental Constraints and Changing Consumer Preferences
With growing awareness of climate change and environmental degradation, UK consumers increasingly seek products and services prioritising sustainability and low environmental impact. This shift is not only consumer-driven but also reinforced by government policies and incentives that aim to reduce waste, limit emissions, and promote renewable resources. The discretionary economy, often reliant on fast fashion, travel, and non-essential consumer goods, is at odds with these values. As the UK moves towards a low-carbon economy, discretionary sectors that cannot align with sustainability imperatives will likely experience contraction or forced transformation.
Shift to Local and Informal Economies
There is a growing movement towards localism and informal economies that prioritise resilience, local production, and mutual support over mass consumption. With its heavy dependence on mass retail, online shopping giants, and global tourism, the discretionary economy struggles to compete with the appeal of local goods and services that meet community needs directly.
In regions of the UK where the cost of living crisis has hit hardest, informal economies emerge as a practical solution, with communities sharing resources, skills, and services in ways that bypass traditional economic models. These local and informal systems will likely expand as trust in formal economic structures declines, especially among younger generations.
Economic Recession and Global Instabilities
Economic recessions, driven by domestic and global factors, have historically reduced discretionary spending. The UK’s ongoing economic vulnerability, exacerbated by recent geopolitical tensions, has left little room for expansive growth in discretionary sectors.
Dependence on international tourism, for instance, made the sector vulnerable to disruptions like the COVID-19 pandemic and, more recently, inflationary pressures worldwide. With the potential for sustained economic shrinkage, the UK’s discretionary economy faces fewer domestic consumers and an unpredictable international market.
The Rise of Social Value Over Economic Growth
The discretionary economy also faces a challenge from shifting societal values, particularly as social happiness increasingly gains importance over consumer-driven growth. Many in the UK, including policymakers, are re-evaluating the quality of life and community well-being as more meaningful goals than GDP growth or consumer spending. This shift could prompt policy changes that prioritise housing, healthcare, education, and renewable energy investments over tax cuts or subsidies for non-essential sectors.
The UK’s focus on social value, an aging population and rising demand for essential services could limit the scope for discretionary economic activity.
No More Discretionary Spending
The discretionary economy’s decline in the UK appears inevitable and logical within the context of evolving consumer priorities, environmental limits, and financial constraints.
As households prioritise necessities, communities lean into local and informal systems, and the government focuses on sustainable and equitable policies, the landscape of the UK economy will likely undergo a fundamental shift.
The question, therefore, is not whether the discretionary economy will contract but how society will adapt as it does, forging a path towards an economy that favours resilience, sustainability, and shared well-being over consumption.
