David Frost’s recent article argues that the Civil Service is becoming an increasingly independent power within the British state. His concern is that unelected officials may acquire greater authority, making governments less able to carry out the policies for which they were elected.
Whether or not one agrees with every aspect of that argument, it highlights a much deeper problem. Britain has become so centralised that almost every important decision depends upon a vast national bureaucracy. As government grows larger, so too does the Civil Service required to administer it. The result is an inevitable struggle between ministers and officials over who really exercises power.
Localism approaches the problem from a completely different direction.
Instead of asking whether ministers or civil servants should control more of the machinery of the state, localism asks why so much power has been concentrated in Whitehall in the first place.
Most decisions affecting everyday life do not need to be made in London. Housing, local transport, small business support, woodland management, energy, local food production, planning, care services and much of education can all be organised within localities by people who understand local circumstances.
As responsibility moves back to local communities, the need for enormous central departments naturally declines. The question of whether permanent officials or ministers dominate those departments also becomes less important because fewer matters require national control.
Every transfer of responsibility to a locality removes work from Whitehall. It reduces paperwork, regulations, consultations and layers of administration. It also shortens the distance between those making decisions and those affected by them.
Perhaps the greatest weakness of highly centralised government is that responsibility becomes blurred. Ministers blame officials. Officials point to legislation. Agencies refer to guidance. Local authorities say they are following national policy. Eventually no one appears genuinely accountable.
Localism restores accountability because decision-makers live alongside the people affected by their decisions. Their successes and failures cannot be hidden behind complicated administrative structures.
There is another important consequence. Large bureaucracies naturally develop their own culture, priorities and institutional interests. Over time they seek stability, continuity and self-preservation. This is not necessarily because individuals have bad intentions, but because every large organisation acquires a life of its own.
Smaller local institutions are less able to become detached from the communities they serve. They remain visible, accessible and easier to influence.
The debate about Civil Service reform therefore risks treating the symptom rather than the cause. The real issue is not whether Britain should have a stronger Civil Service or a weaker one. It is whether so much authority should reside in Whitehall at all.
A genuinely localist Britain would still require a national government and a Civil Service, but both would be considerably smaller because they would perform fewer functions. Their purpose would be to deal with matters that genuinely require national coordination, leaving everything else to local decision-making.
The best way to prevent unelected institutions accumulating excessive influence is not endless constitutional reform. It is to reduce the amount of power that is concentrated at the centre.
The future of British democracy may depend less upon changing the Civil Service than upon rebuilding the capacity of local communities to govern themselves.
The governance of the United Kingdom in the 18th century was not a tidy, centrally managed system in the modern sense. It was instead a layered and uneven structure built up over centuries, in which local authority, customary law, and national power coexisted. If one is interested in modern localism and grassroots governance, it is one of the most instructive periods in British history.
The surviving medieval structure: manors and parishes
In the 18th century, the basic unit of rural life in much of England was still the parish, alongside remnants of the manor system.
The parish was both an ecclesiastical and civil unit. It was centred on the parish church, but it also carried responsibility for poor relief, minor road maintenance, and local order. Overseers of the poor were appointed under the Poor Law system to administer relief to those in need. This made the parish a surprisingly powerful grassroots institution, because it directly managed survival-level support.
Alongside this sat the manor, a legacy of feudal organisation. The manorial court still existed in many places, although by the 18th century its power was declining. It handled minor local disputes, land transfers within the manor, and issues such as trespass or encroachment. The lord of the manor retained influence, but much of the system had become more procedural than coercive.
So yes, both parish governance and manorial courts still existed in the 18th century, though they were evolving rather than dominant in the medieval sense.
Hundreds and county structures
Above the parish level was the hundred, an older Anglo-Saxon division grouping several parishes together. By the 18th century, hundreds were largely administrative relics. They still existed on paper and were occasionally used for legal or taxation purposes, but they had very little active governance function.
More important was the county, administered through the Quarter Sessions courts. These were central to 18th century local governance.
Quarter Sessions: the real engine of local government
Quarter Sessions were held four times a year and were run by Justices of the Peace, who were usually local landowners appointed by the Crown. These courts handled a wide range of functions:
local justice and petty crime
licensing (such as alehouses)
infrastructure such as roads and bridges
administration of local taxes (rates)
oversight of parish officials
In practice, the Quarter Sessions system meant that governance was heavily decentralised in execution, even if authority ultimately derived from the Crown.
This is a crucial point: Britain in the 18th century was not locally democratic in the modern sense, but it was locally administered.
The absence of elected local councils
One of the most striking differences from today is that there were no elected parish or county councils in the modern democratic sense.
Local governance was:
informal in parishes (through vestries, often controlled by local elites)
judicial-administrative at county level (through magistrates and Quarter Sessions)
The vestry meeting, held in the parish church, was effectively the closest thing to a local council. In some places it was “open vestry” (ratepayers could attend), but in many it became “select vestry”, controlled by a small group of local property holders.
So governance was local, but not broadly democratic.
What this tells us about “grassroots power”
If we strip away modern assumptions, the 18th century system reveals something important: local governance functioned because responsibility was embedded in place, not because it was elected.
Key features included:
Decisions were made close to the problem
Local knowledge mattered more than national policy
Administration was carried out by people who lived in the same community
Cost burdens (poor relief, roads) were directly felt locally
But it also had clear limits:
Power concentrated in landowning classes
Poor representation of ordinary people
Uneven standards between parishes
Reliance on informal authority rather than accountability
Lessons for modern localism
For those thinking about grassroots governance today, the 18th century model suggests three key insights.
First, effective local systems do not necessarily require large bureaucracies. The parish and Quarter Sessions system was relatively simple, yet it managed roads, welfare, and local order for a growing population.
Second, localism without democratic inclusion tends to concentrate power. The system worked administratively, but not equitably. Any modern version would need broader participation than 18th century vestries allowed.
Third, resilience came from proximity. Problems were handled where they arose, by people who understood local conditions intimately. This is the strongest argument in favour of localism then and now.
Conclusion
The 18th century United Kingdom was not centrally planned in the modern sense, nor was it locally democratic in today’s sense. It was a hybrid system: national authority at the top, but substantial administrative power embedded in parishes, manors, and county magistracies.
For modern localism, the lesson is not to recreate that world, but to understand its underlying principle: governance works best when responsibility is rooted in place, and when decisions are made as close as possible to the people affected by them.
The transition to localism will not arrive neatly. It will arrive as a muddle. A slow, anxious, contradictory muddle, played out across government departments and public authorities that were designed for a growing, industrial economy and now find themselves managing contraction instead.
The economy is shrinking. Demand is falling. Discretionary activity is draining away. Yet the thinking inside government remains industrial, centralised, procedural and growth-based. The instinct will be to fix the problem using the tools that worked before. Targets. Strategies. National frameworks. Delivery plans. New funding streams tied to old assumptions.
None of these tools fit the task ahead.
Public authorities will try to manage decline as if it were a temporary malfunction. They will search for levers to restart growth rather than accept that growth is no longer the organising principle. This will produce delay. Then confusion. Then overlapping policies that quietly contradict one another.
One department will promote local initiative while another tightens control. One agency will talk about empowerment while another introduces new compliance rules. Local officers will be told to be flexible and innovative, then criticised for stepping outside guidance written for a different era.
The result will be paralysis at the centre and improvisation at the edges.
Local authorities will be caught in the middle. They will see local systems emerging naturally. Informal care. Shared resources. Community food production. Local exchange. Use of land and buildings outside formal markets. These systems will work because they have to. But they will sit awkwardly alongside regulations designed for scale, uniformity and professional delivery.
Councils will hesitate. If they support these systems, they risk breaching rules. If they suppress them, they worsen hardship. Many will do neither. They will tolerate informality without endorsing it. They will look away while quietly hoping someone else takes responsibility.
Central government will respond to visible disorder with reviews and taskforces. Each will promise clarity. Each will add another layer. Guidance will multiply just as capacity declines. Officials will spend more time explaining why something cannot be done than helping it happen.
The language will lag reality. Policies will speak of recovery while households adapt to permanence. Strategies will assume future funding that never arrives. Consultation will continue long after decisions have been taken informally on the ground.
Meanwhile, people will get on with it.
Localism will not wait for permission. It will emerge through necessity. People will reorganise daily life around proximity, trust and shared effort. Not because it is fashionable, but because it works when money, energy and systems are constrained.
The gap between formal authority and lived reality will widen. Public institutions will feel increasingly unreal. Well-meaning. Busy. Irrelevant.
Eventually, government will be forced to choose. Either it loosens its grip and allows informal systems to stabilise society from below, or it continues to impose industrial thinking on a post-industrial reality and watches disorder grow.
The muddle phase is unavoidable. It is the sound of old assumptions breaking apart. The danger lies not in the mess itself, but in mistaking it for a problem to be controlled rather than a transition to be understood.
Localism will not be designed. It will be recognised, late, after it has already taken root.
Herefordshire Council has recently taken part in a major emergency planning exercise designed to test how local authorities would stay connected during a widespread power failure. This work forms part of ongoing efforts to strengthen community resilience across the West Mercia area.
The exercise, known as Exercise Echo, simulated a situation where a large-scale blackout knocks out traditional communication networks, including phone lines, mobile networks and internet services. Emergency planners from Herefordshire, Worcestershire and Shropshire counties came together with volunteer radio operators to see how they could maintain critical communications in such a scenario.
In December 2025 teams set up independent radio systems on high-ground sites such as the Malvern Hills and Clee Hill. These specialist radio relays enabled councils’ emergency planning hubs in Hereford, Worcester and Shrewsbury to transmit and receive messages without relying on the usual infrastructure. The aim was to ensure that, even if power and commercial networks were down, information could still be shared between authorities, and help could be coordinated effectively for residents.
While the likelihood of a nationwide blackout is low, planners emphasise that the value of such exercises lies in preparing for any eventuality. Large-scale power failures can arise from severe weather, technical faults or system overloads, and they create significant challenges for local services trying to support vulnerable people or maintain essential functions.
Herefordshire Council is part of the West Mercia Local Resilience Forum (LRF), a partnership of emergency services, councils, health agencies and volunteer groups working together to assess risks and prepare for emergencies. The LRF’s work includes planning for threats such as flooding, severe weather, transport incidents and loss of critical infrastructure like electricity.
Exercise Echo builds on earlier tests between Herefordshire and Worcestershire, and planners say it confirms the potential to expand and improve these alternative communications systems as part of wider emergency preparedness measures.
For residents and businesses, the council’s broader advice on emergency planning is to be aware of community resilience resources and to have personal plans in place for unexpected events.
Note: Are Parish Councils responsible for the preparation of contingency plans in the event of local power outages?
In the closing paragraph of a recent piece in the Daily Telegraph, David Frost offers a sharp critique of modern government.
He argues that failure is inevitable when the state takes on too much, observing that “the only real answer to government failure is to limit what government actually does.” He also questions why we distrust politicians and bureaucrats while continuing to hand them more power.
That argument already points strongly towards localism, even if Frost himself does not yet take the final step.
Frost treats state failure as a political and administrative problem. But it is also an economic one. We are entering a period of economic contraction, not expansion. In a shrinking economy, the present system of government cannot be sustained. Centralised states are built on growth. They rely on rising tax receipts, expanding markets, and increasing discretionary spending to fund complex national systems. When growth ends, those systems begin to fracture.
Economic contraction has the practical effect of breaking up the existing model of government. As resources tighten, the state is forced either to withdraw or to ration more harshly. Attempting to maintain universal, centrally managed systems under these conditions only accelerates failure. Bureaucracy expands as outcomes deteriorate. Control increases as effectiveness declines.
This is where Frost’s argument becomes unanswerable, even if he does not yet acknowledge it. If there can be no more growth, then limiting what government does is not a choice but a necessity. The question is not whether the state should retreat, but how and in whose favour.
Localism provides the answer. When Frost says we must break out of the mindset that nothing can happen unless the state is involved, he is describing the mental barrier that prevents adaptation to contraction. Localism removes that barrier. It allows activity to continue even as national systems weaken, by relocating responsibility, decision-making, and production to the level of the locality.
Farming illustrates this clearly. Frost notes that viability does not have to be made subject to DEFRA and Treasury bureaucrats. In a contracting economy, it cannot be. Food production must respond to local land, labour, and need. Central schemes designed for an expanding economy become obstacles rather than supports. Local systems, though smaller and less uniform, are more resilient.
The same applies to energy, education, and care. Large, national systems depend on surplus. Local systems depend on knowledge, relationships, and adaptability. As discretionary spending declines, only the latter can survive without constant crisis management from the centre.
Frost calls for massive state surgery. Economic contraction ensures that surgery will happen whether politicians like it or not. Localism determines whether that process is chaotic and imposed from above, or deliberate and shaped from below.
The deeper issue is cultural. For decades, people have been trained to expect solutions from the centre. Growth made that illusion affordable. Contraction removes it. Localism restores a more realistic settlement, where responsibility is visible, limits are understood, and society continues to function even as the state does less.
Frost is right that things will keep getting worse until the scale of the state is reduced. Once the reality of permanent economic contraction is accepted, his argument leaves no alternative. Localism is not ideology. It is what remains when growth is gone.
Power cuts (or electricity outages) can have a number of causes including severe weather, which can lead to damaged infrastructure, or system faults.
The UK has a resilient electricity system. Most power cuts are short-lived and occur locally, but more widespread and longer outages can happen. These could potentially last several days with regional or, although unlikely, national impacts.
Gas boilers and hobs, heat pumps and your home internet won’t work without power. Your mobile phone might stop working if your local mast is in the affected area. Mains water supply to your home could also be disrupted. Find out what to do in a phone and broadband outage, or a water outage.
Actions to take to prepare for a power cut
Keep a battery or wind-up torch (and spare batteries) at home. You probably won’t want to use the torch on your mobile phone as this will drain its batteries more quickly. It is not advised to use candles or any other naked flames to provide light, as these could pose a fire hazard.
Consider keeping some bottled water and non-perishable food that doesn’t need cooking such as ready-to-eat tinned meat, fruit or vegetables and a tin opener. You should also include ready-made baby formula and pet food if needed.
Find out your power/load block letter. In the unlikely event of a national energy shortage, emergency power cuts could be scheduled on a rotating area-by-area basis. Each area in GB is assigned a ‘load block letter’ and would be scheduled to disconnect from the electricity grid for around three hours at a time. You can find which load block letter you are in by entering your postcode at powercut105.com, or some energy suppliers include it on electricity bills.
If you’re eligible, sign up to your energy supplier’s Priority Service Register to let them know that you need additional support during a power cut.
You would lose internet connection and possibly mobile signal during a power cut. To prepare for this:
Write down the phone number to report a power cut – this is 105 in England, Scotland and Wales and 03457 643643 in Northern Ireland. You can also save the number in your mobile phone.
Keep a battery or wind-up radio (and spare batteries) at home. There might be updates communicated by radio during a power cut. A car radio can be used, however in severe weather it might be safer to stay inside. Write down on paper the frequencies of any local or national radio stations you use for news updates. You could add these to your household emergency plan.
It can be helpful to keep these notes with other items you might have, such as a torch or radio, and in a place that’s easy to find in the dark.
If your only way of making emergency calls is through a landline phone, or if you have a telecare kit connected to your landline, contact your landline provider to understand whether your phone will work during a power cut. If your landline will not work during a power cut, your landline provider might offer you a free solution (such as a back-up battery unit), for a minimum of one hour, that would enable you to call the emergency services during a power cut if you needed to.
If you have a personal alarm or diabetes sensor (also known as telecare devices) or other connected equipment monitoring your health (such as diabetes sensors), speak to your device provider/manufacturer to understand how they will function during a power cut.
Download or print out offline versions of maps in case you do not have access to live map-based mobile applications. To provide location services, your mobile smart phone uses a GPS signal. This means your mobile may still be able to provide your location when not connected to the network. However, map-based mobile applications rely on internet connectivity to download the maps.
Actions to take during a power cut
Visit your local network operator’s website to report a power cut and track updates when there’s a problem. If you’re unable to report the power cut online, call 105 for free in England, Wales and Scotland and 03457 643643 in Northern Ireland.
Keep away from hazards such as power lines. Electricity at high voltages can jump gaps with no warning.
Turn off items such as irons, ovens, electric fires and fryers. Unplug your TV and PC as they can be damaged if there is a surge when power goes back on.
Keep warm by using blankets and layered clothing. Keep doors of unused rooms closed and close curtains to keep the heat in. Older adults, babies and young children, and people with long-term health problems are most likely to become ill if they get too cold.
Check in on vulnerable neighbours and, if you are able, offer to share blankets, clothing or other supplies such as food. You can also pass on any important information you might have received about the power cut, such as when the power is expected to go back on. If you have a corded landline phone, this might still be working in a power cut.
In a power cut your TV or internet might not be working. To get news updates use a battery or wind-up radio to search for stations that are still broadcasting. Try FM and digital modes. You can use the radio in your car, however in severe weather it might be safer to stay inside.
If you have a power cut and you don’t have back-up power to your landline phone (or have a corded landline) and have a life-threatening emergency, you should attempt to call 999 or 112 using a mobile. You might receive overlapping signal from a nearby area that is unaffected – emergency calls automatically ‘roam’ onto all available networks.
Keep fridges and freezer doors closed, as this will ensure they stay cold for several hours. The Food Standards Agency provides advice on food safety in a power cut.
To prepare baby formula safely, you will need to be able to boil water and follow the normal safety procedures. If you are not able to boil water, please try to use ready-to-use baby formula. The NHS provides advice on making up baby formula.
One of the greatest mysteries of our times is why the authorities have not only permitted but actively, through their policy choices, promoted the formation of the biggest bubble in financial history, whilst knowing perfectly well, all along, how this must end.
They cannot have done this simply to further enrich the already wealthy, since they must know perfectly well that asset value aggregates can never be converted in their entirety into spendable money.
The answer is that fears of the consequences of a bursting bubble are out-matched by an even greater fear – that the ending and reversal of economic growth might move from the land of theory into the realm of established fact.
If it ever became known that the economy had stopped growing and started to shrink, no existing set of social, political or commercial arrangements could survive.
The denial of economic inflexion is the sine qua non for the defence of the status quo. Nowhere in the world is worse equipped than the West for surviving the ending and reversal of growth.
There may indeed be people in authority who sincerely believe that monetary stimulus can reinvigorate a faltering material economy.
Many might also have swallowed the parallel tarradiddle, which is that human technological ingenuity can overturn the laws of physics to make possible the alchemist’s dream of ‘infinite economic growth on a finite planet’.
What seems to have happened is that the only lever that decision-makers can pull in a slumping economy is the lever of financial stimulus, the use of which in turn triggers a runaway compounding process of escalating risk.
This article must begin with an apology for the hiatus since #314: How wealth dies was published on 2nd November. Whilst the ending and reversal of growth has long been predictable, the sheer pace at which decline has been accelerating has called for considerable reflection.
As you may know, the Surplus Energy Economics interpretation of economics is based on a comparison between the “real” economy of material products and services and the parallel “financial” economy of money, transactions and credit.
The productive process which drives the underlying “real” economy works by using energy to convert other raw materials into products, artefacts and infrastructures, as part of a continuous cycle of production, consumption, relinquishment and replacement.
Though depletion has subjected the non-energy resource base – including minerals, non-metallic mining products, biomass and accessible water – to gradual degradation, the primary factor driving the material economy from growth into contraction has been a relentless rise in the proportionate cost of energy.
Measured here as the Energy Cost of Energy, this cost has climbed from 2.0% in 1980, and 4.3% in 2000, to more than 11% today.
Fig. 1
A long-standing debate about the economy is whether material constraints will, or won’t, eventually put an end to growth.
Kenneth Boulding famously said that only “a madman or an economist” could believe that exponential economic growth could carry on forever on a finite planet.
His view was reinforced and quantified by the authors of the contemporaneous The Limits to Growth (LtG), who set out the interconnected processes which would put an end to economic expansion.
But “eventual” has always been a key word in this argument. Though no timescales were specified in LtG, the accompanying charts appeared to put this ending of growth somewhere between 2020 and 2030, which was a matter of little immediate concern when the report was published back in 1972.
LtG has been revisited on a number of occasions, and these reviews have tended to vindicate the original thesis. As this has happened, time has moved on, and the moment of inflexion from economic growth into contraction has drawn ever nearer.
SEEDS analysis concurs with the LtG projections, indicating that material economic growth might already have ended, and that the economy will have inflected into contraction by the end of this decade.
This has been a matter of modelled calculation, but there’s an abundance of external evidence to support it.
Living costs are rising in a way that cannot be explained away as some kind of temporary and self-correcting “crisis”.
In domestic affairs, economic hardship and financial insecurity are combining with elevated levels of inequality to undermine social and political cohesion.
International relations have been degenerating into bare-knuckled fights over scarce and dwindling resources.
But the single most compelling piece of evidence for the onset of economic contraction is the gigantic bubble that has been inflated across almost all classes of assets in modern times.
Over the past twenty years, aggregate debt has increased by 165% in inflation-adjusted terms, and broader liabilities – incompletely reported as the assets of the financial system – have expanded by not less than 210%. The real-terms value of global equities has increased by about 250% since 2004.
Against this, reported real GDP has grown by 96%, meaning that each dollar of reported growth has been accompanied by net new financial liabilities of at least $8.
Even this calculation drastically understates the severity of the situation, for two main reasons.
First, the aggregate financial liabilities referenced here do not include enormous “gaps” in the under-resourcing of forward pensions promises.
Second, and even more seriously, most of the “growth” reported in recent times has been cosmetic, amounting to nothing more than the transactional spending of vast amounts of borrowed money.
SEEDS analysis puts real growth in prosperity since 2004 at only 25%, reflecting a 37% increase in energy consumption, a dramatic rise in ECoEs, and a gradual decline in the rate at which energy use converts other resources into economic value.
The scale risk of extreme increases in liabilities has been compounded by rising complexity risk as the financial system has morphed into a bafflingly Byzantine structure of inter-dependent cross-collateralisation.
We can estimate that, over the past twenty years, the regulated banking system has accounted for barely a quarter of the increase in financial commitments, with the unregulated NBFI (“shadow banking”) sector contributing about two-thirds.
In essence, qualitative risk has increased as the centre of gravity of credit supply has migrated from the comparatively transparent and conservative centre of the financial system to its opaque and dangerous periphery.
Everyone knows how the reckless over-inflation of bubbles always ends, and many are familiar with the truism that “you can’t taper a ponzi”.
“Everyone” in this context necessarily includes the authorities, which raises the question of why decision-makers have acquiesced in the inflation of a bubble which far exceeds, both in scale and in qualitative risk, anything previously experienced.
In fact, the authorities haven’t just acquiesced in the inflation of the “everything bubble”, but have been conspicuously active in its creation.
Starting in the 1990s, they promoted “credit adventurism” by making debt easier to obtain than ever before. After the GFC of 2008-09, they doubled down with the “monetary adventurism” of QE, ZIRP and NIRP.
The monetary tightening introduced during the immediate period of post-pandemic inflation is already being relaxed, and there’s every reason to suppose that a reversion to QE looms in the very near future.
Meanwhile, governments have become primary drivers of credit expansion, with public debt soaring as fiscal deficits now routinely exceed – in some cases, far exceed – reported “growth”.
But why would governments and central banks knowingly court the chaos that must result from the bursting of ‘the bubble to end all bubbles’?
Charles Hugh Smith has given us the clue to this seemingly inexplicable behaviour in a particularly perceptive recent article in which he explained that “the entire bubble economy is a hallucination”.
A “hallucination”, of course, is ‘a perception that differs from material reality’, or, in the simplest of terms, a false narrative. The “false narrative” to which we have been subjected is that economic growth not only hasn’t stopped, but won’t.
If it ever had to be admitted that economic growth had ended, you see, all existing social, political and commercial arrangements would be invalidated. The succeeding priority would be the sustenance of the generality.
This is a change of direction that might be survived by Russia or China – albeit not without significant difficulties – but would put an end to the post-capitalist expediency (PCE) now prevalent in the West.
This takes us to the two arguments customarily advanced against the idea that material finality might ever put an end to growth.
The first of these is that, since the economy can be explained and managed in terms of money alone, our complete control over the human artefact of money puts our economic destiny entirely in our own hands.
The second is that the continuity of growth will ensured by human ingenuity, enacted as limitless technological advance.
The recurrence of the word “human” in both of these arguments points to their inherent super-hubris. We are, we’re told, Lords of Creation, who can financially innovate, and technologically circumvent, any obstacle to ‘infinite, exponential economic growth on a finite planet’.
Neither of these claims survives rational appraisal.
First, the economy is not shaped by money. Within our two economies conception, we know that money has no intrinsic worth, but commands value only in terms of those material things for which it can be exchanged. This, in Surplus Energy Economics, is the principle of money as claim.
We can indeed create money in virtually limitless amounts, but we cannot similarly create those material things without which money has no meaningful value. Unlike money, energy and raw materials can’t be loaned into existence by the banking system, or conjured out of the ether by central banks.
In essence, money is a proxy for material economic prosperity, whilst the basis of this prosperity is the use of energy to convert natural resources into material products and infrastructures.
The second claim is, if possible, even more hubristically fallacious than the first. Far from being limitless, the potential of technology is contained within an envelope of possibility whose boundaries are set by the laws of physics and the characteristics of materials.
This comes down to a vindication of what Kenneth Boulding said more than half a century ago. The claim that ‘exponential growth can go on forever in a finite world’ is made, if not exactly by ‘madmen and economists’, then on the basis of orthodox economics and cornucopian fantasy.
Beyond its sheer size, what’s truly fascinating about the mania for all things AI-related is the way in which it fuses together the monetary and technological delusions that support the claim of never-ending economic growth.
Critical to this fusion is a disregard for the constraints of material finality.
Whatever promise the technology itself might offer, the current Western business model for AI makes vast demands for material resources, the most significant of which are energy and water. Even if these resources actually exist at the requisite scale – which is very far from certain – they can only be channelled into AI at the direct expense of households and other businesses.
The AI bubble also differs in other significant ways from previous exercises in irrational exuberance. For a start, whereas most of the money lost in the dotcom bust was equity, most of the value at risk in AI is debt, with significant cross-financing involved.
The assets used as collateral for this debt are likely to have remarkably little residual value – it’s hard to foresee much money being recovered from fire-sales of burned out or obsolete GPUs, or much of a post-crash market for vast single-purpose buildings ‘in the middle of nowhere’.
Whilst also noting the likelihood of AI degradation through the regurgitation of its own slop, it would be unwise to dismiss the transformative potential of artificial intelligence.
Rather, it seems likely that an alternative business model for AI will emerge, one that uses less capital, requires fewer resources, and, perhaps, sets itself less ambitious objectives.
What we have been seeing, then, is the use of reckless financial expansion in an effort to either counter, or disguise, the ending and reversal of economic growth.
Before we leap to the conclusion that this has been a deliberately-promoted false narrative, we need to allow for the fact that fiscal and monetary stimulus is an addictive drug, and a particularly alluring one when no other course of action is available.
Either way, we have long known that a financial system entirely predicated on the false presumption of economic expansion in perpetuity couldn’t possibly survive the ending and reversal of growth.
What recent events have been telling us is that, whilst policy-makers seem to be panicking, the moment of economic inflexion is drawing very close indeed. It might, in this context, be of interest that “the astronomical level of insider selling of publicly traded stocks” has now reached levels second only to those of 2007 – and we know what happened after that.
Growth evangelists note that the laws of physics don’t negotiate, nor does the rising Energy Cost of Energy. As we navigate a shrinking economy, it’s time to admit that the “growth” party is over—someone just forgot to turn off the music.
The English Devolution White Paper outlines a framework for empowering strategic authorities, driving investment, and fostering regional economic growth.
However, its growth-oriented assumptions must be reconsidered in a shrinking economy driven by declining surplus energy, as described by Dr Tim Morgan.
A shrinking economy does not result from political failure but from the natural evolution of economic systems reliant on energy.
Rising Energy Costs of Energy (ECoE) reduce the net energy available for activities beyond energy extraction, shrinking discretionary sectors and reclassifying certain “essentials” as discretionary.
In this scenario, grassroots-based localism emerges as a vital partner to strategic governance, facilitating transitions, absorbing displaced workers, and ensuring resilience through decentralised, community-driven systems.
Understanding the Shrinking Economy
Declining Surplus Energy:
Economic growth is historically depended on surplus energy. As accessible energy sources deplete, ECoE rises, reducing the energy available for discretionary activities. This is the case now and will be in the future, eventually leading to the virtual disappearance of discretionary activities, as happened in the 1940s and ’50s.
This energy-driven contraction creates a patchwork economy with localised growth in certain areas and decline in others.
Localised Growth Amidst Decline:
Within a shrinking economy, localities with access to renewable energy, fertile land, or unique resources may experience relative growth. Other areas face stagnation or decline, necessitating strategic interventions to manage these disparities.
Reframing the White Paper for a Shrinking Economy
The White Paper’s vision of regional economic growth must evolve to align with the realities of economic contraction:
Strategic Role of Authorities:
Authorities should prioritise managing transitions rather than driving blanket growth. This includes facilitating population movements from declining to growing areas, echoing historical examples such as Welsh quarrymen migrating to coal mining regions in the 20th
Strategic governance must optimise limited energy resources to sustain essential services while supporting localised resilience.
Localised Economic Development:
Growth-oriented strategies must be targeted, supporting sectors that enhance energy efficiency and sustainability. This includes renewable energy, low-energy transport systems, and sustainable housing.
Investments should align with the unique strengths of growth areas, avoiding areas with limited prospects.
Balancing Growth and Decline:
Authorities must repurpose declining areas for sustainable uses, such as rewilding, localised food systems, or renewable energy projects while fostering development in areas with growth potential.
The Role of Localism in a Shrinking Economy
Localism is essential in complementing the strategic focus of the White Paper, providing adaptability and resilience at the community level:
Facilitating Transitions Between Areas:
displaced populations, offering flexible housing, employment, and social structures.
Growth regions, guided by localist principles, can quickly adapt to population Grassroots-based localist systems enable communities to absorb and integrate inflows through community-led initiatives.
Absorbing Displaced Workers:
As discretionary sectors contract, localism provides displaced workers with opportunities in essential, labour-intensive activities such as:
Local food production.
Decentralised renewable energy systems.
Community healthcare and education.
Building Community Resilience:
Localism emphasises small-scale, decentralised systems that reduce dependence on centralised infrastructure, ensuring communities adapt to resource shortages and economic disruptions.
Decentralised Decision-Making:
Empowering local communities to decide resource allocation, infrastructure, and economic activities ensures tailored responses to regional policies, fostering efficiency and innovation.
Coexistence of the Essential and Localist Economies
In a shrinking economy, the top-down essential and localist economies coexist, each playing a critical role:
The Top-Down Essential Economy:
As the White Paper outlines, strategic authorities manage large-scale systems, including national energy grids, transport networks, and healthcare services.
They ensure the equitable allocation of resources and support migration between areas.
The Localist Economy:
Localism operates at the grassroots level, addressing immediate community needs through decentralised, adaptable systems.
It enables redundancy in the essential economy, enabling communities to function independently during systemic disruptions.
Synergy Between Systems:
The essential economy supplies foundational infrastructure, while the localist economy reduces pressure on centralised systems by fostering self-sufficiency and resilience.
Strategic Changes and Recommendations
Reframe Growth-Oriented Policies:
The White Paper should recognise the reality of a shrinking economy, emphasising localised growth within a broader context of contraction.
Support Migration and Transition:
Strategic authorities must invest in infrastructure and policies that facilitate population movements, ensuring both growth and decline regions are supported equitably.
Integrate Localism:
Decentralise decision-making and fund community-led initiatives to empower localism. This will allow more expansive areas to adapt to their unique circumstances effectively.
Invest in Energy Resilience:
Prioritise investments in low-ECoE technologies and sustainable infrastructure to ensure the viability of both essential and localist economies.
Conclusion
The English Devolution White Paper provides a framework for regional empowerment but must adapt to the realities of a shrinking economy driven by declining surplus energy. By integrating localism into this framework, governance can balance the dual needs of managing large-scale essential systems and fostering community-driven resilience. Together, these approaches ensure a smoother transition to an energy-constrained future, where strategic oversight and local adaptability play crucial roles.
I have written this piece in anticipation of the UK’s possible collapse of financial and public service systems due to the current turmoil. ChatGPT has provided evidence of what is happening outside the UK. It should be seen as a prompt for discussion based on what is happening worldwide.
When cities experience a shift from formal to informal systems, the transformation is complex and multifaceted.
This shift impacts governance, economic activity, social organisation, and the physical space of the urban environment.
The process can lead to opportunities for greater community involvement and challenges as traditional systems of order and service provision are redefined or bypassed. Here’s how different aspects of city life may be affected during this transition:
1. Governance and Decision-Making:
Formal to Informal Power Structures: Formal governance—typically defined by municipal authorities and regulations—can lose influence in a city moving toward informal systems. This happens when local governments become less effective or trustworthy, leading to a rise in community-based decision-making. Neighbourhood assemblies, local councils, or grassroots organisations may take on roles previously managed by the state.
Community-Led Initiatives: Without sufficient formal government intervention, informal groups may lead in managing local problems. For example, community policing, neighbourhood watch groups, and self-organised maintenance of public spaces are common in areas where formal city services are limited or absent.
2. Urban Planning and Development:
Informal Settlements: As formal housing policies struggle to meet the needs of rapidly growing urban populations, as can be expected in the UK due to continuing immigration, informal housing (slums, shantytowns, or squatter settlements) can become more prevalent. These areas may operate outside city development control systems and lack formal services like sewage, electricity, and water, but they become hubs of informal economies and tight-knit communities.
Spontaneous Urbanism: Cities shifting toward informal systems often see bottom-up urban development with little formal planning. Informal vendors, tented villages, self-built shanty homes, and unregulated bus services become part of the urban fabric, reshaping the cityscape.
3. Economic Activity:
Informal Economy Expansion: The shift from formal to informal systems often results in a booming informal economy in cities. Street vendors, unregistered businesses, and freelance workers thrive, especially when formal employment is scarce or inaccessible. In many cities, especially in the Global South, the informal sector accounts for a significant portion of the economy.
Social Capital Over Financial Capital: Relationships and networks become vital for economic survival in informal systems. Bartering, reciprocal services, and local trading networks flourish as people depend more on personal connections and less on formal monetary systems.
4. Public Services and Infrastructure:
Informal Service Provision: When formal systems like public utilities, healthcare, or transportation fail to meet demand, informal systems often fill the gap. Informal transportation networks, such as minibuses, become essential in cities where public transit is inadequate. In some towns, informal water vendors or private electricity suppliers provide essential services, often at higher costs or with inconsistent quality.
Self-Organised Infrastructure: Without formal urban infrastructure, communities often organise to build their own. This can range from informal sewage systems or road repairs to community-run schools and clinics. These systems are generally more flexible and responsive to local needs, but they often lack the scale and reliability of formal infrastructure.
5. Social Cohesion and Networks:
Rise of Localism and Community Networks: The shift to informal systems often strengthens social cohesion at the community level. Neighbours form tighter bonds and work together to solve problems without formal support. These informal networks provide a safety net, offering mutual aid and sharing resources when formal systems falter.
Undocumented Populations: Informal systems are more accommodating to marginalised groups, including immigrants and people experiencing poverty, who often lack access to formal services due to legal or financial barriers. These populations find ways to integrate themselves into the urban economy and society through informal channels.
6. Crime and Informal Justice Systems:
Growth of Informal Policing and Justice: In cities where formal law enforcement is weak, informal justice systems, such as vigilante groups or local mediation councils, may take over. While these systems can provide quick and locally relevant justice, they raise concerns about abuse, lack of accountability, and unequal treatment under the law.
Parallel Power Structures: Cities see the rise of parallel power structures, such as gangs wielding knives or militia groups, that control informal economies and provide their form of justice or protection without adequate formal governance.
7. Cultural and Political Impacts:
Grassroots Movements and Political Activism: As cities shift away from formal systems, they become hotbeds for grassroots political movements. These movements might be focused on issues like housing, labour rights, or environmental justice, advocating for change through informal, decentralised actions. Urban protests, flash mobs, and online activism can challenge formal power structures in ways that reflect the increasing role of informal systems.
Cultural Vibrancy in Informal Spaces:
Informal urban spaces often become cultural hubs, especially when formal authorities neglect them. Street art, local festivals, and alternative cultural practices can flourish in informal districts, contributing to the city’s identity and vibrancy.
Challenges of the Shift:
Lack of Coordination and Scale: Informal systems can be highly localised and lack the coordination needed to manage citywide issues like large-scale infrastructure projects, healthcare, or disaster response.
Inequality and Marginalisation: While informal systems often emerge to serve the underserved, they can also perpetuate inequality. People without access to specific networks or resources might be excluded from the benefits of informal systems.
Fragility of Informal Solutions: Informal systems are often highly adaptive but fragile. A community-organised water supply, for example, might be disrupted by political changes, migration, or environmental challenges.
Opportunities:
Resilience and Flexibility: Informal systems are often more responsive to immediate needs and adapt quickly to changing conditions. This makes them vital in crises when formal systems fail to respond effectively.
Empowerment of Local Communities: The shift to informal systems can empower communities by giving them more control over decision-making and local problem-solving, promoting a stronger sense of ownership and participation in the city’s future.
Example:
In cities like Mumbai, Lagos, or Rio de Janeiro, the informal economy and informal settlements (slums) play a significant role in the urban ecosystem. The constant negotiation between formal city plans and informal realities shapes these cities. Community-led housing initiatives, informal markets, and grassroots political movements often parallel formal urban governance, shaping the urban landscape.
Postscript:
Immigration in the UK has historically been concentrated in major urban centres, such as London, Birmingham, and Manchester, where diverse communities have grown. These cities, known for their economic opportunities and cultural diversity, have long been the first entry point for many immigrants. However, in recent years, there has been a noticeable shift in immigration patterns, with increasing numbers of immigrants moving away from cities and into rural and suburban areas. This shift is reshaping the demographic and cultural landscape of smaller towns and villages across the UK.
Several factors contribute to this movement. High living costs in major cities, particularly related to housing, are driving both native-born Britons and immigrants to seek more affordable alternatives in rural and semi-rural locations. Additionally, as digital technology and remote work opportunities expand, people are no longer bound to the city centres for employment. Immigrants who may have initially settled in urban areas also follow this trend, looking for a better quality of life, more space, and access to nature.
This demographic shift brings both opportunities and challenges. On the one hand, the influx of immigrants into smaller towns can revitalise local economies, introduce cultural diversity, and address labour shortages in sectors like agriculture and healthcare. On the other hand, it can also lead to tensions in communities that may be unaccustomed to significant demographic changes. Local services, infrastructure, and housing markets in these areas may struggle to keep up with the growing demand, while social integration efforts become increasingly important to ensure cohesion and inclusivity.
As immigration spills out of the cities, the UK finds itself at a crossroads. Policymakers and local authorities must adapt to this new reality, fostering environments where immigrants and long-standing residents can thrive. In this context, it is vital to consider how best to support integration efforts, build resilient communities, and harness the economic potential of this new wave of immigration into rural and suburban Britain.
Barry Cooper guides ChatGPT to write about “spontaneous order”.
Disorganisation is how we see things at present from our top-down mindsets. Maybe we are in a transition from the organised conditions of the industrial era to a fundamentally different era.
According to Niall Ferguson …the iconoclastic British political operative Dominic Cummings hypothesises that the state of the future will need to function more like the human immune system or as an ant colony than a traditional state” – in other words, more like a network, with emergent properties and the capacity for self-organisation, without plans or central coordination, relying instead on probabilistic experimentation, reinforcing success and discarding failure, achieving resilience partly through redundancy.
Which sounds unlike anything we can imagine from previous experience.
Is this the opposite of disorganisation as we know it now? A condition that I can’t imagine.
Maybe ChatGPT can help if I ask it what is the opposite of disorganised.:
ChatGPT says:
Disorganisation, as a top-down concept, often refers to a lack of structure or coherence imposed from above, such as within organisational hierarchies or managerial systems. It suggests a failure in leadership, management, or governance to effectively coordinate or direct activities towards a common goal. However, there exists a parallel notion at the grassroots level—a bottom-up equivalent, if you will—that captures the essence of disorder arising from the ground level. This concept is known as “spontaneous order.”
Spontaneous order describes the emergence of organisation, patterns, or systems without centralised control or direction. Instead of being imposed from above, it arises naturally from the interactions and behaviours of individuals or smaller units within a system. This phenomenon is observed in various contexts, including biological systems, social networks, and even economic markets.
At its core, spontaneous order emphasises the capacity of decentralised, self-organising processes to generate complex structures and behaviors without explicit guidance. It recognises the inherent agency and adaptability of individual actors within a system, allowing for innovation, diversity, and resilience.
Consider, for instance, the bustling activity of a street market. Vendors set up their stalls, customers browse goods, and transactions occur, all without a central authority dictating the layout or operations. Yet, amidst this apparent chaos, an order emerges as prices fluctuate, supply and demand adjust, and market forces shape the dynamics. This spontaneous order reflects the collective actions and interactions of participants, each pursuing their own interests yet contributing to the overall functioning of the market.
Similarly, in ecosystems, diverse species interact and coexist, forming intricate food webs and ecological relationships. These complex networks arise from the bottom-up interactions of organisms seeking resources, reproducing, and adapting to their environment. The resulting biodiversity and ecological stability demonstrate the power of decentralised processes in sustaining life.
In contrast to top-down approaches that rely on centralisation and control, embracing spontaneous order acknowledges the inherent complexity and dynamism of systems. It suggests that effective organisation can emerge organically when individuals are free to act and interact within a framework of basic rules or principles. By harnessing the creativity and adaptability of decentralised actors, spontaneous order offers a bottom-up alternative to traditional modes of governance and management.
In essence, while disorganisation may manifest as a failure of top-down control, spontaneous order presents a complementary perspective—a recognition of the inherent order that can arise from the bottom-up dynamics of decentralised systems. Embracing this concept invites us to appreciate the self-organising capacity of individuals and communities, fostering resilience, innovation, and adaptability in the face of complexity.
Me: That is very interesting. If that is how the future will be, please write something about what the government should do to start the ball rolling.
ChatGPT says:
In envisioning a future where spontaneous order plays a significant role in governance and societal organisation, the role of top-down government shifts from one of strict control to one of facilitation and empowerment. To start the ball rolling towards embracing spontaneous order, top-down government should focus on several key initiatives:
Establishing a Framework of Basic Rules: While spontaneous order thrives on decentralised decision-making, it still requires a framework of basic rules to guide interactions and ensure stability. Top-down government can play a crucial role in establishing and maintaining this framework by enacting and enforcing laws that protect individual rights, ensure fairness, and prevent coercion or exploitation.
Investing in Infrastructure and Public Goods: To enable spontaneous order to flourish, top-down government should prioritise investments in essential infrastructure and public goods that provide the foundation for economic and social activities. This includes infrastructure such as transportation networks, communication systems, healthcare facilities, and education institutions, which serve as catalysts for innovation, collaboration, and prosperity.
Promoting Transparency and Accountability: Transparency and accountability are essential to fostering trust and cooperation within decentralised systems. Top-down government should implement measures to promote transparency in decision-making processes, ensure accountability among public officials, and facilitate access to information for citizens. By doing so, it empowers individuals to actively participate in governance and hold institutions accountable for their actions.
Encouraging Civic Engagement and Participation: A thriving spontaneous order relies on active participation and engagement from individuals and communities. Top-down government should actively promote civic education, community organising, and participatory decision-making processes to empower citizens to contribute to the shaping of their communities. This may involve supporting initiatives such as town hall meetings, citizen assemblies, and participatory budgeting programs.
Fostering a Culture of Innovation and Experimentation: Spontaneous order thrives on innovation and experimentation, as individuals and groups adapt to changing circumstances and explore new possibilities. Top-down government should create an environment that encourages experimentation, risk-taking, and entrepreneurship by reducing barriers to entry, providing support for research and development, and incentivising innovation in various sectors of the economy.
Embracing Diversity and Inclusivity: Recognising the strength of diverse perspectives and experiences, top-down government should prioritise policies that promote inclusivity and diversity within society. This includes measures to address systemic inequalities, eliminate discrimination, and ensure equal opportunities for all individuals, regardless of background or identity.
By embracing these initiatives, top-down government can lay the groundwork for a future where spontaneous order flourishes, empowering individuals and communities to collaborate, innovate, and adapt to the complexities of the modern world. Rather than imposing rigid control from above, it fosters an environment where order emerges organically from the bottom-up interactions of decentralised actors, leading to greater resilience, creativity, and prosperity for all.
