Trying to contact a bank, energy company, telephone provider or government department can consume much of a morning. The telephone menu offers numerous options, but rarely the one that is needed. Customers listen to music, repeat security information and explain the same problem to several different people. Sometimes the call is disconnected and the whole process must begin again.
Online services are presented as quicker and more efficient. They may be convenient for straightforward transactions, but they become frustrating when something goes wrong. Passwords are forgotten, security codes fail to arrive and automated systems cannot understand an unusual problem. People without smartphones are increasingly excluded.
This is particularly difficult for older and disabled people. Someone with limited mobility may be unable to reach the telephone quickly. A person with poor hearing may struggle with recorded instructions. Others may find small screens, complicated passwords and rapidly changing technology difficult to use.
The customer’s time is treated as though it has no value. A bank may save money by closing branches and reducing staff, but its costs have merely been transferred to its customers. Thousands of people spend millions of hours trying to complete tasks which once required a short conversation across a counter.
Centralisation has separated organisations from the people they serve. Decisions are made in distant offices. Calls are handled by national centres whose staff may know nothing about the customer or the locality. Responsibility is divided between departments, contractors and computer systems. Everyone follows the procedure, but nobody appears able to solve the problem.
Localism could reverse this.
A local bank or service office would not need to reproduce every function of a large organisation. It could provide a real person who could identify the problem, verify the customer and contact the correct department. Several essential services might share the same local office. Banking, energy, water, council services and benefits advice could all be made accessible through a familiar point of contact.
Local staff would gradually get to know the people they served. They would understand that an elderly customer had no smartphone, that another had hearing difficulties, or that someone with limited mobility needed longer to answer the telephone. Such knowledge would reduce repeated explanations and unnecessary security procedures.
Local accountability would also matter. It is much harder to ignore poor service when the organisation is visible within the locality. Customers would know where to go, whom to speak to and how to pursue a complaint. Staff would have names rather than employee numbers.
Not every service can be completely local. Banks will still require national computer systems, specialist departments and regulation. The important change would be to place a human local layer between large systems and the people who depend upon them.
Efficiency should not be measured only by how many branches are closed or how few employees remain. It should include the time, anxiety and inconvenience imposed upon the public. A system which saves an organisation five minutes but wastes an hour of a customer’s time is not efficient. It has simply moved the burden.
Localism would restore something increasingly absent from modern life: the ability to speak to a responsible person who understands the problem and has the authority to help. That would save time, reduce frustration and make essential services more humane.
Modern tractors have become extraordinarily sophisticated. They may incorporate computers, electronic sensors, satellite navigation, automated steering and proprietary software. Some can diagnose their own faults, but the farmer may not be permitted or equipped to repair those faults. A relatively minor electronic failure can immobilise a very expensive machine until an authorised technician arrives.
Ursa Ag, a small Canadian tractor manufacturer based in Alberta, is taking a different course. Its tractors are deliberately built without computer controls. The company removes complex electronics and returns to proven mechanical systems that can be understood, maintained and repaired by farmers and independent workshops.
This does not mean returning to the horse-drawn plough. Ursa Ag tractors are powerful machines. The present range includes models of about 150, 180 and 260 horsepower. They use mechanically injected Cummins diesel engines and conventional mechanical controls. The electrical wiring is kept to what is necessary. There are no proprietary electronic control units governing every movement of the machine.
The result is a tractor that an experienced mechanic can examine with ordinary tools. A fault does not necessarily require a laptop, a software licence or permission from the manufacturer. Parts can be repaired or replaced without the entire machine becoming dependent upon a distant dealer.
Low technology does not mean primitive technology
Ursa Ag illustrates an important distinction. Low technology is not the rejection of machinery. It is the selection of machinery that is sufficiently simple, durable and repairable for the work it must perform.
The best technology for a shrinking economy may not be the most advanced technology available. It may be the technology that delivers a necessary service while making the least demand upon money, energy, specialised knowledge and distant supply chains.
A purely mechanical tractor may perform fewer functions than a computer-controlled machine. It may not offer automatic steering or precisely vary the application of fertiliser across a field. Yet it can continue working when digital communications fail, when software support is withdrawn or when the nearest authorised dealer is many miles away.
Its useful life may also be extended by repeated repair. This matters because the energy and materials already embodied in a machine should not be discarded merely because an electronic component has become obsolete.
The right to repair
Localism depends upon local competence. A locality cannot be resilient if every essential machine must be returned to a national manufacturer or connected to a remote computer before it can be repaired.
Mechanical equipment supports a local network of engineers, welders, machinists, parts suppliers and agricultural workshops. Knowledge remains within the locality and can be passed from one generation to another. Money paid for maintenance circulates locally instead of being extracted through software subscriptions and manufacturer-controlled servicing.
This principle extends well beyond tractors. Pumps, sawmills, heating systems, food-processing machinery and small generating equipment should all be designed so that their operation can be understood. Standard components should be replaceable. Manuals should be available. Repair should be expected rather than discouraged.
Ursa Ag’s approach is therefore closely connected to the right-to-repair movement. It restores a measure of ownership to the purchaser. A farmer who has paid for a tractor should be able to maintain it without continuing dependence upon the company that supplied it.
A machine suited to economic shrinkage
The highly automated tractor belongs to an economy that assumes abundant capital, reliable global supply chains and permanently available technical support. These assumptions become less secure as energy costs rise and the discretionary economy contracts.
Farmers will have less money available for machinery. At the same time, food production will become more important. Agricultural equipment will therefore have to remain in service for longer. It must be capable of being repaired repeatedly, sometimes by adapting locally available components.
Ursa Ag claims that its simpler tractors are significantly less expensive than comparable machines from the large manufacturers. Independent reporting says the company uses proven mechanically injected engines and avoids the proprietary diagnostic systems associated with many modern tractors. The trade-off is that its machines are not intended for the most advanced forms of digital precision farming. They are working tractors rather than mobile computer platforms. OmniTrattore provides a useful description of the design and its limitations.
Limits to the example
An Ursa Ag tractor is not a complete model for future local agriculture. It remains a large diesel-powered machine. It depends upon imported fuel, industrial tyres, replacement parts and a substantial manufacturing system. Nor does the company currently appear to have an established British sales and support network.
In the longer term, smaller farms and more labour-intensive cultivation may require lighter tractors, walk-behind machines, electric equipment, horses and greater use of human effort. Heavy machinery compacts soil and can encourage farming on a scale that is poorly suited to local food production.
Nevertheless, Ursa Ag demonstrates an important intermediate step. A society cannot move immediately from highly industrialised agriculture to an entirely local system. Existing mechanical power will remain necessary, particularly for ploughing, harvesting, lifting and transport.
The immediate task is to make that machinery simpler, cheaper, longer-lived and more locally repairable.
Technology under Localism
Localism will not divide technology neatly into the modern and the obsolete. It will distinguish between technology that strengthens a locality and technology that creates dependency.
A useful machine should be understandable by those who operate it. It should be repairable near where it is used. It should perform an essential task without unnecessary complication. Above all, it should remain useful when the affluent, globally connected economy in which it was produced can no longer be taken for granted.
Ursa Ag is important not because it has created a revolutionary tractor, but because it has rediscovered an old principle: the purpose of a machine is to do useful work, not to make its owner permanently dependent upon its manufacturer.
That principle will lie at the heart of technology in the coming age of Localism.
The bicycle has one of the longest and most successful histories of any form of transport. During the nineteenth century it evolved from simple wooden machines into the familiar pedal cycle. By the late Victorian period Britain had become one of the world’s leading bicycle manufacturers. Thousands of local workshops produced frames, wheels, chains, saddles and components. Many engineering skills that later supported the motor industry were first developed in bicycle factories.
The bicycle was a truly local product. Every town had cycle shops that not only sold bicycles but repaired and modified them. Parts were interchangeable, skilled craftsmen could braze broken frames, and a bicycle might remain in service for decades.
The twentieth century brought enormous changes. Steel tubing became highly specialised, aluminium alloys became common, and later carbon fibre transformed racing bicycles. Manufacturing became concentrated in large factories, mostly overseas. The local cycle maker largely disappeared, replaced by retailers selling imported machines.
This model depends upon abundant energy, long international supply chains and continuous supplies of high quality metals. As the industrial economy contracts, each of these assumptions becomes less certain. Steel production requires huge amounts of energy and complex infrastructure. Aluminium is even more energy intensive. Carbon fibre depends upon sophisticated chemical industries. If these systems begin to fail, complete bicycles will become increasingly difficult to obtain.
That does not mean that cycling itself disappears. Quite the opposite. As fuel becomes expensive and motor transport contracts, bicycles become more valuable than ever. The question is not whether bicycles survive, but how they are made.
The answer may lie in rediscovering local manufacture using materials that can be obtained within the locality or recovered from the existing economy.
The first source of material will be recycling. Millions of bicycles already exist. Their frames, wheels, chains and gears represent an enormous stock of engineering materials. Even badly damaged bicycles contain useful components. Local workshops can recover, repair and rebuild machines almost indefinitely.
Eventually, however, even recycled steel may become scarce. Local communities will then need to explore other materials.
Timber offers one possibility. Modern wooden bicycles already exist, using laminated hardwoods such as ash, oak and beech. Properly designed wooden frames are surprisingly strong, absorb road vibration well, and can last for many years. Unlike metals, timber can be grown within the locality and replenished continuously through careful woodland management.
Bamboo provides another example where climate permits. It has exceptional strength for its weight and has been used successfully for bicycle frames in several countries. Although not suitable everywhere in Britain, it illustrates how natural materials can replace industrial ones.
Other parts can also return to natural materials. Wooden mudguards, leather saddles, wooden rims for certain applications, natural fibre baskets, hemp ropes and locally produced accessories all reduce dependence upon imported industrial products.
Local blacksmiths and engineering workshops could manufacture the few metal fittings still required from recycled steel. Bearings, axles and chains may remain the most difficult items to replace, making their careful maintenance increasingly important.
The bicycle itself may also change. Modern multi-speed machines are highly efficient but mechanically complex. Simpler designs, single-speed bicycles and direct chain drives require fewer specialised components and are easier to maintain locally.
This represents a return to an older philosophy. Throughout most of cycling’s history, people expected to repair rather than replace. A broken frame was brazed. Worn bearings were adjusted. Wheels were rebuilt repeatedly. Ownership meant stewardship rather than consumption.
Localism naturally supports this approach. Every locality could sustain a bicycle workshop employing skilled mechanics, woodworkers and metalworkers. Apprentices would learn practical engineering rather than simply replacing factory-built parts. The bicycle would once again become part of the productive economy instead of the consumer economy.
Ironically, the decline of industrial abundance may restore the bicycle to its original role. Not a fashionable recreational item, but an essential machine that local people understand, build, maintain and value.
The future bicycle may look rather different from today’s lightweight racing machines. It may contain more timber than steel, more craftsmanship than automation, and more local knowledge than imported technology. Yet it will still perform the same remarkable task that has made the bicycle one of humanity’s greatest inventions – transporting people efficiently using nothing more than human energy.
In a shrinking economy, that may prove to be one of its greatest strengths. The bicycle does not belong to the age of limitless industrial growth. Properly adapted, it belongs just as naturally to the age of localism.
For many years it has been assumed that the future would always become more digital than the present. Each stage of technology, from personal computers to the internet, smartphones, and now artificial intelligence, has appeared to strengthen large national and global systems.
But this expectation depends on something rarely stated. It assumes that the energy, materials, finance, and organisational stability needed to support ever larger digital systems will continue indefinitely.
If artificial intelligence turns out not to be the next great expansion but the high-water mark of the digital phase of the industrial era, then the direction of society begins to change.
In that situation, localism is not a retreat from progress. It is the next stage of adaptation.
The digital phase within the industrial era
The industrial era created large systems because it had access to abundant fossil energy and expanding finance. Digital technology extended those systems by allowing organisations to coordinate activity across very large distances at low cost.
Artificial intelligence appears at first sight to strengthen this pattern. But it also exposes its limits.
AI depends on:
large electricity supplies
significant cooling water
specialised semiconductor production
global logistics chains
stable communications infrastructure
If these conditions weaken, artificial intelligence cannot expand indefinitely. Instead, it becomes another demanding layer within the industrial era rather than the foundation of a new one.
The digital phase then stabilises and gradually loses its dominant position.
The return of locality as a practical necessity
When large systems stop expanding, smaller systems become more important.
Local food production becomes more reliable than distant supply chains.
Local repair becomes more practical than replacement.
Local decision-making becomes more effective than remote administration.
Local knowledge becomes more dependable when national systems become less predictable.
This does not mean digital tools disappear. It means they stop organising society at its centre.
They become tools rather than the structure within which life operates.
A period of overlap rather than replacement
Localism does not replace the industrial era. It grows alongside it.
Many industrial systems will continue to operate for a long time:
national health services railways major utilities higher education specialised manufacturing
But everyday life increasingly shifts toward locality.
This creates a long period of overlap in which two organising systems exist together:
The industrial era provided large-scale support localism provides everyday resilience
This overlap is already beginning.
Hybrid communities rather than digital dependence
The future of localism is not anti-technology. It iwill be selective about technology.
Digital systems remain valuable for:
medical knowledge engineering reference education archives mapping occasional long-distance coordination
But daily life depends more on:
local production local services informal exchange practical skills neighbourhood cooperation
Digital capability remains present. Digital dependence declines.
The reshaping of employment
If artificial intelligence does not produce a permanently expanding knowledge economy, employment gradually shifts back toward the physical economy.
More people work in:
food growing maintenance care construction local energy systems water systems repair
These activities are difficult to centralise and difficult to automate.
They naturally belong within the locality.
In this way, the workforce begins to resemble a skilled community rather than a distant labour market.
Local governance (not governmenment becomes more visible again
During the expansion of the digital phase of the industrial era, many decisions moved upward into national systems and outward into global markets.
As those systems become less dominant, responsibility moves downward again.
Local authorities and communities increasingly manage:
small-scale housing adaptation minor access routes local energy arrangements community health support food coordination land use decisions
Authority becomes closer to everyday experience.
This makes governance easier to understand and easier to trust.
Artificial intelligence as the last major centralising technology
It is possible that artificial intelligence will eventually be seen not as the beginning of a new era but as the final large centralising technology of the industrial era.
If that proves correct, then the long direction of travel changes.
Instead of:
global systems coordinating local life
the pattern becomes:
local life supported by selected industrial systems
This produces a quieter but more stable structure.
The long future of localism
Localism in this setting is not a temporary response to crisis. It becomes the normal structure of everyday life within a smaller economy that continues to overlap with the industrial era.
People live closer to where food is produced.
Services operate closer to where they are used.
Decisions are taken closer to where their consequences are felt.
Industrial systems remain present, but they no longer organise everyday life.
Local society moves back into the foreground again.
I first used email in 1982 – when BT lauched Telecom Gold – a public dial-up email service.
In 1986–1988 – Novell MHS appeared, for LAN email and peer-to-peer systems.
IThen in the 1990s internet-based SMPT email t emerged and was developed into the worldwide system of today.
I experienced all of these development phases, all occurring as the economy grew. I can now see how email will develop in the UK shrinking economy.
4
During the 1980s and early 1990s, many people used electronic messaging systems that worked without large central providers. Messages travelled from computer to computer using store-and-forward routing. Systems such as FidoNet linked thousands of locally operated machines into cooperative communication networks.
Today most communication depends on large remote data centres. Email appears to be universal, but it depends heavily on continuous internet connectivity and corporate infrastructure.
As the economy changes and becomes less centralised, it is sensible to reconsider whether communication can again become more local.
Local email networks offer a practical answer.
A village-scale communication system
A locality can operate its own electronic messaging network using small computers placed in:
houses
farms
workshops
schools
village halls
community centres
These machines pass messages between one another automatically. Messages do not need a permanent connection to the wider internet. They simply move step by step across the locality until they reach their destination.
This approach worked reliably forty years ago. It works even more easily now.
How the system operates
Each participating building hosts a small communication node. These nodes connect by:
short-range Wi-Fi links
cable connections between nearby buildings
longer wireless links across rural gaps
If one link stops working, messages travel by another route.
The system therefore remains usable even when parts of the network fail.
This makes it very suitable for a future in which infrastructure may become less dependable.
What the network can carry
A locality communication system does more than transmit email.
It can support:
local notices
tool-sharing requests
repair coordination
local trading messages
health support information
weather warnings
food availability updates
transport sharing arrangements
In effect, it becomes a shared communication space for the locality 📡
Why local networks matter in a shrinking economy
Large communication systems depend on:
continuous electricity
expensive infrastructure
specialist maintenance
remote corporate control
Local systems depend mainly on cooperation between neighbours.
They are:
inexpensive
repairable locally
adaptable
resilient
Most importantly, they continue working even if national systems become unreliable.
A practical example
Imagine a rural locality of about two thousand people.
The network might include:
fifteen rooftop relay points
several larger hub computers
one optional internet gateway
Messages travel from building to building until they arrive.
If the gateway stops working, communication inside the locality continues normally.
This creates independence without isolation.
The wider importance for localism
Local communication systems support the development of:
local food networks
shared transport arrangements
neighbourhood repair services
informal health support
local decision making
They help restore communication as something rooted in place rather than controlled from afar.
In a contracting economy, this matters.
Reliable communication inside the locality becomes more valuable than high-speed communication across the world.
Local email networks are therefore not a backward step. They are a practical foundation for the next stage of economic organisation 📮
I have deliberately tried not to write too much about AI, because the signal gets swamped by the noise. But I think the picture is becoming clearer now. This week on The Next Wave, I’m going to re-publish versions of posts originally on my newsletter, Just Two: one from last summer, and one that goes live this week.—-
Just by way of a thought experiment: what if the current surge in the bunch of technologies that goes under the label of ‘AI’ isn’t the beginning of a whole new technology surge, but is actually the final stage of the digital surge that started in the 1970s and accelerated at the turn of the century?
I’ve been wondering this for a while in a vague kind of a way because I haven’t been able to see the business model that supports the huge investment in AI in the USA. (I’ve written about this before on here.)
This is a long way in to couple of pieces by Nicolas Colin, the strategy and innovation blogger, who has been wondering the same thing, but a lot more coherently. He calls this ‘late cycle investment theory’.
Like me, he is a fan of the work of the academic Carlota Perez, who built on the work of Christopher Freeman to develop a model of how technology and finance interacted to create new long surges of investment, starting with canals and cotton, that run for 50-60 years. (She calls them ‘surges’ because unlike ‘waves’ each technology embeds itself in the society and its infrastructure.)
The two most recent surges are a cars/oil surge, which started in 1908, and the Information and Communications Technology, which started in 1971.
(Source: Carlota Perez)
I’m not going into all of the theory of the Perez model here—it’s online if you want to do that, and I have written about it elsewhere—but the relevant point for the present discussion is that it follows an S-curve, and the first half is slow going, as new infrastructure is ‘installed’, and some of it is below the radar. The internet was a closed academic network for most of the first part of its S-curve.
From infrastructure to ‘deployment’
Halfway through, after a lot of infrastructure has been built out, and usually following a financial crash in which some of the investors in that infrastructure lose their shirts, ‘deployment’ companies take over, with actual customers and business models, and have an accelerated period of growth, before they hit market limits and turn into ordinary businesses. And the investors who have made large returns from that period of growth start looking elsewhere—for the technologies that will make the next surge.
The reason I like Perez’s version is that her model has had a lot of explanatory power over the last 25 years as I have watched the evolution of the tech sector.
Seen through a late-cycle lens, today’s markets show signs that we’ve entered the maturity phase of the computing and networks revolution. The theory, therefore, leads to specific, testable predictions about where capital should go and which strategies will outperform.
Three indicators
He points to three indicators from the tech sector that support this observation that we’re in the ‘late cycle’:
The startup funding collapse of 2022 wasn’t just a correction—it may be structural. As investor Jerry Neumann argued in his landmark Productive Uncertainty, startups rely on uncertainty as a competitive edge. When good ideas become obvious to everyone—including well-funded incumbents—the startup model faces real strain.
Then came AI, revealing new dynamics. ChatGPT’s breakthrough didn’t come from a garage startup but from OpenAI, backed by Microsoft’s vast computing power. Google, Meta, and Amazon responded with billions. This pattern—big tech deploying huge capital against well-understood problems—fits the late-cycle theory exactly.
Most tellingly, platform saturation now looks almost complete. Digital transformation has reached most sectors where computing and networks can plausibly work. What remains—healthcare delivery,education,construction, government services—may reflect the paradigm’s natural limits, not untapped markets. [His emphasis]
Optimising the existing system
In the second article —some behind a paywall—he looks specifically at the way AI is being deployed, and I’m going to quote/paraphrase quickly the visible bits of this here.
Colin’s done a lot of analysis here, and he’s assembled quite a lot of evidence which he shares. I’m not going to spend a lot of time on this, because I’m more interested in the bigger strategic questions that get raised if he is right.
What a new technology surge looks like
But it’s worth summarising some of the observations. First, that at the start of a new technology surge, you don’t know it’s happening. You understand the decisive moment afterwards, the moment at which an innovation transformed the cost structure (the Spinning Jenny, Watt’s condensing engine, the Ford production line, the microprocessor). But with AI, the moment was very visible, to the point of being choreographed.
Second, the amount of capital investment is off the scale. At the early stage of a surge, investment tends to be patchy and not fully understood—the sector exists but it is not completely legible yet.
And third, Colin suggests that AI allows computing to reach sectors that have in some ways resisted it:
Like lean production, which extended mass production’s dominance for decades through efficiency gains, AI doesn’t mark computing’s end but its maturation. The technology spreads to previously untouchable sectors, creating the illusion of radical novelty whilst actually representing computing and networks’ final conquest of the physical economy.
Late deployment
It’s worth pausing here. Although Perez dates the end of each of her surges from the date of the innovation that makes the next surge, possible, there’s a kind of ‘late deployment’ stage in the old surge while the new one is still in its early stages of development.
Late deployment: So although the ICT surge dates from 1971, much of the final innovation in the cars/oil surge also dates from then. In the UK at that time, there’s still a huge roadbuilding programme of motorways and ring-roads, and these then made possible the emergence of long-distance logistics, big-box out of town retailing, and edge of town business parks. Colin’s arguing that AI is the equivalent of bigger roads and big box retail—different, but more about embedding the technology more deeply than the kind of transformational change that eventually causes a new and distinctive form of abundance.
There’s also social pushback—in the UK the campaigns against big ringroad schemes started in the late 1960s and early 1970s. And perhaps we’re seeing some of that about AI. The U.S. map of local pushback against data centres from Data Center Watch covers the whole of the country, in red states and blue. People seem to hate Google’s inserting of AI tools into its search results, and hate even more that it is all but impossible to turn it off. This doesn’t speak to an exciting technology that is being embraced by its users. A note by Ted Gioia on his music blog says that:
Most people won’t pay for AI voluntarily—just 8% according to a recent survey. So [tech companies] need to bundle it with some other essential product.
This matters for a couple of reasons. In the first place, late stage post-deployment technologies do produce returns on investment, but they’re normal returns, not increasing returns.
But in the second place it sheds a different light on what amounts to a ‘business model war’ going on between China and the United States at the moment through their different approaches to AI.
I think we know plenty about the American model. It is fuelled by a transhumanist ideology that is just this side of The Rapture, as Sam Altman of OpenAI reminds people every week of the year.
In Washington, the AI policy discourse is sometimes framed as a ‘race to AGI.’ In contrast, in Beijing, the AI discourse is less abstract and focuses on economic and industrial applications that can support Beijing’s overall economic objectives.
Azeem Azhar of EV added some gloss:
Chinese teams… publish leaner open-source architectures and partner with specialists in areas such as healthcare analytics (Yidu Tech) and adaptive learning (Squirrel AI).
This is partly driven by constraints: China has far less computing power than the US, and needs to build lean. This also means that its model is far more exportable. But the important point here is that if AI is a late-stage technology and not the next large surge of innovation, the Chinese model matches the moment. Perhaps we shouldn’t be surprised: unlike most countries, a third of the full members of China’s Central Committee are technocrats.
I have just spent two days trying to get a new mobile phone working. In the end I had to order an adapter.
Each time I tried to complete the purchase, a security code was sent. Often the code arrived after it had expired. So I requested another. And waited again.
Nothing was technically “wrong”. The system was functioning exactly as designed. Yet the process absorbed hours.
This is not an unusual experience. It is normal life in a large, centralised, digitised economy. But it raises a serious question.
How much productivity is being lost in friction?
Friction in the Formal System
In the formal economy, simple transactions pass through layers:
Remote suppliers
Automated call centres
Security platforms
Banks
Delivery chains
Warehouses
National distribution systems
Each layer protects itself. Each layer has procedures. Each layer introduces delay.
The individual carries the cost in time.
When codes expire, when parcels are delayed, when call centres cannot decide, when websites reject passwords, the clock is running. The economy counts the transaction as efficient. The lived experience is different.
Multiply this by millions of people and millions of transactions.
The hidden loss of productivity is enormous.
How It Would Work Locally
If I lived in a strongly localist locality, none of this would apply.
I would walk to a local electrical shop. I would take the phone with me. The shopkeeper would look at it. He would hand me the correct adapter. I would pay and leave.
Total time: ten minutes.
No expired codes. No delivery tracking. No outsourced helplines. No national logistics network.
The transaction would be resolved at human scale.
The Cost of Hierarchy
Large systems require hierarchy.
Decisions move upward. Authorisation moves downward. Queries are escalated. Responsibility is divided.
Even when digitised, hierarchy remains embedded in procedure.
In contrast, a localist economy operates with minimal hierarchy.
The person who serves you can decide. The supplier can adjust. The builder can agree. The shopkeeper can solve the problem.
Decision-making is immediate because authority is local.
Speed increases because there is no need to refer upward.
Real Productivity
Productivity is usually measured in output per hour.
But this misses something essential.
What about the hours lost navigating systems? What about the time spent correcting digital errors? What about the administrative overhead of compliance, security, and centralised control?
In a localist area:
Fewer intermediaries exist
Fewer verification layers are needed
Trust reduces transaction costs
Problems are solved face to face
The time saved is real. The reduction in stress is real. The efficiency is human, not statistical.
Trust as Infrastructure
Large systems replace trust with procedure.
Local systems rely more heavily on reputation.
In a locality, the electrician knows the builder. The shopkeeper knows the customer. The customer knows where to return if something fails.
Trust becomes infrastructure. And trust reduces friction.
Reduced friction increases productivity.
The Wider Implication
As the UK moves into a period of economic contraction, hidden inefficiencies will become more visible.
We will not be able to afford vast administrative overheads. We will not be able to tolerate wasted time embedded in digital layers.
Localism is not nostalgic. It is structurally efficient.
Short supply chains. Flat decision-making. Direct accountability. Immediate resolution.
These characteristics are not sentimental. They are productive.
The adapter episode may seem trivial. It is not.
It illustrates how much time modern systems consume. And it suggests that localist areas, with fewer hierarchies and faster decisions, may in fact be more productive in real terms than the complex structures they replace.
Localism does not arrive with announcements, policies, or official programmes. It emerges quietly. It develops beneath the surface of the formal economy and remains largely unnoticed until it is already established. By the time it is recognised, it is no longer new. It has simply become the way people live.
This is because localism is not a reform. It is an adaptation. It grows out of necessity rather than ideology. People do not adopt it because they believe in it. They adopt it because the systems they previously relied upon no longer provide what they need.
In its early stages, localism is almost invisible to government and to economists. This is because it does not first appear as growth in new industries or investment. It appears as decline. It appears as loss. It appears as failure within the formal system.
One of the earliest signs is rising formal unemployment. This is often misunderstood. Unemployment is usually treated as a temporary malfunction, something that can be corrected by stimulus, retraining, or renewed growth. In the context of localism, it is something different. It reflects the permanent contraction of discretionary markets.
As households lose spending power, demand for non essential goods and services falls. Businesses close. Jobs disappear. These jobs do not return because the demand that sustained them no longer exists. The economy is not paused. It is shrinking.
Alongside unemployment comes a reduction in formal employment more generally. Even those still in work experience fewer hours, lower pay, or more precarious contracts. Productivity improvements no longer translate into rising wages or new opportunities. Instead, they accelerate job loss in a system that no longer needs additional output.
These changes are signals. They indicate that the industrial economy is no longer capable of providing paid employment at scale. But they do not mean that people stop working. They mean that work changes its form.
As formal employment contracts, people begin to create their own means of survival. This is the point at which localism starts to take root. It does not begin with community plans or local strategies. It begins in kitchens, sheds, gardens, and spare rooms.
Self employment becomes a defining feature. Not the entrepreneurial self employment celebrated in policy documents, but survival self employment. Small scale. Low capital. Often part time. Often informal. People do what they can, with what they have, for those around them.
This might include repairing, growing food, providing care, cooking, teaching, mending, or making simple goods. Much of this work would once have been done within households or localities before the rise of the industrial economy. It returns not because of nostalgia, but because it is once again necessary.
This form of self employment rarely shows up in official statistics. It is too small, too irregular, and too embedded in personal relationships. Some of it is unpaid. Some of it is paid in cash. Some of it is exchanged for goods or favours. None of it fits neatly into the categories used to measure economic activity.
As a result, the informal economy expands without being recorded. From the perspective of the state, economic activity appears to be stagnating or declining. In reality, work continues, but outside the formal system.
This creates a growing gap between lived experience and official data. Policymakers see falling productivity, weak growth, and low tax receipts. Local people see busy days, full lives, and networks of mutual dependence. The two realities no longer align.
Another early sign of localism is the shortening of supply chains. As money becomes scarce, people reduce travel and reduce reliance on distant suppliers. Goods and services sourced from outside the locality become less affordable and less reliable. Local alternatives, even if imperfect, become preferable.
This process is not driven by environmental concern, although it may have environmental benefits. It is driven by affordability and access. People use what is nearby because it is what they can reach and pay for.
Over time, local networks thicken. Trust becomes important again. Reputation matters. Skills are recognised locally rather than through formal qualifications. Knowledge is shared informally. This further reduces reliance on external systems.
None of this is planned. There is no central coordination. That is why it is so difficult to recognise while it is happening. Each individual adjustment appears small and isolated. Together, they represent a structural shift.
The state continues to operate as if the formal economy remains dominant. It measures what it has always measured. Employment, output, tax revenue. Because the informal economy is not measured, it is treated as if it does not exist.
This leads to confusion. Decline is interpreted as failure rather than transition. Policies are designed to restore a system that is no longer capable of functioning at its previous scale. Meanwhile, people quietly move on.
Only when localism is fully established does it become visible. At that point, the formal economy has shrunk to a supporting role. It provides essential infrastructure, core services, and regulation where necessary. Everyday life, however, is organised locally.
By then, it is too late to reverse. Nor would reversal be desirable. Localism is not a second best outcome. It is the natural form of a society adapting to permanent economic contraction.
The mistake is to look for its emergence in positive indicators. New programmes. New investments. New institutions. Localism emerges through absence. Through withdrawal. Through the quiet replacement of formal systems with informal ones that work better under constrained conditions.
Because of this, localism will not announce itself. It will not be recognised until it has already become normal. When it is finally named, it will feel familiar. It will feel as though it has always been there.
The First Cracks: Pubs and Hospitality as Early Indicators
The decline of discretionary markets in the United Kingdom is no longer theoretical. It is already visible, and nowhere more clearly than in pubs, cafés, restaurants, and the wider hospitality sector.
Pubs are not closing because people have suddenly stopped liking pubs. They are closing because pubs exist almost entirely within the discretionary economy. Drinking in a pub is not essential to survival. It is something people do when they have surplus income, surplus energy, and surplus confidence about the future.
As those surpluses disappear, pubs are among the first businesses to fail.
Rising energy costs, higher food prices, staff shortages, business rates, rent, and declining disposable income have converged into a structural problem, not a cyclical one. Even well-run pubs are finding that there is no viable price point that allows them to stay open while remaining affordable to their customers.
This is not a temporary downturn. It is the early stage of a wider contraction.
Hospitality was one of the most significant sources of employment growth during the late stages of the growth economy. It absorbed labour released from manufacturing, logistics, and clerical work. It provided flexible jobs, part-time roles, and entry-level employment. But it depended entirely on discretionary spending.
As explained in Beyond Growth, discretionary work only exists when there is surplus energy and surplus income in the system. When those surpluses decline, discretionary work disappears first.
The closure of pubs is therefore not an isolated cultural loss. It is an economic signal.
Tourism: A Fragile Foundation Now Giving Way
Many parts of the UK have become dangerously dependent on tourism. Coastal towns, national park fringes, historic cities, market towns, and rural beauty spots have reshaped their economies around visitors rather than residents.
Tourism is one of the most discretionary sectors.
People only travel when they have spare money, spare time, and cheap transport. Remove any one of those, and tourism contracts sharply. Remove all three, and it collapses.
This is now happening.
Fuel costs make travel expensive. Accommodation costs have risen beyond what many households can justify. Food prices make eating out prohibitive. At the same time, household insecurity makes people cautious. Holidays become shorter, closer to home, or disappear altogether.
Tourism-dependent areas are therefore facing a double squeeze. Visitor numbers decline, while the cost base of serving those visitors rises.
The consequences are already visible:
Seasonal businesses failing to reopen
Reduced opening hours
Fewer staff taken on each year
Entire streets of gift shops, cafés, and attractions becoming unviable
These areas often have very little alternative employment. Tourism replaced farming, fishing, small-scale manufacturing, and local services. When tourism declines, there is nothing beneath it.
This creates a false narrative of “regional decline”, when in reality it is the collapse of a discretionary overlay that was never structurally sound in the first place.
Discretionary Employment Was Always Precarious
Discretionary employment expanded rapidly during the final decades of growth. Retail, leisure, entertainment, hospitality, events, travel, and personal services all flourished.
But these jobs were not anchored to essential needs. They were anchored to consumption.
As Beyond Growth explains, when surplus energy declines, economies do not shrink evenly. They shed layers. The outermost layers – the least essential – disappear first.
This is why discretionary employment is collapsing before essential services do.
Retail jobs disappear as people buy less. Hospitality jobs disappear as people eat and drink at home. Tourism jobs disappear as travel becomes unaffordable. Creative and cultural work shrinks as sponsorship and ticket sales dry up.
This is not unemployment caused by laziness, automation alone, or poor policy. It is structural redundancy in a shrinking economy.
No amount of “retraining” can recreate jobs that no longer have an economic basis.
The Illusion of Recovery
There is still a widespread belief that these trends represent a temporary dip and that growth will return. Short-lived rebounds, government subsidies, and debt-funded interventions reinforce that belief.
But these measures do not restore surplus energy. They merely redistribute shrinking resources.
As argued in Beyond Growth, what appears to be economic activity is increasingly funded by borrowing rather than by production. This creates the illusion of stability while the underlying system continues to contract.
Pubs reopen briefly, then close again. Tourist seasons look “busy”, but businesses still fail. Employment figures fluctuate, but job quality deteriorates.
The economy is no longer renewing itself. It is thinning.
What Happens Next: The Broad Unravelling of Discretionary Work
The decline of pubs and tourism is only the beginning.
Other discretionary sectors will follow:
Non-essential retail
Entertainment venues
Events and exhibitions
Large parts of the creative industries
Long-distance commuting and business travel
Corporate hospitality and conferencing
These activities were built on assumptions of cheap energy, rising incomes, and expanding markets. Those assumptions no longer hold.
As discretionary markets shrink, employment patterns will change fundamentally. People will not move seamlessly into new paid jobs. Many will exit the formal economy altogether.
This is not mass unemployment in the conventional sense. It is a reconfiguration of work.
The Shift Toward Essential and Informal Activity
As discretionary employment disappears, people will not simply remain idle. They will redirect their effort toward essential activity, much of it outside the formal economy.
This includes:
Growing food
Processing and preserving food
Repairing and maintaining goods
Caring for family members and neighbours
Sharing housing and resources
Running small, local enterprises
Much of this work will not appear in GDP figures. It will not be taxed in the same way. It will not resemble conventional employment.
But it will sustain life.
This is the localist response described throughout Beyond Growth. It is not ideological. It is adaptive
Tourism Areas Will Have to Relearn How to Live
Tourism-dependent areas will face the hardest adjustment.
They will have to transition from serving visitors to supporting residents. This means:
Reclaiming land for food production
Repurposing empty holiday accommodation for permanent living
Turning cafés and pubs into food-processing, community kitchens, or local shops
Reducing dependence on seasonal income
Some places will manage this transition. Others will continue to decline.
There is no guarantee of rescue from outside. The national economy is shrinking too.
This Is Imminent, Not Distant
The decline of discretionary markets is not a future scenario. It is already unfolding.
Pubs are closing now. Tourism businesses are failing now. Hospitality employment is shrinking now.
What lies ahead is not sudden collapse, but steady erosion.
The danger lies in misunderstanding what is happening. If we continue to treat this as a temporary downturn, we will keep applying the wrong remedies.
If we recognise it as a structural transition, we can begin to adapt.
Conclusion: Reading the Signs Clearly
The closure of pubs and the weakening of tourism are not cultural accidents or policy failures. They are early signals of a deeper economic evolution.
They tell us that surplus is disappearing. That discretionary life is contracting. The economy is shedding what it can no longer support.
As Beyond Growth makes clear, the future will not be rebuilt around consumption, leisure, and growth. It will be rebuilt around food, care, repair, and locality.
Those who understand this early will adapt more easily. Those who cling to the old model will experience only confusion and loss.
The discretionary economy is fading. What replaces it will not look like recovery. It will look like something simpler, quieter, and closer to home.
