Many of the pieces on this blog start from the same observation. The formal, industrial system that shaped the last two centuries is no longer expanding. It is becoming more brittle, more abstract, and less able to describe the conditions it is meant to manage. One consequence of this is rarely named, but it matters greatly. Large systems are increasingly poor at telling the truth about what is actually happening.

This is not because people have become less honest. It is because scale weakens feedback.

There is strong evidence that small, local systems generate fewer invented facts than large, top-down organisations. This strengthens the case for localism, not as a lifestyle choice, but as a structurally viable way of organising society in a period of contraction.

In local settings, most interactions are direct and repeated. People know one another and share overlapping knowledge of the same places, activities, and outcomes. Claims are made in the presence of others who can test them against lived experience. If a harvest is considered good, the fields are visible. If a scheme is said to be working, its effects are felt locally.

This produces tight feedback loops. False claims are rarely exposed through formal processes. They are exposed through everyday contradiction. A person who repeatedly invents facts does not simply lose an argument. They lose trust, cooperation, and standing. In an informal local economy, that loss has immediate practical consequences.

Large organisations operate oppositely. Information moves upwards through layers, losing detail as it goes. Reports replace observation. Targets replace judgment. Responsibility is dispersed to the point where no one wholly owns the accuracy of what is being said.

In such systems, invented facts usually arise without malicious intent. People adapt their descriptions of reality to what the organisation can tolerate. Bad news is softened. Ambiguity is resolved in favour of approved narratives. Over time, internal coherence becomes more important than correspondence with lived conditions.

This is a structural outcome of scale, not a failure of individual character.

In small communities, knowledge is redundant. Many people know the exact facts through different routes. This makes sustained fabrication difficult. In large systems, knowledge is siloed. Falsehoods can persist simply because those closest to reality lack authority, while those with authority are distant from reality.

This pattern is well supported by the work of Elinor Ostrom, who studied how local groups successfully managed shared resources such as water systems, fisheries, and grazing land. Across thousands of cases, she found that small, self-governing groups shared information openly, detected rule-breaking quickly, and maintained higher factual accuracy than centrally managed systems.

These groups did not function because people were unusually virtuous. They functioned because dishonesty was visible and costly. Everyone depended on the same resource. Everyone could see when claims diverged from reality.

This connects directly to the wider argument of this blog. As discretionary markets shrink and formal institutions struggle to adapt, systems that depend on abstract reporting and distant control become increasingly fragile. They require simplification to function, and simplification drifts into distortion. Targets replace reality. Invented facts become a way of keeping the system moving.

Local systems do not scale, and that is precisely why they remain viable. Their small size anchors them in observation, shared experience, and rapid correction. Errors surface quickly. Misjudgements are owned locally. False claims cannot be institutionalised or passed endlessly upwards.

Localism does not eliminate deception. People remain human. But in a local setting, deception is short-lived and self-limiting. It damages trust quickly and cannot be embedded into the structure of the system.

As the formal economy contracts and informal systems take on a larger role in meeting everyday needs, this matters. A society that cannot accurately describe its own condition cannot adapt to change. Localism remains viable not because it promises harmony or moral improvement, but because it preserves feedback.

And feedback, more than scale or efficiency, is what keeps a system connected to reality.