Tag Archives: politics

399. Piddington and the Natural Emergence of Localism

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The Government proposes to accommodate as many as 1,256 male asylum seekers at a former military site near Piddington in Oxfordshire. The village itself has a population of only about 350. The proposed centre would therefore be several times larger than the existing community.

Residents say that they have not been adequately consulted. They are concerned about safety, transport, policing, medical services, sewage and the character of their village. Their campaign has included a symbolic referendum on leaving the United Kingdom.

The central issue is not whether every fear expressed by every resident is justified. Nor should people seeking asylum be treated automatically as criminals or enemies. Most are individuals caught within a system which they did not create.

The deeper issue is one of scale, consent and authority.

A national government has decided that a very small locality should absorb the consequences of national asylum policy. Central government determines the policy, selects the site and controls the money. The locality is then expected to cope with many of the practical and social consequences.

Piddington’s response is therefore about more than immigration. It is also a reaction to remote government and the limited influence which local people have over decisions that directly affect their lives.

Immigration as the trigger

Immigration and asylum policy have become the immediate triggers because their consequences are experienced in particular places.

National politicians discuss annual totals, legal obligations, processing capacity and the cost of hotel accommodation. Residents experience the policy differently. They consider its possible effects upon roads, medical services, policing, public transport, water and sewage. They ask whether the scale of the proposal is compatible with the capacity of their locality.

A national total can appear manageable when viewed from Whitehall. The same policy can become overwhelming when a large part of it is concentrated in one small place.

The proposed Piddington centre would not gradually introduce a few families into an established community. It would place a large, predominantly male and temporary population beside a village containing only a fraction of that number.

Whatever one’s opinion of immigration, it is reasonable to ask whether such a concentration is socially and practically sustainable. It is also reasonable to ask whether concentrating so many asylum seekers in one isolated place is in their own interests.

The Government may regard the former military site principally as an available piece of property. Local residents regard it as part of the place in which they live. That difference helps to explain the conflict.

From residents to a locality

Localism often begins when people discover that they share a common interest.

Until an outside decision substantially affects their surroundings, residents may have little reason to organise. They live in the same place, but they do not necessarily act together.

A crisis can change this. Meetings are held. Information is exchanged. Local knowledge is collected. Responsibilities are accepted. People who seldom spoke to one another begin working together.

A collection of individual households starts behaving like a locality.

That appears to be happening at Piddington. Residents are not merely complaining as individuals. They are asserting that their community has an identity, a voice and a legitimate right to influence decisions affecting its future.

The symbolic independence referendum will have no constitutional effect. Its importance lies in the message it conveys. If national government will not listen adequately to the locality, the locality must find democratic ways of making itself heard.

This is one of the ways in which localism emerges. It is seldom introduced according to a government timetable. It develops from below when national institutions appear unable or unwilling to respond to particular local circumstances.

Part of the evolution of the UK economy

Piddington should also be considered within the wider evolution of the UK economy.

The industrial economy encouraged centralisation. Abundant energy, expanding tax revenues and economic growth enabled governments to construct large national systems. Decisions about housing, transport, health, energy and population could be made centrally because the State appeared to possess the resources needed to manage their consequences.

That period is ending.

Energy, materials, public services and government finance are becoming less affordable. The gap between national promises and local capacity is consequently growing.

Central government may announce a policy, but it cannot easily provide another doctor’s surgery, additional police officers, more buses, improved drainage or the social relationships needed to make the policy work. These cannot be created merely by issuing instructions from Whitehall.

A shrinking economy makes scale increasingly important. A policy that might have been absorbed during decades of expanding services becomes much more disruptive when existing services are already stretched.

Immigration is exposing this change, but it did not create the underlying weakness. It reveals the declining ability of the centralised State to match national decisions with local resources.

The same pattern is likely to emerge in other fields. Localities will increasingly organise around food, care, housing, water, energy, transport and employment. They will do so because national systems are becoming too expensive, too complicated and too remote to meet every local need.

This does not require a political revolution. It is an economic and social evolution. Responsibilities will move towards the locality because that is where many essential needs must ultimately be met.

Local consent must carry weight

Localism does not mean that every locality can ignore the interests of the rest of the country. Britain will continue to require national functions, including defence, border administration, taxation, justice, telecommunications and specialist medical services.

It does mean that national policy must recognise the physical and social capacity of individual places.

A genuinely localist asylum policy would ask several questions before selecting a site:

  • What population can the locality reasonably accommodate?
  • What services and infrastructure already exist?
  • Who will pay for the additional demands?
  • Can newcomers be accommodated on a human scale?
  • Have local residents been involved before the decision is made?
  • How will the interests of both residents and asylum seekers be protected?
  • What responsibilities and resources will remain within the locality?

Large concentrations imposed with little local involvement are the opposite of localism. Smaller-scale accommodation, supported by adequate resources and shaped through local consultation, would have a better chance of succeeding for residents and newcomers alike.

No locality can possess an absolute right of refusal over every national responsibility. Equally, central government should not possess an unlimited right to impose radical change upon a small community simply because a convenient site is available.

There must be balance, proportionality and genuine consultation.

A lesson from Piddington

Piddington is not yet an example of a fully developed localist economy. Its campaign is primarily defensive. Nevertheless, defensive action can awaken a sense of local responsibility.

The relationships and practical experience created by the campaign may later help residents work together on transport, medical provision, food supplies, energy or care. They may recognise that the difficulties revealed by asylum policy also affect many other centrally managed services.

The importance of Piddington is therefore not confined to the immigration debate. It demonstrates how a national policy can stimulate the recovery of local identity and collective action.

Localism will not necessarily arrive because Westminster decides to introduce it. It is more likely to emerge because communities find it necessary to safeguard their capacity, resources and social cohesion.

Immigration and asylum policy may be the triggers at Piddington. The underlying cause is the growing tension between centralised decision-making and local circumstances.

As the UK economy contracts and the resources available to government diminish, similar disagreements are likely to arise elsewhere. Communities will increasingly question whether decisions made at national level take sufficient account of local capacity.

Piddington may therefore be a small early sign of a much larger evolution. It points towards the gradual recovery of local initiative as an increasingly overstretched central State finds it more difficult to manage every consequence of its policies.

This is not the rejection of national government. It is the development of a new balance. National government will retain the functions that only it can perform, while localities assume greater responsibility for the practical conditions of everyday life.

That is how localism is most likely to emerge: not through revolution, but through necessity.

398. The Shift Is Not Ideological. It Is Structural.

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The Shift Is Not Ideological. It Is Structural.

Much of the academic discussion about post growth assumes a deliberate transition. The language is about “choosing” degrowth, redesigning capitalism, or voting for ecological limits.

But what if the transition is not optional?

In the UK and other mature industrial economies, several forces are already in motion:

  • Ageing populations
  • Declining discretionary spending power
  • Infrastructure decay
  • Energy constraints
  • Stagnant productivity
  • Rising maintenance costs
  • Fiscal pressure on the state

These are not ideological. They are structural.

The future is not a government programme. It is an evolution already underway.

Government Does Not Lead Structural Contraction

Historically, governments lead during expansion. They stimulate, borrow, build, and promise.

But during contraction:

  • Tax revenues weaken.
  • Welfare demands increase.
  • Borrowing capacity tightens.
  • Political promises become harder to sustain.

In such conditions, governments do not shape growth. They manage decline.

The economy sets the pace. Government follows.

This is closer to historical experience in long stagnations than to the optimistic tone of degrowth theory.

The Cultural Shock

The real issue is not economic technique. It is mindset.

For seventy years, the UK has assumed:

  • Next year will be richer than this year.
  • Property will rise.
  • Consumption will expand.
  • Public services will grow.
  • Pensions will be funded by a larger workforce.
  • Mobility will increase.

If the underlying economy is shrinking in real terms, those assumptions quietly break.

And that break is not temporary.

What Changes in a Shrinking Era

If contraction is structural and prolonged, then values gradually shift:

Instead of expansion:

  • Maintenance becomes central.
  • Repair replaces replacement.
  • Longevity replaces novelty.

Instead of rising revenues:

  • Hard prioritisation emerges.
  • Universal provision becomes targeted.
  • Informal support systems grow.

Instead of mobility and scale:

  • Local provision strengthens.
  • Travel reduces.
  • Small units become viable again.

This is not a manifesto. It is adaptation.

The Foreseeable Future

The critical point is permanence.

If shrinkage is cyclical, governments can wait for recovery.

If shrinkage is structural, they must adapt permanently.

And so must households.

The political danger lies in pretending expansion will return. The practical wisdom lies in recognising that the system is evolving into a lower throughput economy and planning accordingly.

That means:

  • Resetting expectations.
  • Rewriting fiscal assumptions.
  • Accepting that some activities will not return.
  • Valuing stability over growth.

This is not degrowth as policy.

It is contraction as condition.

And it is likely to shape the foreseeable future.

395. The Energy Crisis Will Be a Crisis of Affordability

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This article was prompted by Gail Tverberg’s important essay, “Affordability, Not Scarcity, Is the Real Energy Crisis”, published on Our Finite World. Her original article, including its charts and detailed historical analysis, should be read at the link.

The conventional picture of an energy crisis is one of physical shortage. Oil wells begin to run dry, petrol prices soar and queues form outside filling stations. Governments respond by searching for new supplies or subsidising alternatives.

Tverberg presents a more complicated and much more disturbing possibility. The immediate problem may not be that the world has no oil, gas or coal left. It may be that the economy can no longer afford to extract and use them at the prices producers require.

Energy can therefore become unaffordable in two different ways.

If its price rises sufficiently to cover the increasing cost of extraction, transport and processing, households and businesses cannot afford to buy enough of it. Demand falls and the economy contracts.

If its price falls to what consumers can afford, producers may be unable to justify investment in new mines, wells, pipelines, refineries and power stations. Production then becomes financially unviable.

There may be plenty of energy remaining underground, yet no price at which the whole system works satisfactorily.

Energy and economic growth

The industrial economy did not develop independently of energy. It was created by the growing availability of relatively cheap coal, oil and gas.

Cheap energy allowed mechanised farming, mass manufacturing and long-distance transport. It supported the growth of large cities and international supply chains. It enabled rising wages, expanding consumer markets and the construction of millions of homes. Credit could expand because lenders expected future economic growth to make debts repayable.

Tverberg connects periods of rapidly growing energy consumption with rising living standards. She also identifies troubled periods when energy consumption grew slowly or contracted. These periods were associated with financial crises, political instability, wars and the failure of governments.

This does not mean that energy alone explains every historical event. It does suggest that political and financial systems become much harder to sustain when the energy available to support each person is no longer increasing.

Our present arrangements were built during an age of expansion. They depend upon continuing expansion. Governments, pension systems, banks, property markets and businesses all make promises based upon the assumption that tomorrow’s economy will be larger than today’s.

If the economy is shrinking instead, many of those promises cannot be honoured.

Why low prices are not necessarily good news

We are accustomed to regarding falling oil prices as beneficial. They reduce the cost of transport, heating and production.

In a weakening economy, however, a low oil price may be evidence that households and businesses lack purchasing power. People travel less, buy fewer cars, postpone buying homes and reduce discretionary spending. Factories produce less and freight movements decline.

Falling demand then pushes energy prices below the level needed by producers. Investment is cancelled. Older fields continue to decline and new supplies are not developed quickly enough.

The apparent abundance may therefore be misleading. Oil is available, but only because fewer people can afford to use it. Meanwhile, the productive system required to maintain future supplies is deteriorating.

This explains why scarcity and affordability cannot be separated from the wider economy. A barrel of oil has no economic value unless someone can afford to buy the products made from it. Equally, an oilfield cannot continue operating unless its income covers the cost of machinery, skilled labour, finance and replacement infrastructure.

The debt problem

Debt has allowed governments and households to postpone recognition of the affordability crisis.

Borrowing creates additional spending power in the present. It can support house prices, consumer spending, public services and business investment even when underlying prosperity is weakening. But borrowing is a claim upon future production.

If future production does not grow, the debt becomes harder to service. Governments borrow more to cover existing commitments. Businesses refinance loans that cannot realistically be repaid. Households devote a rising proportion of their income to mortgages, rent, energy and food.

Eventually, borrowing ceases to disguise contraction and begins to intensify it. Banks become cautious. Investment falls. Property prices weaken. Unemployment increases and tax receipts decline.

The financial economy may continue to report growth for a time, particularly when inflation is included. The material economy can nevertheless be shrinking underneath it.

The implications for the future

The future may not be characterised by one dramatic moment when energy suddenly runs out. It is more likely to consist of repeated losses of affordability.

People will give up discretionary purchases first. New cars, holidays, restaurant meals, entertainment and non-essential household improvements will become less frequent. Businesses dependent upon these purchases will contract.

Housebuilding will suffer because the combined cost of land, materials, energy, labour, finance and regulation exceeds what buyers can afford. Existing property prices may also weaken as mortgages become harder to obtain and household incomes come under pressure.

Governments will face the same difficulty. The cost of maintaining roads, hospitals, schools, defence, pensions and public administration will rise while the tax base becomes less dependable. Borrowing may postpone reductions, but it cannot permanently replace the productive economy from which public revenue ultimately comes.

Large projects will become particularly vulnerable. High-speed railways, data centres, complex renewable-energy systems and major urban developments require huge quantities of energy, materials, finance and specialist labour. A government may announce them, but completion and continued maintenance are separate questions.

Global supply chains will also become less reliable. Higher shipping, insurance and financing costs must be absorbed somewhere. Consumers may be unable to pay more, while producers and farmers cannot indefinitely accept less.

The result is likely to be declining variety as well as declining quantity. Goods that depend upon complicated international supply systems may disappear long before the basic materials from which they are made become physically exhausted.

The localist response

Tverberg describes the economy as a self-organising system. When one form of economic organisation becomes unworkable, people do not simply stop living. They find different ways of meeting their needs.

This is where localism becomes important.

Localism is not a government scheme for reproducing the present economy on a smaller scale. It is the natural reorganisation of economic life around what remains necessary, affordable and locally possible.

Food production, repair, care, basic building, water management, woodland work and small-scale energy provision will become relatively more important. Discretionary employment will decline, releasing people who will need to find useful work closer to where they live.

Localities with fertile land, water, practical skills, workshops and strong social relationships may be more prosperous in real terms than places which retain high financial incomes but depend completely upon distant supplies.

Prosperity will have to be understood differently. It may consist less of the number of new products purchased and more of secure food, maintained homes, dependable neighbours and access to essential services.

National government will remain necessary for activities such as defence, telecommunications, specialist medicine, intercity rail and the maintenance of a common legal and monetary framework. But it may no longer possess the resources to organise every aspect of life from the centre.

More responsibility will fall upon localities, families, small businesses and informal networks. This will not necessarily happen because government deliberately chooses localism. It will happen because centralised systems become too expensive and unreliable.

Preparing for a different economy

The importance of Tverberg’s argument is that it moves the discussion beyond the simple question of how much energy remains.

The decisive question is how much useful energy society can afford after meeting the costs of obtaining it. If those costs rise while household purchasing power falls, the industrial economy can contract even though substantial physical resources remain.

Governments will continue to describe each difficulty as temporary. They will promise renewed growth through borrowing, technology or investment. Some innovations will undoubtedly help. But technology cannot remove its own dependence upon energy, materials, infrastructure and paying customers.

The sensible response is not to attempt to predict an exact date for collapse. It is to make households and localities less dependent upon systems whose affordability is deteriorating.

The future may contain less energy, less mobility and fewer material choices. It need not contain less human purpose. As the growth economy loses its ability to provide, people will begin to rebuild economic life around necessity, proximity and sufficiency.

Localism will not prevent the shrinking economy. It is how we may learn to live within it.

393. National Shrinkage and the Uneven Growth of Localities

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The shrinking economy will not affect every part of the United Kingdom in the same way or at the same speed. National statistics will record falling prosperity, weakening tax revenues, declining discretionary employment and increasing pressure on public services. But these national figures will conceal a much more varied process taking place within individual localities.

Some localities will continue to grow, at least in terms of population, food production, practical employment and social cohesion. Others will shrink rapidly. Some may become extremely poor, while a smaller number retain considerable wealth. Between these extremes will be many places undergoing repeated adjustment as people, skills and resources move in response to changing conditions.

This will not be a planned redistribution directed from the centre. It will be an evolutionary process.

National shrinkage will not be evenly distributed

Economic shrinkage is usually discussed as though it will descend uniformly upon the country. National output falls, real wages decline and public expenditure becomes less affordable. It is then assumed that every household and every place will become proportionately poorer.

That is unlikely.

The national economy is an aggregation of very different local economies. Some depend heavily upon discretionary spending, long supply chains, commuting, tourism, financial services or government expenditure. Others possess productive land, water, woodland, workshops, useful buildings and people with practical knowledge. Some have strong social connections. Others consist largely of isolated households whose relationships are mediated through employers, public agencies and commercial services.

As the formal economy contracts, these differences will become increasingly important.

A locality that loses a large office employer may experience an abrupt fall in money incomes. Shops may close, house prices may fall and tax receipts may decline. Yet if the locality has access to land, practical skills and a willingness to reorganise, it may gradually replace some of the lost formal activity with food production, repair, care and small-scale manufacturing.

Another locality may initially appear prosperous because its residents have accumulated pensions, investments and valuable property. But it may lack food-producing land, water, affordable housing and people capable of maintaining its physical systems. Its monetary wealth may disguise a deeper dependence upon distant supplies and outside labour.

The real strength of a locality will therefore not be measured simply by the amount of money circulating within it. It will be measured increasingly by what it can provide for itself.

Growth within shrinkage

The United Kingdom can shrink while particular localities grow. This is not a contradiction. It depends upon what is meant by growth.

A locality may experience falling financial turnover while increasing its production of food, firewood, clothing, tools and essential services. It may have fewer supermarkets but more market gardens. It may have fewer professional care companies but more people providing care within families and neighbourhoods. It may have fewer new products but much more repair and reuse.

Such a locality would be shrinking according to conventional economic measurements. Yet its ability to support its inhabitants could be increasing.

Local growth in a shrinking national economy will not resemble the growth of the industrial age. It will not necessarily involve rising consumption, expanding credit or increasing house prices. It will mean the growth of useful activity.

There may be growth in:

  • local food production;
  • the number of people engaged in practical work;
  • repair and maintenance;
  • shared equipment;
  • small workshops;
  • household and locality energy production;
  • woodland management;
  • care provided close to home;
  • informal exchange;
  • apprenticeships and the transfer of skills;
  • relationships of trust and mutual obligation.

This activity may not be fully captured by Gross Domestic Product. Some of it may not involve money at all. But it will determine whether a locality is merely becoming poorer or is becoming more self-reliant.

National shrinkage may therefore be surprisingly difficult to see in the more successful localities. People will know that imported goods are less available, that travel is more expensive and that national services are deteriorating. Yet everyday life may remain tolerable, and in some respects improve, because essential needs are being met more directly.

People may have less money but more useful work. They may buy fewer prepared foods but have better access to locally grown produce. They may travel less but know more of the people around them. The economy will have shrunk, but life will not necessarily feel like continuous decline.

De-layering the local economy

This process can be understood as de-layering.

The formal economy has inserted numerous layers between the person who does useful work and the person who benefits from it. Social care provides a good example. The person receiving care pays, directly or through taxation, for much more than the time of the carer. The cost may also include management, regulation, property, transport, finance, debt servicing and profit.

The same is true of food. The price paid by the consumer includes processing, packaging, advertising, distribution, refrigeration, supermarket property, finance, management and profit. Some of these functions are necessary within the present system. But many do not produce food.

As energy and financial resources become less affordable, these layers will contract. The process may be disorderly, but it will encourage a shorter relationship between production and use.

Food grown close to where it is eaten requires fewer layers. A person caring for someone nearby does not require a national company to organise every hour of assistance. A local craftsperson repairing an implement avoids the energy, materials and finance required to manufacture and distribute a replacement.

The successful locality will not preserve every feature of the formal economy. It will retain the useful core while shedding unaffordable complexity.

Migration as a judgement upon localities

Population movement may become one of the clearest signs of how individual localities are coping.

People have always moved towards places offering food, work, shelter and security. During the era of industrial expansion, this generally meant movement towards towns and cities where monetary employment was concentrated. In a shrinking economy, the direction of movement may become less predictable.

Some towns will continue to attract people because they possess housing, workshops, markets, rail connections and established institutions. Some rural localities will attract people because they offer land, water, food production and practical work. Other places will lose population because they cannot provide affordable essentials.

Emigration from a locality will be a visible judgement upon its conditions. Immigration will often indicate that people believe they can establish a tolerable life there.

This judgement will not always be correct. A place may attract newcomers because it appears wealthy, only for its dependence upon external supplies to become apparent later. Another may lose young people during a period of severe difficulty, even though its land and resources give it good long-term prospects.

Movement will also be constrained. Poor people may be unable to move. Wealthier households may retain homes in attractive places while obtaining their essentials from elsewhere. Older people may remain because of family connections or because moving is physically impossible. Population movement will therefore be an important measure, but not a perfect one.

Over time, however, the movement of people will help shape the new local pattern. Skills will move as well as numbers. A locality that attracts growers, builders, carers, mechanics and craftspeople may strengthen itself. A locality that drives such people away through high housing costs or lack of access to land may become weaker, despite retaining substantial financial wealth.

Localities of wealth and poverty

National shrinkage will not abolish inequality. It may initially increase it.

Some localities will contain large concentrations of property, savings and political influence. They may be able to secure scarce supplies for longer than poorer places. They may employ people from outside to maintain their houses, gardens and personal care. For a time, they may seem insulated from the national decline.

But wealthy localities will face a fundamental question. Are they merely places in which wealthy people live, or are they functioning communities capable of providing essential goods and services?

A locality of expensive houses but few workers cannot sustain itself. If carers, growers, cleaners, builders and repairers cannot afford to live there, its financial wealth becomes a claim upon labour imported from elsewhere. As transport and energy costs rise, that arrangement becomes increasingly fragile.

Poorer localities will face different problems. They may contain unemployed people, derelict land and empty buildings, yet lack the finance and organisation needed to bring them together productively. Their poverty may be severe even when useful resources are physically present.

The decisive issue will be access. Who may use the land? Who may occupy empty buildings? Who owns the tools? Can people obtain the small amount of capital needed to begin producing? Are local rules designed to enable useful activity, or do they protect arrangements inherited from the age of growth?

Extreme local poverty will not always result from a complete absence of resources. It may result from the inability of people to gain access to them.

Homelessness during the breakdown of the formal system

Housing may reveal one of the most painful contradictions of the shrinking economy. People may become homeless even while houses and other buildings stand empty.

The formal housing system depends upon wages, mortgages, rents, property values, credit and state support. As discretionary employment contracts, increasing numbers of people may be unable to maintain rent or mortgage payments. They may lose their homes before any alternative local system is ready to receive them.

This could create a period of severe but temporary poverty.

Someone expelled from the formal economy may have no recognised job, little money and nowhere secure to live. Yet that same person may later become essential to a local food system, care network, building group or repair workshop. The difficulty is the interval between the loss of the old livelihood and the creation of the new one.

Grass-roots food systems cannot appear overnight. Land must be made available. Soil must be improved. Tools, seeds and knowledge must be obtained. Growing has to follow the seasons. Storage and distribution must be organised. People accustomed to specialised formal employment need time to learn different skills.

During this interval, destitution could exist alongside the early stages of local renewal.

Homelessness should not therefore be interpreted as evidence that people have become unnecessary. It is evidence that the formal system has discarded them before the emerging system has found a way to use and support them.

This is where a continuing national core and functioning local institutions will be vital. Temporary shelter, basic food, healthcare and access to land can prevent a period of disruption from becoming permanent exclusion. The object should not be to preserve every feature of the failing formal system. It should be to keep people alive, sheltered and capable of taking part in the new one.

The danger of failed localities

Not every locality will evolve successfully.

Some may be trapped by poor land, water scarcity, contaminated sites, unsuitable buildings or isolation from transport. Others may possess adequate physical resources but lack cooperation. Powerful owners may prevent access to land and buildings. Existing groups may exclude newcomers. Crime, intimidation or political conflict may prevent productive activity.

A failed locality may enter a downward spiral. Useful people leave. Essential services deteriorate. Property is abandoned. Those who remain become older, poorer and less able to restore the physical fabric. Food and energy must still be brought in, but the locality has less to offer in exchange.

The national government will not have the resources to rescue every place by recreating former patterns of employment. Nor can it design a uniform local economy from the centre. It can, however, maintain the framework within which local recovery remains possible.

This includes basic law, defence, a workable currency, intercity rail, telecommunications, specialist healthcare and a minimum system of income or essential provision. It may also require measures preventing usable land and buildings from remaining idle while people lack food and shelter.

The purpose of national government in a shrinking economy will increasingly be to preserve the conditions for local evolution.

Local success will have different forms

There will be no single model of a successful locality.

A rural locality may depend upon mixed farming, woodland, village workshops and small food-processing businesses. A market town may serve as a centre for exchange, repair, healthcare and education. A former industrial town may reuse its terraces, railway connections, warehouses and workshops. Parts of cities may reorganise into closely connected urban localities, using allotments, markets, repair centres and shared services.

Each will develop according to its geography, buildings, history, people and natural resources.

This is why localism cannot be delivered as a standard national programme. Government may enable it, but it cannot prescribe its detailed form. The process will involve experiment. Some arrangements will work and be copied. Others will fail and be abandoned.

Successful localities will also exchange with one another. Localism does not mean complete self-sufficiency. Few places can provide everything they need. The aim is to shorten essential supply chains and reduce dependence upon complex systems, not to eliminate trade.

A food-producing locality may exchange with a town possessing workshops and medical facilities. Woodland localities may supply timber and charcoal. Coastal localities may provide fish. Railways and waterways may connect these different economies using less energy than the present road-based distribution system.

The national economy will become less uniform and more like a network of distinct but connected localities.

A new measure of prosperity

The success of this evolution cannot be judged primarily by house prices, retail sales or financial turnover.

A prosperous locality in the shrinking economy will be one in which ordinary people can obtain food, shelter, warmth, care and useful work without depending upon long and fragile chains. It will retain skills, support children and older people, maintain its buildings and land, and produce enough of value to exchange for what it cannot provide itself.

Its inhabitants may own fewer consumer goods. They may travel less and have lower monetary incomes. Yet they may be more secure than people living in apparently wealthier but highly dependent places.

The most important division may no longer be between nationally rich and nationally poor. It may be between localities that can evolve and those that cannot.

Evolution rather than a master plan

National shrinkage is already beginning to weaken the systems built during the age of cheap energy and expanding credit. The consequences will not follow a neat timetable. Neither will they be identical throughout the country.

Localism will emerge unevenly. It will advance where necessity, resources and human cooperation come together. It will falter where access is denied, practical knowledge has been lost or social relationships have broken down.

There will be periods of hardship. People may lose formal employment and housing before new local systems are sufficiently developed. Some localities will become much poorer, while others retain wealth or discover new forms of material security. Migration will increasingly reveal which places offer a viable future.

But national shrinkage does not require every locality to experience unrelieved decline. Within the contraction of the formal economy, there can be growth in food, care, repair, skills, cooperation and genuine usefulness.

This is the central possibility offered by localism. A country may become financially poorer while many of its localities become more capable of meeting human needs. What appears from the centre as national economic decline may be experienced locally as adaptation, simplification and renewal.

The future will not be distributed evenly. It will be made, locality by locality, through the evolutionary response of people to the condition

389. Cutting the State in a Shrinking Economy

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A recent Daily Telegraph editorial argues that cutting public spending must become the central issue in British politics. National debt is estimated to have passed £3 trillion. The cost of long-term borrowing has risen sharply, while debt interest consumes money that can no longer be spent on defence, healthcare or other public services.

The newspaper welcomes Reform UK’s proposal to reduce annual government spending by £80 billion. It also approves of Conservative plans to restrain welfare spending while increasing defence expenditure. Its conclusion is that the British state is consuming ever more resources while delivering increasingly disappointing results.

The financial warning is justified. The Office for Budget Responsibility has acknowledged that debt-interest spending has reached post-war records as a proportion of both government revenue and national output. It has also become exceptionally volatile. Higher interest rates can therefore upset the public finances very quickly. The original Telegraph editorial can be read here.

However, the political debate still avoids the more fundamental question. What if economic growth cannot simply be “unleashed”?

The assumption that growth will return

The conventional argument is that government should cut spending, reduce taxes, remove regulations and allow the private economy to grow. Economic growth would then raise tax revenues and make the remaining public services affordable.

This assumes that the underlying productive economy is merely being restrained by bad government. Remove the restraints and expansion will resume.

But Britain may be facing something much deeper than poor economic management. The industrial economy depends upon abundant and affordable energy, raw materials, transport, infrastructure and credit. As these become more expensive, a growing proportion of economic activity must be devoted simply to maintaining existing systems.

The economy may continue to appear to grow in money terms while producing less real prosperity. Government borrowing can disguise this for a time. So can rising house prices, financial speculation and expanding public expenditure. None of them creates the affordable energy or physical resources upon which productive activity ultimately depends.

If the economy is shrinking structurally, no government will be able to restore the growth rates upon which its promises are based.

Spending cuts will come anyway

In that case, public spending will eventually be reduced. The choice is not necessarily between spending cuts and continued abundance. It may be between planned adaptation and disorderly contraction.

When government borrows to maintain services that current taxation can no longer support, it transfers part of the cost into the future. Interest then becomes another permanent claim upon future taxpayers. Eventually, lenders demand higher returns because they see that the state’s commitments are growing faster than its ability to pay.

The bond market is therefore not merely expressing a political preference for a smaller state. It is exposing an affordability problem.

Nevertheless, announcing a large figure such as £80 billion does not explain what should disappear. Every item of government spending supports somebody’s income. A departmental economy may mean the closure of a local office, the loss of a bus service, fewer carers, less road maintenance or the disappearance of a small rural school.

Badly designed national cuts can weaken precisely those local structures that will be needed as the economy contracts.

What should be cut?

The first distinction should not be between public and private activity. It should be between the essential and the discretionary.

Britain will continue to need defence, basic healthcare, water, food production, essential transport, telecommunications, law, taxation and the maintenance of vital infrastructure. These functions may have to be delivered more simply, but they cannot safely be abandoned.

There is much greater scope for reducing the machinery constructed around them. Layers of administration, overlapping authorities, consultancy contracts, constant reorganisations, excessive reporting systems and grand projects with doubtful practical value all consume resources.

Government must also reconsider whether it can continue trying to manage every locality through elaborate national systems. Central administration is expensive because it attempts to impose uniform procedures upon places with very different circumstances.

Cutting local capacity while preserving central bureaucracy would be the worst possible outcome. It would leave people with fewer services but no greater ability to provide for themselves.

Spending must move closer to necessity

A shrinking economy requires a smaller national state, but not an absent one. The national government will still be responsible for functions that cannot sensibly be undertaken locally. These include defence, monetary affairs, national taxation, major railways, telecommunications and highly specialised medicine.

Many other activities should move closer to the locality. Food production and processing, basic care, housing maintenance, smaller schools, minor roads, local transport, repair workshops and some forms of energy supply can be organised nearer to the people who depend upon them.

This would not merely transfer existing bureaucracy from one tier to another. Localities would have to recover the freedom to decide what they genuinely need and what they can afford. Solutions would differ from place to place.

One locality might give priority to food production and a small bus network. Another might concentrate upon fisheries, forestry, water management or the repair of existing buildings. A town might convert empty shops into workshops, health rooms and food markets.

Success would no longer be judged solely by the amount of money spent. It would be judged by whether essential needs were met.

Welfare and the loss of employment

Reducing welfare spending is particularly difficult in a shrinking economy. Discretionary employment is likely to disappear before essential employment. Retailing, hospitality, advertising, entertainment, financial services and parts of the digital economy may contract as households have less money left after paying for food, energy and housing.

Simply withdrawing benefits will not create conventional jobs that the wider economy can no longer support.

The answer must include enabling people to undertake useful local work. This could mean food growing, care, maintenance, woodland management, repair, reuse and small-scale manufacturing. Some of this work may produce relatively little taxable money while making an important contribution to local survival.

A government that recognises only formal employment and monetary output will misinterpret this development as economic failure. In reality, it may represent the beginning of a more resilient economy.

A different political debate

The Telegraph is right that Britain cannot continue borrowing and spending as though growth will always rescue the public finances. But the argument cannot end with a competition over which party promises the largest cut.

The real debate concerns what the national state must continue to do, what it must stop doing and what it should allow localities to do for themselves.

Public spending will have to fall because the resources supporting it are becoming less affordable. Yet indiscriminate austerity would accelerate decline without creating anything to replace the services being lost.

The purpose of spending reductions should therefore be to preserve the essential national core while releasing local initiative. Government must become smaller at the centre while localities become more capable, practical and self-reliant.

Britain cannot cut its way back to the former growth economy. It must reduce its financial commitments while helping a different economy to emerge: one founded upon local resources, essential production, sufficiency and the quality of everyday life.

388. When House Building Ceases to Pay: What the Viability Crisis Means for Localism

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The conventional housing model depends upon continual economic growth. A developer buys land, obtains planning permission, installs infrastructure, builds houses and sells them at prices sufficiently high to cover every cost while leaving an acceptable profit.

The Home Builders Federation’s report, The Viability Crunch, suggests that this model is beginning to fail across substantial parts of England and Wales.

The Federation calculates that additional taxes, regulations and rising material and labour costs have added as much as £76,000 to the cost of building a typical house since 2020. It cites research suggesting that conventional house building is financially unviable across 48 per cent of the country and faces viability difficulties in a further 16 per cent. Typical housing schemes are therefore viable in little more than one-third of English local authority areas.

The Home Builders Federation represents the building industry, so its recommendations naturally reflect the interests of developers. Nevertheless, its figures point towards something more fundamental than a dispute over planning regulations.

The national housing machine is faltering

Government housing policy assumes that granting more planning permissions will produce more houses. But planning permission does not make an unprofitable development profitable.

Developers build only when completed houses can be sold for enough to cover land, materials, labour, finance, taxation, environmental obligations and infrastructure contributions. If household purchasing power is weakening while these costs continue to rise, the calculation no longer works.

This is particularly serious in parts of the Midlands and northern England, where house prices may be too low to support present construction costs. The strange result is that houses may be desperately needed but cannot be supplied through the commercial market.

A national housing shortage can therefore coexist with land that has planning permission, builders who need work and families who need homes. The missing element is not physical capacity. It is financial viability.

This is one more indication of the shrinking economy. The monetary value of a completed house can no longer be assumed to rise fast enough to absorb every additional cost imposed upon its construction.

Development will become increasingly uneven

Where building remains profitable, investment will be concentrated. This is likely to be in localities with high incomes, wealthy purchasers, strong employment markets or an influx of people able to bring money from elsewhere.

Other localities may receive very little new housing, even where their existing population needs it. Young people may be forced to leave because homes are unavailable or unaffordable. Older people may remain in houses larger than they require because suitable smaller homes have not been built.

This could divide the country into pockets where conventional development remains profitable and much larger areas where it does not.

Central government may respond by increasing subsidies, reducing requirements or pressuring planning authorities to approve more land. But none of these measures resolves the underlying problem if construction costs remain above what local people can afford.

A threat to local communities

The immediate consequences could be damaging.

Fewer homes will mean fewer opportunities for local families. Small builders may disappear because they are less able than national companies to absorb delays and rising costs. Building trades may lose employment. Contributions towards roads, schools, drainage and affordable housing may also decline.

Large developers may concentrate on standardised estates in the most profitable locations. Such development is designed primarily around the national housing market, mortgage finance and car travel. It does not necessarily meet the needs of the locality.

There is also a danger that government, desperate to meet national targets, will overrule neighbourhood plans and local objections without ensuring that the resulting schemes are financially deliverable. Localities could lose control over land while still receiving few of the homes they actually need.

The opportunity for localism

The failure of the national development model could eventually encourage a different approach.

A locality does not merely need a numerical allocation of houses. It needs particular kinds of homes for particular people: modest houses for young families, smaller homes for older residents, accommodation for carers, homes connected with farms and small businesses, and housing that can be maintained with locally available skills and materials.

Instead of asking how many houses a national developer can profitably sell, the starting question could become:

What homes does this locality need in order to remain a functioning community?

That change of question has far-reaching consequences.

Land might be released at a value related to local housing need rather than its speculative development value. Community land trusts, housing co-operatives, local authorities and small builders could play a larger part. Some homes might be self-built or completed gradually. Existing buildings could be subdivided, extended or converted. Groups of cottages might share heating, water, workshops, gardens and other facilities.

Local builders could use designs suited to the climate, landscape and available materials. Houses might be smaller, simpler and easier to repair. Construction could provide apprenticeships and maintain practical skills within the locality.

This would not remove the cost of building. Safety, accessibility, water conservation and protection of nature remain important. But decisions could be made together, at locality level, rather than arriving as an accumulation of separate national demands, each considered worthwhile but with little regard for their combined effect.

Housing as local infrastructure

In a shrinking economy, housing can no longer be treated principally as a financial asset. It must increasingly be regarded as part of the essential infrastructure of a locality.

A community cannot maintain farming, food processing, care, education or small manufacturing if the people doing those jobs cannot afford to live nearby. Housing policy must therefore be connected with the future economic purpose of the locality.

Some localities may need homes tied to essential work. Others may need to renovate empty properties rather than build large estates. Towns may convert redundant offices and shops. Rural areas may need small groups of cottages close to farms, workshops and local services.

The appropriate solution will differ from one locality to another. That is precisely why a rigid national model is becoming less useful.

From developer viability to community viability

The Home Builders Federation asks whether a development leaves an adequate return for the builder and an incentive for the landowner. Those are legitimate questions within the existing system.

Localism asks a broader one: will the locality itself remain viable if the homes it needs are not built?

The answer cannot be found simply by relaxing planning control or subsidising the established development industry. It requires new relationships between landowners, builders, residents and local government. It also requires society to accept that rising land and house prices cannot remain the foundation of housing provision indefinitely.

The house-building viability crisis is therefore both a warning and an early sign of change. The growth economy produced housing as a national investment product. A shrinking economy will increasingly require homes to be created as durable, affordable and useful parts of a locality.

The future may involve fewer large estates and more small, locally determined developments. They will not be judged merely by the profit they produce, but by whether they provide sufficient homes, sustain essential work and allow the locality to endure.

386. The Future of Political Parties in an Age of Localism

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UK political parties developed to compete for control of central government. They offer national programmes, seek national majorities and promise to apply broadly similar policies throughout the country. This made sense during an expanding industrial economy. A growing state could collect more revenue, build national systems and distribute resources from the centre.

A shrinking economy will change this. As energy, materials and financial resources become less affordable, central government will find it increasingly difficult to fulfil national promises. Political parties may continue to argue about how the economy should be managed, but none will be able to restore the conditions on which their traditional programmes were based.

The important political question may therefore cease to be: “Which party should govern the country?” It may become: “How should each locality organise itself with the resources available to it?”

From national ideologies to local choices

National political parties divide society into large ideological camps. Socialists, conservatives, liberals, nationalists and greens each offer a different theory of how the whole country should be governed.

Localism does not require every locality to follow the same theory.

A locality may base its modus operandi on whatever its inhabitants consider suitable. One locality might favour co–operative ownership of land, workshops and essential services. Another might depend mainly upon family businesses, privately owned farms and voluntary associations. A third might organise much of its economy through extended family ownership, most would probably develop a mixture of all three.

This variety would not be a defect. It would be one of localism’s greatest strengths.

Localities differ in their geography, history, culture, skills and natural resources. A fertile agricultural locality should not be organised in the same way as a former industrial town, a fishing community or a densely populated city district. National uniformity can disregard these differences. Localism begins with them.

Politics would become practical

National politics is largely concerned with abstract questions. Should taxation rise or fall? Should an industry be privately or publicly owned? Should economic growth be encouraged by borrowing, investment or deregulation?

Local politics would be more immediate.

How much land is available for food production? Who owns it? How will elderly people be cared for? Can houses be repaired with local materials? Is there enough water? Which roads and buildings can still be maintained? Can waste become a useful resource? What skills must be taught to the young?

These questions do not always divide naturally along party lines. A Conservative gardener, a socialist engineer, a liberal shopkeeper and a green smallholder might agree completely about the need for a local bakery, a repair workshop or a reliable water supply.

Political allegiance would become less important than knowledge, competence and trust.

The possible decline of political parties

Political parties might not disappear, but their influence could diminish. They might remain important at the national level, where decisions would still be required about defence, currency, taxation, national transport, telecommunications and specialist medicine.

Within localities, however, national party labels might become increasingly unhelpful. Candidates could instead stand as individuals or as members of temporary local groups formed around particular needs.

There might be a food and land group, a water association, a housing co-operative, a traders’ council and a care organisation. These would not necessarily try to control the whole locality. They would contribute knowledge and undertake particular responsibilities.

Representation might grow out of useful activity. The person who successfully organises a community orchard, maintains a workshop or establishes a care network would possess practical authority. This would be different from the career politician whose main abilities are winning elections, following party discipline and appearing in the media.

UK-wide political parties might gradually become looser associations. Their role could be to express broad principles rather than impose detailed national programmes. Local members would be free to adapt those principles to local circumstances.

Different localities, different arrangements

A locality should be able to choose its own form of organisation within a simple national framework of law and fundamental rights.

Some localities might elect conventional councils. Others could make greater use of public meetings, citizens’ assemblies or occupational representation. Farmers, carers, craftspeople, teachers, traders and young people might each contribute to decisions affecting the locality.

One locality might provide communal allotments and shared machinery. Another might lease smallholdings to individual families. One might operate a local currency or system of credits. Another might rely upon sterling, barter and informal exchange. One might own its energy and water systems collectively. Another might contract these services to local enterprises.

Even neighbouring localities might adopt very different methods.

This would allow ideas to be tested on a manageable scale. If an arrangement worked well, other places could copy it. If it failed, the failure would be contained. National government would no longer have to impose a single experiment upon millions of people.

Freedom needs limits

Local autonomy could also have dangers. A powerful family, landowner, employer or faction might dominate a small community. Local majorities might treat minorities unfairly. Personal disputes could become political disputes.

Localism must therefore be accompanied by safeguards. National law could still protect fundamental rights, ensure access to justice and prevent exploitation. Higher authorities might intervene where a locality became corrupt, oppressive or incapable of meeting basic obligations.

There would always be tension between local freedom and national protection. It could never be removed entirely. The object would be to keep decisions at the lowest level capable of making them, while retaining enough national authority to protect people from abuse.

Localism is not the abolition of the state. It is a change in the division of responsibility.

Politics without a single destination

Modern political parties present history as a journey towards their preferred destination. For some, the destination is greater equality. For others, it is a freer market, faster growth, national strength or environmental sustainability.

Localism need not offer one final destination. It accepts that society will develop differently in different places. It is evolutionary rather than doctrinal.

People will adopt arrangements because circumstances make them useful. A co-operative may emerge because no private business can afford the necessary equipment. A privately owned workshop may prosper because one person has the skill and determination to run it. Shared grazing may return because individual holdings are too small. Informal care networks may grow because national services can no longer provide everything.

The resulting economy will not be purely socialist, capitalist or conservative. It will be shaped by necessity, custom and experience.

A different kind of political debate

National political debate asks which ideology is correct. Localist debate would ask what works here.

That small word, “here”, changes politics profoundly.

It replaces general promises with visible consequences. Decision-makers live among the people affected by their decisions. Resources cannot be treated as figures in a national account. They are particular fields, woods, buildings, streams, workshops and human abilities.

Failures become harder to conceal. Success becomes easier to recognise. People may still disagree strongly, but their arguments will concern circumstances they understand and results they can observe.

The future of politics may therefore lie less in the triumph of one political party than in the gradual weakening of party thinking itself. National parties will survive where national decisions remain necessary. Below that level, political life may become more varied, practical and personal.

A locality will not have to wait for the correct national ideology. It will be free to develop its own modus operandi, drawing upon whatever combination of private enterprise, common ownership, voluntary effort, custom and public authority best meets its needs.

In a shrinking economy, this freedom to differ may be essential. The future will not be planned successfully from one centre. It will be discovered, locality by locality.

385. Just Stop Oil and the Shrinking Economy

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Just Stop Oil may be seen as an early sign of the changes that will accompany the shrinking economy.

However, the reduction in oil use is unlikely to happen simply because governments prohibit it. It will happen increasingly because oil, diesel fuel and the activities that depend upon them become less affordable.

The modern industrial economy was built upon abundant, inexpensive fossil energy. Diesel fuel made possible large tractors, combine harvesters, construction machinery, road haulage and the daily delivery of food to supermarkets. It allowed factories to draw materials from across the world and distribute finished goods through national and international markets.

As energy becomes more expensive, the economy cannot continue operating on the same scale. A rising proportion of its resources must be devoted simply to obtaining energy, maintaining infrastructure and servicing debt. Less remains for discretionary consumption. The result is not an ordinary recession followed by renewed growth. It is a long-term shrinking of the industrial economy.

Just Stop Oil recognises that dependence upon oil must end. But its emphasis is mainly upon stopping new oil and gas development to limit climate change. Localism approaches the same problem from the direction of economic necessity. It asks what happens when society can no longer afford to use diesel fuel in the quantities to which it has become accustomed.

The answer cannot be the abrupt removal of diesel from every activity. Modern food production and distribution are critically dependent upon it. If diesel supplies were suddenly withdrawn, farmers would struggle to cultivate and harvest crops. Food processors would lose deliveries, and supermarkets could quickly run short. Emergency services, care workers and essential trades would also be affected.

In the shrinking economy, diesel use is more likely to be reduced progressively. The least essential uses will disappear first because people and businesses can no longer afford them. Recreational driving, frequent flights, long-distance commuting and the transport of low-value goods over great distances will become increasingly difficult to sustain.

Diesel will then have to be concentrated upon essential purposes. Agriculture, emergency services, necessary construction and the maintenance of water, electricity and telecommunications may receive priority. The question will no longer be whether oil should be used, but where its declining availability produces the greatest social benefit.

The contraction of road transport

Road haulage is one of the foundations of the industrial economy. Thousands of lorries constantly move food, building materials, components and consumer goods around the country. This system assumes that diesel fuel, vehicles, tyres, spare parts and maintained roads will remain affordable.

A shrinking economy will weaken every part of that system. Haulage charges will rise. Roads will deteriorate as maintenance becomes more expensive. Marginal deliveries will cease to be worthwhile. Businesses dependent upon distant customers or suppliers will become vulnerable.

Rail could carry a greater proportion of essential long-distance freight. Goods could be moved between towns by rail and then distributed locally by smaller vehicles. Over time, electric vans, bicycles, handcarts and perhaps animal-drawn vehicles could undertake some short journeys. None would replace the present haulage system completely. Their importance would lie in creating an economy that required less movement.

Farming with less diesel

Agriculture presents the greatest difficulty. British farming has become dependent upon powerful machinery, imported fertilisers, pesticides and long supply chains. It produces large quantities of food with relatively little human labour, but it does so by consuming considerable amounts of energy.

Reducing diesel use would require more than replacing tractors with electric versions. Batteries capable of powering large machinery are costly, heavy and dependent upon complex international industries. A shrinking economy may not be able to manufacture and replace them on the scale required.

Farms may instead become smaller, more diverse and more labour-intensive. Machinery would continue to be used, but it would be shared, maintained for longer and reserved for work where it offered the greatest advantage. More people might work in food growing, processing and distribution. Horses could return for certain tasks, particularly on smaller farms, in woodland and on difficult ground.

Food production would also move closer to consumers. Local mills, dairies, slaughterhouses, bakeries and preserving businesses would reduce the need to carry food repeatedly across the country. A locality with good land and food-processing skills might become prosperous in practical terms, even while contributing relatively little to the measured growth economy.

Localism will reduce the need for oil

The most effective way to reduce oil consumption is not merely to substitute another fuel. It is to reduce the amount of energy that everyday life requires.

A locality that grows more of its own food needs fewer lorries. A town with local workshops needs fewer distant deliveries. People who live near their work need less transport. Repairing goods reduces manufacturing and shipping. Local markets shorten the distance between producer and customer.

This is where localism differs from many national energy plans. Those plans commonly assume that the industrial economy can continue largely unchanged if petrol and diesel vehicles are replaced by electric ones and fossil-fuelled machinery is supplied with alternative energy.

But electrifying everything would require immense quantities of electricity, copper, batteries, generating equipment and grid infrastructure. These would have to be financed, manufactured and maintained while the wider economy was already shrinking. Some electrification will certainly be useful, but it cannot preserve every part of the present system.

Localism begins with the recognition that less energy will be available and affordable. It therefore reorganises economic life around shorter distances, fewer material demands and locally available resources.

Evolution rather than prohibition

Just Stop Oil looks principally towards government action. Localism is more likely to emerge naturally from economic conditions.

As discretionary spending contracts, businesses serving non-essential markets will close. Workers will seek employment in food production, repair, care, maintenance and other essential activities. Some people will move from places with few viable livelihoods to localities where useful work remains available.

This has happened before. When employment declined in the slate-quarrying areas around Corris, some workers moved to the coalfields of South Wales. Future migration may follow different routes, but the underlying process will be similar. People will move towards places capable of supporting them.

Government cannot prevent the shrinking economy by borrowing more money or announcing another growth strategy. Nor can it design localism in every locality. It can, however, help the natural evolution by protecting essential diesel supplies, supporting rail freight, permitting small-scale food processing and removing regulations that unnecessarily favour large centralised businesses.

An early indication, not the complete answer

Just Stop Oil is therefore coincident with one early movement towards localism. It challenges the belief that increasing quantities of oil will always be available to support economic growth. It helps to make society conscious of a dependence that was previously taken for granted.

But the shrinking economy will reduce oil consumption regardless of protest. People will drive less because driving becomes unaffordable. Businesses will transport fewer goods because their customers have less discretionary income. Farmers will use diesel more carefully because its cost absorbs a growing share of their income.

The essential task is not simply to stop oil. It is to prepare for an economy in which oil, diesel fuel and many other resources are less available and less affordable.

Just Stop Oil asks society to reduce fossil-fuel use because of climate change. The shrinking economy will compel society to reduce it through declining affordability. Localism is the practical way in which people may adapt to both.

384. Islands of Prosperity in a Shrinking Economy

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A shrinking national economy does not mean that every place will become poorer at the same rate. Nor does it mean that prosperity will disappear everywhere. It may become more local, more varied and less visible in national statistics.

The United Kingdom could evolve into a patchwork of economic postcodes. Some localities would continue to contract. Others would discover new forms of prosperity, not measurable in industrial terms, based on their land, skills, water, buildings or position.

This would not be growth as understood from the top down. It would not necessarily produce rising GDP, expanding financial markets or growing consumer spending. It would be prosperity measured through sufficiency, security and the quality of everyday life. Maybe not called “prosperity”.

The end of the uniform national economy

The industrial economy encouraged places to become specialised. One area made steel. Another mined coal. A third manufactured cars. Food, energy, materials and manufactured goods were transported across the country.

Cheap energy made this possible. Rising energy and infrastructure costs will gradually weaken it.

As the national economy shrinks, places will become more dependent on what can be produced, repaired and maintained nearby. Their fortunes will increasingly diverge.

One locality might possess fertile soil, reliable water, orchards, market gardens and food-processing workshops. Another might have poor soil, few practical skills and a population dependent on distant employers. Their experiences of economic shrinkage would be very different.

The national economy might be shrinking while particular economic postcodes remain busy, productive and reasonably prosperous.

Food-prosperous localities

Imagine a locality with good agricultural land, several villages and a small market town. It has dairy farms, orchards, vegetable growers, a flour mill, a bakery, a slaughterhouse and workshops able to repair agricultural equipment.

As national supply chains weaken, this locality becomes increasingly valuable.

Its prosperity would not necessarily appear as economic growth. Local food might replace food previously transported from hundreds or thousands of miles away. A local workshop might repair machinery that would once have been replaced. Families might preserve fruit, share tools and grow vegetables.

These activities could reduce measured spending. Nevertheless, people would have food, useful employment and a functioning community.

The locality would be prosperous in the things that mattered, even though its contribution to the quantified industrial economy might appear small.

Land that had been used for horse paddocks, lawns or speculative development might return to food production. Empty shops might become bakeries, stores, workshops and food-processing premises. Young people could find work in horticulture, forestry, food preservation, building maintenance and care.

This would be an economy of provision rather than consumption.

Energy-prosperous localities

Other localities might prosper because of energy.

A wooded district could develop a wood economy based on coppicing, timber, charcoal, firewood and woodland crafts. An upland locality might use small hydroelectric schemes. A coastal settlement could combine fishing, wind power and boat repair. A farming area might produce modest amounts of biogas from agricultural waste.

These places would not become entirely self-sufficient. They would still need national electricity networks, telecommunications, medicines and specialist machinery. But local energy would provide a degree of protection against rising national costs and unreliable supply.

Energy prosperity would attract activities that needed dependable power. Small food processors, cold stores, sawmills and repair workshops might gather around such places.

The economic map would begin to change. People might move towards localities with food, energy and useful work rather than towards the places offering the highest salaries.

The return of economic migration

This would not be entirely new.

When work disappeared from one industry, workers historically moved to another. Slate quarry workers from the Corris area, for example, migrated to the South Wales coalfield. Their skills, strength and experience of dangerous manual work could be used in a different industry.

Similar movements could occur in a shrinking economy.

A town dependent upon warehouses, commuting, tourism or discretionary retail might lose employment. Some of its working population could move towards localities where food, forestry, maintenance and essential production were expanding.

The movement might be gradual. A family could retain its original home while one member worked seasonally elsewhere. Young people might move first. Empty houses in productive rural towns could be occupied by workers, while housing in less viable commuter settlements declined in value.

Not every locality would survive in its present form. Some places exist because of economic arrangements that may no longer be affordable. Their decline could be unavoidable.

Government could not prevent all such change. Attempting to preserve every existing pattern of settlement and employment would consume resources needed elsewhere.

How government could enable natural evolution

Government would not create these new local economies. They would emerge because people responded to necessity and opportunity.

Government’s most useful role would be to stop obstructing them.

Planning rules could allow farm buildings, empty shops and redundant public buildings to become workshops, food stores and small processing premises. It could become easier to build modest homes for people working locally.

Regulations designed for large industrial businesses could be simplified for small producers. A village bakery, cheesemaker or slaughterhouse should not face the same administrative burden as a national corporation.

Public purchasing could favour nearby production where practical. Schools, hospitals, care homes and military establishments could buy more food from their surrounding localities.

The tax system could recognise very small businesses, cooperatives, household production and exchanges partly conducted through goods or services. Not every useful transaction needs to be forced into the structure of a conventional company.

Government could also preserve the national foundations upon which localism depends. These include telecommunications, the electricity grid, railways, defence, specialist hospitals, a functioning currency and the rule of law.

Its task would be to maintain the framework. The detailed economy would be created from below.

Unequal but different

These economic postcodes would not all be prosperous in the same way.

One might have abundant food but little cash. Another might possess hydroelectric power and engineering workshops. A third might specialise in timber, textiles or care. A market town could prosper as the centre where several surrounding localities exchanged their surpluses.

There would also be struggling areas. Large cities might find it difficult to secure affordable food, water and energy. Former commuter settlements could lose their economic purpose. Coastal resorts dependent on discretionary spending might contract sharply.

Government would face pressure to redistribute resources from successful localities to unsuccessful ones. Some redistribution would remain necessary. But excessive extraction could weaken the very places producing the essentials upon which everyone depended.

The objective could no longer be to make every area economically identical. It would be to help each locality discover what it could sustain.

Prosperity without growth

This future would confuse conventional economists.

A locality might produce more food, employ more people and become more resilient while showing little monetary growth. Households might consume fewer imported goods but enjoy better food and stronger communities. Repair, reuse and shared ownership might reduce retail sales. Lower incomes might coexist with greater security.

National GDP could continue to fall.

Yet within that shrinking total, some economic postcodes could become better places in which to live. They would possess the essentials of life. They would offer useful work. Their prosperity would come from producing what people needed rather than encouraging them to consume what they did not.

No government could design this pattern in advance. It would be too complicated, too local and too dependent upon human initiative.

It would evolve naturally.

Government’s challenge would be to recognise what was happening, protect the essential national framework and give localities enough freedom to find their own future.

375. Global Migration in a Shrinking Economy

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For most of the industrial age, migration has been driven by a simple expectation. Life somewhere else would be better. There would be more jobs, higher wages, better services and greater opportunities for children. The movement of millions of people around the world has been made possible by expanding economies, abundant fossil fuels and increasingly affordable transport.

That world is changing.

As the global economy shrinks in real terms, migration will not stop. Indeed, in the short term it may increase. But over time it will become more difficult, more selective and increasingly local. The great age of mass international migration is likely to give way to an era of constrained mobility.

Migration Depends on Surplus

Migration is expensive. It requires transport, housing, employment opportunities and functioning public services. Every migrant depends, directly or indirectly, upon the surplus generated by the receiving economy.

When economies are growing, this surplus can absorb newcomers. New houses are built, businesses expand and governments collect rising tax revenues. Even where tensions arise, growth helps soften the impact.

In a shrinking economy the opposite occurs.

Jobs disappear. Housing becomes scarcer. Infrastructure deteriorates. Governments struggle to maintain existing services. Instead of expanding capacity, society begins managing decline.

Migration therefore becomes a competition for shrinking resources.

Why people will continue to move

Economic decline does not remove the pressures that encourage migration. In many parts of the world they become even stronger.

Climate instability reduces agricultural yields.

Water shortages make farming impossible in some areas.

Political instability increases as governments lose the resources needed to maintain order.

Young people continue to seek better opportunities abroad.

Some coastal settlements become increasingly vulnerable to flooding.

Initially these pressures will increase international migration.

But the countries that once absorbed large numbers of migrants are themselves entering economic contraction. The opportunities which attracted migration begin to disappear.

Britain becomes less attractive

For decades Britain attracted migrants because wages were relatively high, public services were dependable and employment was plentiful.

These advantages are steadily weakening.

Real wages struggle to keep pace with living costs.

Housing becomes increasingly unaffordable.

Public services face growing financial pressures.

Infrastructure ages faster than it can be replaced.

The United Kingdom will remain attractive compared with many poorer countries, but the gap narrows. Migrants may still arrive, yet many will find that the prosperity they expected no longer exists.

Increasing numbers may also choose not to come.

A changing pattern of movement

Migration itself may become more regional.

Instead of crossing continents, people may move shorter distances.

Migration within Europe may replace migration from much further afield.

People may move from large cities to smaller towns where housing remains affordable.

Families may regroup in familiar localities rather than disperse across the globe.

The enormous energy costs associated with long-distance migration become harder to justify as fuel prices remain structurally high and disposable incomes decline.

What happens to population?

Global population is unlikely to continue growing indefinitely.

Industrial civilisation allowed population to rise by providing abundant food, modern medicine, sanitation and mechanised agriculture. All of these depend upon high levels of affordable energy.

As surplus energy declines, population growth slows and eventually reverses.

Many developed countries already have birth rates well below replacement level.

Developing countries are also seeing fertility decline, although often from much higher starting points.

Population may continue to rise for a time because people are living longer and because of demographic momentum. Eventually, however, deaths begin to exceed births.

Migration cannot reverse this globally.

It merely redistributes people.

The world as a whole must ultimately live within the carrying capacity supported by available energy, soils, water and climate.

Britain will age

The United Kingdom already has an ageing population.

Governments have often viewed migration as a way of maintaining the workforce and supporting tax revenues.

This works while the economy continues expanding.

In a shrinking economy it becomes increasingly difficult.

More workers do not automatically create more prosperity if the economy itself cannot grow. Instead, additional demand for housing, healthcare, transport and energy may simply place greater strain on declining systems.

The challenge becomes one of adaptation rather than expansion.

Why localism becomes more important

As international systems weaken, communities become more important.

People increasingly depend upon nearby suppliers rather than distant ones.

Food production becomes more local.

Repair replaces replacement.

Neighbours become more valuable than distant institutions.

Migration does not disappear. People will still move between localities. Some areas may gain population while others lose it. Rural districts with productive land, reliable water and strong communities may become increasingly attractive.

Local resilience becomes more important than national averages.

The return of locality

History suggests that periods of contraction reduce mobility.

Before cheap fossil fuels, most people spent their entire lives within a relatively small area. Long-distance movement existed but involved only a minority.

Industrialisation reversed that pattern.

The coming decades may gradually reverse it again.

People are unlikely to become completely immobile. Digital communications will continue to connect communities. Some international migration will remain essential for specialised skills, family reunification and humanitarian protection.

But everyday life is likely to become increasingly rooted in place.

A different future

The political debate often assumes migration is simply a matter of border control or immigration policy.

In reality it is closely linked to economics and energy.

As surplus energy declines and economic contraction becomes permanent, migration patterns will change whether governments wish them to or not.

Some countries will become less able to receive large numbers of newcomers.

Others will become less able to retain their own populations.

Over time, mobility itself becomes another resource constrained by energy and affordability.

For localism, this presents both challenges and opportunities.

Communities will need to welcome those who genuinely become part of local life while strengthening their own capacity to provide food, water, energy, housing and mutual support. Success will depend less upon the size of the national economy than upon the resilience of individual localities.

In the shrinking economy, the future belongs not to places that rely upon endless growth, but to places that learn how to thrive within limits. Localism is not a retreat from the wider world. It is an adaptation to a world in which distance becomes increasingly expensive, resources increasingly constrained, and community increasingly valuable.

372. From Mordor to the Long Repair

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Nate Hagens has published a thought-provoking essay entitled Mordor to the Long Repair: How Might Daily Life Feel in the Next Decades? It can be read here:

https://natehagens.substack.com/p/essay-mordor-to-the-long-repair-how

Rather than attempting to predict the future, the essay explores a series of possible futures and asks a much more useful question: what might everyday life actually feel like as industrial civilisation encounters increasing economic, energy and ecological constraints?

The central argument is that there is no single future waiting ahead. Instead, society may travel along several different paths depending upon political choices, resource availability and human behaviour. Some futures are darker than others, but all acknowledge that the era of abundant, cheap energy and perpetual economic growth is drawing to a close.

One of these futures is described as “Mordor.” Here, societies become increasingly authoritarian as governments struggle to preserve existing institutions despite declining resources. Living standards fall, inequality widens, public services deteriorate and social tensions become commonplace. Industrial systems continue to operate, but with increasing difficulty and at ever greater cost.

At the other end of the spectrum lies “The Long Repair.” This is not a return to some imagined golden age, nor is it a technological miracle. Instead, it is a gradual adaptation to a world with fewer resources, lower energy availability and reduced complexity. Communities slowly rebuild resilience by becoming less dependent on fragile global systems and more capable of meeting their own needs.

This vision resonates strongly with the principles of localism.

The Long Repair is not simply about surviving decline. It is about reorganising society around what is practical rather than what is merely efficient. Global supply chains give way to regional and local production wherever possible. Repair replaces replacement. Skills become more valuable than consumption. Communities rediscover cooperation because it becomes economically necessary rather than socially desirable.

These ideas are entirely consistent with the concept of a shrinking economy. As surplus energy declines, discretionary spending contracts and the economic landscape changes fundamentally. Many industries that flourished during decades of growth gradually disappear, while activities meeting essential human needs become increasingly important.

The essay provides an excellent explanation of why this transition may occur. However, it says relatively little about how communities might organise themselves once the transition begins. That is where the practical ideas of localism become important.

A resilient locality needs more than goodwill. It requires practical systems. Local food production, local water supplies, community energy, workshops, repair skills, local communications, community ownership of assets and neighbourhood governance all become essential components of everyday life. These are not nostalgic ambitions but rational responses to a world of increasing uncertainty.

Perhaps the most valuable aspect of Hagens’ essay is its emphasis on imagination. Much discussion about the future focuses on economic statistics, politics or technology. Far less attention is given to how daily life may actually change. What work will people do? Where will food come from? How will homes be heated? What skills will children need? Which institutions will remain important?

These are the questions that deserve serious attention.

There is, however, another perspective that helps explain why a Long Repair may be more than simply one possible future. Tim Morgan’s Surplus Energy Economics provides a compelling underlying mechanism.

Morgan argues that prosperity is determined not by the total amount of energy produced, but by the amount of surplus energy remaining after the energy sector has supplied its own needs. As the Energy Cost of Energy (ECoE) rises, less surplus energy is available to support the wider economy. The result is a gradual decline in discretionary prosperity, slowing economic growth, increasing financial instability and growing pressure on governments, businesses and households.

From this perspective, many of the trends described by Hagens are not isolated problems. They are symptoms of a deeper physical reality. Modern industrial civilisation has been built upon abundant, inexpensive surplus energy. As that surplus diminishes, society is forced to simplify. Complexity becomes increasingly expensive to maintain, while localisation becomes increasingly attractive because it reduces dependence upon long, energy-intensive supply chains.

This interpretation also explains why many current policies appear unable to restore sustained economic growth. Governments continue to pursue growth because the existing financial system depends upon it. Yet if declining surplus energy is the underlying constraint, policies alone cannot reverse the trend. They may delay the adjustment, but they cannot remove its physical causes.

Seen in this light, localism is not a political ideology or a nostalgic movement. It is an adaptive response to changing economic and energetic realities. Communities that can produce more of their own food, energy, water, goods and essential services are likely to prove more resilient than those dependent upon increasingly fragile national and global systems.

The Long Repair is therefore much more than an interesting scenario. It represents the gradual rebuilding of society around the resources that are actually available rather than those that were once assumed to be limitless.

For those seeking to understand the decades ahead, Nate Hagens provides an insightful picture of what the transition may feel like, while Tim Morgan offers a persuasive explanation of why it may be happening. Together they point towards a future in which local resilience, practical skills and strong communities become not simply desirable, but essential.

375. Declining Wages in the Shrinking Economy

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For over two centuries, most people have assumed that each generation would enjoy higher wages than the last. This expectation became part of everyday life. Productivity rose, businesses expanded, and governments could distribute some of the benefits through higher incomes, pensions and public services.

A shrinking economy changes this picture. Declining wages are not simply the result of greedy employers or poor government policies. They emerge because the economy itself can no longer produce enough surplus to maintain previous levels of income.

The key is to understand where wages come from.

Wages come from surplus

An employer does not pay wages because people need money. Wages are paid because workers produce goods and services that customers are willing and able to buy.

In an expanding economy there is sufficient surplus energy, investment and demand to support rising productivity. Businesses compete for labour and wages tend to rise.

In a shrinking economy the opposite occurs. The amount of economic surplus available to distribute becomes steadily smaller.

Businesses therefore face difficult choices.

  • Reduce profits.
  • Raise prices.
  • Reduce wages.
  • Employ fewer people.

Initially they try every other option before reducing wages. Eventually, however, lower labour costs become unavoidable.

The hidden decline

The first stage is rarely an obvious wage cut.

Instead workers find that annual pay increases no longer keep pace with inflation.

If prices rise by 5% but wages rise by only 2%, purchasing power has fallen by 3%. The payslip looks larger, but it buys less.

This process can continue for many years without people fully appreciating what is happening.

Fewer secure jobs

As conditions worsen, employers become cautious.

Permanent positions are replaced by temporary contracts, part-time work and self-employment.

Many jobs become “zero-hours” or freelance positions with little security.

Workers compete with one another for fewer opportunities, weakening their bargaining power.

Automation cannot solve everything

Some believe automation will maintain wages by increasing productivity.

Automation certainly replaces some labour, but it also requires investment, maintenance, skilled technicians and complex supply chains.

In a shrinking economy capital itself becomes scarce. Businesses cannot endlessly replace workers with machines if customers cannot afford the products or the finance is unavailable.

Automation therefore slows the decline in some industries while accelerating job losses in others.

Government employment

Governments employ millions of people.

When tax revenues decline while demands on public spending increase, governments encounter growing financial pressure.

Initially they borrow more.

Eventually borrowing reaches practical limits.

Public sector recruitment slows.

Vacant posts remain unfilled.

Services become stretched.

Real wages fall.

Some departments are reorganised or closed altogether.

Pension pressure

Older workers may postpone retirement because pensions no longer provide sufficient income.

This increases competition for employment.

Younger people entering the labour market find fewer vacancies available.

Generational tensions may increase, even though both groups are responding rationally to declining incomes.

The disappearance of discretionary work

Many occupations depend upon discretionary spending.

Advertising.

Luxury retail.

Tourism.

Entertainment.

Fashion.

Professional sport.

Consultancy.

As households devote more of their income to essentials such as food, housing and heating, demand for these sectors gradually weakens.

The jobs disappear long before essential occupations.

Local differences

Not every locality experiences wage decline in the same way.

Areas dependent upon finance, technology or government spending may initially appear protected.

Industrial regions may suffer earlier.

Eventually the underlying economic forces affect every part of the country.

The differences become matters of timing rather than direction.

Inflation changes everything

Persistent inflation creates an illusion.

People may receive larger salaries every year.

Yet they can afford less food, less travel, fewer holidays and fewer household improvements.

The important figure is not the number printed on the payslip.

It is what the wages will actually buy.

Real wages become the critical measure.

Localism offers another response

Localism cannot prevent national wage decline.

It can, however, reduce dependence upon wages.

A household producing vegetables, fruit, eggs and firewood requires less cash income than one buying everything.

Neighbours sharing skills reduce the need for expensive commercial services.

Repair replaces replacement.

Community enterprises keep more value circulating within the locality.

Barter and mutual assistance supplement money.

The objective is not to earn ever larger wages.

It is to require less money in order to live well.

Looking ahead

The great assumption of the industrial age was that wages would always rise.

If the economy enters a prolonged period of contraction, that assumption will no longer hold.

Real wages are likely to decline slowly, unevenly and often almost invisibly. People may continue receiving annual pay rises while becoming steadily poorer.

Understanding this process is essential because it changes the question society must ask.

Instead of asking how to restore continually rising wages, we may need to ask how people can maintain secure and meaningful lives when the economic surplus that once supported continual income growth is no longer available.

That question lies at the heart of the transition towards localism.

370. Europe’s Gas Warning – Another Reminder to Build Local Resilience

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Europe is once again discovering the weakness of depending on distant energy supplies. Gas storage levels are unusually low for this time of year, and analysts are warning that the continent could enter the coming winter with significantly less reserve than normal. Even though fighting in the Middle East has eased for the moment, the underlying problem has not gone away.

The immediate cause may be conflict affecting global gas markets, but the deeper issue is that Europe has become increasingly dependent on imported energy carried across oceans and through vulnerable international supply chains. Every geopolitical crisis now has the potential to raise prices and threaten supplies.

For Britain, this is another warning that energy security cannot simply mean finding another overseas supplier. It means reducing dependence on fuels that have to be imported from thousands of miles away. A localist approach looks instead to producing as much energy as possible within each locality – using solar power, wind, small-scale hydro where appropriate, biomass from sustainable woodland, and above all reducing demand through better building design and insulation.

No single local energy source will replace natural gas. However, a diverse collection of local resources can make communities far less vulnerable to international events. Every kilowatt-hour generated locally is one that does not have to be bought on volatile world markets.

The lesson is becoming increasingly clear. Whether the disruption comes from war, sanctions, financial instability or simple resource depletion, our highly centralised energy system is becoming more fragile. The answer is not merely to build bigger storage facilities or search for new imports. It is to rebuild resilience from the ground up, so that every locality is able to meet a greater share of its own essential energy needs.

Each new energy crisis reinforces the same message. Local resilience is no longer an environmental aspiration – it is becoming an economic and social necessity.

365. The Economy Follows Energy, Not Government

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Much political debate assumes that governments determine the future of the economy.

They do not. Governments influence many aspects of society, but they do not control the underlying direction of economic development.

That direction is determined principally by the availability of surplus energy.

Every economy is an energy system before it is a financial system. Without energy there is no transport, manufacturing, agriculture, communications or construction. More importantly, it is not simply the amount of energy that matters, but the surplus energy available after the energy sector has met its own needs.

When surplus energy is abundant, economies expand. Industries become more specialised. Trade grows over longer distances. Cities increase in size. Public services expand. Governments collect more tax revenue and can afford larger programmes.

When surplus energy begins to decline, the reverse process gradually takes place. Economic growth slows. Discretionary spending falls. Governments experience increasing financial pressure. Businesses consolidate or disappear. Production becomes more local because long and complex supply chains become increasingly difficult to sustain economically.

This is not primarily the result of government policy. It is the natural evolution of an economy responding to its energy base.

Governments certainly matter, but they operate within limits imposed by the physical economy. They can influence the detail without changing the overall direction.

For example, governments can influence:

  • taxation;
  • public spending;
  • regulation;
  • education;
  • planning policy;
  • land ownership;
  • housing policy;
  • the distribution of wealth;
  • the legal rights of citizens.

These decisions affect how fairly society functions and who benefits from the available resources. They influence the quality of life, but they do not determine the overall size of the economy.

The size of the economy is determined by the quantity of surplus energy available to support productive activity.

This distinction is fundamental.

The structure of the economy evolves naturally in response to changing energy availability.

The details of how society operates are influenced by successive governments.

Confusing these two levels of change leads to unrealistic expectations. Elections cannot restore economic conditions that were made possible only by abundant, inexpensive surplus energy. Likewise, no government can legislate sustained growth if the underlying energy surplus is shrinking.

This helps explain why governments of different political parties often struggle with the same economic problems. Each administration introduces new policies, yet the broad direction remains remarkably similar because all are operating within the same energy constraints.

As surplus energy declines, the United Kingdom is experiencing a gradual transition towards a smaller, less complex economy. This should not be confused with a temporary recession. It represents a long-term structural adjustment driven by physical realities rather than political ideology.

The important political questions therefore become different.

Instead of asking how governments can restore perpetual economic growth, we should ask:

  • How should land ownership be organised?
  • How can essential services be protected?
  • How can greater equality between citizens be maintained?
  • How can communities become more resilient?
  • How should power be distributed between central government and localities?

These are questions that governments can influence.

They cannot, however, determine the overall size of the economy. That is ultimately governed by the amount of surplus energy available to society.

Understanding this distinction changes the entire debate about Britain’s future. The evolution of the economy is largely determined by energy. Politics determines how society adapts to that evolution.

364, Devolution Is Not Localism 

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The current debate about devolution assumes that transferring power from Whitehall to larger regional authorities will create stronger economic growth. It is certainly an improvement if decisions are taken closer to the people affected by them. Local knowledge is almost always better than decisions made hundreds of miles away.

However, devolution should not be confused with localism. They are not the same thing.

Devolution merely moves power from one level of government to another. Whitehall gives powers to combined authorities, regional mayors or county authorities. The structure remains essentially the same. Decisions are still made from above. Taxation, regulation and administration remain the principal tools of government.

Localism is fundamentally different.

The localist model begins with the locality itself. Instead of asking how government can manage economic growth, it asks how people can meet more of their own needs where they live. The emphasis shifts from administration to production, from bureaucracy to practical activity.

The Daily Telegraph rightly warns that devolution could simply become another layer of taxation, regulation and administration. That danger is real. New political institutions have a tendency to justify their existence by creating more officials, more plans and more spending. Unless there is genuine economic change beneath the political structure, little will have been achieved.

The deeper question is whether the industrial economy that made large-scale central government possible is now beginning to contract.

For two centuries Britain became steadily more centralised because abundant, cheap fossil-fuel energy allowed production, transport, communication and government to operate on an ever larger scale. Economic growth supported increasingly complex institutions. Centralisation was not simply a political choice. It was made possible by abundant surplus energy.

As surplus energy declines, that process begins to reverse.

Economic activity naturally becomes more local because long supply chains, distant administration and highly specialised systems become increasingly expensive to maintain. This is not an ideological programme. It is the natural evolution of a post-growth economy.

In that world, local government itself will have to change. Success will depend less on attracting outside investment and more on increasing local resilience.

A successful locality will produce more of its own food. It will conserve water. It will generate part of its own energy. It will maintain local skills, workshops and small businesses. It will make greater use of local materials and local labour. Money will circulate within the locality instead of constantly leaking away to national and international corporations.

The role of government also changes. Instead of attempting to stimulate endless economic growth, it becomes an enabler of local production. It removes unnecessary barriers, supports local enterprise and helps communities organise the essential services upon which daily life depends.

Competition between regions, as suggested in the debate on devolution, has some value. But cooperation within localities is even more important. The future is unlikely to be won by competing to attract the next multinational employer. It is more likely to depend on rebuilding the local economy from the ground up.

This is why localism goes beyond devolution.

Devolution changes who exercises power.

Localism changes where economic life takes place.

One is primarily constitutional.

The other is structural.

As Britain moves beyond the age of continuous economic growth, transferring powers from Westminster to regional authorities may prove useful. But unless that process also encourages the rebuilding of genuinely local economies, it risks becoming little more than a different way of administering decline.

The real challenge is not to create bigger local government.

It is to create stronger local economies.

362. The Missing Debate: Has the Industrial Economy Reached Its Limits?

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Comparing economist Robert Peston’s view of the economy with the localist view

Robert Peston is not an economic pessimist in the sense of predicting imminent collapse, but he has been consistently concerned that the UK has deep-seated structural economic weaknesses that politicians have failed to address.

His views can be summarised like this:

  • Low economic growth
    • He argues that Britain’s biggest problem is persistently weak productivity.
    • Without higher productivity, wages, tax revenues and living standards cannot rise significantly.
    • He frequently says governments of all parties have promised growth without tackling its underlying causes.
  • High government debt
    • Peston believes the UK’s public finances are under severe long-term pressure.
    • He points to:
      • an ageing population,
      • rising NHS and social care costs,
      • defence spending,
      • climate transition costs.
    • He argues that future governments will probably face difficult choices involving higher taxes, lower spending, or more borrowing.
  • Living standards
    • One of his recurring themes is that many people feel poorer even when GDP is growing.
    • He has highlighted that real wages have grown very slowly since the 2008 financial crisis.
    • In his view, this explains much of the political frustration seen across the UK.
  • Investment
    • He believes Britain invests too little in:
      • infrastructure,
      • research,
      • skills,
      • training,
      • technology.
    • He argues these are essential if productivity is to improve.
  • Brexit
    • Peston has repeatedly argued that Brexit has reduced trade with Europe and made the economy less productive.
    • While he does not blame every economic problem on Brexit, he regards it as an additional drag on growth.
  • The Bank of England
    • He generally supports the Bank’s independence.
    • However, he has criticised occasions when monetary policy or communication has been unclear, especially during periods of high inflation.

Peston does not usually claim that:

  • the UK economy is about to collapse;
  • capitalism is ending;
  • Britain is running out of physical resources or energy.

Instead, his analysis is that Britain faces long-term stagnation unless productivity and investment improve.

Peston’s view Compared with the localist view

Localism is more radical.

Robert Pestonlocalism
Weak productivityEnd of economic growth
More investment can restore growthGrowth itself is ending
Structural reforms are neededSociety must adapt to a post-growth economy
Concerned about debtConcerned about declining surplus energy and shrinking economies
Expects national institutions to continueExpects increasing importance of local communities

The key difference is diagnosis:

  • Peston: Britain’s problems are mainly economic and political, and could be improved through better policy.
  • Localism view: The problems are rooted in natural limits to growth—particularly energy, resources and economic contraction—so localism is an adaptation of what is occurring naturally and not a matter for government policy choice.

So, Peston identifies many of the same symptoms that concern localism (weak growth, stagnant incomes, strained public finances), but he attributes them to policy and productivity, whereas localism analysis sees them as natural consequences of how the economy works.

Neither Peston nor other classical economists say that the industrial economy has ended thia seems to be the bigger difference beween them and localism

I think we have identified a fundamental difference in the starting assumptions rather than just a disagreement about policy.

Most mainstream economists, including Robert Peston, generally assume that the industrial economy is still the dominant system and will continue, although it may need reform. Their questions are usually:

  • How can productivity be increased?
  • How can investment be encouraged?
  • How can innovation, technology and skills raise output?
  • How can governments manage debt and taxation?

The possibility that the industrial economy is entering a terminal phase is usually outside their framework.

The localist perspective starts from a different premise:

The industrial economy was built naturally on abundant, cheap energy, expanding material consumption and increasingly complex global supply chains. If those foundations weaken, the issue is not how to restore growth but how society reorganises itself after growth.

From this viewpoint, many of the problems identified by economists – stagnant wages, falling productivity growth, unaffordable housing, public debt, pressure on services – are not isolated policy failures but symptoms of a system reaching its limits.

The difference can be expressed like this:

Mainstream economicsLocalism / post-growth analysis
Growth is the solutionGrowth will no longer be possible
Productivity can keep rising through technologyTechnology itself depends on industrial supply chains and energy
More investment creates expansionInvestment may increasingly maintain existing systems rather than expand them
Globalisation increases efficiencyGlobalisation creates vulnerability
National governments remain the main actorsLocal communities naturally become more important
Economic decline is a temporary problemDecline is a long-term evolution from fossil fuel based industrial and consumerist growth to food based local economies.

The concept that bridges these views is surplus energy. Economists traditionally focus on money, capital, labour and productivity.

Analysts such as Tim Morgan argue that the economy is fundamentally a system for converting energy into useful work, and that declining energy returns constrain economic possibilities.

Where localism differs is that it treats this not merely as an economic adjustment but as a social transformation. The question becomes:

If the industrial economy cannot continue expanding, what replaces it?

The localist answer which evolves naturally will be:

  • shorter supply chains,
  • greater local food production,
  • community ownership,
  • repair and reuse rather than replacement,
  • local energy systems,
  • mutual support networks,
  • reduced dependence on distant complex systems.

This is not simply a forecast of industrial based economic decline, it is a different model of adaptation. Mainstream economics asks: “How do we restart growth?” Localism replies: “We are creating a new kind of society in which economic growth is no longer the organising principle?”

That distinction is probably the central argument you have been building in Chatting about Localism: that localism is not an ideological preference, but a practical response to the end of the industrial growth era.

348. The Pension Crisis Points Towards Localism

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A recent Daily Telegraph article examined Britain’s growing state pension problem by comparing it with Slovakia, which has introduced reforms to make its pension system more affordable. The conclusion is clear. Britain faces rising pension costs, fewer working-age people to support retirees, and difficult political choices over taxation, borrowing and retirement age.

But the article raises a more fundamental question.

Why has the pension system become unsustainable in the first place?

The answer lies in the ending of the growth economy.

For most of the last century governments assumed that each generation would enjoy higher productivity, higher incomes and a larger workforce. Economic growth would generate enough tax revenue to support an expanding retired population. The system depended upon continuous expansion.

That expansion is now faltering. Energy is becoming more expensive to obtain, natural resources are under increasing pressure, debt has grown to extraordinary levels, and birth rates have fallen across much of Europe. Governments are trying to maintain promises that were made under conditions that no longer exist.

The result is predictable. Pension ages rise. Benefits come under pressure. Taxes increase. Governments borrow more. None of these measures addresses the underlying cause. They merely delay the adjustment.

Localism starts from a completely different understanding.

Instead of asking how central government can continue financing an ever more expensive welfare state, localism asks how people can recover the ability to provide more of life’s essentials within their own locality.

This is where the emerging wood economy becomes important.

As fossil fuels become more costly and less available, wood once again becomes a valuable local resource. Managed woodlands can provide building materials, fuel, furniture, tools, charcoal, compost, craft products and many other necessities. They also create meaningful work that cannot easily be moved elsewhere.

Older people have a particularly important place in such an economy. Many possess practical knowledge, traditional skills and life experience that can be passed on to younger generations. Their contribution is measured not only by paid employment but by teaching, mentoring, repairing, organising and strengthening the social fabric of the locality.

At the same time, local communities naturally provide much of the practical support that older people need – friendship, transport, meals, small repairs, shopping and companionship. These are things that no amount of central government spending can organise as effectively as neighbours who know one another.

The pension itself remains important. People who have contributed throughout their lives deserve financial security. But money alone cannot provide resilience. A pension paid

At the same time, local communities naturally provide much of the practical support that older people need – friendship, transport, meals, small repairs, shopping and companionship. These are things that no amount of central government spending can organise as effectively as neighbours who know one another.

The pension itself remains important. People who have contributed throughout their lives deserve financial security. But money alone cannot provide resilience. A pension paid into an isolated community with few local skills and little local production buys progressively less security as national systems come under strain.

A locality that produces more of its own essentials, values the contribution of every generation and shares responsibility for one another is far more resilient.

The pension debate is therefore about much more than retirement ages or Treasury budgets. It is about the future shape of society.

The growth economy assumed that security would come from expanding national wealth.

The local economy recognises that lasting security comes from productive localities, healthy woodlands, practical skills and strong human relationships.

The pension crisis is not simply a financial problem. It is another sign that Britain is moving from one economic age into another. Localism is not an escape from that transition. It is one of the few practical ways of living successfully within it.

347, The Daily Telegraph reports that Britain is approaching a point where the present economic system is becoming impossible to sustain.

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The Office for Budget Responsibility warns that ever higher taxes will discourage work, while advances in artificial intelligence could remove millions of jobs over the coming decades.

The discussion is framed as a crisis. How will governments pay for everything if fewer people are in paid employment?

From a localist perspective, this may be asking the wrong question.

The industrial economy has taught us to believe that people only become economically useful when they are employed by someone else and paid through the national money system. Anyone outside that system is seen as a cost, supported by taxes collected from those who remain in work.

Yet throughout history this has been the exception rather than the rule.

For thousands of years people created wealth directly within their own localities. They grew food, repaired buildings, made tools, cared for one another, passed on skills and maintained the landscape. Much of this work never appeared in government statistics, yet it sustained society.

Today millions of unemployed, retired and underemployed people possess experience, practical ability and local knowledge. The present economic system largely ignores this resource because it values only paid employment.

Localism sees something entirely different.

These people are not an economic problem. They are the seed from which a new local economy can grow.

Given access to land, workshops, woodland, community buildings and local markets, they could help produce food, repair household goods, restore neglected buildings, manage local woodlands, teach traditional skills, care for neighbours and create countless small enterprises that reduce dependence on distant supply chains.

Many already have the time. Many have the willingness. What they lack is not ability but opportunity.

As national systems become increasingly strained by debt, taxation and declining growth, local production becomes more valuable. Every item produced locally is one that does not need to be transported long distances or purchased from outside the locality. Every practical skill shared strengthens local resilience.

Artificial intelligence may replace many office jobs, but it cannot coppice a woodland, repair a dry stone wall, maintain a village hall, grow vegetables, restore biodiversity or care personally for an elderly neighbour. These activities are rooted in place.

The unemployed therefore represent a reserve of human energy waiting to be released. Instead of paying people simply to remain outside economic life, society could create the conditions in which they become active participants in rebuilding their own localities.

This is not a return to the past. It is a recognition that the future may depend less on creating ever more jobs within a shrinking industrial economy and more on enabling people to create genuine wealth where they live.

The question is not how many people leave the national labour market.

The real question is how many of them can become the pioneers of a thriving local economy.

Source

The Daily Telegraph article, “Two million could quit work: Burnham warned on tax rises”, 8 July 2026, discusses the long term fiscal outlook published by the Office for Budget Responsibility and the growing pressures on taxation, employment and public debt.

346, Could There Be Some Beauty in Collapse?

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Professor Jem Bendell has published a thought-provoking essay entitled “Could There Be Some Beauty in Collapse?” It can be read here:

Could there be some beauty in collapse?

The title itself challenges one of our deepest assumptions. Collapse is normally seen only as something to fear. Bendell does not ignore the hardship that accompanies the breakdown of complex societies, but he asks whether such a process might also create the conditions for a better way of living.

This question goes to the heart of localism.

Our industrial economic system depended upon continual growth, abundant energy, expanding global trade and increasing complexity. Yet these same forces have steadily weakened local communities. Production has moved further away. Decision-making has become centralised. People have become consumers rather than participants in the places where they live.

The growing evidence is that this system is reaching its limits. Economic growth has ended as energy is becoming more difficult and expensive to obtain, public finances are under increasing pressure and many institutions struggle to perform the functions expected of them. These are not isolated problems. They are symptoms of a civilisation that has grown beyond what can be sustained.

If this is true, then the future will not simply be about managing decline. It will be about discovering how society can function at a smaller and more human scale.

That is where localism offers hope.

As large systems become less reliable, localities become more important. Food can increasingly be produced close to home. Small businesses can meet more everyday needs. Skills that have almost disappeared can return. Repair can replace disposal. Local woodland can provide timber, fuel and employment. Housing can be built using local materials. Young people can find worthwhile work without leaving the places where they were born.

A shrinking economy does not have to mean a shrinking quality of life. If wealth is measured only by money, the future may appear bleak. If wealth includes security, friendship, purpose, practical ability and belonging, then a very different picture emerges.

Throughout history, people have shown extraordinary resilience during periods of change. Communities that work together often become stronger, not weaker. They discover that many of the things that bring satisfaction cannot be bought in a supermarket or delivered through a national bureaucracy.

The beauty in collapse, if there is any, lies not in the suffering that accompanies it but in the opportunity to rediscover ways of living that industrial society has pushed aside. Simplicity can replace excess. Cooperation can replace dependency. Responsibility can replace bureaucracy. The locality can once again become the place where people shape much of their own future.

Localism is therefore not a reaction to collapse. It is preparation for it. It provides a practical framework through which people can rebuild economic life, restore community and recover a sense of belonging. In doing so, it transforms what many see only as decline into the beginning of renewal.

Whether or not one agrees with every aspect of Bendell’s argument, his essay deserves careful reading. It encourages us to look beyond the immediate difficulties and ask what sort of society might emerge afterwards. That is a question localism has been asking for many years.

Perhaps the greatest beauty in collapse is that it reminds us of something we should never have forgotten – that the strongest society is not built from the top down, but grows from the locality upwards.

343. The Real Answer is Not Civil Service Reform – It is Local Self-Government

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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.