Tag Archives: politics

210. David Frost Is Right – the End of Growth Makes His Case Unavoidable

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  • In the closing paragraph of a recent piece in the Daily Telegraph, David Frost offers a sharp critique of modern government.

He argues that failure is inevitable when the state takes on too much, observing that “the only real answer to government failure is to limit what government actually does.” He also questions why we distrust politicians and bureaucrats while continuing to hand them more power.

That argument already points strongly towards localism, even if Frost himself does not yet take the final step.

Frost treats state failure as a political and administrative problem. But it is also an economic one. We are entering a period of economic contraction, not expansion. In a shrinking economy, the present system of government cannot be sustained. Centralised states are built on growth. They rely on rising tax receipts, expanding markets, and increasing discretionary spending to fund complex national systems. When growth ends, those systems begin to fracture.

Economic contraction has the practical effect of breaking up the existing model of government. As resources tighten, the state is forced either to withdraw or to ration more harshly. Attempting to maintain universal, centrally managed systems under these conditions only accelerates failure. Bureaucracy expands as outcomes deteriorate. Control increases as effectiveness declines.

This is where Frost’s argument becomes unanswerable, even if he does not yet acknowledge it. If there can be no more growth, then limiting what government does is not a choice but a necessity. The question is not whether the state should retreat, but how and in whose favour.

Localism provides the answer. When Frost says we must break out of the mindset that nothing can happen unless the state is involved, he is describing the mental barrier that prevents adaptation to contraction. Localism removes that barrier. It allows activity to continue even as national systems weaken, by relocating responsibility, decision-making, and production to the level of the locality.

Farming illustrates this clearly. Frost notes that viability does not have to be made subject to DEFRA and Treasury bureaucrats. In a contracting economy, it cannot be. Food production must respond to local land, labour, and need. Central schemes designed for an expanding economy become obstacles rather than supports. Local systems, though smaller and less uniform, are more resilient.

The same applies to energy, education, and care. Large, national systems depend on surplus. Local systems depend on knowledge, relationships, and adaptability. As discretionary spending declines, only the latter can survive without constant crisis management from the centre.

Frost calls for massive state surgery. Economic contraction ensures that surgery will happen whether politicians like it or not. Localism determines whether that process is chaotic and imposed from above, or deliberate and shaped from below.

The deeper issue is cultural. For decades, people have been trained to expect solutions from the centre. Growth made that illusion affordable. Contraction removes it. Localism restores a more realistic settlement, where responsibility is visible, limits are understood, and society continues to function even as the state does less.

Frost is right that things will keep getting worse until the scale of the state is reduced. Once the reality of permanent economic contraction is accepted, his argument leaves no alternative. Localism is not ideology. It is what remains when growth is gone.

209. Best Wishes for 2026: It will be interesting

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We are living through a period of profound misallocation. Enormous amounts of money, energy and material are still being poured into activities that only make sense in a growing economy. In a post-growth world, many of these investments cannot deliver what they promise. When financial bubbles burst, they do not so much destroy value as reveal that the value was never there in the first place. The damage was done earlier, during the period of optimism, when malinvestment was mistaken for progress.

This problem is sharpened by the growing divide between two economies. The real economy, grounded in energy, materials, food and labour, is already contracting. The financial economy, by contrast, continues to expand through debt, speculation and asset inflation. These two trajectories cannot coexist indefinitely. When money grows faster than the physical systems that support it, trust in money itself begins to fail. A fracture in the financial system is not a distant possibility. It is a structural outcome.

When that fracture occurs, even basic questions become difficult. How will trade function if trust in money collapses? How will essentials be exchanged? Modern economies depend heavily on imports, not only of discretionary goods but of energy, food, minerals and components. No country is truly self-sufficient. A breakdown in financial systems therefore becomes a breakdown in physical supply chains.

At the same time, consumerism continues to place excessive demands on the planet. Energy use remains high. Resource extraction continues. Environmental damage accumulates. Yet the ending of consumerism is rarely discussed in practical terms. How do societies adapt when consumption must fall, not by choice but by necessity? This is not simply an economic question. It is a social one.

Inequality adds another layer of instability. Wealth and power have become increasingly concentrated. These inequalities are not accidental, and they will be fiercely defended by those who benefit from them. As pressures increase, the gap between what systems can provide and what elites seek to preserve is likely to widen, not narrow.

Competition for scarce resources is already reshaping global relationships. The old assumptions of stability, cooperation and rules-based order are weakening. This is not an aberration. It is a predictable response to scarcity. Managing this process peacefully will be one of the hardest challenges of the coming years.

Climate change intensifies all of these pressures. Rising temperatures, disrupted food systems and extreme weather are already driving migration. These movements will grow. Attempts to manage them through borders alone will fail, because the underlying causes are structural.

Taken together, these trends point to a future defined less by growth and more by adaptation. The central task is no longer how to expand the system, but how to manage contraction without collapse. That requires honesty about limits, a rethinking of trade and money, and a shift towards more local, materially grounded forms of economic life. The alternative is not stability, but unmanaged breakdown.

What to do? I will sit back and watch. Apart from ridding ourselves of debts, there’s nothing we can do until the powers-that-be recognise that growth has ended. Then we will be able manage our own moves into localism.

208. The Good News Is People Are Realizing We’re On Our Own

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We no longer care who’s behind the curtain because we’re in charge of our own lives now.

Charles Hugh Smith Dec 26

The Good News is people are realizing We’re On Our Own and starting to take action accordingly.

This article describes how people in one low-income county are localizing self-reliance rather than remain dependent on government subsidies.

The War on Poverty Failed Them–and They’re No Longer Waiting For Help (wsj.com, paywalled) Federal money and projects have come and gone so many times that McDowell County locals have little faith in the government to restore their fortunes; ‘We’re on our own.’

Here in the heart of America’s War on Poverty, some two-thirds of households with children still get food stamps, among the nation’s highest rates, and the estimated median household income hovers around $35,000. Nonfarm employment has plummeted 78% since 1975, according to data compiled by West Virginia University economist John Deskins, as the coal that once powered this rugged place is now mostly mined with machines, if at all, and no other industry has replaced it. The county has lost 67% of its residents over those years, the largest drop in West Virginia, its population dwindling from just over 51,000 to roughly 17,000.

With little faith left in government to break the cycle of poverty, those who remain say it’ss up to them to forge a brighter economic path.

“We’re on our own,” said Jason Tartt. “Nobody’s coming down here to save us.”

Tartt, the grandson of coal miners, is teaching locals, including retired miners and those recovering from opioid addiction, how to farm the forested hillsides. Down the winding, two-lane roads that connect communities, a pastor organizes bottled-water drives for neighbors whose tap water is undrinkable, while the local utility patches together funding for long-term solutions. A tiny, former coal town is trying to transform a shuttered Walmart into a new factory it hopes will jolt the local economy.

Their efforts are small in comparison to the government programs that have sought to revive McDowell County, and can’t make up for the prosperity that slipped away when the coal companies left. But they are spurring hope for renewal in some places, driven by one of the few constants here: resilience.

Nobody includes not just the federal government; it also includes Corporate America. Walmart pulls the plug on under-performing stores regardless of their local importance, and the rest of Corporate America is equally focused on next quarter’s profits.

Dependence breeds helplessness, passivity, addiction and the decay of community. There are alternatives. Those seeking to maintain the status quo dismiss alternatives that don’t require Wall Street, federal monies and Corporate America ownership because those institutions are buttering their bread.

But out in the real world, there are alternatives–underfunded, dismissed as impractical, etc., but real nonetheless, for example: Regenerative Farmers of America (6:19 minutes) (via Chad D.)

As I observe in my book on Self-Reliance in the 21st Century, we all have to start somewhere, and as the Chinese saying put it, the journey of a thousand miles starts with the first step. (A thousand li in the original, of course.)

Self-reliance sounds like an individual journey, but it’s fundamentally a community effort as no one person can fulfill every function. As the number of people participating expands, the self-reliance of each participant expands, too.

Those working on self-reliance tend to lead by example. Get the work done, share the results, keep moving forward. There’s no jetting around to meetings and conferences, just do the work on the ground. Get it done, learn from mistakes and from others’ experiences, experiment to identify what works best in local conditions.

When we realize we really are on our own, things change for the better. We start taking full responsibility for our health, work, goals and integrity. We start thinking through Plans A, B, and if things unravel, Plan C. We lose interest in addictive technologies and substances and other hindrances. We start noticing improvements and taking well-earned pride in them.

We no longer care who’s behind the curtain because we’re in charge of our own lives now.

207. Energy Surplus, and the Evolution of Power: Roman Britain, Localism and Globalism

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The history of the United Kingdom can be seen as an economy which grew and shrank and grew again, and so on, driven by rising and falling energy surpluses.

After Rome: Energy Collapse and Political Fragmentation (5th–9th centuries)

When Roman rule ended in Britain in the early fifth century, the collapse was not only political.  It was energetic and economic.

Roman governance depended on surplus extracted from agriculture and trade, enforced through taxation, roads, towns, and paid officials.  When that surplus disappeared, the system could not be maintained.

Energy surplus is the extra energy left after people have met their basic needs.  It is what allows societies to build, travel, govern, trade, and create things beyond survival.

Small surpluses come from human effort, animal power, food, wood, and water.  These support local economies and simple administration.

Large surpluses come from fossil fuels.  These support cities, extended supply chains, national governments, and global trade.

When energy surplus grows, economies expand.  When it shrinks, economies simplify and become more local again.

Britain then became fragmented into small, autonomous kingdoms.  Governance shrank to the scale permitted by available energy.  Power could only operate where it could be exercised directly.  Authority depended on walking distance, personal loyalty, and local knowledge.

Economic life became intensely local.  Energy came almost entirely from human labour, animal traction, and local biomass.

Local Biomass is:
Wood used for fuel, charcoal, and construction
Crop residues such as straw
Grasses and fodder grown to feed animals
Animals themselves as a source of energy
Human food energy produced from local agriculture

In a low-energy economy, almost all usable energy comes from biomass.  People eat locally grown food.  Animals eat local fodder.  Firewood is gathered nearby.  Materials are grown or harvested close to where they are used.

Biomass is limited by land and time.  You cannot extract more wood or food than the local landscape can regenerate.  That natural limit keeps economies small, local, and seasonal.  It also prevents long-distance centralisation, because energy cannot be moved cheaply.

Long-distance transport was expensive and unreliable.  Under these conditions, central administration was impossible.  Survival depended on proximity.

This was not disorder.  It was governance resized to fit a low-energy economy.

The Emergence of Local Administration: Shires, Hundreds, and Wapentakes (9th–11th centuries)

As agricultural output slowly improved, a modest surplus returned.

This allowed more structured local administration to emerge, particularly under later Anglo-Saxon rule.

England developed shires, later known as counties, as broad administrative areas.  Within them were hundreds, or in areas of former Danelaw influence, wapentakes.  The difference in name reflected legal custom rather than function.  Both were units of local governance designed to operate within strict energy limits.

Hundreds and wapentakes were not bureaucracies.  They were assemblies.  They handled justice, land disputes, obligations, and local order.  Courts met at regular intervals.  Attendance was personal.  Decisions relied on reputation, oath, and community enforcement.

These systems existed for practical reasons.  Travel had to be possible within a day.  Administration had to be cheap.  Authority had to be visible.  Justice had to be embedded in daily life.

Later, during the era of a national monarch, royal power was thin.  Sheriffs represented the crown, but relied heavily on local cooperation.  Governance was layered rather than centralised.

  • Norman Rule: Central Authority Built on Local Foundations (11th–13th centuries)

The Norman Conquest did not abolish counties, hundreds, or wapentakes.  It took them over.

The Normans imposed a new ruling elite, but relied on existing local administrative structures.  What changed was the direction of extraction and control.  Land was redistributed.  Obligations were formalised.  Written records became more important.

In this context, extraction does not mean only the physical removal of resources such as minerals or fuel.  It refers more broadly to the organised removal of surplus from where it is produced to where it is controlled.  This includes food, labour, energy, rent, taxes, and later money and profit.  Centralised systems depend on this process.  When surplus can no longer be extracted without damaging local viability, those systems weaken, and local forms of organisation reassert themselves.

The Domesday survey illustrates the shift to written records.  It was possible only because surplus and administrative capacity had grown enough to support a nationwide audit.  Yet the information gathered remained grounded in local knowledge.

This period marks the beginning of systematic centralisation.  Local courts remained active, but royal courts expanded.  Money replaced payment in kind.  Law became more uniform.

Central authority grew because it could now be afforded.

Growth, Energy, and the Limits of Medieval Centralisation (13th–15th centuries)

As water power spread and farming intensified, surplus increased further.  Towns expanded.  Cathedrals, castles, and manor houses multiplied.  Governance became more formal and more distant.

Yet this system remained fragile.  When surplus collapsed in the fourteenth century due to famine and plague, central enforcement weakened.  Labour shortages undermined manorial control.  Large houses became unaffordable.  Obligations loosened.

Local autonomy increased again.  Informal arrangements replaced rigid rules.  Authority drifted back toward locality, not through reform, but through necessity.

This pattern is essential.  Centralisation advanced only while surplus allowed it.  When surplus fell, local systems resurfaced.

Fossil Fuels and the National Bureaucratic State (18th–19th centuries)

The Industrial Revolution transformed the scale of economic and administrative life.  Fossil fuels release vast quantities of stored energy.  Coal allowed work to be concentrated, multiplied, and transported.  Production no longer depended on land, season, or muscle.

This new energy regime generated an unprecedented surplus.  Factories expanded.  Cities grew rapidly.  Transport improved.  Administration scaled up.  Permanent salaried officials became normal.  Authority could now be exercised reliably nationwide.

Counties and local courts were not abolished, but they were absorbed into a national hierarchy.  Local discretion narrowed.  Uniform rules replaced local judgment.  Governance became more distant because energy allowed it to be.

This period also saw the consolidation of the national monarchy and state.  Taxation systems expanded.  Law became increasingly standardised.  The costs of administration could be met because the surplus was abundant.

An Interlude: Railways as a Surplus Warning Signal

The nineteenth-century railway boom and bust reveal a crucial aspect of this phase of expansion.

Railways were made possible by coal.  Without fossil energy, rails, locomotives, steel production, and large-scale earthworks would have been inconceivable.  Coal powered not only the trains, but the financial and industrial systems that built them.  This sudden abundance of usable energy created a national surplus.

That surplus sought outlets.  Railways appeared to offer certainty, profit, and permanence.  Investment surged.  Lines were promoted far beyond immediate need.  Routes duplicated one another.  Some ran through sparsely populated areas with little long-term demand.

This was not irrational behaviour.  It was what surplus looks like when it is abundant and searching for expression.  Energy abundance encouraged confidence.  Financial systems amplified it.

The collapse that followed was not a failure of the railways themselves.  It was a correction in scale.  Capital had outrun underlying economic reality.  What survived was a smaller, more viable network.  What disappeared were speculative extensions that surplus had briefly made possible.

Railways also enabled a new level of administrative centralisation.  Distance collapsed.  Officials, goods, and information could move quickly and cheaply.  National governance became practical in ways it had never been before.  Local systems were increasingly subordinated, not because they failed, but because energy allowed authority to operate at scale.

Later contraction made the limits visible again.  Branch lines closed.  Rural connections disappeared.  The network retreated toward routes that still justified their energy and maintenance costs.  This was not merely a policy choice.  It was surplus reality asserting itself.

From Managed Centralisation to Global Overreach (Late 19th–20th centuries)

After the railway corrections, centralisation continued in a more managed form.  Infrastructure was treated as essential rather than speculative.  The national state deepened its role in welfare, planning, policing, and regulation.

Oil later extended this trajectory.  Energy became more flexible and mobile.  Cars, aviation, suburban living, and global supply chains expanded.  Economic life stretched far beyond local and even national boundaries.

Globalism was not an ideological project at first.  It was an energy condition.  Cheap fuel made distance irrelevant.  Supply chains lengthened.  Local production declined.  Authority moved further away from daily life.

The national state reached its greatest scale during this period because surplus allowed it to do so.

The Present Transition: Shrinking Surplus and Administrative Strain (21st century)

That condition is now weakening.  Energy still exists, but net energy is lower.  Costs rise.  Surplus shrinks.

Central systems strain under their own weight.  Enforcement weakens.  Services falter.  Global supply chains prove fragile and expensive.

As always, discretionary systems fail first.  Long commutes, non-essential retail, and high-energy lifestyles contract.  Large homes become burdens.  Inequality changes shape as complexity becomes costly.

At the same time, local systems re-emerge.  Food growing.  Repair.  Informal care.  Shared resources.  These are often described as social trends, but they are energy adaptations.

Why Counties, Hundreds, and Wapentakes Worked, and Why Something Like Them May Return

Counties, hundreds, and wapentakes worked because they respected three constraints.

They matched travel limits.
They minimised administrative cost.
They combined functions locally.

They were not designed.  They evolved.

Modern equivalents will not look medieval.  But they are likely to share key characteristics.  They will be small enough for people to recognise one another, large enough to pool skills and resources, and able to resolve routine matters without escalation.

They will handle practical issues first.  Care.  Maintenance.  Local resources.  Disputes.  They will gain authority through usefulness rather than legislation.

Digital tools may support them, but they will remain place-based.  Trust cannot be centralised.

From National Monarchy and Globalism to Local Autonomy

Historically, political scale follows energy scale.  Fragmented kingdoms emerged when energy was local.  National monarchies grew when surplus allowed centralisation.  Globalism followed fossil energy abundance.

As surplus declines, authority drifts back toward locality.  The national monarchy and state may persist symbolically, but practical power shifts downward.

This does not require collapse.  It requires adjustment.

Local systems will not announce themselves as replacements.  They will simply become the places where things still work.

A Note on Extraction

Extraction does not mean only mining or taking physical resources out of the ground.  It means the organised removal of surplus from where it is produced to where it is controlled.

Here is a clear breakdown.

At its simplest, extraction is the process by which energy, labour, or output produced locally is taken away from local use and redirected elsewhere.  That “elsewhere” might be a lord, a king, a state, an empire, or a global system.

In Roman Britain, extraction meant taxes in grain, goods, and money.  Agricultural surplus was removed from farms to feed armies, towns, and administrators.  Labour was also extracted through conscription and obligation.  Without this extraction, Roman administration could not exist.

In the medieval period, extraction took the form of rents, tithes, labour services, and fines.  Peasants produced food locally, but a portion was claimed by landlords, the church, or the crown.  That surplus funded manor houses, castles, and officials.  The key point is that production happened locally, but control of surplus did not.

Under the manorial system, extraction was often physical and visible.  Grain stored in a lord’s barn.  Days of labour owed.  Animals taken as rent.  The system functioned only while there was enough surplus to be extracted without collapsing production.

With the rise of national states, extraction became more abstract.  Taxes were paid in money rather than goods.  Surplus was converted into revenue.  That revenue funded bureaucracies, courts, and wars.  The mechanism changed, but the principle remained the same.

In the fossil-fuel era, extraction expanded again.  It included not only taxation, but wages, profits, interest, and resource flows.  Energy extracted from coal and oil fields was converted into economic surplus, which was then extracted again through markets and finance to support distant systems, global supply chains, and large institutions.

In the present context, extraction also includes the removal of local resilience.  When food, energy, care, and production are organised at a distance, localities lose control over their own surplus.  They become dependent on systems that extract value upward or outward, often invisibly.

So extraction is a recurring pattern:

Local production
followed by
the removal of surplus
to sustain larger, more distant structures

This is why extraction and centralisation go hand in hand.  Extraction requires surplus.  Central systems exist to organise and enforce it.  When surplus shrinks, extraction becomes harder.  Central authority weakens.  Localism re-emerges because less can be taken away without breaking the system.

Conclusion: Administration is an Energy System

Administration consumes energy.  Governance requires surplus.  When surplus expands, power centralises.  When surplus contracts, power localises.

The history of counties, hundreds, and wapentakes shows that local governance is not primitive.  It is efficient under constraints.

What lies ahead will not be a return to the past.  But it may rhyme with it.

199. What Individuals Can Do in a World Filled with Conflict

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A recent article on the website Our Finite World explores what people can do as the global economy becomes more fragile and conflict becomes more common. It argues that falling energy supply, rising extraction costs, growing debt, and the increasing complexity of modern life point towards a long period of contraction. The article can be read here:
https://ourfiniteworld.com/2025/06/18/what-should-individuals-do-in-a-world-filled-with-conflict

In this uncertain environment, the author suggests several practical steps for individuals.

Be thankful for what you have now
We are still living in conditions that most people in the world would regard as fortunate. We have a wide choice of food, warm homes, and access to services. It is helpful to recognise this rather than constantly wanting more.

Keep away from conflict
As cheap energy declines, global supply chains and long distance trade will become unstable. This may lead to tension between countries and within countries. Individuals gain little from being drawn into political or physical conflicts. It is safer to stay clear.

Expect simpler living and fewer goods
The complex systems we rely on may not last. High tech medicine, electronic equipment, imported goods, and replacement parts depend on global supply chains. These systems may fail or become unreliable. We should adjust our expectations and prepare for a simpler life.

Rethink saving for retirement
If the economy shrinks, there may be fewer goods and services available in future years. Money may lose value. The traditional idea of saving for retirement may not make sense in a contracting economy. Many people may need to work for as long as they are able.

Live in shared or extended households if possible
Sharing space lowers costs. Larger households mean shared cooking, shared heating, and shared help with daily tasks. Living with family or trusted friends may provide greater stability in difficult times.

Avoid taking on large debts
The article argues that the economy has produced too many people with long and expensive educations for the number of jobs available. It suggests that young people might consider practical or hands-on skills rather than long university degrees that create heavy debts.

Stay healthy and avoid ultra processed food
As hospitals and medical supply chains come under pressure it will become more important to stay healthy. This means simple food, home cooking, less sugar, modest amounts of meat, and regular movement such as walking.

Grow some of your own food
Even a small garden can provide fruit or vegetables. It will not make anyone fully self-sufficient. But small steps matter and provide a degree of security.

Why I Think This Matters

The article fits closely with the ideas I have been developing about the future of the United Kingdom. The decline in cheap energy, the rising cost of imported goods, and the loss of discretionary income will move the country towards a simpler and more local economy.

This will include more small farms, more local food processing, and more households growing some of their own food. It will include fewer long journeys, fewer imported goods, and a shift from highly skilled industrial jobs to more practical work with the hands. The future industrial economy will contract. The social economy will grow. Locality will become the centre of life.

The article reinforces the view that the coming shift will not be a matter of choice. It will be driven by physical limits. In that sense it supports the need to prepare for a smaller but more grounded way of living.

196, The Coming Reset and the Natural Emergence of a Localist, No Debt Economy

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In his latest Post, Tim Watkins argues that many of the crises now closing in on us share a common root. Our monetary system relies on debt based money. New money appears only when someone takes out a loan. Interest then has to be paid on that loan. This structure forces the economy to expand year after year. If expansion slows, the strain increases. If it stops, the system begins to break.

Watkins warns that the global debt mountain is now at a point where it can no longer be supported. Once confidence falters, a major crash becomes likely. Such a crash would not simply cause a short downturn. It could trigger the rapid unravelling of global trade. Western countries would be hit hard. They have relied on currency dominance to obtain cheap food, fuel and manufactured goods from outside the locality. If that advantage disappears, shortages will follow. The hardship could be worse than the 1930s as even basic needs become uncertain.

He points to the example of the Soviet collapse. When its economic structure fell apart, life expectancy dropped sharply. He argues that something similar could happen in the West if debt based systems fail. This is not a forecast anyone would welcome. Yet it highlights how exposed we have become. Long fragile supply chains depend on cheap credit, cheap energy and political stability. All three are weakening.

Watkins suggests that after such a shock, attitudes may shift. People and the politicians they elect may have to accept that sustainability means living within limits. Managed decline will become necessary. Growth can no longer be the aim in a world of constrained resources and declining discretionary markets. In this new reality, debt based money becomes unworkable. It demands expansion when expansion is no longer possible. It traps households, businesses and governments in a structure that cannot survive the end of growth.

Once the debt based model breaks, something else must take its place. This is where the future begins to take shape. Without large flows of credit, without global supply chains, and without the ability to import essentials cheaply, economies naturally shrink in scale. Production moves closer to where people live. Exchange becomes simpler. Communities focus first on securing food, heat and shelter. In time, this creates space for a localist economy. It does not arise from political ideology. It emerges because local exchange becomes the only dependable system when the wider world becomes unstable.

Such an economy does not rely on debt. It relies on mutual support, direct production, personal trust and the use of simple local forms of money or barter that do not require constant expansion. It allows people to meet their needs without loading themselves with obligations that cannot be repaid in a contracting world. It replaces interest bearing debt with reciprocal arrangements and practical cooperation. It allows localities to adapt at their own pace rather than being dragged into crises created far away.

If Watkins is right, the monetary reset will not simply change how we think about finance. It will change the shape of society. The industrial economy will continue to shrink. The social economy will expand around it. And if I am right, a localist, no debt economy is not only possible. It is the natural outcome once the current debt based system reaches its limits.

194. The Decline of Surplus Energy:  What it Means

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Now and then, I have to remind myself where I have got to in my thinking.

For two centuries, the UK economy grew because we had cheap energy with a large surplus.  We put a little energy into getting a lot back.  That surplus powered everything beyond basic survival, including, for a while, the consumer-based economy, much of which is discretionary.

Discretionary businesses and markets depend on people having spare money created by surplus energy in the broader economy.  When surplus energy is high and energy costs are low, households can afford extras such as leisure, travel, and luxury goods. 

Essential businesses rely on steady demand for food, heat, and basic services, and their markets shrink or grow only slightly as energy conditions change. 

As surplus energy falls and energy costs rise, households cut back on discretionary spending first, which causes those markets to contract while essential markets remain the backbone of daily life.

Now the surplus is decreasing, and we have become focused on affording the essentials.  Less is left over for comfort, variety, and growth.

What this means for prosperity

Prosperity depends on what is left after the basics are paid for.

When energy costs increase, households have less money for eating out, leisure activities, holiday travel, new clothes, and gadgets.  Firms have less to invest in staff and new kit.  The State collects less tax from slowing activity, while costs for health care, care, and infrastructure continue to rise.  

The result is a slow squeeze on the domestic and wider economies.  

Discretionary markets are now shrinking.  Second-hand replaces brand new.  Some replacements cannot be afforded.  It feels like a reduction in choice, pace, and reach.

What if the present UK system remains unchanged?

Assume the government tries to run the current model with blinkers on, as if nothing basic has changed.

Debt will try to bridge the gap of the declining surplus.  Households will juggle higher bills and lower real incomes.  Local shops will thin out.  Out-of-town retailing will struggle with energy and transport costs.  Public services will, in effect, be rationed through increased waiting times.  Councils will delay maintenance.  National supply chains will trim their range and carry less stock.

Daily life is already stepping back toward past habits.  People travel less and nearer to home.  More meals are cooked from basic ingredients (something now being rediscovered).  Gardens and allotments will become part of domestic economies, not just hobbies.  Homes will fill with repaired items.  Sharing will become normal, from tools to car lifts.

Much of the formal framework will be retained, as an informal layer emerges beneath it.  

The system quietly reverts to an older pattern, albeit boosted by modern technology.

Will this be an evolution or a revolution in the economic system?

Both are possible.  

Evolution occurs when institutions acknowledge the energy constraint and redesign their use of money, services, and daily behaviour to accommodate a world that is no longer expanding.  

Revolution occurs when the formal system fails to adapt despite rising pressure.  The outcome includes a decline in honesty and trust.  Although it may not be acknowledged, unconscious lying is a response to the ensuing muddle.  Because people become unable to cope.  From top to bottom in society, this may already be happening.

How change actually happens

Change is an evolutionary process.  The government may want us to think it rules the roost, but in reality, the natural evolution of the economy determines what happens.

As the return on energy declines, discretionary sectors become memories of good times, and the rising costs of essentials creep into everything. 

For example, heating all the rooms in our homes, an essential we grew up with, is becoming unaffordable and discretionary.  Those of us who lived through the 1940s and 50s, when the economy was much smaller than it is now, will remember how we clustered round the only open fire and were kept warm, filling the coal scuttle.

Tax receipts will decline, and the state will have to trim benefits.  Local authorities will defer projects.  Households will move decision by decision toward thrift.  Informal exchange will grow, from neighbourly help to small cash jobs.  

In response to the shrinking economy, pay rates charged by electricians, plumbers, and builders for household work will decrease.  Their purchase and maintenance of electrical tools will become unaffordable, and they will have to revert to using hand tools.  DIY and self-built housing will increase, with some opting for off-grid living in response to rising utility prices.

The number of small businesses may increase because the margins of large-scale operations are too thin.  

A parallel economy will form, close to home.  Black markets in rationed food will develop.

If policy stays fixed, stress builds.  Debt becomes harder to service.  Banks and lenders pull back.  Shocks, such as a winter price spike or a supply interruption, will expose the lack of slack.  Trust in promises, both public and private, will weaken.  People and firms seek reliability over growth.  They value a steady supply over a low sticker price.  They accept less variety if it is nearer and more certain.  

The formal rules either bend to reality or break.  Goods and services become less trustworthy.  Home deliveries fail and are stolen.

What a managed evolution could look like

If the Government and councils recognise that the era of economic growth and surpluses is over, there will be an opportunity to shift to an entirely new way of thinking. 

The first step will be for the government to recognise that a radical shift in thinking is needed.  There can be no further economic growth.  This will take time to be generally accepted and become the norm.

In the meantime, the UK will slip into an Anomie system.  It may already be there.

In anomic systems, there is a growing absence of social rules, norms, and expectations that once guided people’s behaviour.

  • Society’s norms become unclear or weakened.
  • People feel disconnected, uncertain, or without guidance.
  • Traditional structures no longer provide stability.

In short, anomie is the feeling or condition of normlessness.  Everything will seem to be muddled.

The outcome of this rethink must be recognition that the hierarchical systems of governance that enabled the industrial/consumer economy to develop are over.

The focus must shift from maximising throughput and economic growth, led from the top down, to enabling people in local communities to secure their essentials.  Hierarchies enable growth; once growth ceases, they have to be de-layered and dismantled.

Planning and licensing will need to facilitate small-scale production, repair, and food production.  Procurement must favour nearer suppliers to cut energy costs.  Community buses, driven by volunteers, will replace conventional services.  A transition which is already underway in country areas.

A kind of management is needed which enables this to happen.  Not top-down, but enabling bottom-up grassroots activities to be born and develop.  Not guided, which would be counterproductive because this is new territory not visited before.  People won’t be bothered to think for themselves if local councils act as if they know best and limit funding to services they deem necessary.

As the economy shrinks, the localist economy is likely to be increasingly self-generating.

In time, there will be no need for top-down intervention in local community doings.  Local health services will develop, and general hospitals will provide services sought locally.  The localist economy will be established.  At first, we can’t imagine what it will look like, except that it will be driven from the grassroots.

What a rupture could look like

If denial of the end of growth persists, cuts will deepen, backlogs grow, and services erode.  

A sharp energy shock triggers business closures and job losses in the thinning discretionary sector.  Households default.  The tax base shrinks.  The central government centralises more decision-making to hold the line, slowing local problem-solving.  Black markets and petty thefts grow.  

A settlement then arrives fast, not by design, but through breakdown.  Price controls, rationing, emergency procurement, and strict priorities appear.  After the shock, rules are hastily written to match the new reality.  In effect, it would be creeping centralisation, leading to totalitarianism.

Not unlike what happened after the last big shock, when the Second World War broke out and then ended, leaving the government to deal with the dreadful state of the indebted economy.

Life in the United Kingdom during and after the war was shaped by disruption, hardship, and a strong sense of collective effort.  Daily routines were transformed by rationing and power outages.  Food was limited, so people learned to stretch every ingredient, grow vegetables, and share what they had.  Cars became rare on the roads because petrol was tightly rationed, and most private motoring came to a halt.  People walked or cycled.  Essential vehicles were reserved for the military, ambulances, farming, and other vital work.  

A return to the past would only be partial.

We will not rewind to the 1940s and 50s.  We will keep today’s knowledge and experiences, basic digital tools, and some modern infrastructure.  But for those of us who experienced the post-war era, the pattern feels familiar.  Shorter supply lines.  Less travel.  National systems still exist, but local practice carries a greater share of the load.

Choosing the path

The energy fact will not change.  The choice will be how we will change our systems with it.  

Evolution is calmer than revolution.  It will require clear communication about limits, early support for essential services, and legal space for small-scale activities.  It will reward households that adapt and communities that organise.  

Revolution is the risk if we delay, deny, or defend old models.  Delay will result in the change arriving suddenly and on harder terms.

Politically

Revolution will involve a regular party-political choice, reacting to events.  Parliamentary procedures may not be necessary.

A decision to enable fully fledged localism to evolve will require extensive parliamentary processes.  Once enacted, each locality will decide how to govern itself. 

A willing local authority may be able to implement some aspects of localism that do not require new legislation.

What to watch

There will be shrinking ranges on supermarket shelves.  Longer waiting times.  Rising repair trades.  Growth of allotments and local food.  More second-hand.  New mutual aid groups.  Small makers and services that thrive by being near.  These are signals of the shift.  They are also the seeds of the next economy. 

Conclusion

Falling surplus energy leads to falling prosperity.  

If we keep the current systems unchanged, life will narrow and move closer to home, much like it was 75 years ago.  The issue is whether it will be a top-down revolution or grassroots localism.

With top-down systems maintained, there would be increasing government and local government regulation of daily life.  Social inequality might increase due to rising social unrest.

Moving closer to home can be a managed evolution to localism.  It may be self-managed at each locality.

The difference lies in whether economic shrinkage is acknowledged and accepted, and the UK positively redesigns around it, with localism playing a significant part.  Or we can pretend that shrinkage isn’t happening and have to put up with the unexpected consequences of attempts to fabricate “growth”.

192. Immigration Overload – News from Canada

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Canada has long prided itself on its multicultural mosaic, but for many Canadians, the pace of immigration—450,000 newcomers annually, with plans to hit 500,000 by 2026—feels like too much, too fast.

The top-down ideas of the UK government and other political parties are all of the same ilk. Top-down. Localism is on the horizon – maybe immigration, internally and externally, should be considered?

In small towns and big cities alike, people are voicing concerns: strained housing markets, overcrowded schools, stretched healthcare systems, and a sense that their communities are changing before they can catch their breath. A 2024 Angus Reid poll found 60% of Canadians believe immigration levels are too high, up from 35% a decade ago.

In places like Brampton or Surrey, where immigrants make up over half the population, locals worry about integration lagging behind arrivals. It’s not about rejecting newcomers; it’s about feeling unheard in a top-down system where Ottawa dictates numbers and policies, often ignoring regional realities.

Take Sarah, a teacher in Regina. Her classroom is bursting with new students, many needing language support her school can’t fully provide. Housing costs in her neighborhood have spiked 30% in five years, pricing out her own kids. She’s not anti-immigrant—she values integration—but feels the federal government’s one-size-fits-all approach disregards her community’s capacity. From Halifax to Kelowna, Canadians are asking: why can’t we have a say in who joins our towns and how many?

The solution lies in flipping the script: transfer immigration control to regional and municipal governments, using Swiss-style direct democracy to let residents decide. This decentralized approach respects local needs, rebuilds trust, and ensures immigration strengthens communities, not strains them.

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The Strain of Centralised Control

Canada’s immigration system is a federal fortress. Ottawa sets annual targets, selects economic migrants, and processes refugees, with provinces getting limited input through programs like the Provincial Nominee Program (PNP). Municipalities? They get no say, despite bearing the brunt of integration—schools, housing, transit, and social services.

Centralized control assumes Ottawa knows best, but Canada’s regions are wildly diverse. Vancouver’s tech-driven economy can absorb skilled migrants differently than Cape Breton’s fishing communities. A top-down system ignores these nuances, fueling resentment. Canadians aren’t saying “no” to immigration—60% in the Angus Reid poll support it in principle—but they want a voice. By handing immigration decisions to regions or municipalities, Canada can ensure newcomers fit local needs and capacities, turning frustration into collaboration.

Swiss-Style Democracy: Power to the People

Switzerland, a nation of 8.7 million with 25% foreign-born residents, thrives on decentralised governance. Its 26 cantons (like provinces) and 2,200 municipalities have significant autonomy over taxes, education, and even immigration policies. Swiss citizens vote in referenda—sometimes multiple times a year—on issues like asylum policies or foreign worker quotas. This hyper-local approach ensures communities aren’t overwhelmed, and newcomers integrate into places ready to welcome them.

Canada could adapt this model. Imagine if Regina residents voted on how many immigrants their city can support, based on housing and school capacity. Or if a rural Nova Scotia municipality, eager for young families, set its own criteria. Municipal councils or regional assemblies could hold referenda to decide numbers, vetting processes, and integration priorities. This isn’t about closing doors—it’s about opening them thoughtfully.

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Co-ops: A Local Integration Engine

Even with local control, integration matters. Newcomers need jobs, community ties, and a sense of belonging. Enter cooperative businesses—worker-owned enterprises that embody the democratic spirit of Swiss-style governance. Co-ops aren’t just economic tools; they’re social ecosystems where immigrants become co-owners, not just employees.

Picture a cleaning co-op in Toronto, where a Nigerian immigrant, Chidi, joins after his community approves a small intake of skilled workers. He’s not just scrubbing floors—he’s voting on contracts, sharing profits, and planning outreach.

“In the co-op, I’m not just cleaning homes—I’m building a home here.” —Chidi, a Nigerian immigrant in a Toronto cleaning co-op, on the power of ownership.

Through daily collaboration, Chidi learns Canadian workplace norms while contributing his own ideas. Language barriers fade as he debates strategies with colleagues, accelerating fluency. Co-ops turn immigrants into stakeholders, fostering pride and connection.

Overcoming the Hurdles

Skeptics might argue decentralization risks chaos or exclusion. Couldn’t some communities reject immigrants outright? Swiss-style democracy guards against this. Referenda are binding but operate within constitutional frameworks ensuring fairness. Canada could require municipalities to align with human rights laws, preventing discrimination while allowing local flexibility.

The goal is to ensure immigration flows where it’s sustainable. If Brampton says “slow down” while Prince George says “bring it on,” the system adjusts to community capacity. Pairing local immigration control with co-op opportunities ensures newcomers integrate into welcoming, prepared communities.

Conclusion: A Canada That Listens

Canadians aren’t anti-immigrant—they’re tired of being sidelined. A centralized system that ignores local realities fuels frustration, but Swiss-style democracy offers a fix. By letting regions and municipalities decide who joins and how many, we empower communities to welcome newcomers on their terms. Co-ops seal the deal, turning immigrants into co-owners who build Canada alongside locals.

It’s time to trust Canadians to shape their future. Support local co-ops, push for decentralized policies, and let’s build a Canada where every community has a say—and every newcomer a stake.

168. The End of Degrowth

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Or what comes after the realization hits that we’ve been already in degrowth for fifty years now

An American view of the future. Copied from The Honest Sorcerer

With peaking energy supplies humanity faces a massive dilemma. How to adapt to the shift from ever growing supplies of fossil fuels and minerals to an ever shrinking availability of these resources? Is this even possible?

Let’s take the case of America, the poster child of capitalism, for example. In order to see how degrowth might unfold — wholly unwillingly, I have to add — we must first understand the essence of our current economic system. The key thing to note here is that the core tenet of capitalism is not a belief in markets, free trade or private ownership but unimpeded growth. Unrestricted competition between businesses was nothing more than an ideal which was never met. The larger enterprises grew, the bigger their influence over pricing and regulation became. The repeated appearance of monopolies, an ever growing wealth inequality and a growing number of rent-seeking billionaire oligarchs thus were not unintended side effects of an otherwise benevolent system, but a clear goal towards which capitalism as a complex adaptive system evolved over time.

Concentrating wealth in the hand of the few and limiting competition was simply the best way to maximize profits. In fairness this is not an entirely new phenomena: whenever lootable, hoardable, tradable and storable surplus became available — be it grains, gold, sheep etc. — sooner or later some people always ended up owning much more than the average folk. And when the richest conspired to bend the rules for themselves, civilizations inevitably ended up in the rather unstable state of oligarchy. History never repeats itself, but it sure does rhyme — a lot.

What has made capitalism more “successful” than any of its predecessors was an ever increasing supply of raw materials, energy and labor turned into products and services at a profit. In a more or less stable system, such as in the Middle Ages, it would have been much harder for Rockefellers and Carnegies to rise and contest established power structures. That has changed when fossil fuels started to unlock more and more resources and technology in the industrial age. Whenever a new market or resource (be it real or digital) was opened up for competition, and ultimately for exploitation, a few companies quickly ended up dominating that field — making their owners the new richest kids on the block.

What would happen though, when that material growth finally turns into reverse, consumers can no longer afford to spend as much as they used to, and market after market start to shrink, only to eventually disappear? You see, without adequate surplus energy, it would be impossible to keep producing and consuming at present rates, so something will have to give. Is it possible for capitalism to adapt by degrowth or will this shrinkage — enforced by Nature — cause the system to mutate into something entirely different?

Profits over the economy

Just take a look at what growth has already turned into in the past five decades. In contrast to what it meant half a century ago — new, well paying jobs, a general rise in living standards and improving future prospects — growth has basically turned into a wealth pump. Ever rising asset prices and corporate welfare for the rich, collapsing living standards, food inflation and unaffordable housing and energy for everyone else. The post World War II economic boom revolved around making and selling goods at a profit while paying workers well, thereby creating a self-reinforcing feedback loop of consumption — driving manufacturing and still more consumption. This, however, required cheap raw materials, coal, oil, natural gas and electricity, as well as the “freedom” to dump waste on and destroy Nature free of charge. As environmental regulations became stricter, at the same time when resource extraction and conventional oil peaked (and became more expensive as imports kicked in) in the 1970’s, the old model of “economic” growth became impossible to maintain.

There is only so much you can extract, pollute and destroy without ruining your own prospects.

You see, a continued real, material improvement for the everyday person always required a corresponding increase in resource and energy use. A bigger house, a second car, electronic gadgets, flights abroad, eating out etc. could no longer be provided on a shrinking material and energy base. The only way to preserve growth was to move the manufacturing of the most energy intensive and polluting products and services abroad, where labor, resources and energy was still cheap. This practically meant unfettered growth in company profits, at the cost of disappearing industrial jobs and stagnating wages for everyone else.

Profit per unit of real gross value added of nonfinancial corporate business: Corporate profits after tax with IVA and CCAdj (unit profits from current production), retrieved from FRED, Federal Reserve Bank of St. Louis, October 2, 2025.

Education followed a similar pattern: as working class jobs vanished and salaries stopped growing in real terms, the only prospect for improving one’s lot was by going for a diploma. Asking more and more for higher education, and by financing this activity via student loans, created a lot of economic activity but required very little energy and resources to perform. Hence the birth of a myth: the post-industrial, service economy. (There is, of course, no such thing as a service economy.) These trends, on the other hand, has led to the devaluation of degrees, combined with a swell in administrative and frankly BS jobs. The same “happened” to healthcare, where the number of doctors barely grew as opposed to that of controllers and management. And the list goes on: from “owning” copyrights to creating “intellectual property”, providing financial services and inserting a middle man into every transaction imaginable. Sure, a lot of economic activity could be generated this way (measured as GDP growth and rising stock valuations), while very little — if any — real value was added. Money for nothing? Quite likely.

U.S. per capita energy use (from all sources including fossil fuels) is falling since 2000. China is set to surpass the EU in 2025 on a per capita basis. In absolute terms, China has already left behind the EU and U.S. (combined!) in 2020 already. Source

The real state of the economy

Despite the lack of real value added, and much to the reasons explained above, U.S. gross domestic product — the total value of goods produced and services provided during a year — just kept rising and rising. Lacking real material growth this expansion was increasingly financed by credit institutions and government debt. That is, by conjuring money into existence. (Yes, banks create around 80% of the money circulating the economy as electronic deposits.) And as of late: the government running massive deficits — i.e.: spending more than what gets collected as revenues.

Deficit spending, besides creating even more inflation, has a direct stimulating effect on the economy as a whole. When you take a look at what the government spends taxpayer money on, you find expenditures such as social security, Medicare, national defense etc. Retired workers spend their benefits on goods and services, Medicare pays doctors, nurses and the administrative staff (who then also use this money to buy stuff), while national defense drives entire industries (besides being a massive racket). In the end most of this government deficit spending ends up circulating the economy as consumption and investment a.k.a. GDP growth. On the other hand, this practice also increases inflation and locks future governments into a debt trap, where ever increasing amounts of money will have to be spent on servicing this debt. Short term benefits, long term costs — sounds familiar?

The effect of U.S. government deficit spending on GDP. The total height of each bar shows the “official GDP” reading for Q3 each year (in trillions of Dollars, seasonally adjusted annual rate) — source. The effect of deficit spending (source) was marked by diagonal stripes. The red line shows real gross domestic product (source) minus deficit spending — both converted to chained 2017 Dollars (seasonally adjusted annual rate). 2025 values are my estimates. Based on these real values, U.S. economic growth was 2% year-over-year in the past quarter of a century.

If we take a look at the actual GDP figures, we can not only discern a growing trend when it comes to overspending, but a tendency to use deficit spending to fill in the gaps after a recession. Governments in the past 25 years, it seems, have done everything in their power to a) hide the true depth of each recession, and to b) show higher than normal GDP growth. But that’s only half of the story. If we take inflation into account by using chained 2017 Dollars, and deduct government overspending, the true size of the U.S. economy in the middle of 2025 would have been around $22.5 trillion — some 27% below the official figure ($30.5 trillion). And that’s by using the seriously under-reported and heavily massaged CPI figures… If real inflation had been just two percentage points higher than the official figure, economic growth over the past eight years would have simply disappeared into the mist.

Take note how we got to this point: starting with the peaking of conventional oil production in 1970’s, then the outsourcing of manufacturing jobs, followed by neoliberalism and credit adventurism leading to a financial meltdown in 2008/2009. Then came zero interest rate policies, wage suppression, tax cuts for large corporations and now a cost of living crisis in the wake of the 2021 energy crisis (which has never ended). Is it any wonder the U.S. economy is where it is: drowning in debt?

Degrowth is already on — Now comes war

Let’s face it: degrowth is already here — since the 1970’s at least. So far it was offset by globalization (mainly by importing cheap goods from China) and a massive expansion of debt — both federal and private. However, no economy can be propped up artificially forever. With the coming peak and decline in U.S. oil and natural gas production later this decade, revenues can expected to fall dramatically, at the same time when the country becomes import dependent again. Should that be the case, a major economic downturn would be inescapable, and it would be only a question of time till the rest of the world realized that the U.S. economy would deflate like a balloon without incessantly increasing its debt levels, or seriously and heavily taxing its major corporations (1). The former would further erode trust in America’s ability to honor its obligations which, together with the realization that with less and less oil it would be impossible to repay these debts, would be devastating. The latter move, however, would make paying prodigious dividends to shareholders practically impossible, and quite possibly trigger a stock market meltdown. A rock and a hard place?

No wonder that slashing social benefits, Medicare, Medicaid are all on the top of the government’s list — we can take severe cuts to those as a given. But then what’s there to do the year after? Sure, cutting social spending will result in lower consumption (and lower GDP growth), but resource depletion won’t stop just because we no longer give adequate medical and financial support to retired citizens… The now accelerating long decline of high-tech industrial civilization will demand more and more cuts each and every year. Unless… Unless there is a way to “convince” other nations to give up their consumption and resources first.

The European economy is already in self-destruction mode for four years now, resulting in a massive (10%) drop in their overall energy consumption compared to 2014. And not only that, they also became more dependent on U.S. energy deliveries than ever. Should any of their nations decide not to put up with American pressures then, LNG shipments could easily drop to zero overnight. Or the last remaining pipeline underneath the Black Sea could suffer a severe blow. Europe, the second largest importer of energy in the world is now on a strict slimming diet, enforced and controlled by their biggest friend and ally. Next one on the list: China, the globe’s largest importer of oil and gas.

Constraining the world largest energy consumer’s access to hydrocarbons is a more tricky question, though, as they are not as dependent on one source as the EU was (or rather: still is). There are, however, some major suppliers — ruled by governments deemed hostile by the West — whose deliveries to China could be curtailed: Venezuela and Iran. Toppling these two regimes could thus deliver triple benefits: first, U.S. oil corporations could finally return in full to exploit their resources. Second, they could divert oil deliveries to America, instead of the far east, and third it could help reserve the Dollar’s status as the world’s number one currency. As Curro Jimenez observes:

Iran has the third-largest oil reserves and the second-largest gas reserves. If the U.S. were to control Iran and Venezuela’s oil reserves, it would control the first and third-largest oil reserves in the world, while the second and fourth – Saudi Arabia and Canada – are already under its influence. Having control and influence over the four largest oil reserves would allow the U.S. not only to influence prices and distribution, but to dictate in which currency they are paid.

Note, how bailing out Argentina, the last U.S. friendly South American state with a booming shale oil industry in its Vaca Muerta region, fits neatly into this picture. There is, however, a fly in the ointment: we no longer live in the 1990’s when the U.S. was the sole military superpower. Today, we have other players with formidable air defense complexes, hyper-sonic missiles and manufacturing capacities far greater than that of the entire West, combined. Russia, for example, is already busy training and equipping Iran to resist the next wave of U.S.-Israeli bombardment. The recent Tomahawk scare and turning Taiwan and the Philippines into a porcupine are thus part of a diversionary tactic aimed at pinning down air defense and missile resources far away from U.S. targeted countries. As for the success of this strategy… Well, I’m highly skeptical, to say the least.

Conclusion

U.S. per capita energy production and use is already falling for two decades now, despite the shale “revolution” adding record amount of barrels to the mix. Without an ever growing number of well paying jobs, and with a continued cost of living crisis, on the other hand, this cannot be expected to change. So even if American military adventurism were successful, it would most likely end up enriching a few oil corporations, while the rest of the population would still be unable to buy more gas or products made with oil. On a falling per capita energy availability — translating into higher electricity and gas prices — it will be impossible to keep consumption even on its current level. With a continued decline in conventional oil production, and now with peaking shale oil extraction, diesel fuel supply can be expected to fall in the years and decades ahead, making the crisis especially severe in the food, mining, construction and transportation businesses.

Under these circumstances it’s not terribly hard to understand why tariffs were a failed attempt to rein in competitors and to incentivize the re-industrialization of America; as none of these goals were achievable from the get go. Tariffs have thus ended up becoming just another tax on the average citizen, with the only practical purpose of raising government revenues to pay interest on debt, while further eroding people’s ability to buy more products and services. Now add in austerity measures, cuts to social benefits — as well as to many other government programs — and a continued decline in consumer spending is pretty much locked in. With slowing consumer demand, however, even more manufacturing companies will be forced to close doors, and even less oil wells will be drilled — effectively cementing peak oil in place. U.S. oil companies in anticipation of weaker demand and ever increasing drilling costs, are already accelerating layoffs and cutting investments, and not only in the shale business but everywhere.

This, however, is only the beginning. As more and more producers are pulled out, like blocks from a jenga tower, so will the risk of entire supply chains failing grow. Not just in the oil industry, but everywhere else. How this will affect finance and the monetary system is anyone’s guess at this point, but I suspect we are in for a pretty rough ride — potentially involving issuing massive amounts of stimulus checks, investors having to bail-in (2), and CBDC-s being introduced in a rush. Such a major, or even partial, meltdown of the economy, and the draconian measures needed to prevent a complete collapse, however, raises the risk of civil unrest to it’s highest level in recent history… That’s the risk every government around the globe takes, when not explaining that we are rapidly approaching the end of growth, after having surpassed an almost infinite number of planetary and resource boundaries. So, in case you were wondering why there is a war psychosis all over the world, or why the President called certain states and cities ‘training grounds’ or why did he sign orders to criminalize dissent — look no further for an answer. I’m afraid what we have seen up until now is just a dress rehearsal for what comes next: the biggest turning point in human history. Buckle up.

162. The Great Canadian Reset: by Ludovic Viger

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Cooperatives as the Path Through Economic Contraction

Copied from a piece by Ludovic Viger with his permission.

Canada’s economy is at a turning point. For decades, we’ve relied on the promise of perpetual growth to fuel prosperity, but the foundations of that growth are crumbling. According to Dr. Tim Morgan’s Surplus Energy Economics, the global economy, including Canada’s, is inflecting from growth to contraction, driven by the rising Energy Cost of Energy (ECoE). This shift challenges our assumptions about progress and demands new approaches to secure a resilient future.

In this post, I’ll outline three likely outcomes of Canada’s economic contraction and argue why cooperative businesses—democratic, community-driven enterprises—are uniquely suited to address this predicament. Drawing on data from Surplus Energy Economics and Canada’s own economic context, we’ll explore how cooperatives can transform challenges into opportunities for a sustainable, equitable future.

The End of Growth: Understanding Canada’s Economic Contraction

Dr. Tim Morgan’s Surplus Energy Economics provides a critical lens for understanding why economic growth is faltering. Morgan argues that the economy is an energy system, not a financial one. All goods and services depend on energy, and the surplus energy available after the cost of accessing it (ECoE) determines prosperity.

Historically, low ECoEs from fossil fuels drove exponential growth, enabling Canada’s resource-rich economy to thrive. However, as Morgan notes, global ECoEs have risen from around 2% in 1980 to now well over 10%, eroding the surplus energy that fuels economic output. For Canada, a nation with high energy consumption and reliance on exports like oil and gas, this trend is particularly acute.

Morgan’s SEEDS (Surplus Energy Economics Data System) model projects that global material prosperity could decline by 1% annually through 2050, reducing aggregate prosperity by around 22%. For Canada, this translates to shrinking real GDP, strained public finances, and reduced household purchasing power. Evidence from Statistics Canada increasingly points to this reality: real household disposable income growth has stagnated since the 2008 financial crisis, and inflation-adjusted costs for essentials like housing and food have risen sharply, consuming a greater share of our budgets.

The era of “solutions of quantity”—building more, extracting more, borrowing more—is ending. Instead, we must embrace “solutions of quality,” prioritize cooperation over individualism, and adapt to shrinking discretionary funds. Cooperatives, with their focus on community ownership and resilience, are the ideal vehicle for this transition.

  1. From Quantity to Quality: Reprioritizing for Resilience

As economic contraction takes hold, governments and businesses can no longer rely on growth-based strategies. Morgan highlights that rising ECoEs reduce the surplus energy available for non-essential activities, forcing a shift toward efficiency and value. For Canada, this means rethinking how public services and businesses operate. Governments, facing declining tax revenues, will need to optimize spending on essential services like healthcare, education, and infrastructure. Businesses, meanwhile, must focus on delivering high-quality, sustainable goods and services rather than chasing volume.

Cooperatives are uniquely positioned to lead this shift. Unlike corporations driven by shareholder profit, cooperatives prioritize member needs and community well-being.

  • Take Coast Capital Savings, a federally regulated credit union based in British Columbia with over 600,000 members. By reinvesting profits locally and offering affordable financial services, it strengthens communities while maintaining stability in tough economic times.
  • Similarly, agricultural producer cooperatives, like those forming the backbone of Canada’s dairy and grain industries, enable farmers to achieve economies of scale and market their produce efficiently, ensuring quality and fair returns without the exploitative pressures of purely profit-driven intermediaries.

In a contracting economy, cooperatives can deliver “solutions of quality” by focusing on durability, local needs, and equitable distribution. For example, housing cooperatives across Canada, such as those within the Co-operative Housing Federation of Canada, provide affordable, stable homes without the speculative price spikes of private markets. By pooling resources and prioritizing long-term value over short-term profit, cooperatives align with Morgan’s call to adapt to a less energy-intensive, more resilient economy.

Governments could amplify this by redirecting subsidies from corporations to democratic businesses, as envisioned in my upcoming book, The Great Canadian Reset (September 2025), which advocates for a Democratic Business Development Agency to support cooperative growth.

  1. From Individualism to Cooperation: Building Community Resilience

Economic contraction often exposes the fragility of hyper-individualistic systems. Morgan warns that as prosperity declines, competition for dwindling resources intensifies, potentially fueling social and geopolitical tensions. In Canada, we’ve seen this in rising inequality and housing unaffordability, with the top 1% owning a disproportionate share of wealth while many struggle to afford basics. In such times, individualism—chasing personal gain at the expense of others—becomes unsustainable. Cooperation, however, offers a path forward.

Cooperatives embody cooperation by design. Owned and governed by their members, they distribute benefits equitably and foster collective problem-solving.

  • Historical movements like the Antigonish Movement in Nova Scotia during the Great Depression demonstrated how community-driven cooperatives could provide essential services and build economic self-reliance when traditional markets failed.
  • In Canada today, consumer cooperatives like the Saskatoon Co-op, part of the larger Federated Co-operatives Limited (FCL) system, demonstrate this resilience by providing affordable food and services and reinvesting profits into local jobs and community initiatives.
  • During the 2008 recession, Canadian credit unions, with over $400 billion in assets today, weathered the storm better than many banks due to their conservative, member-focused models.

In an energy-constrained future, cooperatives can mitigate resource competition by localizing economies. For instance, SolarShare, a Toronto-based renewable energy cooperative, allows members to invest in solar projects, reducing reliance on high-ECoE fossil fuels while keeping energy dollars local. This cooperative model counters the divisive effects of scarcity, fostering trust and mutual support.

As you’ve discussed on various forums, Canada’s values of fairness and belonging align perfectly with cooperatives, making them a natural fit for navigating economic decline. By scaling up cooperative networks, Canada can build resilient communities that share resources rather than compete for them.

  1. Shrinking Discretionary Funds: Cooperatives as a Buffer

As ECoEs rise, the cost of essentials—housing, food, energy—consumes a larger share of household budgets, leaving less for discretionary spending. Morgan’s SEEDS data shows that discretionary sectors, like luxury goods and entertainment, could contract by 30% or more as prosperity declines. In Canada, this is already evident: a 2023 Statistics Canada report noted that 40% of households cut back on non-essential spending due to rising costs. This squeeze threatens economic stability, as discretionary sectors employ millions and drive tax revenue.

Cooperatives offer a buffer against this trend. By pooling resources, they reduce costs for members while maintaining access to essential goods and services.

  • For example, Organic Meadow Co-operative, a Canadian dairy cooperative, provides affordable, sustainable food by cutting out corporate middlemen and ensuring fair prices for both producers and consumers.
  • Similarly, education cooperatives can offer low-cost, community-driven schooling tailored to local needs, providing vital services without the high overheads of private institutions. These models ensure that essentials remain accessible even as discretionary funds dwindle.

Moreover, cooperatives can stabilize local economies by keeping money circulating within communities. The T’Sou-ke Nation Solar Co-op on Vancouver Island generates clean energy and local jobs, reducing dependence on expensive, high-ECoE fossil fuels. By contrast, corporate models often extract wealth to distant shareholders, exacerbating economic leakage in tough times.

Cooperatives’ focus on reinvestment and affordability aligns with Morgan’s warning that we must “own our mistakes and misfortunes” without the “elixir” of growth to bail us out. Through collective ownership, Canadians can stretch limited resources further, ensuring stability in a contracting economy.

Why Cooperatives Are the Answer

Cooperatives are not just a stopgap; they’re a transformative model for Canada’s future. Morgan’s work underscores that economic contraction is inevitable as ECoEs rise and surplus energy shrinks. Traditional growth strategies—borrowing, deregulation, globalization—have failed to address this reality, leaving Canada vulnerable to financialization and systemic risks.

Cooperatives, however, offer a proven alternative. With over 8,000 cooperatives employing 100,000 Canadians and contributing $50 billion to GDP annually (Co-operatives and Mutuals Canada), they’re already a cornerstone of our economy.

Their democratic structure ensures accountability and fairness, countering the exploitative tendencies of neoliberalism. Unlike corporations, which prioritize profit over people, cooperatives reinvest in communities, fostering belonging and resilience. They’re also adaptable to local contexts, whether it’s a fishing cooperative in Atlantic Canada or a solar co-op in Ontario. As my book, The Great Canadian Reset, argues, redirecting support to cooperatives—through loans, training, and policy reform—can democratize our economy and ease the pain of contraction.

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A Call to Action

Canada stands at a crossroads. Economic contraction, driven by rising ECoEs, demands a shift from growth to resilience, from individualism to cooperation, and from excess to sufficiency. Cooperatives are not a utopian dream but a practical, proven solution. They’ve thrived in crises before, from the Great Depression to the 2008 recession, and they can do so again.

Join the conversation and learn more:

Together, we can build a resilient, equitable economy that faces the challenges of contraction head-on.

161. Fragments of the Future: Life After Industrial Civilisation

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A Future We Cannot Avoid

The future will not be what governments promise. Industrial civilisation is ending, not by choice but by natural evolution. Population will shrink, economies will contract, and communications will slow. Governments may talk of growth, but nature, energy, and limits will decide. The question is not whether change comes — but how we prepare for it.

Civilisations do not last forever. Rome fell. Empires rose and disappeared. What seems permanent in one age can crumble in the next. We now stand in the shadow of our own industrial civilisation, built on fossil fuels, global trade, and vast machinery. For two centuries it has powered growth, population expansion, and lifestyles once unimaginable. But the cracks are plain to see.

In the 1960s, Britain offered most young people a clear path to security. A couple could marry, buy a home, start a family, run a car, and even take holidays — often all on the income from one wage-earner in their early twenties. For those who struggled, there was a fallback: council housing, provided by local authorities at rents ordinary people could afford.

The population then was smaller, and its diversity was mainly economic. Britain contained a mix of manual workers, clerks, professionals, and entrepreneurs — but they shared a common expectation of stability. The country was not without problems, but security was within reach for most.

Today the picture is unrecognisable. The population has grown by millions, reshaped by waves of global migration. Cultural diversity has become a defining feature of the nation, while economic security has been hollowed out. Secure jobs have given way to the “gig economy” and “zero-hours contracts.” Housing has been transformed from a basic right into a speculative asset. Young people are burdened with student debt before they even begin working life. The idea of owning a home and raising a family on one income is no longer realistic.

This is called “progress.” Yet it is progress that has stripped away stability and left society more fragmented and insecure than at any time in living memory. Successive governments, locked into the growth narrative, sold off council housing, deregulated labour, and promoted a financialised housing market. They clung to the illusion of control — but the world has shifted beneath their feet.

Here lies the uncomfortable truth: the future is no longer predictable. Climate change, global conflicts, and collapsing ecosystems are driving mass movements of people. Populations will rise in some areas, shrink in others. Economies that once grew steadily will contract, forced down by resource limits and unaffordable energy. Governments that promise stability through top-down planning are selling a fantasy.

And behind all this looms a reality we barely dare to name. Industrial civilisation has enabled the world’s population to grow to nearly 8 billion, sustained by fossil-fuel farming, long-distance transport, and global medicine. Remove those supports, and such numbers cannot be maintained. The conclusion is unavoidable: the global population — and Britain’s share of it — must fall, not by thousands but by millions.

This contraction will not be optional. It will come through falling birth rates, forced migration, or harsher routes: famine, disease, and conflict. We can soften the impact with foresight and preparation, but we cannot prevent it. A smaller economy means fewer jobs, less food, and lower energy availability — and ultimately, fewer people. Industrial society has raised us to unsustainable heights, and nature’s limits will bring us back down.

What happens when there is not enough food for everyone? What happens when hospitals run short of medicines that can no longer be imported? What happens when millions find they cannot afford heat or shelter? These are no longer theoretical questions. They are the questions a shrinking, post-industrial Britain will be forced to answer.

And what of communications — the arteries of any civilisation? The Romans held their empire together with roads. They allowed armies to march, traders to travel, and ideas to spread. When those roads fell into disrepair after the Roman withdrawal, Britain fragmented. Towns shrank, trade declined, and life became more local because the networks that once bound the country together were gone.

Industrial civilisation has had its own communications revolution. Railways and canals first linked the nation, followed by motorways, airports, and container ports that tied Britain into global supply chains. In the past fifty years, telecommunications — from landlines to satellites to the internet — have shrunk time and space, binding the world together at dizzying speed.

But all of these systems are energy-hungry. They depend on fossil fuels and vast industrial infrastructures. What happens when energy becomes scarce, expensive, or unreliable? Railways may endure if they can generate their own power, but roads and air transport will falter without cheap fuel. Telecommunications may not collapse, but they will contract. High-speed networks, data centres, and always-on connectivity may become luxuries rather than assumptions.

The future of communications may therefore be low-energy, local, and patchy. Local radio, community printing, face-to-face exchange, and simple digital systems powered by renewables could survive. National railways may endure if designed to be self-powering, but the age of cheap flights and overnight container shipping will be gone. Britain will remain connected, but less tightly, less instantly, and at a slower pace. Communities will need to rely on themselves first, and on distant networks only when essential.

This matters because communications are the glue of society. If that glue weakens, fragmentation follows. When the Romans left, Britain broke into kingdoms. Today, if global supply chains and digital networks falter, we may find ourselves in a patchwork of local systems again. The question is whether those systems will be resilient enough to support life with dignity.

To glimpse what might come next, we can look back. When the Romans withdrew from Britain in the early fifth century, the centralised system they had imposed collapsed. Roads decayed, towns emptied, and trade shrank. What followed was not chaos so much as adaptation. Smaller kingdoms emerged — the Mercians, the Northumbrians, the Welsh kingdoms in the west. Life reorganised itself on a more local, self-sufficient scale. People lost the benefits of Roman order, but they created new forms of society that fitted the times.

We may now be facing something similar. The retreat of industrial civilisation will not look like the lights going out in a single moment. It will look like services failing, supply chains breaking, and global companies quietly withdrawing from places they no longer find profitable. It will look like governments losing their grip, still promising “growth” while people on the ground see their lives becoming harder. And just as the departure of the Romans gave rise to smaller kingdoms, the retreat of the industrial system may force us back to something local and fragmented — not feudal states perhaps, but communities taking charge of their own survival.

That future will be unimaginably different from the world we know. It will not be delivered by grand plans from Whitehall, because the state itself will struggle to manage the shocks of climate migration, resource scarcity, economic collapse, and population decline. Governments will go on pretending to shape events, tinkering with policies and slogans, but the real driver of change will be natural evolution: energy limits, ecological collapse, and demographic shifts far beyond political control.

This is where localism comes in. Localism is not a slogan, nor a lifestyle trend. It is the only practical response to an age of contraction and unpredictability. Communities must take responsibility for the essentials of life — housing, food, energy, care, and communications. These systems will have to be rebuilt on a human scale, resilient to global disruption, and designed for sufficiency rather than endless growth.

We should not pretend this will be easy. Living standards, as measured by consumption, will be lower than in the heyday of the industrial economy. Population itself will shrink — and the reduction will not be gentle. Whether by design or by disaster, Britain’s millions will diminish. Transport and communications will slow, shift, or even break down. But security, belonging, and dignity can return if communities build resilience together. That is what “progress” must come to mean: not more gadgets, not more debt-fuelled consumption, but the ability to live stable, meaningful lives within the limits of the natural world.

So perhaps the real question is not whether Britain will fracture into “kingdoms” as it did after the Romans left. The question is whether we are ready to face the end of industrial civilisation and prepare for a future made up of fragments — smaller, more resilient communities, strong enough to withstand the storms of the coming age.

The past tells us that societies can survive collapse — but only if they adapt. The blunt truth is this: Britain’s population, economy, and communications will not survive in their current form. The question is no longer if things will change, but how. Will we accept the challenge and rebuild on a smaller, human scale — or will we wait until hunger, isolation, and breakdown make the choice for us?

158. The Moral Decay of Debt

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Debt has moral implications, and in denying this, we’re choosing a rendezvous with Nemesis

Charles Hugh Smith – Sep 17

Let’s start with a household analogy. A married couple have four fine children, and since expenses are higher than income, they borrow money in their children’s’ names to fund their lifestyle and investments. Once the offspring reach 18 years of age, the debt their parents borrowed is theirs to service.

The offspring didn’t get a say in how much money was borrowed or how it was spent, but the debt is now theirs to service (i.e. pay the interest) for their entire lifetimes, as the debt is simply too large to pay off with conventional wages.

The economy changed, and since wages don’t go as far and costs keep rising, the four offspring borrow in their own children’s’ names to afford the basics of a middle-class life.

The parents are now comfortably retired, drawing on their investments bought with borrowed money. The two generations behind them are now debt-serfs who funded their own lifestyles by borrowing even more money. Since the kind of house their parents bought for 3-times-income is now 6-times-income, the debt required to own a house and fund what is considered the minimum middle-class entitlements is multiples of their parents’ borrowing.

Is anyone willing to call this offloading of ever-expanding debt onto future generations wrong, as in morally wrong, or have we lost the vocabulary and ability to declare the offloading of debt as morally disgraceful, a line that should never have been crossed?

Debt that cannot be extinguished and that is offloaded onto future generations is a manifestation of moral decay, a decay of the moral foundations of the economy and society that is terminal.

So here we are, cheering on a big reduction in the Fed Funds Rate to encourage an expansion of debt, as more debt means more spending and that means more taxes and corporate profits. The manipulation of interest rates and the financial machinery to encourage more debt is viewed as bloodless, absolutely devoid of moral judgment: when it comes to “growth” of asset prices, spending, taxes and profits, there is no wrong, as “growth” is the only good anyone cares about.

This is the perfection of moral decay. Offloading debt onto future generations–money borrowed to prop up a self-serving status quo that focused on expediencies, not future consequences–and then telling the debt-enslaved generations, “we’ll inflate away the debt, and your wages will buy less and less, but no worries, we’ll just borrow more to pay the interest due”–how is this not morally repulsive?

Here is Federal debt as a percentage of Gross Domestic Product (GDP). This is a better measure of consequences, for it illustrates the Federal government’s ability to counter a deep recession by borrowing and spending trillions of dollars is now limited by extreme debt levels.

Those who track the history of government debt generally draw the red-line at 100% of GDP, so 120% is already deep in the danger zone. History is rather decisive: any attempt to add trillions in additional debt at these levels has zero chance of working as intended, i.e. a pain-free way to boost “growth.”

Note the debt-to-GDP ratio actually declined during both the stagflationary 1970s and the 1990s Internet boom. In both eras, the economy was still largely organic, i.e. unmanipulated enough that natural forces (supply, demand, risk aversion, writedowns of bad debt, etc.) could work through excesses of speculation and debt and restore not just balance sheets but legitimacy.

The Federal Reserve no longer trusted the system’s self-correcting capacity and leaped into full-blown manipulation of financial and mortgage markets in 2008-09. The debt-to-FDP ratio soared from 60% to 100% in the post-Global Financial Crisis (GFC) “save” of the Federal Reserve, which inflated the money supply and pushed ZIRP (zero interest rate policy) and QE (quantitative easing) to boost borrowing.

As a result, private-sector borrowing also skyrocketed. Now that households and enterprises have borrowed up to their capacity to service debt, their ability to “borrow their way to prosperity” is also constrained.

Here is total debt, public and private (TCMDO). In Q2 1975, total debt was $2.5 trillion. If this had tracked inflation, it would have reached $15 trillion by Q2 2025. ($1 in Q2 1975 is $6 in Q2 2025.) (BLS Inflation Calculator)

Let’s say that debt can double the rate of inflation if it’s being invested productively. That would put today’s total debt at $30 trillion.

But total debt isn’t close to $30 trillion; it’s $104 trillion and climbing, suggesting 70+ trillion is “excess debt.” As for all this borrowed money being invested productively–given “waste is growth” planned obsolescence and rampant asset appreciation / speculation, it seems obvious that most of this borrowed money was consumed by ephemeral products and services or squandered chasing asset bubbles.

Debt has implicit moral implications, and in denying this, we’re choosing a rendezvous with Nemesis–a rendezvous with Destiny that will be arranged by Nemesis, not the Federal Reserve or the Treasury.

Yes, debt can be productive, but it can also be exploitive, and therein lies the moral implications. Debt can never be amoral or bloodless; its moral nature cannot be extinguished. We appear to be destined to discover this truth the hard way.

157. The End of the Industrial Era and the Rise of Local Makers

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The twentieth century was the age of great industries in the UK. . Steel, shipbuilding, textiles, cars, chemicals and electronics were produced on a vast scale, with workforces counted in the tens of thousands. Entire cities were shaped around a single factory or plant. The rhythm of life followed the whistle of the works. But that world is passing.

Globalisation, automation, and the limits of growth have hollowed out the giant industries. Many can no longer compete, either with low-cost overseas production or with new methods that require far fewer workers. Where once a steelworks employed 20,000, today the same output can be achieved with a few hundred. The vast labour armies are gone, and the communities that depended on them are left adrift.

This decline marks more than an economic change. It signals the fading of the industrial era itself, when economies were measured by the mass production of heavy goods. The future lies not in ever bigger factories, but in smaller, more flexible systems closer to where people live.

Localism offers a different path. Across the country, small manufacturers are emerging to meet needs that global supply chains once served. A workshop making timber window frames for local housing repair; a community bakery supplying fresh bread within walking distance; a small brewery producing distinctive ales for local pubs. These are modest in scale, but rooted in place. They keep money circulating in the local economy and provide jobs that cannot be outsourced to the other side of the world.

Technology supports this shift. Small-scale digital tools, such as 3D printers or computer-controlled cutters, allow local workshops to design and manufacture customised goods without the capital of a giant plant. In towns and villages, shared workshops – sometimes called makerspaces – give craftspeople and engineers access to equipment that once only large companies could afford.

We see it in Totnes, where local food processing and brewing firms supply a growing share of the town’s needs. In Sheffield, once the heart of heavy steel, small workshops now produce specialist blades and tools of a quality that mass producers cannot match. In rural areas, small sawmills and furniture makers are reviving traditional skills while adapting them to modern demand.

This is not nostalgia, but evolution. As big industry contracts under the weight of global pressures, small-scale making rises to fill the gaps. The end of the industrial era does not mean the end of production. It means production becomes embedded in communities again, on a scale that fits within the limits of resources and the needs of people.

The giant factories that defined the past will not return. The future belongs to the small workshops, the local makers, and the networks of exchange that sustain them. In their modest way, they point to a new economy – one that is lighter, more resilient, and more human.

156. A Grim Encore: Europe’s Descent into Coal

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Civilisation rests on pillars—food, water, steel, cement, and above all, energy. Without them, everything crumbles. That foundational truth, articulated in “A Return to Coal” by Consciousness of Sheep on September 8, 2025, rings louder now than ever consciousnessofsheep.co.uk.

Once the world’s industrial heart, Europe now teeters on the verge of a second Dark Age—for reasons that read like tragicomic irony.

The Mirage of “Cheap” Russian Gas

For decades, European rhetoric cast Russian gas as cheap and plentiful. But that was a myth. In reality, while Russian pipeline gas benefited from transport infrastructure and long-term contracts, pricing steadily converged with—or even exceeded—European spot and LNG levels Reuters. The notion that Russia ever offered a perpetual gas discount was less energy economics and more wishful politics.

Renewables That Aren’t So Renewable

Europe pinned its hopes on non-renewable renewable energy-harvesting technologies (NRREHTs)—wind and solar. But these technologies lack the physical inertia of traditional plants like coal, gas, or nuclear. That’s a serious grid integrity issue. When something disrupts the system—say, a lightning strike at a wind farm or sudden loss of production—there’s no spinning turbine mass to smooth the shock. The result? Cascading blackouts and grid instability.

Even sustainably-minded myths crumble under scrutiny: renewables can’t provide the fast ramp-up, inertia, or black-start capabilities essential to modern grids.

Lignite: Europe’s Dirty Refuge

So where does Europe turn? The article points—with mordant humor—to Europe’s vast coal reserves, especially lignite (brown coal) in places like Northern Ireland—and critically, Germany. Ironically, the nations most bullish about decarbonisation—Britain, France, Germany—may be the first to revert to coal when cheaper Russian gas flows eastward.

It’s especially telling that nuclear shutdowns and intermittent renewables are leaving Europe exposed—only to fall back on one of the dirtiest and least sustainable fuels.

The Irony of a Green Collapse

Here’s the tragic core: efforts to phase out fossil fuels—often at the cost of nuclear decommissioning—have made Europe more fragile, not greener. Germany’s premature nuclear exit, green policy fetish, and reliance on renewables without proper backup capacity led to industrial decline and imports of coal-based wind turbine components from China  In the UK, expensive LNG imports have hamstrung heavy industry; steel production falters, business bankruptcies skyrocke.

All the while, the “green transition” depends heavily on subsidies and mandates—renewables get priority dispatch, despite lacking inertia, and profits for renewable operators are barely viable without these supports.

Conclusion: Coal’s Comeback – Wry, Grim, Inevitable?

Europe may well be hurtling back toward coal—not because of innovation, but under the weight of failed energy policy, shaky grids, and geopolitical isolation.

  • Russian gas wasn’t really cheap, and its myth masked deeper vulnerabilities.
  • Renewables without robust backup are fragile illusions, not anchors of sustainability.
  • Coal—lignite in particular—lurks as a last-resort fallback, especially for nations that once led energy reforms.

This is not a “green transition” but a reversal, propelled by miscalculation, rigid ideology, and the brutal physics of energy systems. The irony is bitter, the direction unmistakable, and the cost – economic, environmental, and societal – immeasurable.

155. The Decline of Surplus Energy and What it means for Prosperity: Part Four

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From Top-Down Control to Grassroots Evolution

In Part One, we saw that the decline of surplus energy will steadily shrink prosperity and reduce the capacity of our current economic system to deliver the lifestyle we have come to expect. In Part Two, we explored why localism — shorter supply chains, stronger community economies, and decisions made closer to home — is the only sustainable response. Part Three described how localism could take shape in practical terms: in food, housing, energy, work, and governance.

Part Four brings these threads together with one critical insight: real change will not start at the top. It will begin in the streets, the villages, the households, and the informal networks where people live their daily lives. The evolution to localism will be led from the bottom up.

1. Why Change Starts with People

Centralised systems, built on abundant cheap energy, are already struggling to respond to today’s challenges. As prosperity contracts, national institutions will find it harder to maintain the breadth of services, infrastructure, and supply chains we once relied on.

People and communities will adapt first because they have to. When supermarket ranges shrink, people will grow food. When heating bills rise, they will share resources. When public services become unreliable, they will build informal networks of care and exchange.

This is not rebellion — it is necessity. Localism will grow because it works when larger systems falter.

2. The Role of Grassroots Action

We are already seeing the early signs of this shift:

  • Community gardens, allotments, and shared kitchens emerging in towns and villages.
  • Repair workshops replacing throwaway consumption.
  • Informal service exchanges — neighbour helping neighbour, often outside the formal economy.
  • Local food networks and direct farm-to-household schemes bypassing centralised distribution.
  • Small-scale renewable energy projects designed and owned by communities.

These are not waiting for government permission. They happen because people see gaps and fill them. Each small step strengthens resilience. Each success inspires others. Localism spreads not by decree, but by demonstration.

3. A New Role for Top-Down Institutions

As grassroots initiatives grow, the role of central and local authorities changes fundamentally:

  • From control to support.
  • From planning first to responding first.
  • From enforcing uniformity to enabling diversity.

Communities will develop solutions suited to their own resources, geography, and needs. The task of councils, planners, and national government is not to dictate those solutions but to remove barriers, offer practical help, and connect good ideas so they can spread.

This is the revolution: a shift from top-down control to grassroots evolution.

4. Why Ownership Matters

People are far more likely to support and sustain changes that they believe are theirs. Top-down plans, however well intentioned, often fail because they feel imposed. Bottom-up action succeeds because:

  • It grows from lived experience and local knowledge.
  • It builds trust within communities.
  • It encourages creativity and flexibility.
  • It develops informal systems that complement, not compete with, formal systems.

Localism works because it places control where people already live, work, and care — close to home.

5. A Grassroots Evolution, Not a Crisis Response

The danger, as outlined in Part One, is that we delay until breakdown forces sudden, chaotic change. But there is another path: early, steady grassroots evolution.

If communities take the lead now:

  • Food systems can localise before supermarket shortages make it urgent.
  • Shared energy schemes can be in place before blackouts become common.
  • Repair and reuse networks can grow before replacement costs become unbearable.
  • Skills can be built while there is still time to prepare the next generation.

This is about being ahead of the curve, not behind it.

6. The Shape of the Future

If we succeed, the UK of the future will feel smaller, slower, and closer to home. But it will also feel more secure, more connected, and more meaningful:

  • More food grown and processed locally.
  • More energy generated and managed by communities.
  • More informal economies where people trade time, skills, and care.
  • Less dependency on fragile global systems.
  • Stronger local identity and greater trust between neighbours.

Top-down systems will still exist, but they will become servants rather than masters — responding to, supporting, and amplifying the innovations of grassroots communities.

Conclusion

Parts One to Three showed why localism is inevitable: declining surplus energy, shrinking prosperity, and the need for shorter supply chains and stronger communities.

Part Four shows how it will happen:

  • Change begins with people, not planners.
  • Localism spreads by action, not instruction.
  • Authorities succeed when they enable rather than control.

This is not a managed transition imposed from above. It is an evolution driven by households, neighbourhoods, and communities taking ownership of their future — step by step, choice by choice.

The question is not whether this happens, but how smoothly. If we encourage grassroots action and allow people to lead, we can make the shift to localism steadily, creatively, and together.

140. Post-Growth Social Realignment

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In today’s post by Tim Morgan he concludes that in our situation, intensifying competition for dwindling resources is likely to drive a disorderly rather than a structured and organised transition to a post-growth social realignment.

Not sure what a post-growth social realignment entails, I sought the advice of ChatGPT:

A post-growth social realignment refers to the broad and often fundamental changes in society that occur when an economy moves away from the goal of continuous economic growth and begins to prioritise well-being, sustainability, and resilience instead. This shift affects not only economic policy but also cultural values, social structures, and political power dynamics.

Key elements of a post-growth social realignment:

  1. New values and priorities
    • Societies begin to value quality of life over quantity of goods.
    • Success is measured less by GDP and more by things like health, community strength, environmental integrity, and time affluence (free time).
  2. Restructuring of work and livelihoods
    • Paid work may become less central; informal work, care work, and community activities grow in importance.
    • More people might work part-time or in subsistence, local, or cooperative economies.
  3. Decentralisation and localisation
    • Power and resources may shift from national or corporate centres to local communities.
    • Local food, energy, and social networks become more important as globalised systems contract or prove unreliable.
  4. Change in consumption patterns
    • Reduced emphasis on material consumption and status goods.
    • Simpler lifestyles, reuse, repair, and local exchange are favoured.
  5. Social and political shifts
    • Governments and institutions may be forced to adapt by supporting more equitable resource distribution, local decision-making, and ecological limits.
    • New alliances form around common interests in health, fairness, environment, and security.
  6. Redefinition of prosperity and progress
    • Prosperity is seen as the ability to live well within ecological limits.
    • Progress is measured by regeneration, not expansion.

In short, a post-growth social realignment describes how societies reorganise themselves socially, politically, and economically when the underlying assumption of infinite growth is abandoned. It is both a consequence of ecological and economic necessity and a conscious reimagining of what a good life and fair society look like.

139. Stagflation in a Shrinking Economy: What It Means – and What We Can Do About It

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We’re entering unfamiliar territory.

Across the UK, people are noticing that life is getting harder in ways that don’t make sense if you’re still thinking in terms of normal economics. Prices are rising, but the economy isn’t booming. Wages are flat or falling behind. Public services are creaking. And while government figures talk about recovery, it doesn’t feel like recovery for most of us.

What we’re living through is stagflation – a mix of stagnation and inflation – but with a new twist: it’s happening in an economy that’s no longer growing at all. In fact, in many places, the economy is quietly shrinking.

What is stagflation?

Stagflation used to be rare. Economists once believed that if inflation rose, it meant the economy was overheating. However, we are now witnessing a simultaneous rise in prices and decline in living standards.

In plain terms, that means:

  • Your bills go up, but your pay doesn’t.
  • Jobs become harder to find or more insecure.
  • The weekly shop gets more expensive even as the packets get smaller.
  • Councils cut services while tax rises eat into your pension or take-home pay.

The causes are complex, but the direction is clear. The old model of growth, based on cheap fossil fuels, mass consumption, and global trade, is no longer effective. The government’s response so far has primarily involved printing money, raising interest rates, and hoping for the best.

What does this mean for ordinary people?

It means life is going to feel tougher, especially for those on lower or fixed incomes. And it also means that many of the systems we’ve relied on – housing, healthcare, transport, and food – will become less dependable over time.

You may already feel it: buses disappearing from rural routes. GP appointments are becoming harder to book. Rent is rising faster than wages. Local shops are closing. Savings are being eroded.

For families, it often means saying no to things that used to be normal – holidays, heating, hobbies. For younger generations, the promise that hard work will bring stability is eroding.

But there is another story here. One that doesn’t just leave us as victims of a failing system.

Because when the formal economy retreats, the informal economy begins to matter more.

How we respond: seven local actions that matter

Stagflation is serious. But it doesn’t mean helplessness. In fact, it’s a wake-up call – a chance to rethink how we live and support each other. Here are seven ways that communities and households can respond:

1. Grow more of what we eat
With food prices rising and extended supply chains at risk, local food matters more than ever. Home gardens, community plots, and small farms can make a difference – and reconnect people with land and seasons.

2. Rebuild informal networks
Mutual aid isn’t just for crises. Time banks, skill swaps, neighbour help – these are the lifelines of a post-growth world. They don’t show up in GDP, but they keep communities alive.

3. Waste less, share more
From mending clothes to swapping tools, a culture of resourcefulness is re-emerging. Frugality, once looked down on, may become a new kind of wealth.

4. Local energy resilience
Energy bills will keep rising. Local solar panels, shared heating schemes, and community energy cooperatives can give people more control and buffer against shocks.

5. Trade skills, not just money
When cash is tight, practical skills become currency. Fixing bikes, making clothes, cooking, growing – these are the trades of a more grounded, resilient economy.

6. Reclaim local decision-making
Councils and parishes need the power to act locally, not just carry out orders from above. When central systems falter, it’s the neighbourhood that holds things together.

7. Talk honestly about the future
This isn’t just a blip. It’s a turning point. And we need to be honest about that – with our families, our communities, and ourselves. A smaller economy can still be a good society – but only if we build it deliberately.

In summary

Stagflation in a shrinking economy may sound like something only economists worry about. But for ordinary people, it’s already shaping the way we live. The challenge is real – but so is the opportunity.

We cannot return to the old model of endless growth. But we can go forward into a different kind of economy – one that values people over profits, place over global reach, and resilience over illusion.

And that begins not with waiting for someone else to act – but with small, determined steps close to home.

138. Rachel Reeves’ 2025 Mansion House speech

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Rachel Reeves’ 2025 Mansion House speech largely focuses on revitalising the UK economy through deregulation, encouraging private investment, and unlocking pension wealth—especially to boost financial markets and infrastructure. It’s a bold, pro-City, pro-growth agenda rooted in the mechanisms of the existing industrial economy. Here’s a review by ChatGPT of how her proposals relate to the prospects for localism:

🏘️ Implications for Localism: Mixed to Weak Support

  1. Top-down framing and centralised delivery

Reeves’ plan is a state-led strategy, with regulatory change intended to stimulate investment flows through large-scale institutions. Her framing of “unlocking growth” is couched in terms of:

  • Capital markets
  • Big pension funds
  • Large infrastructure projects
  • City of London reforms

These are all centralised, top-down mechanisms, with little mention of the everyday informal economy, community autonomy, or local economic resilience—the cornerstones of localism.

Conclusion: The philosophy underpinning her speech reinforces centralisation and scale, not subsidiarity or community control.

  1. No mention of community wealth-building or fiscal devolution

There was:

  • No reference to local government funding
  • No suggestion of devolving fiscal powers
  • No plans to empower local councils or communities to lead investment or planning

Reeves referred to the Treasury’s Green Book reforms in passing, but this signals only minor tweaks to capital allocation—not a radical shift toward place-based economics.

Conclusion: There’s no structural pathway offered for localism to flourish financially or institutionally.

  1. Opportunities missed: Pensions and ISAs

Reeves proposes unlocking DC pension funds and ISAs to flow into:

  • Long-Term Asset Funds (LTAFs)
  • National infrastructure
  • Growth-oriented UK equities

But there’s no mechanism or encouragement for local investment vehicles, such as:

  • Local co-ops
  • Community land trusts
  • Mutual credit systems
  • Local housing or energy schemes

Even her nod to a revived “Tell Sid”-style retail investment campaign suggests nostalgia for privatisation, not a reimagining of place-rooted finance.

Conclusion: Her proposals exclude the local, informal investment ecology needed for bottom-up economic transitions.

  1. Reinforcing the formal economy at the expense of the informal

Reeves is clear: she wants to roll back post-crash regulations in order to stimulate the formal economy. But in a shrinking economy, where discretionary consumption, tax yields, and investment are all declining, her strategy effectively doubles down on industrial-era economics.

There’s:

  • No mention of rising informal work or community economies
  • No acknowledgement that much of the UK is already post-industrial and operating semi-informally
  • No plan for empowering hyperlocal production, repair, food, housing, or service systems

Conclusion: Her model assumes re-expansion is possible; it doesn’t accommodate managed contraction or local self-reliance.

  1. Language of innovation, but not the right kind

Reeves says red tape is a “boot on the neck of innovation”—but her definition of innovation is squarely financial and technological. There’s no vision of socio-ecological innovation:

  • No support for commons-based systems
  • No framework for low-carbon, high-employment community farming
  • No acknowledgment of local currencies, LETS, or mutual aid systems

Conclusion: Innovation is seen as a return to market liberalism, not adaptive change to meet ecological and economic limits.

137. Key Proposals of the Government’s Health Plan Relating to Social Care

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1. Closer Integration with Health Through ICSs

  • Integrated Care Boards (ICBs) will work with Integrated Care Partnerships (ICPs), where local authorities are equal partners alongside the NHS.

  • The plan promotes “joined-up care” between the NHS, social care, and community services—particularly for elderly and disabled people.

  • It seeks shared accountability across health and social care services for outcomes.

Implication: Local authorities will still manage social care, but their services are expected to be coordinated with NHS provision at the ICS level.

2. Single Shared Plans

  • ICSs must produce “Joint Forward Plans”, co-produced by the NHS and local authorities, setting out shared priorities across health and care.

This supports localism, as decisions are expected to be tailored to local needs and made collaboratively.

3. Workforce and Digital Support

  • The plan aims to improve career pathways across health and care, potentially facilitating smoother transitions between the NHS and care homes or domiciliary care.

  • Promises improved digital infrastructure to allow shared records and more coordinated care.

However, it falls short of funding or reforming social care salaries, which are determined by local care providers and councils.

4. Prevention Focus

  • It highlights that better social care can reduce demand on NHS services (e.g., through reduced hospital admissions and delayed discharges).

  • Local authorities are encouraged to focus on housing, community resilience, and rehabilitation, though no new funding streams are clearly allocated.

Limitations and Unanswered Questions

Issue Comment
Funding No significant new money for social care has been announced. Local authorities continue to face pressure from growing demand.
Workforce Pay and Conditions NHS reforms don’t extend to care workers, many of whom earn minimum wage under private or local authority contracts.
Governance While local authorities are “partners” in ICSs, the NHS retains substantial control. It’s not clear whether councils can veto or redirect ICS decisions.
Autonomy The plan encourages partnership but does not shift any decision-making powers to local government, thus not expanding localism in social care.  Instead, in effect, the NHS will gain control of social care, with local authority services forced to follow their lead.

136. The Government’s 10-Year Health Plan (“Fit for the Future”) and how it aligns with localism

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The Alignment of the Plan with Localism

  1. The Shift to Community-Based “Neighbourhood Health Centres”
    • The plan proposes establishing 250–300 local health hubs—bringing diagnostics, social support, mental health, and GPs into communities—aiming to wrap health services around patients’ local needs.
    • This mirrors localism services designed and delivered closer to where people live.
  2. Integrated Community Prevention Efforts
    • Measures like “Prevention Accelerators” run at the Integrated Care Board (ICB) level target local issues such as obesity and diabetes.
    • Devolving responsibility for these initiatives locally supports community-tailored approaches.
  3. Commitment to Public Engagement
    • The plan was co-developed through “Change NHS”, with over 250,000 contributions from the public, staff, and partners.
    • Community input in design promotes the empowerment of localism.

Tensions with Localism

  1. Centralisation of Governance
    • It involves abolishing NHS England and funnelling power back to Whitehall.
    • A strong central authority will conflict with ambitions to transfer real power to local areas.
  2. Performance Targets & Budget Caps
    • Centralised budgets, patient satisfaction metrics, and caps on local spending will limit local discretion.
    • True localism requires space for communities to make uneven trade-offs based on their own priorities, rather than complying with central policies. Does the plan do this?
  3. Funding & Capacity Constraints
    • The plan includes a £29–52 billion top-up,
    • It lacks clarity on workforce and premises funding.
    • Without local financial levers, communities will struggle to shape services to local needs.

Summary Table

Localism PrinciplePlan’s StrengthsShortcomings
Community deliveryBudget caps, performance targets, and central oversightCentral governance will be able to override local initiatives
Local decision-making powerICB-level programmes, co-designBudget caps, performance targets, and central oversight will be imposed on local areas
Capacity for local variationPrevention Accelerators tailored to local needsUnclear ring-fenced funding and infrastructure support
Genuine devolution of authorityPublic co-design, integrated care structuresAbolishing NHS England will centralise power even more

Verdict

The plan partially aligns with localist ideals, but the government will have the power to dictate policies and programmes to be implemented locally.:

  • Pros: A strong drive to move care into neighbourhood settings, empower local prevention, and may involve the public in co-design.
  • Cons: Centralisation through governance changes, financial constraints, and top-down accountability systems will constrain genuine local control.

Key Risks

  • Governance Shift: Merging NHS England into central government will compromise local autonomy.
  • Funding Without Devolution: Money Matters—but without local control of budgets, local areas can’t adapt services flexibly.
  • Tokenistic Local Input: Public engagement is good, but without formal power transfer, it risks being superficial.

Conclusion

The plan appears to make strides toward localism, especially in service delivery and patient involvement. However, those gains will be undermined by centralised governance, funding and accountability.

Whether these reforms can be considered localist depends on whether local structures are empowered not just to consult, but to make decisions. Which is unlikely.

It is a plan to decentralise the health service in a way the idea was discussed 50 years ago. In other words, extending the existing centralised system beyond its current remit to enable top-tier leaders to gain more control over the NHS.

The proposals may prove to be irrelevant if the natural evolution to localism overrides the attempt to plan a growth-based post-industrialism.