Saturday, July 29, 2023

Saturday Snippet: Self-reliance in history and today, and what it implies


We've met Charles Hugh Smith in these pages many times.  He's an insightful and incisive commentator on our economic scene, looking behind the obvious to examine the factors underlying developments and their implications for individuals and communities.

Last year he published a short book titled "Self-Reliance in the 21st Century".

The blurb reads:

Just as no one was left unaffected by the rise of globalization, no one will be unaffected by its demise. The only response that reduces our vulnerability is self-reliance.

When Ralph Waldo Emerson wrote his famous essay Self-Reliance in 1841, the economy was localized and households supplied many of their own essentials. In our hyper-globalized economy, we’re dependent on distant sources for our essentials.

Emerson defined self-reliance as being our best selves—thinking for ourselves rather than following the conventional path. Self-reliance in the 21st century means reducing our dependency on fragile supply chains and becoming producers as well as consumers.

Self-reliance is often confused with self-supporting (making enough money to support yourself) and self-sufficiency—the equivalent of Thoreau’s a cabin on Walden Pond. But self-reliance in the 21st century isn’t about piling up money or a cabin in the woods; it’s about humanity’s most successful innovation: cooperating with trustworthy others in productive networks.

This book explores the mindset of self-reliance and 18 principles that advance self-reliance in the 21st century.

It's an interesting book, summarizing in a concise, readable way the dilemma facing many of us in these troubled times.  How can we secure ourselves and our families against the vicissitudes of modern living?  How can we become more independent of often disrupted supply networks, and more self-sufficient in terms of our day-to-day needs?  Is "prepping" (physically, mentally, spiritually and societally) not just viable, but necessary - and if so, to what extent?

Here are the opening sections of the book.

The Difference Between Self-Reliance in 1841 and the 21st Century

What is self-reliance?

Ralph Waldo Emerson’s advice in his 1841 essay Self-Reliance still rings true today: “Be yourself; no base imitator of another, but your best self. There is something which you can do better than another.”

For Emerson, self-reliance means thinking independently, trusting your own intuition and refusing to take the well-worn path of conforming to others’ expectations.

This celebration of individualism is the norm today, but it was radical in Emerson’s more traditionalist day.  What’s striking about Emerson’s description of self-reliance is its internal quality: it’s about one’s intellectual and emotional self-reliance, not the hands-on skills of producing life’s essentials.

Emerson doesn’t describe self-reliance in terms of taking care of oneself in practical terms, such as being able to build a cabin on Walden Pond and live off foraging and a garden like his friend Thoreau. (The land on Walden Pond was owned by Emerson.)

Emerson did not address practical self-reliance because these skills were commonplace in the largely agrarian, rural 1840s. Even city dwellers mostly made their living from practical skills, and the majority of their food came from nearby farms. (Imported sugar, coffee, tea and spices were luxuries.)

The economy of the 1840s was what we would now call localized: most of the goods and services were locally produced, and households provided many of their own basic needs. Global trade in commodities such as tea and porcelain thrived, but these luxuries made up a small part of the economy (one exception being whale oil used for lighting).

Even in the 1840s, few individuals were as self-sufficient as Thoreau.  Households met many of their needs themselves, but they relied on trusted personal networks of makers and suppliers for whatever goods and services they could not provide themselves.

Households sold their surplus production of homemade goods and family businesses offered small-scale production of specialty goods (metal forging, furniture, etc.) and services (printing, legal documents, etc.).

For example, Thoreau’s family business was manufacturing pencils and supplying graphite (pencil lead). Before he took over this business on the death of his father, he earned his living as a surveyor.

Households obtained what they needed from local networks of suppliers who were known to them. If some item was needed from afar, the local source had their own network of trusted suppliers.

The government’s role was also limited. The government provided postal, judicial and basic education systems and collected tariffs on trade, but its role in everyday life beyond these essential services was modest.

The conditions of Emerson and Thoreau’s day—localized hands-on self-reliance was the norm and the elevation of the individual was radical—have reversed: now the celebration of the individual is the norm while few have practical skills. Our economy is globalized, with few if any of the goods and services we rely on being sourced locally. We rely on government and corporations for the essentials of life. Few of us know anyone who actually produces essentials.

Our primary means of obtaining the staples of life is shopping because producing basics ourselves is difficult compared to getting everything we need from global supply chains.

Emerson took the practical skills of self-reliance for granted because these skills were the bedrock of everyday life.  Now skills have become specialized: we gain narrow expertise to earn our living and only hobbyists develop multiple skills.

What is self-reliance in the 21st century?

Some may feel that having a job--being self-supporting--is self-reliance, but relying solely on goods and services from afar isn’t self-reliance. Should a few links in those long supply chains break, the entire chain collapses and we’re helpless.

Money only has value when it’s scarce. When money is abundant and essentials of life are scarce, money loses value. When supply chains break down, money is a measure of our helplessness, not our self-reliance.

The inner self-reliance Emerson described as being our best selves remains essential, but the material-world skills of self-reliance have atrophied. We rely on government and long supply chains for our necessities without understanding the fragility of these complex systems.

In the 21st century, even more than in the 1840s, self-reliance doesn’t mean self-sufficiency. Even Thoreau used nails and tools produced elsewhere. Building a cabin on a remote pond isn’t practical for most of us, and even Thoreau re-entered conventional life after two years.

What self-reliance means in the 21st century is reducing our dependence on complex systems we have no control over. This means reducing the number of links in our personal supply chains and reducing our dependence on goods and services from afar by 1) consuming less and eliminating waste and planned obsolescence; 2) learning how to do more for ourselves and others so we need less from the government and global supply chains; 3) relocalizing our personal supply chains by assembling trusted personal networks of local producers and 4) becoming a producer in addition to being a consumer.

Just as Emerson noted that self-reliance requires being our best self--something no one else can do--no one else can chart our course to self-reliance. Our path must be our own, tailored to our unique circumstances.

Self-reliance in the 21st century means moving from the artifice of trying to appear grander than our real selves in social media to the authenticity of being a producer anchored by a self-reliance that no longer needs the approval of others.

Here are some examples of what I mean by self-reliance in the 21st century.

By becoming healthy, we need fewer (ideally zero) medications that are sourced from afar and we’re less dependent on costly medical interventions.

By becoming a producer in a local network, we reduce the number of links in our supply chain from many to a few.  If we trade for food from local producers, there are only a few links in that supply chain. If we grow some of our own food, there are zero links in that supply chain.

By eliminating waste, we reduce our dependency on distant sources of food, energy and water—what I call the FEW essentials. If we eliminate 40% of our consumption, we’ve reduced our dependency on supply chains we don’t control by 40%.

By buying durable products that we can repair ourselves, we reduce our dependency on the global system of planned obsolescence and waste that I call the Landfill Economy. The less we need and the less we waste, the lower our dependency on fragile supply chains and the greater our self-reliance.

By moving to a location near fresh water, food and energy, we reduce our exposure to the risks of long supply chains breaking down.

The more we provide for ourselves, the less we need from unsustainable systems we don’t control.

Self-reliance has many other benefits. Self-reliance gives us purpose, meaning, goals, fulfillment, enjoyment and the means to help others.

Specialization and Fragility

Our economy is optimized (i.e., streamlined) for specialization because that’s how our economy became more productive. By mastering one skill, each worker can produce more than non-specialists. This is one of the key insights of Adam Smith’s Wealth of Nations, published in 1776: the comparative advantages of specialization increase the wealth of both buyer and seller.

As the global economy has become more cost-sensitive, specialization has increased. Enterprises want highly productive workers and this requires specialization.

The higher our skill, the more valuable we are and the more we earn. The financial incentives favor specialization rather than broadening our real-world skills.

The financial incentives for developing real-world self-reliance are marginal. If repairing a toaster takes two hours and we’re paid $25 an hour at our job, that’s $50 of time. If a new toaster costs $25, why bother learning how to repair the broken one? Hobbyists may repair things, but for most people, it makes sense to devote their time to making money and toss the broken toaster in the landfill.

This is why we have a Landfill Economy.  We measure prosperity by how much gets tossed in the landfill and replaced with something new. If we measured prosperity by how long products last and how easy they are to repair, we’d have much different incentives and a much different economy.

Valuing everything in terms of time and convenience makes sense in an era of endless abundance but it breaks down in an era of scarcity. If things are no longer cheap and accessible with an on-screen click, then the calculation of what’s valuable changes.

The conveniences of the 21st century come at a cost few recognize: our dependence on long supply chains that are inherently fragile. These chains of specialized production and distribution we depend on only function if every link works perfectly, but things are no longer working perfectly. These long supply chains are decaying right before our eyes.

The era of abundance has ended and we’re not prepared for an era of scarcity.

Since few of us know anyone who produces anything tangible, our social networks are completely disconnected from the production of life’s essentials. We’re completely dependent on products made thousands of miles away delivered by supply chains powered by diesel.

As these systems decay and scarcities drive prices higher, the incentives change. What becomes convenient and low-cost is producing essentials within our own local networks. Specialization will still be valuable in terms of producing surplus which can be traded or sold locally, but specialization is no substitute for practical knowledge.

Abundance gave us the time and means to express our uniqueness on social media. In a world of scarcity, our uniqueness will find expression in becoming productive in a network of other producers.

Self-reliance in the 21st century demands both the inner strengths Emerson promoted and the real-world skills and trusted local networks he took for granted that we have lost.

Many people believe that scarcities are temporary and abundance will soon be restored. They are mistaken, and it’s important to understand why.

What Are the Essentials of Human Life?

Before we address scarcity, we need to define essentials. There are two ways of thinking about the essentials of human life: one is psychologist Abraham Maslow’s hierarchy of needs, which many visualize as a pyramid of physiological needs as the base, with the higher levels being security and love, belonging and self-worth, and what Emerson called being our best selves, what we now call self-actualization.

In this approach, food, water, clothing, shelter and energy are the basic physiological needs without which we perish. Above basic survival, we need safety / security and belonging to a supportive family and group. Above those basic emotional needs, we need self-respect. At the top of the pyramid is becoming our best selves via self-knowledge and self-expression.

The second approach is to look at the complex system that provides our basic needs as an iceberg where 90% of the system is not discernable.  For example, we think of food being available at supermarkets without grasping the immense system that grows and harvests the grains, raises and slaughters the animals, processes and packages all these products and delivers them thousands of miles to markets near us. The systems that provide us with fresh water, clothing, shelter and fuel are equally complex and costly.

In other words, our food supply doesn’t just rely on farms and farmers. It relies on roads and diesel fuel, because the vast majority of our food travels hundreds of miles on trucks. It depends on spare parts being available for tractors, trucks, aircraft and many other machines such as freezers, as well as parts for the oil wells, pipelines and refineries that provide diesel fuel for the tractors and trucks.

The grapes flown in from thousands of miles away require jet fuel, air cargo containers, refrigerants and spare parts for jet engines.

Many of our basic essentials come from overseas: fabric and clothing, minerals such as cobalt and the materials needed to make pharmaceuticals.

These long supply chains need millions of machines to work perfectly to function. All these machines depend on a vast industrial base for their manufacture, maintenance and operation.

Compare these fantastically complex and costly 21st century systems without which the basics of human life disappear with the sources of essentials in Emerson’s 19th century America. Food was grown within walking distance even for city-folk, clothing was often sewn at home and shelter was built out of local materials.

If we look at these systems as networks with nodes and connections, we ask: how many intermediary links are there between the source of the food and our table? In the 19th century, there was often no intermediary link at all: the harvest was turned into food within walking distance. Now there are dozens of links in every chain connecting us to the sources of what we need to survive.

If even one link in those chains fails, the chain is broken.

What are the essentials of human life nowadays? Food, water, clothing, shelter and energy, and all the parts of the vast industrial system that processes and delivers these essentials to us.

The greater our dependence on long, complex chains, the lower our self-reliance because we cannot possibly influence these chains. If they break, we’re helpless. Our only leverage is to reduce our dependency on these chains and reduce the number of intermediary links between the source of essentials and our household.

Reducing dependencies and shortening our supply chains are the core principles of self-reliance in the 21st century.

We cannot reduce our dependency on complex, costly supply chains to zero, but we can reduce our dependency in consequential ways. Which is preferable: to be 100% dependent on long supply chains for food, or source half of your food within walking distance? Which is preferable: to need 100 gallons of fuel a month just to get by, or 10 gallons?

Let’s look at why self-reliance will become increasingly valuable as unsustainable systems start breaking down.

Global Disruptions Are Affecting Everything and Everyone

The conventional media has a vested interest in maintaining confidence in the status quo, and so blunt realities are softened into acceptable pablum. For example, globalization is presented as win-win for everyone, when the blunt reality is the benefits flowed to the few at the expense of the many: American corporate profits soared from less than $700 billion in 2002 just after China entered the World Trade Organization (WTO) to $3.4 trillion annually in 2022.

While America’s economy (GDP) rose 2.3-fold in those 20 years, corporate profits soared almost five-fold. (Source: St. Louis Federal Reserve Bank.)

This astounding increase in corporate profits was not a happy accident.

Corporate profits soared because Corporate America (along with other global corporations) shipped production to China and other low-wage, lax environmental standards nations, cutting costs and quality while keeping prices high.  Pressured by globalization, the wages of American workers lost ground.

Globalization was never win-win; it was win-lose: those reaping the immense profits won and everyone else lost. Yes, the cost of a few products dropped, but the quality dropped even more. Corners were cut to boost profits and so the poor-quality product soon ended up in the landfill.  Before globalization, products lasted decades; after globalization, they only last a few years and have to be replaced. How is that a win for consumers?

Now the boom in China is unraveling, and once again we’re not being told the blunt reality: corporations are shifting production out of China because the changing political and economic landscape is threatening their fat profits.

The dynamics disrupting the global economy are presented piecemeal, when in fact each source of disruption reinforces the others.

Once we understand the self-reinforcing nature of these disruptions, we realize the global system is changing permanently and these changes will affect everyone. These disruptions are not temporary or trivial. They are long-term and cannot be reversed, any more than time can be reversed.

1. Climate change.  Drought, flooding and extreme temperatures are disrupting agriculture and pushing habitable regions into being uninhabitable. Food will be scarce and expensive. (See the following section on the end of cheap food.)

2.  Disease and pandemics. Global air travel enables mutations and rapid spread of microbes.

3. Long supply chains. (See following sections.) These fragile chains are disrupted by pandemics, geopolitical conflicts, economic and labor turmoil and scarcities of essential commodities.

4. Domestic political turmoil. Global sources of disruption--soaring energy and food prices, hardship caused by climate change, financial bubbles popping--fuel political discontent.

5. Labor discontent. Demographics and labor shortages are pushing global wages higher; workers are demanding living wages, leading to strikes and other disruptions.

6. Depletion of cheap, easy-to-get resources.  If energy is still abundant, why are we drilling so deep in such inhospitable places and mining tar sands?  The low hanging fruit has been picked, what’s left is hard to get. This can’t be reversed.

7. War and conflict. Wars to control resources are disrupting supply chains and globalization. Wars are being waged on numerous fronts: cyber warfare, proxy warfare, Cold Wars, hot wars, rebellions, etc.

8. Unraveling of global finance.  Currencies, credit, risk and assets are all being repriced. Volatility is now the norm.

Everyone who is dependent on the global economy for goods, services and income has become dependent on a system that is unraveling. Disruptions in one region quickly spread, eventually affecting everyone. One domino topples a line of other dominoes that end up knocking down all the dominoes.

The idea that all these sources of disruption will go away and all the dominoes of global abundance can be set up again is not realistic.  What’s realistic is to start reducing our dependence on long supply chains by relocalizing our production of life’s essentials.  Since we can’t count on authorities being willing or able to move fast enough to matter, the best option is to relocalize our own supply chains and reduce our dependence on systems that are unraveling. The term that describes this is self-reliance.

The book goes on to analyze many areas where we can improve our self-reliance, and discusses how to go about it.  Interesting and recommended reading - and it's short (less than 100 pages), so it's easily digested.



Barbarus said...

Fortunately, he is overstating his case. Supply chain issues can be worked around by simple operation of the free market - which is of course the default of human affairs - or by intentional smuggling / sanctions busting if necessary (effective, as you have pointed out in regard to Russia and South Africa). Disease is, yes, a risk but not a new one; the same goes for political turmoil, strikes, etc. while climate change has turned out to be a paper tiger. In short, there is a lot of ruin in the global economy; it's not as fragile as it's being painted here.

That said, of course, there is a lot of ruin going on; a lot of crumbling away of systems and institutions. In large part this is because they are so taken for granted that nobody feels a need to look after them, and when they do fail it's usually somewhere else (as seen from Western civilisation - Ebola only happens in Africa, war in Eastern Europe and so on). That, itself, is probably the real trap; the system will carry on crumbling while western civilisation concerns itself with irrelevancies, until it all does come crashing down.

Anonymous said...

Sir, I totally agree with you. Mr. Smith is an astute observer and thinker that has pointed out many global flaws in the systems that we use to provide water, food, medical care, and the other necessities for ourselves, our families, and our communities. Like you, Mr. Smith, at ‘Of Two Minds’ blog, is a daily/weekly read for me as we travel the road of our collapsing society.

Anonymous said...

Thoreau was a hippie.

Anonymous said...

Thoreau lived just a couple of miles from Mom. I'm pretty sure she sent over a covered dish supper for her boy so he wouldn't go hungry.....

Anonymous said...

Thoreau’s mom did his laundry. I'm underwhelmed.

Sendarius said...

I have heard that argument many times before.

"If I get paid $25 per hour, then spending two hours (ie $50) to fix a $25 toaster is foolish."

There is a fundamental error in it, and that is this: Do you get paid $25 for EVERY hour you spend above the dirt?

If I take two hours from my paying job (and thus don't get paid that $50) to fix that $25 toaster, then, yes, I was foolish.

If however, I take two hours WHEN I WAS NOT WORKING AND THUS NOT BEING PAID, and use them to fix that toaster, it's a completely different story.

As an IT specialist, I get paid $80 to $100 per hour.
I just spent 100+ hours refurbishing a bathroom.
Did that COST me $10,000?
No, I SAVED more than that because I performed the work during UNPAID hours, and didn't have to pay tradesmen to do the work.

Michael said...

Specialization is for insects.

Robert Heinlein

I've been reading Smith for years. His message isn't to get specialized (and make money to pay others for all your needs) but to adopt the attitude of self-reliance in many skills.

To those that think Smith is alarmist about systemic failures please feel free to not build your reliance skills and growing groups of trusted friends that have skills you need around.

I have a buddy that has an old pickup truck rebuilt several times from the thrown away-totaled other pickup trucks around the area. He doesn't duct tape and Bondo but replaces and fabricates parts to weld-rivet into the repaired vehicle.

He is NOT Rich in dollars (and the taxes paid) but never lacks for anything he and his extended family needs. Even dental care was "paid for" by his hands on skills for the dentist.