Tuesday, August 18, 2015

Historically, who wins when the economy goes into the septic tank?

Historically, who wins when the economy goes into the septic tank?

I am not talking about the one-percenters or the 0.1-percenters.  I am talking about the folks you work with, the folks in your neighborhood, the parents of your kid's friends, the folks you rub elbows with at church.

And "goes into the septic tank" is way beyond going into the toilet.  I am not talking about a 25% "correction" in the stock market.  I am discussing those times when the formal economy simply stops working.

The book When Money Dies is a detailed study of the Weimar Republic and the hyperinflation they experienced in the early 1920s.  The book suggests that the "winners" are people who can manufacture or grow products or services that meet primary needs using local or found materials.  The book has many stories of the formerly wealthy being strip-mined of their wealth...their fur coats, carpets, furniture, grand pianos....for bags of potatoes or fifty pounds of grain.

Nothing to Envy is a book that looks at North Korea.  North Korea experienced a one-two punch when the Soviet empire collapsed in the same time period as a significant drought.  The economy crashed when power plants and pumps in the coal mines ran out of fuel and lubricating oils.  North Korea had coal, but no way to extract it after the mines flooded.  Loss of the Soviet empire meant the loss of the markets for their products and the loss of the hidden subsidies.

One North Korean family was able to keep their head above water because they had a small mill for grinding grain.  Other families would bring grain and fillers.  First the grain would be ground and then enough filler was ground to bring the level up to the amount necessary to make the day's bread or noodles.  Fillers were often corn cobs and husks but virtually anything could be pressed into service.  Another family made "cookies" and sold them for lunches.  The "cookies" made with grain, filler and any sweetening that could be found.  A third family survived because one family member traveled on business and filled her suitcase with rice before returning home.  Another family survived because family members in Japan mailed them high-performing, modern seeds every spring.

Interesting article HERE that explores this issue.

Key points:  Inputs are local or found materials.  Outputs are basic needs.

Examples (hat tip to Peter Grant who contributed ideas for this list):
Fire wood
Manufacture food dehydrators
Dehydrate seasonal foods
Gardens
Fruit trees
Propagate garden plants or fruit trees
Seeds
Knife sharpening
Chickens and ducks
Fish
Puppies (dog breeding)
Trapping mice
Repair/mend clothing
Shoe and glove repair (you will be stunned to learn how fast these wear out when you burn 3000 Calories a day working)
Tanning leathe
Laundry (incredibly labor intensive without automatic washers)
Make dwellings more resistant to break-ins
Awnings for windows
Reworking fixed windows so they can be opened
Screen repair
Vehicle repair
Bicycle tire repair
Recycle containers
Make carts and wheel barrows
Fence building
Trapping pests
Making fly swatters
Make cheese/yogurt
Blacksmithing
Preaching, neighborhood church
Resale shop
Sell books or for-profit library
Recharge cell phone batteries
Start a newspaper or swap bulletin board
Basic wound care
Home brew
Distilling
Grow and cure tobacco or other smokable products
Taxi service
Child care

This list is not exhaustive, it is a thought starter.  Your ideas will be better than my ideas.

5 comments:

  1. Joe, this is a really excellent topic.
    I spent most of my working life building things, mostly luxury items from wood. Yacht interiors, etc. A few years ago I needed to repair a piece of machinery, and decided to buy a lathe and a mill. It was a long way around a simple repair, but I had to wait for the machinist to find time to do it.. So I found some used metalworking equipment and started a process of self education. The learning resources available now on the web are amazing- for example, there are thousands of retired people who have spent their entire working lives doing the most demanding machinist work imaginable, who LOVE to pass on their knowledge to others- in a sense, it is both an online training course and a validation of all those hard won skills-there is little more satisfying to an old hand than knowing they are still appreciated and genuinely valuable to society.
    My backup plan for societal disarray to to take Marx at his word and bring the tools of production into the hands of the people- my hands. As long as I can fix and make things I can swap for goods. I told my (pre-zerocare) Doc. that someday he might be trading stitches for a chicken. Same thing.

    It is a very sad and frightening fact that there are a lot of people who have never produced anything-and really never even contemplated where or how things get made or grown. This applies to a lot of middle class paper shufflers as well as to the welfare class. They will know of only one way to obtain what they need in lieu of trade. Force. I suspect there will be a rapid sifting in response.

    As far as a list- food trumps all, except perhaps medical care when the condition is dire.



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  2. The ability and skill to have a barterable skill will be a good thing... My great-great grandfather was a doctor in the 1850s in Louisiana. He kept food on the table through barter for a number of years.

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  3. The accounts I have read of places under extreme duress- Sarajevo during the war, Japanese civilian prison camps, etc indicate small luxuries were highly sought after. Soap, makeup,chocolate, cigarettes, etc. It seems when things go sideways folks need a refuge and a little place inside where they can pretend, even for a short while, that things would return to normal.

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