Let them fail? I wish.

Douglas Rushkoff’s latest Arthur column has been making rounds in the blogosphere since it was posted yesterday. It’s a good read, but strikes me as naive for an old fogy like Rushkoff. I don’t have time to reply in depth, but briefly:

1. I question his claim that people made more money in the middle ages. Yeah, maybe if you landowner and not a serf. I think that was not the point of using this as an example, but it makes him sound like a silly back to the middle ages type.

2. It would be nice if it were a possibility to actually let the economy fail. But too many entrenched interests (backed up by guns and bombs) have too much riding on this. Just “letting it die” won’t be an option.

3. Even if it were, it wouldn’t be a very pleasant process (though it might be necessary to build something better). I think the financial sector does a lot more than Rushkoff is giving them credit for.

4. He’s assuming all trade can and should be local.

The real problem is how much we’ve come to rely on the FIRE sector of the economy – or actually, how much they’ve coerced us into relying on them. There are a number of movements afoot to create more resilient communities, less dependent on the FIRE sector, oil, and other things that exist outside the control of individuals. This is a good thing – but there are a few problems:

A. Will they be allowed to operate or will they be shut down by the police? Alternative currency is particularly vulnerable to government intervention. Grey water systems are illegal in most states and cities. And so on.

B. Can these systems be implemented fast enough to absorb the shock of the crumbling economy? Or will they be brushed aside by more aggressive, less democratic totalitarian movements?

C. Can they scale?

D. Can they avoid becoming just as corrupt as what preceded them?

Problems A. and B. are directly related to problem 2. above.

Solutions are always welcome at the Recession Hacking Wiki.


  1. B. Can these systems be implemented fast enough to absorb the shock of the crumbling economy?

    Scale is the monster that haunts my dreams of the future. The only answer the numbers ever give me is “No, not even remotely close.”

    His notion that this is some sort of “justice” really baffled me. Rich people are still insanely rich, and the worst of this crisis will be borne by those below and hovering above the poverty line — billions of humans who had nothing whatsoever to do with any of this.

    Systemic failure, even a cartoon version that leaves $0 in all of our bank accounts, still leaves us in a position where ruling class families and groups hold vast amounts of real resources: water, food, metals, factories, mines, hospitals, and of course private security forces. The power imbalance remains with or without money.

  2. Dr. Paul Proteus

    March 18, 2009 at 8:26 am

    “It would be nice if it were a possibility to actually let the economy fail.”

    The more relevant question is, can we let it continue?

  3. 4. He’s assuming all trade can and should be local.

    Grapes from Chile, catfish from China, onions from Mexico. Generally, a lot of the stuff we consume can be obtained locally or within a few hundred miles. Wal-Mart is NOT the solution to lower prices, the Wal-Marts of the world are the problem. Transition Towns are a great example of better living: http://transitionculture.org/shop/the-transition-handbook/ here is the place to start.


  4. @Justin Those points were written a little to hastily. I should have expanded a bit. The “shock” of disappearing luxuries for the middle class isn’t that big a deal – people are actually able to cope with this pretty quickly. But I don’t know what would happen if local governments – and more importantly, local/regional utility companies, suddenly had their lines of credit vanish. Or transport/logistics companies lost all of their credit as well. Big problems, I expect.

    @Mark Transition Towns is a great movement. I’m working with Transition PDX on SEECamp right now.

    There are many things that can and should be produced and traded locally – but what about everything else? There’s coffee, but as much as it would hurt, I could technically live without it. But what about: pharmaceuticals (or the chemicals to manufacture them), medical equipment, plastics, iron ore, silicon, public transportation vehicles and their parts… different cities will have different needs.

    Last year, I caught tuberculosis (right here in Portland, OR) – something that a few decades ago was a life threatening disease. Today, my girlfriend is getting a preventative surgery involving lasers to prevent a life threatening disease. There would be some hope for me using natural antibiotics – garlic and/or certain types of mushrooms. My girlfriend wouldn’t have been so lucky. So I’m quite partial to non-local trade. We can do a lot more to insulate ourselves from temporary shocks, to be more self-reliant – but while many cities and towns could *survive* indefinitely as islands (with enough advanced preparation), it is not preferable.

  5. Transition Towns are a great idea for better living — for actual examples, check out the “Success Stories” forum at Urban Evolution:


  6. Scale doesn’t worry me in terms of disappearing luxuries, but in terms of energy demand for core infrastructure. As long as we can avoid any major “cascading system failures” in the next decade, I am optimistic that we’ll transition successfully, thanks to the greatest motivating force humankind has ever known: sheer necessity.

  7. Well, not letting it die amounts to living with an infection for the rest of our lives, using antibiotics that barely control the worst symptoms.

    Cutting the damn infected imb off will hurt as hell, and we will have to learn to live with just the other three, but we won’t be in ever present risk of the inmune system just collapsing.

    The bubbly gangrene we witness now is the clearest possible signal.

  8. It’s interesting to note that much of the MSM has mentioned the whistleblowers that contacted the SEC and the Treasury about financial fraud within the companies that they worked for. You want to know part of the cause of the crisis?! It’s the fact that many warnings were “ignored” by the SEC and the Treasury.

    Many former SEC and Treasury employees go to work for companies they once had to “oversee”. Why is this legal? It’s completely absurd!


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