# The Archdruid Report

Druid perspectives on nature, culture, and the future of industrial society

## Wednesday, July 30, 2008

### Reviving the Household Economy

Part One: The World Outside the Market
As the current pullback in oil prices continues – one of the benchmark grades dropped to a little over $120 a barrel yesterday, though it jumped back up $4 in early trading today – peak oil skeptics have seized the opportunity to insist that there’s nothing wrong with the petroleum market that a few more trillion-dollar giveaways to the oil industry wouldn’t fix. One interesting lesson worth drawing from the current barrage of punditry is that most of people who reject the concept of peak oil don’t actually seem to know what the phrase means.
A case in point is a recent opinion piece that denounced peak oil as “sheer nonsense,” on the grounds that the world still has some forty years of oil left at today’s rate of production. The author of this piece somehow managed not to notice that the peak oil theory focuses on precisely the point he took for granted, the sustainability of today’s rate of production. The world may well have the equivalent of forty years’ worth of current annual petroleum production left in its reserves, but if the amount it can produce each year plateaus and then begins to shrink due to geological limits, a global economy founded on ever-expanding energy supplies is in trouble. That’s the essence of the peak oil position, and waving around claims about the absolute size of global reserves doesn’t address it at all.
Still, it’s not surprising that so many people are finding such ingenious ways just now to avoid understanding the implications of peak oil. As worldwide oil production remains stuck in its current plateau – a plateau that increasingly has had to be propped up by massive production of high-cost biofuels and tar-sand products – some of the most basic presuppositions of the modern world are turning out to be well past their pull dates. Once production begins to slip down the far side of the world’s Hubbert curve, that process is likely to accelerate, and much of what counts as conventional wisdom today will end up sitting in history’s dumpster next to phlogiston and the divine right of kings.
One example with sweeping implications unfolds from a particular mismatch between current economic theories and the practical realities of the age of peak oil. Perhaps the best way to introduce this example is to invite my readers to put on their walking shoes, pick up their canvas shopping bags, and join me in one of yesterday’s errands.
In the southern Oregon town where I live, Tuesday is the day of the weekly grower’s market, and so yesterday, as we do nearly every Tuesday between March and November, my wife Sara and I walked the 3/4 of a mile or so to the National Guard armory parking lot where local growers and ranchers sell their produce. Among our purchases was a flat of fresh raspberries, and this afternoon we’ll be turning those into home-canned raspberry jam for the year to come.
Now it’s unquestionably true that we could just buy an equivalent volume of commercially manufactured raspberry jam and eat that instead. Still, these two ways of putting by a supply of raspberry jam are by no means equal. Set aside for a moment the higher quality of homemade jam, which (in this case, at least) is made of fresher ingredients and prepared in small batches; one of the most important differences between the two processes is that the homemade jam represents a much more efficient use of fossil fuels.
The grower who produced the raspberries used organic methods, which saved the petroleum and natural gas that would otherwise have had to go into pesticides and fertilizers. While she used a pickup to bring her crop to the market, the ten miles or so she drove compares favorably to the thousands of miles agricultural products are routinely shipped in their journey from farm to factory, warehouse, and supermarket, and even if we owned a car and drove to and from the market, the extra mile and a half of gas wouldn’t shift the balance much.
Turning berries into jam and canning the result probably takes about an equal amount of energy per pint of jam whether it’s done in a home kitchen or a huge factory, though it’s a lot easier to provide the energy via a solar cooker or other renewable source on a small scale. Even without that, though, the homemade jam takes a small fraction of the energy to go from raspberry canes to our pantry than commercial jam requires. One measure of these energy economies is that, including all expenses, our homemade jam costs us only about two-thirds as much as the same volume of commercial jam.
Compare the homemade jam with its commercial equivalent from the viewpoint of conventional economic measures, though, and the balance swings the other way. In terms of its impact on the gross domestic product – generally considered the broadest measure of national prosperity – our homemade jam is practically an economic disaster. The very modest price of raspberries, sugar, pectin, and new lids for our much-recycled canning jars is the only contribution it makes to the economy. By contrast, making, shipping, storing, and selling the commercial jam requires, directly and indirectly, the expenditure of a very large amount of money, all of which counts mightily toward a higher gross domestic product.
Consider the economics from the perspective of the participants in the creation of the homemade jam, though, and things take on a very different shape. Even aside from the other reasons Sara and I might want homemade jam, we have a potent economic motive; by making the jam ourselves we get a superior product at a lower price. The raspberry grower, in turn, benefits handsomely from the same decision; the price she gets for her berries when sold directly to the consumer is several times the price she can get from wholesalers. According to conventional economics, the end result of individuals freely pursuing their own interest in a market should be the maximization of prosperity – and yet if prosperity is measured by the gross domestic product, our free pursuit of our own interest decreases our contribution to national prosperity.
What is happening here, of course, reflects one of the largest of the blind spots of contemporary economics: the assumption that market transactions mediated by money are the only significant form of economic activity. Our household jam-making activities drop off the economic radar screen the moment we finish paying for the raw materials. Value is being produced – the same jam offered for sale at next week’s market would bring substantially more than the cost of the raw materials – but it’s being produced outside the market economy, and therefore has no official existence in an economy measured entirely by market metrics.
What makes this particularly relevant in the twilight of the age of cheap oil is that the world’s industrial nations, and above all the United States, have spent most of the last century transferring as much as possible of the household economy into the market sphere. In making our own jam, among other things, Sara and I belong to a minority of American households. Glance back a hundred years, by contrast, and nearly every family in the country outside the very rich and the very poor had an active household economy that produced a large fraction of the total goods and services they consumed. Many factors contributed to this dramatic shift, but one of the most significant is the availability of cheap abundant energy.
Most of the economies of scale that make mass production of processed foods economically viable, after all, are economies only because the cost of transportation is low enough to permit them. As recently as the first half of the 20th century, most consumer products in the US were produced locally for regional markets, in large part because transportation costs were still high enough to make national distribution a costly proposition. (Those brands that did find a nationwide niche, such as Coca-Cola(tm), did it by franchising out manufacturing and bottling to local firms.) It took the birth of a new transportation network of diesel-powered trucks using a massive new interstate highway network to create today’s national distribution chains, and cheap petroleum provided the foundation on which the whole system arose.
The twilight of cheap oil, in turn, bids fair to throw this process of economic centralization into reverse. As transportation costs rise to become a major part of the cost of consumer products, the economies to be gained by local production will sooner or later outweigh the economies of scale that shape the current system, opening economic niches for small and midsized firms nimble enough to move with the currents of economic change. Equally, though, the financial advantages of the household economy will become overwhelming. In a world of scarce oil, anything that can decrease the amount of fossil fuel energy that has to go into an product will pay off handsomely, and if the transition to scarcity involves widespread impoverishment – as seems most likely just now – the choice faced by many households throughout the industrial world may well come down to doing things themselves or doing without.
At the same time, it’s crucial to recognize that the forces holding the current economic order in place reach beyond the realm of simple economic calculations into murkier areas of culture and collective psychology. For those who have access to fruit growers – and with the growth of farmers markets across the US and elsewhere, this has become a tolerably large fraction of the population – making one’s own jam, and a great many other food products, is already a paying proposition; so are many other activities that once formed part of the household economy, and very likely will do so again; yet these activities remain the hobbies of a minority of today’s Americans, and most of their neighbors turn to the market economy to get inferior products at higher prices instead. The forces motivating this sort of economic irrationality will be the focus of next week’s post.

#### 42 comments:

Dorcas' Daddy said...

  Sorry for that last one, I was seeing if my blogger account worked for this.
  So let me start by saying, please allow anonymous comments! It's easier for the masses to get in, supports no particular corporation (google, etc.)and will make for a freer dialogue. I believe you can still require word verification AND approve all comments, keeping the trolls to a minimum.
  As my parents live in Gold Hill, I think I'll come see you next time I'm in Southern Oregon, if that's ok with you.
  Your blog is wonderful, and as refreshing antidote to the doom and gloom of Kunstler, Survivalists, and even good ol' Charles Hugh Smith--so thank you!
  I've had much more to say in the past, and may again in the future, but I've been stymied by the barriers to entry you've placed in front of commenting--so consider allowing our friend Anonymous to join the fray.
  Sincerely Yours,
  Dorcas' Daddy

  7/30/08, 10:49 PM
Erik said...

  The only economic factor you seem to have left out of your equation is time; and I imagine you will address it in next week's post, under the causes of shopping.

  7/31/08, 1:33 AM
Seaweed Shark said...

  A few questions:
  1. Does the Archdruid expect the cost of energy to stabilize at what it was around 1900 (there being still a lot of coal left in the ground) or to rise to what it was when wind, water and muscle were the only motive forces available?
  2. As was mentioned, franchising is in fact an early 20th century invention. Does it have a future? One thinks of both commercial systems and cooperative associations that inspect and certify the quality of their members' produce. Such systems would presumably depend upon communications technology being maintained, but then again wire drawing machines and crystal radios are still around.
  3. What advances (in knowledge or technology) made during the time of cheap oil are most likely to be retained during the time of more expensive energy?

  7/31/08, 3:51 AM
moodivine said...

  Its called perception management nowadays but before that it was formally noted as Bateson frames or 'frames of reference'. Noted social scientist Bateson "discovered" that if you can determine the frames of reference that anchor reality for an individual, you can pretty much determine behavior. This is the motivating force in product placement in television programs, movies, etc. But is operates in much more subtle ways, and the more successful it is the more subtle and barely perceptible it is. This not only works with consumption of products, but ultimately all behavior contained within our society, even the Archidruid's behavior. Mother culture is a totalizing force. Even if I do not watch television or participate in the dominate norms of our culture, the frames still effect me since others perceptions of me are to a large extend, framed by what reference points that the cultural matrix imposes. Mother culture is on a never ending quest to identify emergent threats to its existence and it neutralizes those threats by incorporating them into its narratives. The pressures that this process creates are intense, isolating and the source of all hopelessness since, as long as the Mother culture persists, 'escape is futile'. While there is some truth that we could 'can' our way to freedom making great jams, that would require a consciousness capable of grasping the world in a completely different and more compelling light. As long as the automatons continue to get their proscriptions from the electronic Pantheon, you can rest assure not much will change until it no longer has energy to power (my bet), or that the people abandon/destroy it. Abandonment has been a recurring theme in the collapse of civilizations...the idea that the underlying force that drives the civilizing process disappears (and with a vengeance). The Romans lamented the abandonment of their gods from the temples during their long demise....I can envision the same thing as the tv sets go black, abandon fuel pumps becoming the staging grounds for the emergence of cargo cults and the psychic shift is so traumatic that most civilized humans simply lose their 'mind' and cannot function and simply die from lack of instruction on how to live.

  7/31/08, 5:51 AM
hapibeli said...

  Another inciteful view of our past and current economic situation. I look forward to a new [old?] day of social and economic interaction between those of us in the "first" world. May we live simpler, yet more fulfilling lives. Troubles we will have, but of a different, and possibly more repairable, type of trouble than we have today. Thanks JMG.

  7/31/08, 5:58 AM
jewishfarmer said...

  I suppose it isn't really a surprise that I loved this post, but well worth mentioning anyway.
  Sharon

  7/31/08, 6:14 AM
albert said...

  The blackberries are coming ripe soon, better than raspberry jam, and free for the picking.

  7/31/08, 7:16 AM
FARfetched said...

  Forty years of oil left? Fine… so what do we (or our kids/grandkids) do in forty years when it's gone for good? Sheesh. These "skeptics" are too easy, sometimes. ;-)
  Having hiked around FAR Manor and the adjacent farm (belonging to the in-laws) earlier this month, followed by turning 3 gallons of wild blackberries into 12 pints of jelly, I know where you're coming from. There was a certain amount of interaction with the money economy — jars, lids, sugar, and pectin have to come from somewhere — but the jars (and rings) are reusable. We probably could have scrounged a dozen pint jars from my mother-in-law, who's canning as fast as she can trying to keep up with her garden (the potatoes have been especially productive this year).
  So what happened to turn people away from the home economy and into the money economy? Time and convenience. It took me three hours to pick the blackberries, and another couple hours to can them (with advice from the mother in law and help from Mrs. Fetched). I consider it time well-spent — I got outside and got some exercise, and learned that canning isn't nearly as involved as I thought — while other people might have preferred to spend that time doing something else (or nothing). Perhaps at one time, the store-bought jelly was of similar quality, and economies of scale made it cheaper than doing it at home (even if you don't factor in your labor) as well. There are still some instances where the money economy stacks up pretty well against the home economy, but the ongoing quest for profit margins (combined with increasing production costs) will erode their advantages, and the money economy will only have inertia to fall back on.
  BTW, I love this phrase: "some of the most basic presuppositions of the modern world are turning out to be well past their pull dates."

  7/31/08, 8:50 AM
Danby said...

  Having come from a poor family, I grew up canning. I still look back with pride to my 13th summer, when my mother was too sick to can. I put up 285 quarts of applesauce and 116 pints of blackberry jam by myself. All we paid for was the electricity, sugar, paraffin (though much of it was recycled from the previous year) for the jam and lids for the applesauce.
  The next year, in what was then called Junior High School, I was taking a home economics course. According to the textbook, home canning was actually a net money loser, once you take hidden costs such as lost hourly wages, storage and monetary opportunity costs into account. So I had actually lost money getting a couple of hundred dollars worth of great food for about $10 in sugar and pectin and pocket change for power and lids. Learn something every day.
  GDP is a meaningless statistic. Going by GDP, the loss of the twin towers was great. Billions of dollars in insurance paid out, thousands of businesses spending more billions of dollars to recover their operations, and eventually some other building will be put up on the same location. All add to the GDP.
  Another example is the commodities market. The commodities exchanges shift huge sums of money back and forth, all adding to the GDP. Unfortunately, none of it is in any way productive. Nobody involved in the commodities exchanges actually produces anything of value.
  Actually, it's the broken window fallacy all over again. the base problem is not what you are measuring. That's cash or cash equivalent outlay. It's what you think you're measuring, which is economic activity.

  7/31/08, 9:08 AM
tristan said...

  Aaargh!!
  Albert beat me to the blackberry comment.
  But seriously - you can can your own raspberry jam cheaper then store bought? It seems like the effects of higher fuel prices are still working through the system. I would think that economies of scale would still give a slight edge to the mass market. Especially since you are buying the higher priced organic berries. Add in your few supplies (pectin, lids, etc.), energy for the stove and time and it still seems like you should come out slightly behind. Of course this assumes you are buying the cheapest S-mart brand jam not an actual equivalent organic, all natural ingredients brand.
  AV

  7/31/08, 11:39 AM
John Michael Greer said...

  DD, every site I know that allows anonymous comments has much more trouble with trolls (and their sock puppets) than I do. It's really not a big hassle to get a Google ID, and that's all you need. But please do stop by when you're in town!
  Erik, compare the time you spend doing something yourself with the time you spend earning the money to pay somebody else to do it, and in many cases doing it yourself still comes out ahead.
  Shark, each of those questions is worth a post by itself. I'll put 'em in the stack.
  Moodivine, by the same logic, your concept of "frames of reference" is simply a product of your "mother culture," and so is your critique.
  Hapibeli, unfortunately we're a long ways off from an age of simpler and more reparable troubles; we have the decline and fall of a civilization to get through first. Still, thanks for the encouragement.
  Sharon, no, it wasn't a surprise, but thank you!
  Albert, there'll be blackberry jam in the pantry too. I like both.
  Farfetched, "time and convenience" only work out when you don't factor in the hours you have to work to earn the money to pay for the things you could have done yourself. More on this next week.
  Dan, your home economics textbook is a fine example of what I'll be talking about in the second part of this article: the demolition of the household economy in the 1960s and 1970s. It was nonsense then and, with rising energy prices, it's even more nonsense now.
  Tristan, to make a valid economic comparison you need to compare equivalent products. I'm comparing our jam to commercial jams in which raspberries are the main ingredient and no chemical flavors or dyes are used, and ours costs significantly less. Does nutritionally empty, chemically flavored and dyed brand-X jam cost less? Yes, but if I could get the chemicals locally, I could probably make that for less than the store charges for it, too.

  7/31/08, 12:13 PM
Zach said...

  I've only read a bit of Ralph Borsodi, but didn't he show that the same economics held during the Great Depression? He documented, in excruciating detail, how home economics beat out industrial economics in almost every case. Borsodi's initial example was home canning of food, but he eventually extended it to textiles.
  peace,
  Zach

  7/31/08, 12:13 PM
Matt said...

  I've never thought of jam making quite like this. I don't do jam much, but we put up lots of cucumber pickles, sauerkraut, and tomato products. It does take time, but to my mind its joyful time and there is something inherently satisfying about making your own reasonably healthy stuff. Same with making homebrew beer & mead and picking wild mushrooms. Can't put a dollar value on that as it would cheapen things!

  7/31/08, 4:40 PM
Panidaho said...

  Danby said:
  "The next year, in what was then called Junior High School, I was taking a home economics course. According to the textbook, home canning was actually a net money loser, once you take hidden costs such as lost hourly wages, storage and monetary opportunity costs into account. So I had actually lost money getting a couple of hundred dollars worth of great food for about $10 in sugar and pectin and pocket change for power and lids. Learn something every day."
  I am actually becoming quite tired of every single thing in normal human existence being reduced to numbers and cash equivalents. I'm all for being practical and saving one's hard earned money, but c'mon - not everything in life boils down to a dollars and cents equation.
  And I agree with you - the math in that home economics lesson was bogus. Totally bogus. "Lost hourly wages..." [SNORT!] You and only you get to decide what your spare time is worth and how best to "spend it." It sounds to me like you spent your time that summer in a most worthwhile, practical, loving, and personally satisfying way. You can't put a dollar sign on that!

  7/31/08, 9:34 PM
Panidaho said...

  JMG said:
  "What is happening here, of course, reflects one of the largest of the blind spots of contemporary economics: the assumption that market transactions mediated by money are the only significant form of economic activity."
  In other words, the only significant economic activities, according to modern economists, are those that can be measured, charted and ultimately, controlled. How sad.

  7/31/08, 9:46 PM
John Michael Greer said...

  Zach, I'm not familiar with Borsodi's work at all -- thanks for the tip! I'll look it up.
  Matt, we also do pickles of various kinds, chutneys, and homemade soap -- use that just once, and you'll never want to go back to the storebought variety. A good friend of mine brews beer, and I plan on giving that a try this autumn as well. Of course putting a dollar value on it misses much of the point, but it's *also* usually cheaper than buying comparable products!
  Teresa, what Rene Guenon called "the reign of quantity" is among the worst features of modern thought -- and in the case of Dan's home ec textbook, it's meretricious as well. "Monetary opportunity costs"! And people accuse Druids of muttering gibberish over cauldrons...

  7/31/08, 10:52 PM
Panidaho said...

  JMG said:
  "Teresa, what Rene Guenon called "the reign of quantity" is among the worst features of modern thought -- and in the case of Dan's home ec textbook, it's meretricious as well. "Monetary opportunity costs"! "
  Yup, just call me another faceless cog in the global economic wheel...
  Would I be far off if I suggest this attitude is an extension of our culture's tendency to view our entire planet and all that's within it as commodities and assign value according to how efficiently we think we can exploit it? I.e., everything that is able to be exploited for human commerce and consumption is assigned "value" but that which cannot be used to line our pockets with cash is not?
  "And people accuse Druids of muttering gibberish over cauldrons..."
  Ah, that must be what I'm doing wrong. I'm not muttering enough gibberish, apparently. I'll have to work on that. ;-)

  8/1/08, 12:16 AM
x2fer said...

  John, have you seen Bill McKibben's "Deep Economy"? His book makes many of the same points you're making (relocalizing economies reduces energy use, standard economics mismeasures real life in many ways, reliance on cheap energy is essential to current economic arrangements) and adds some important ones (personal happiness/satisfaction is stagnant or in decline but improves with reinvigorated communities, stronger local networks increase resiliance in the face of adversity).

  8/1/08, 12:21 AM
JimK said...

  Your talk of households "doing things themselves" can be misinterpreted as some kind of individualistic survivalist lifestyle. Of course we are headed back to much more localized trading networks, as fuel gets more scarce. But that just changes the form of interdependence, not the degree.
  For example, nowadays a household can get by with practically no tools at all, by outsourcing all services. The more work gets done in a household, the more tools they need. These tools will not likely be made in the household. So it seems that trade will shift from lots of cheap finished product to a few valuable and essential tools or components.

  8/1/08, 4:42 AM
FARfetched said...

  Figures that I left out the most important part of my comment. I think I edited it out, trying for brevity. :-P
  Comparing the time you have to spend at a job to buy the equivalent jelly, bread, beer, what-not, with the time you enjoy making your own, is silly. The money economy knows the price of everything and the value of nothing.

  8/1/08, 7:07 AM
John Michael Greer said...

  Teresa, one of the big questions is whether the obsession with monetary profit comes first, and drives the fixation on a purely quantitative approach to the world, or whether it's the other way around. I'm not prepared to make an argument either way yet -- but it's a crucial point, and one that deserves consideration.
  X2fer, thanks for the tip! No, I haven't read McKibben yet -- I'll put him on the list.
  Jim, of course there will still be interdependence, but there's a happy medium between the go-it-alone survivalist mentality and the sort of complete dependence on social systems (local or global) that modern society fosters. People can do more for themselves, and I suspect will have to do so in the future ahead of us.
  Farfetched, it's not the whole picture, and may not be relevant at all in some cases, but I'm not sure it's completely pointless to include the time you work to earn money in the actual cost of the things you buy. In many cases, it takes less time to do something yourself than to work for an employer and earn the money to pay somebody else to do it. That's an economy worth taking into account.

  8/1/08, 7:58 AM
Danby said...

  Economics is really the wrong point of view on the whole question. The real question is "How then shall we live?"
  Shall we live as creatures and creators of monetary value, or as Men and Women?
  The value of a jar of jam is not in the cost or the price, but in the enjoyment, both in making and in eating (especially on fresh bread.) The value of a bar of soap is not what you could get on ebay, but in being clean and in being productive.
  I could say more, but the prophet Chesterton has already said it, and more besides.

  8/1/08, 10:35 AM
Ralph said...

  I guess the implicit assumption when trying to use GDP as an indicator of economic activity, or "wealth creation," is that people produce nothing for their own consumption, that they buy everything they use.
  That is probably a pretty good approximation to the truth in the US right now, and it's certainly the way our corporate leaders want us to think and act.
  As a result, it is automatically subversive to make one's own jam or butter or shoes.

  8/1/08, 4:13 PM
yooper said...

  I suppose, some people might be forced into the home economy from the money economy in a quick hurry (job loss, etc.). Of course, some services and goods were only realized from the money economy and no amount of home economy will bring it back...
  I wonder what kind of jam or jelly might be made from foraging around New York City?
  Thanks, yooper

  8/2/08, 5:31 AM
porterbill said...

  JMG;
  Not only will Peak Oil impact the local economy by raising transport cost among many other costs - it also impacts internatioanl trade.
  While relocalization is IMHO a foregone conclusion - it must be remembered that trade enables an increase in carrying capacity as Party A can produce product A in excess for trade with party B who produces product B. Trade enables both parties to access a greater variety of goods which enhances carrying capacity.
  In your jam example, I assume you traded US Federal Reserve Notes in return for the berries. With the early onset of the financial collapse coincident and interdependent on peak oil, it would seem that the Federal Reserve Notes themselves will continue to become worth less, not necessarily zero but definetly less as inflation eats into the value of the FRN and foreign investors shun our T Bills, notes and .gov debts.
  In a period of scarcity with less trade and a falling carrying capacity, I still look for ways to avoid violence and as yet do not see a viable option....
  Best regard.

  8/2/08, 10:50 AM
eboy said...

  Enjoyed the post John .
  Opportunity costs, pointed to by Danby, are only valid when comparing apples with apples. The price of our food is not truly reflective of the costs of production.
  The notion that there are large economies of scale in agriculture is a fallacy. Although it may well be cheaper if I as big agri-business buy more tractors hence drop my per unit tractor price, what is not being talked about are the large agricultural subsidies, that exist in the U.S. These subsidies, removes market correction. Since the supermarkets control entry to producers they skew the market, which contributes to the illusion of economies of scale.(I'm not saying that there are 'no' e.o.s. but rather they play a smaller roll in agriculture versus widget production)
  Consider that most if not all imported garlic and spices are irradiated, some commercial tomatoes have pig enzymes in them, and are nutritionally void and have pesticide residue. So do we account for cancer? The environmental costs? No so the economy is phoney, or as phoney as Louis X1V's economy. Do we factor in the true cost of our slaves?
  As the costs rise sharply in transportation so does the costs of market manipulation (though this may remain largely masked by subsidies). Jimmy Carter wanting to put it to the beef farmers bought a large number of cows from Australia to 'dump' into the market. Thereby bringing prices down. In high fuel prices this brings higher costs associated with this behavior.
  You don't sell the sizzle so much in agriculture, you sell the steak! As cost of production rises since farmers are price takers this suggests we will see market collapse before you see price increases. In other words you start seeing shortages versus, just higher prices and no shortages. Increased prices will suggest that there will be more entrants in to the market which ultimately will decrease prices. This then continues the delusion about the price of our food. So making jam is a great thing to do, for your health and for everyone elses. But should you decide that you want to make that jam to produce income for yourself then you move from the real economy that accounts for the energy inputs back to the phoney economy where you are deprived of a r.o.i.
  Specialization and mono-culture thrives in a cheap energy environment. In an energy restricted future, mono-culture is masochistic behavior. (crop failure!)
  The way out of the great depression was the introduction of parity laws and the new deal. Parity laws brought in a more honest market place where unfettered capitalism was able to reward productivity.
  Ralph said: "As a result, it is automatically subversive to make one's own jam or butter or shoes."
  A great point! Should enough people return to gardening governments may well be keen to ban or limit this behavior. Expect to be treated like small farmers patted on the head and publically lauded while at the same time they impose laws to limit, restrict and to direct your behavior towards business as usual and to benefit large agri-business at your expense.(fascism)
  The 'raw milk' producers in certain states are under attack as we speak, using the rubric of 'health and safety' they wish to limit your access to raw milk. Which (taking bacterial counts is understood) is dramatically superior for you. The increased levels of c.l.a. (when increased grass is fed) omega 3's and less omega 6's confer great health benefits. The non homogenization means less atherosclerosis. I live in Ontario where it is considered a more serious offense to sell raw milk than to murder. (See The Untold Story of Milk by Ron Schmidt, and Everything I want to do is Illegal by Joel Salatin)

  8/2/08, 1:14 PM
Laura's Blog said...

  Some people will mention the "lost wages" of the time it takes to make something yourself versus how much money you save and say it's not worth the effort.
  What about the "lost wages" of the millions of sheeple spending endless hours watching American Idol and other such drivel?
  Why is it considered unproductive to spend time making something due to the value of the time spent, yet many people think nothing of hours of unproductive time plopped in front of a television with no results other than a fatter behind?

  8/3/08, 5:26 AM
Evan said...

  i work on a small organic farm that sells at a farmer's market in a nearby city. we always trade our produce with other vendors at the market. it's usually not much, but we'll get fresh bread and goat cheese for tomatoes and eggplant. i always wish that the entire market worked on a barter. it's a lot more satisfying to trade than to give away food for pieces of paper...
  i also find that it makes for better relationships too. while we often have regulars at our stand, it's sometimes hard to distinguish them from infrequent market-goers because they're paying with currency. it's as if we identify folks by what they bring to market -- are they just another money-spending consumer or are they the baker, the goat cheese maker, or the dairyman? you can imagine there's more a sense of community among the latter than the former...

  8/3/08, 5:51 AM
Danby said...

  Peak oil effects are not longer just a theory.
  From the article:
  The study, published in May by the Canadian investment bank CIBC World Markets, calculates that the recent surge in shipping costs is on average the equivalent of a 9 percent tariff on trade. “The cost of moving goods, not the cost of tariffs, is the largest barrier to global trade today,” the report concluded, and as a result “has effectively offset all the trade liberalization efforts of the last three decades.”
  And:
  The industries most likely to be affected by the sharp rise in transportation costs are those producing heavy or bulky goods that are particularly expensive to ship relative to their sale price. Steel is an example. China’s steel exports to the United States are now tumbling by more than 20 percent on a year-over-year basis, their worst performance in a decade, while American steel production has been rising after years of decline. Motors and machinery of all types, car parts, industrial presses, refrigerators, television sets and other home appliances could also be affected.
  Plants in industries that require relatively less investment in infrastructure, like furniture, footwear and toys, are already showing signs of mobility as shipping costs rise.
  Until recently, standard practice in the furniture industry was to ship American timber from ports like Norfolk, Baltimore and Charleston to China, where oak and cherry would be milled into sofas, beds, tables, cabinets and chairs, which were then shipped back to the United States.
  But with transportation costs rising, more wood is now going to traditional domestic furniture-making centers in North Carolina and Virginia, where the industry had all but been wiped out. While the opening of the American Ikea plant, in Danville, Va., a traditional furniture-producing center hit hard by the outsourcing of production to Asia, is perhaps most emblematic of such changes, other manufacturers are also shifting some production back to the United States.

  8/3/08, 12:26 PM
MandT said...

  Moodivine seems on a parallel with Debord's 'Society of the Spectacle.'

  8/3/08, 1:48 PM
Joel said...

  The energy used to turn berries into jam will be dramatically lower in a factory than a mainstream kitchen. Gigantic vats have a lot of volume for the surface area, and canneries tend to have a co-generator that produces all their electricity along with the necessary heat.
  Your conclusion is right, though, because packaging takes much, much more energy to produce than the jam (Hospidio et al. show this for canned tuna, and I know glass would be worse than tinplate). Savings from re-using a jar will dwarf the relative inefficiency of using a steam turbine to drive electricity through miles of wire and heat an un-insulated, open container.

  8/3/08, 4:47 PM
Danby said...

  I should point out that although the NY Times article I excerpted above took a grim tone about the end of globalization, to me it looked like good news. Who could mourn the return of manufacturing jobs to the US, and the end of the senseless practice of shipping bulk products to China (lumber, chicken, ore) in order to ship back finished products, except the parasite class that infests NY, DC and other financial centers? And the Chinese, of course.

  8/3/08, 11:08 PM
FARfetched said...

  «I wonder what kind of jam or jelly might be made from foraging around New York City?»
  Dunno for sure, Yooper, but I can tell you that huge stands of blackberries used to (and may still) grow wild in and around Atlanta. I remember boggling at a line of cars parked along the shoulder of I-85 back when, wondering what happened to them all, then saw the drivers up on the bank picking berries. People who know what they're doing could find edible mushrooms here & there, certainly.
  But the first few foragers would be overwhelmed by the succeeding wave, if word got out.
  «Should enough people return to gardening governments may well be keen to ban or limit this behavior.»
  Eboy, my mother-in-law has already run afoul of this. She makes *the* best fried apple pies, using local apples in season and her own pastry, and they're perennially best-sellers at autumn craft shows and the like. However, the state government has said she has to provide a list of ingredients and nutritional content on the labels, and that put her out of contention for a couple of years. Somewhere along the line, though, the gov't may have backed down partially — I print her labels, and they include ingredients, but there's no nutritional info (which seems silly if you're talking snack foods anyway!).

  8/4/08, 1:22 PM
gigglingwizard said...

  Being a small, home-based producer who sells directly to end consumers at farmers' markets and from my home, I'm reluctant to draw attention to a point that is against my interests; however, I feel that it is important that we not, in our zeal to promote self-reliance and the simple life, gloss over the reality of economies of scale or indulge in comparing apples to oranges in order to promote our preferred way of life.
  I'm not going to say that canning your own jam isn't cheaper or less-energy consumptive than commercially produced jam, but neither is it a foregone conclusion that it is. There are so many variables to tease apart to get a true equation that exposes all the hidden costs. As one commenter noted, the commercial vats use energy more efficiently than your home canner, but using the same jars year after year is a tremendous savings in packaging.
  I recently lost an argument with an engineer over this very subject. A person in Oregon had asked on Live Journal which was "better," driving one mile to a local store to buy berries grown two states away in California, or driving ten miles to a local farm to buy berries. I took the position that which was "better" depended on what one was quantifying, but that ten miles was a negligible cost weighed against the energy savings of not trucking berries in from so far away.
  The engineer pointed out exactly how many trays of berries could be hauled by a semi, and what kind of fuel mileage it would get. Divided over the total cargo, the fuel (and fuel cost) was dramatically cheaper than the fuel used to drive ten miles to buy one flat of berries.
  How far did your berry grower drive her pickup? Think about how much she can fit in it and what sort of mileage it gets. I'm sorry, John, but we lose this point. Even if gas is $40/gallon, it affects the little guy as much as the Megacorp. In many cases, it actually cuts the little guy deeper, because he doesn't have the capital reserves to weather rough times. If it were really so much more expensive to do it the conventional way, they wouldn't be doing it.
  I think where local and home production become competitive is their flexibility and ability to improvise when conditions become too hostile for mass production. If the fuel to truck berries to you from California becomes too expensive, your local grower might be able to convert her pickup to be pulled by a draft animal that can eat grass. When grid energy is too expensive to run the efficient cooker at the canning company, you can still gather sticks that fall from neighborhood trees and can over a little campfire in your back yard.
  Also, it goes without saying that your jam should be "cheaper" than what you buy at the store, even if identical ingredients and methods are used, even setting aside marketing and transportation costs. The jam you made, you got for cost, and you're probably not figuring an hourly wage for yourself. The jam in the store is retail, so both the producer and the retailer (and who knows how many people in between) all get their cut.
  The real test of cost comparison, and a key to localizing the economy, would be to make enough of that jam to sell, and see if you can compete with equivalent products offered in the store (assuming there are any). I already know I can't. I charge a little more for my free-range, antibiotic-free chicken than certified organic chicken goes for in the store. I'm in business now only because there are local consumers who value the fact that my product is made locally, and because they have the money to spend on it. If trucked-in chicken becomes unavailable in the future, however, and I can manage to produce my own feed and chicks, I'll prosper--or at least survive--while Tyson and Perdue crash. This, I believe, is the greatest economic benefit of strengthening the home economy. Of course, there are far more benefits than just economic ones, and I'm guessing you'll get into those in a future post. ;)

  8/4/08, 10:19 PM
eboy said...

  Hi Farfetched the regulation b.s. is universal. (obviously not all regulations)
  A bakery in a small town near me won in the court of public opinion against a government regulation that wanted them to register their recipes. The cost of this was going to be around $30,000. This would have been a show stopper for them. Of course the govt was just doing the bidding of an agricorporation that wanted to eliminate the competition.
  Similarly small producers of jams for local farmers markets have been attacked and told that they need to put in $10,000 stainless steel kitchens to meet 'safety' requirements. (regulatory barrier to entry)
  Joel Salatin a grass fed beef producer in Virginia tells of many similar type of rules and regulations that are attacking rural N.A.
  In fact looking at what has been happening to farmers in India and Korea by agencies like the w.t.o. acting on behalf of the Monsatans
  of the world. The plight of small farmers seems pretty universal. I hope to learn more about groups like the 'via campesina'.
  Understanding that these tactics are much more universal in nature can inform us (forewarned may in fact forearm us)
  From George Monbiots site Tell a man something he knows and he will thank you. Tell him something he doesn't know and he will hate you.
  Cheers

  8/4/08, 10:39 PM
John Michael Greer said...

  Dan, oh, granted -- the economic issues are a small fraction of the real points at issue, and then from the point of view of an abstract game massively distorted by ideology. The challenge is finding a way to talk about the broader issues among people who only know how to speak in the language of economics.
  Ralph, exactly.
  Yooper, not much, but from fruit from farmer's markets and truck gardens near NYC? Plenty.
  Porterbill, the interesting thing is that at this point -- with people competing for food against machines, courtesy of the biofuel craze -- it's just possible that relocalization, in some areas, will increase carrying capacity significantly. But of course you're right that violence will be a part of the decline. It's a part of the current phase -- the soldiers who have been sent to Iraq and Afghanistan to seize control of oil reserves there aren't doing it by handing out lollipops, you know.
  Eboy, several excellent posts. A central issue here is recognizing the difference between the money economy and the broader human ecology of subsistence. More on this soon.
  Laura, good. For that matter, what about the lost time taken up in commuting to work to earn the money to buy the commercial product? Apply the same logic used in Danby's home ec textbook to buying commercial product and you can easily prove that it's a waste of money to work at all.
  Evan, I pay money for my produce -- as a writer in a very specialized field, I'd have a hard time bartering my books for vegetables -- but we've got relationships with favorite vendors. It's one of the good things about the local market.
  Danby, yes, I saw that. Expect the same effects to zoom off the chart in the years to come.
  Mandt, good, but Debord's arguments aren't quite as self-canceling.
  Joel, good point, but even adding in a rough estimate of energy use for processing and canning the jam, we still come out much cheaper than commercial equivalents.
  Dan, they're bound to take a grim tone; the end of globalization means the end of the line for an entire economic structure, and a significant shift in wealth and power away from the coastal import-driven economies to the agricultural heartland.
  Farfetched, just be careful not to eat blackberries that have been sprayed. A lot of that happens here.
  Wiz, that's why I used jam as an example, rather than raw berries. Whatever the economies of scale a semi may have over a pickup truck, when the pickup truck travels ten miles from farm to market, and the semi takes raspberries most of a thousand miles from Oregon fields to southern California factories, and then hauls the jam back again, the pickup wins. It's crucial to factor in the energy use of the entire food chain from field to table, not just a single stage.
  eBoy, it'll be interesting to see how long those regulatory barriers last as the Great Recession starts to take hold. My guess is they won't last long.

  8/5/08, 11:51 PM
Bill Pulliam said...

  Actually John I'd like to see some numbers on the pickup versus semi comparison. My own back-of-the-envelope numbers have always suggested that the majority of the fuel used in transporting consumer goods is burned in private vehicles between the store and the house, even for things imported from Asia. Here's a typical example:
  Semi from California to Washington, 46,000 pounds of goods hauled 1000 miles at 4 mpg = 0.0054 gallons/pound
  Car from store to home, 20 pounds of goods, 10 mile round trip, 30 mpg, 0.017 gallons/pound, three times what the semi used.
  Pickup from small farm to farmers market, 200 pounds of produce, 20 mile round trip, 20 mpg = .005 gallons/pound, same as semi.
  So it very much depends on the size of the load and the distance driven. My general feeling is that if you make a special trip out of your way to get to the farmers market, driving more miles than you would have otherwise, you have erased any potential energy savings from buying locally. This is true for any consumer good, though; the biggest transportation energy usage is by shoppers making too many trips too far. If you need something specialized, mail order it, don't drive 20 miles to the specialty shop for it. The noisy rumbling USPS/UPS/whatever delivery truck is burning less fuel per pound of freight than even your small energy efficient car does.
  There are of course many other issues involved in locally grown versus industrially grown produce. But the energy tradeoffs are not clean-cut.
  These numbers always beg the question: If I can drive an 80,000 pound tractor trailer and get 4 mpg, where is my 2,000 pound car that gets 160 mpg? Or the 500 pound motorbike that gets 640 mpg? Even allowing for economies of scale, where is my car that get 80 mpg or the motorbike that gets 200?

  8/6/08, 6:28 AM
eboy said...

  "Bill said: These numbers always beg the question: If I can drive an 80,000 pound tractor trailer and get 4 mpg, where is my 2,000 pound car that gets 160 mpg? Or the 500 pound motorbike that gets 640 mpg? Even allowing for economies of scale, where is my car that get 80 mpg or the motorbike that gets 200?"
  Thinking about proper accounting of energy inputs. If it takes 8 hours to cook the berries at 120 degrees, then it might take 16 hours at 60 degrees. Could we just save the energy cost and simply let them sit for 32 hours at room temperature. :-P
  The cost of Perdue and Tyson chickens if it included the costs of creating superbugs like M.R.S.A. or C-difficile, and other associated health costs versus the health improving qualities of grass fed chicken were it accounted for would greatly change the price of KFC chicken.
  The transport truck does indeed on a per unit basis have a lower cost.
  But we want to account for the whole enchilada. What about the highway infrastructure, the trucking depots, the inspection booths. The soldiers to wrestle free the oil.
  Contrast that with I picked the beans this morning out back.
  A website devoted to giving a comprehensive energy invested accounting for the goods and services provided, would shed a bright light on just how inefficient we are and where all the subsidies lay.

  8/6/08, 9:22 AM
FARfetched said...

  Gigglingwizard, I have far too much experience with the factory method of raising chickens. But the message for you is, hang in there a little longer. The system is being strained to the breaking point right now by high natural gas prices, here at the growers' side. As Scotty said, "it canna take much more o' dis."
  In a few years, everybody will be eating chickens raised in someone's back yard or barnyard.

  8/6/08, 10:17 AM
Danby said...

  where is my car that get 80 mpg or the motorbike that gets 200?
  I used to have a honda moped that got 140 m/g. Top speed of 35mph and maybe 15mph going up any significant hill, but still.....

  8/6/08, 11:45 AM
julien said...

  Hi, I just wanted to say I really enjoyed this article & wish you would post something (or write a book!) about how people could take steps in that direction. Most of the ideas I have read on that topic aren't easy to apply to myself since I live in an apartment complex with no land, no car, and no television, and I don't eat regular food anyway, but aren't there ideas for productivity and self-sufficiency that go beyond what you eat, what you drive and how much water you use? And is it really all about becoming more countrified & agrarian?
  Thanks. I love your blog! -Julien Aklei

  8/31/08, 4:32 PM
Brian said...

  JMG, another good post. Came across a story about retrofitting (don't diregard because of the website). http://www.treehugger.com/files/2008/09/now-net-zero-house.php Keep up the good work. Don't be afraid to venture off on any topic you think needs addressing, it would be welcomed by your readers.

  9/11/08, 6:28 AM

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