# The Archdruid Report

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

## Wednesday, March 04, 2009

### The End of Retirement

I suppose I shouldn’t have been surprised by the flurry of responses to last week’s Archdruid Report post on the twilight of investment. “Men will forgive the murder of their fathers sooner than the loss of their patrimony,” Machiavelli wrote a long time ago, and the principle can be applied more generally: if you really want to rile people, threaten the money and property they think is securely theirs.
Unfortunately the word “security” can be applied to any financial asset in today’s economy only in the most ironic of senses. The entire system of economic value that underlies the possibility of investment broke down completely in the speculative excesses of the last thirty years, drowned in a flood of unpayable debts – public, corporate, and private – that were mistakenly classified and then sold as financial assets. The face value of these paper debts vastly exceeds the value of all human economic activities on Earth; the huge majority of them can thus never be paid off, and so they are effectively worthless.
That awkward fact, if honestly faced, would likely bring the world’s economies to a shuddering halt. Thus we can be confident that it will not be honestly faced. Instead, governments around the world are playing a high-stakes game of make-believe, pretending that the global economy is not bankrupt in the hope that the losses can be spread out over years rather than hitting all at once. For all I know, they may succeed – but even so, the downside will not be pretty.
One aspect of that downside was on many of my readers’ minds last week, to judge by the comments and emails I fielded. People nowadays invest for many reasons, but one of the most common is retirement. Ever since the American pension system and its government equivalent, Social Security, began to shed their reputation for stability and adequate funding, a growing number of Americans – pushed that way by large and lavishly funded ad campaigns – have placed their hopes for a comfortable old age on investments. The result is a huge fraction of Americans who are emotionally as well as financially invested in the hope that a big payoff from their assets will enable them to have the retirement of their dreams.
If you are among the people who cling to that belief, I’m sorry to say I have bad news. Over the next decade or so, the huge overhang of paper wealth that now floods the world economy is going to lose nearly all its value. As it goes, it will take your retirement funds with it.
It’s anyone’s guess exactly how the process will play out. One possibility is a long deflationary spiral in which markets slump, bankruptcies soar, and the legacy of bad debt suffers the death of a thousand cuts. Another is hyperinflation, in which the dollar value of the bad debt still holds good but a cheeseburger costs US$150,000 and workmen take their salaries home in wheelbarrows. Another is a credit crisis in which efforts by governments to fund deficits via borrowing exhaust the world’s dwindling pool of credit, and nations are forced into default. Still another is a political decision on the part of a major debtor nation to default on its foreign debt, leading to panic selling of offshore assets and the collapse of international trade and investment.
What makes this devastating for those who hope to retire on their current investments is that most current asset classes are part of that overhang of unpayable debt, and the rest are priced at levels that assume that much of the unpayable debt is still boosting the global economy’s net worth. One way or another, those assets will sooner or later move toward their real value, which in the case of most financial assets is nothing, and in the case of most nonfinancial assets is a lot less than they’re worth on paper right now. This means that no matter where you put your investments, you’re likely to lose most of your money.
Interestingly, this is likely to be true even of commodities such as crude oil which are subject to declining production curves for hard geological reasons. Last year’s price spikes in oil and other energy resources were only partly a product of geological limits on production. The soaring demand growth of an overheating economy, and speculative money flooding into any asset that was gaining in price, both played major parts. Prices collapsed when the speculative money flowed back out, and slumping demand has helped keep prices low since then. As the economy unravels further, the chance of further downside action can’t be dismissed. It has, I think, too rarely been noticed in peak oil circles that there are at least two ways to price oil out of the market; the first is for the price per barrel to soar out of reach, the second is for the economy to contract so sharply that even a modest price per barrel is more than most people can pay.
For the next decade or so, then, there’s unlikely to be any asset class that will give prospective retirees the income they’ve come to expect. Nor will private pensions, most of which are dependent on investments and vulnerable to corporate bankruptcies, far much better during that time. Nor are government pensions immune; most governments are hemmorrhaging red ink right now, adding to unsupportable debt loads, and the pool of credit available for government borrowing is far from limitless.
What about after that, when the overhang of debt has been cleared one way or another and this crisis, like all economic crises, finally comes to an end? Well, once again, I have bad news.
Retirement as a social habit was entirely a product of the zenith of the age of abundance now sliding backwards in our collective rear view mirror. For a brief window of time – rather less than a century – it made financial and political sense for nations in the developed world to pay their elderly citizens to stay out of the work force, in order to keep unemployment down to politically bearable levels. All this unfolded, in turn, from an industrial economy so lavishly supplied with cheap energy that human labor was worth replacing with machines wherever the state of technology permitted, and so greedy for new markets that every part of human life was made subject to market forces.
Before that period began, something less than half of all economic activity even in the industrial world had anything to do with the market at all. Most women, and many men outside the age of regular employment, worked in a household economy governed by custom and intrafamily exchange rather than market forces. This included essentially everyone who would be eligible for retirement by the standards of the age that has just ended. Outside the market but not outside the demand for skilled human labor, elderly people typically provided household goods and services to a household somewhere in their extended family. That was their full-time job; by contributing the value of their labor and skills, they earned their keep.
The end of the age of cheap energy means that such household economies will once again be viable. It also means that they will once again be necessary. When the limited energy and resources of a contracting, deindustrial society have to be prioritized for urgent needs, takeout meals and convenience foods will sooner or later draw the short straw; in their absence, most food will once again be made at home from raw materials. When the energy cost of the global network of sweatshops that keeps Americans clothed can no longer be met, a great deal of clothing will once again be made at home from raw fiber, as it was not so long ago, and so on. All this requires human labor. Thus a society no longer supplied with nearly unlimited amounts of cheap abundant energy will have every incentive to keep elderly people in the household labor force, and neither the incentive nor the resources to keep them in comfortable idleness.
Now of course it’s true that we will not be landing in such a society overnight. It’s also true that the clout of the retiree lobby in most industrial nations is such that public and private pensions will be gutted only when every other option has been exhausted – though in the United States, at least, the vast tide of red ink currently flooding out of Washington DC is likely to bring about this eventuality sooner rather than later. Still, it’s quite possible that at least some of today’s retirees and soon-to-be-retirees will manage to cling to that status, at least for a while.
If I were asked for advice about retirement, then, it would probably go something like this. If you’re already retired, or within a few years of retirement, it’s probably worth your while to try to get any investment money you have left into a stable investment, if you can find one. Still, it’s probably unwise to assume that your investments will be worth anything in the long terms, and having a Plan B in place would be a very good idea. If you’re more than a decade or so out from retirement, having a Plan B in place is essential. If you’re thirty years out or more out, as I am, forget about Plan A for now; you can look into the options for investment later, once the wreckage of the last few decades has been hauled away and a new economic order has begun to take shape, but you probably will never retire.
What sort of Plan B might work best for you depends on so many local and personal variables that specifics would almost certainly be misleading. If you’ve got a large family with whom you’re on good terms, bone up on your home ec skills; ten years from now, when four of your grandkids, their spouses, and their children all live in one rundown McMansion, having Grandma and Grandpa there to cook the meals, tend the children, and keep the garden going will likely be worth much more than your keep. If you don’t have a family or can’t stand them, cultivate relationships with younger friends, or get ready to take up a second career that you can continue into advanced old age.
No matter what you choose, it’s not going to be as fun as sitting on a lawn chair in a Sun Belt trailer park. Still, history is under no obligation to give the options we’d prefer, and a great many pleasant options are going away for a time, or forever, as the industrial age draws to a close.

#### 49 comments:

FARfetched said...

  Well, I have been resigned to this state of affairs for a while now. I knew that when I was pushed into buying FAR Manor, that I kissing any chance of retirement good-bye. (FAR is an acronym for "Forget About Retirement.")
  In a way, this post helps me to accept facts… with or without FAR Manor, I was not destined to kick back and enjoy the golden years. I suppose I should say thanks. :-P

  3/4/09, 2:50 PM
Bootstrapper said...

  Hi John,
  This and last week's posts are probably the most valuable insights I've seen for anyone who's looking to successfully navigate the decline of Industrialism. Thank you and well done.

  3/4/09, 2:59 PM
Dan Treecraft said...

  JMG. Seems that saner ("doomy-er") voices are starting to get traction in the world of accessible ideas. Yours is one of those, IMHO. Thank you for articulating a most credible generalization of the way our lives might work in the months and years ahead.
  Your deeply informed thoughts are are a surprising balm amidst all the cacauphony of wishful thinking, as well as bloody hand-wringing. Who knew druids were so smart?
  Treebeetle

  3/4/09, 3:05 PM
Danby said...

  Thirty years or more from retirement age, eh? Not unless people age more slowly in Oregon than in Washington. Unless by "retirement age" you mean "When they put me in the cold, cold ground."
  BTW, Larison has an excellent post on a conservatism of limits at the new group blog The Front Porch Republic. Check it out if you think Conservatives are all pro-corporate militarists.

  3/4/09, 3:31 PM
Todd said...

  Related to this, we're going to see mass migration within the US as families come back together as you described. Many families, like mine, are spread out all over the country. My father in South Florida, mother and brother on Long Island and me in Colorado. I would gladly take any of them in, but I would never move (back) to either of those places. Both are sprawling suburbs with lots of issues. With the exception of the very east end of LI, there is no open space on which to grow food on a large scale. My dad's house in FL will be underwater in a few decades if sea levels rise as predicted. CO is the best of the three, although we have major water issues. Of course, many will just adapt in place and make do.
  I imagine by the end of this year we'll see this start to play out.

  3/4/09, 4:35 PM
yooper said...

  Right on, John! I remember offering your readers awhile back, that in the land I live in it's quite normal of having to work until the day you die. My great grandfather worked until the day he died, my grandfather the same, my Dad, now 77 still working (after a serious heart attack and later a stroke), the chances of me retiring were/are nill. I was taught this would be very likely, as a child. So, it doesn't come to me as a shock at what you're suggesting, as it may be to other readers.
  Along the way of life, I've thought about this (not being able to retire) quite a bit. How would my wife take it, while many of her friends are sipping martinis, basking in the sun at the Florida trailer court?
  I suppose, I can put such thoughts out of my mind, as I'm assured, my "net worth" might actually improve with age... All the while of those that might not have the knowledge/experience that I've acquired (over the years), will be the ones who are struggling.
  At any point John, it's somewhat comforting to me (perhaps in a sick way), that I won't be alone in this endeavor, that I'll likely have company...
  Finally, I've the land to thank, that I even have this oppertunity....
  That is something to consider, it's the only "security" that I've even known, as my father, as his father, as his father.....
  Thanks, yooper

  3/4/09, 4:43 PM
The North Coast said...

  Your great post speaks loudly to this Baby Boomer. After 20 years of living on the roller coaster that is the financial industry, I'm steeply underfunded and accept that I will not be able to retire 10 years from now. Therefore, I'm attempting to build a home-based business online while acquiring old-fashioned hard skills that may be marketable in a different future.
  The idea of spending my declining years in a Sun City or a trailer park is pretty demoralizing anyway. Many people, including a large number known to me personally, mostly professionals, work clear up to age 90, and have vast hordes of knowledge to share that comes only with 60 years or more of constant practice and study.These people tend to be much happier, healthier, and intact than people who retreat into a vegetative retirement at one of those ghastly retirement parks.
  Many retirees of my acquaintance are working merely because they can't stand the thought of being "put out to pasture". I believe that humans have a strong need to know that they can still function and meet their own needs, and feel reduced and infantilized by the conditions of retirement.
  Perhaps, as more elders continue to participate in the economy on all levels of endeavor, old age will command the respect it once did. I believe our young people desperately crave the guidance and example set by healthy, functional, and wise old people- I remember one young man commenting on Kunstler's blog that he wanted older people who were true Elders. It is certainly more edifying to be a contributor than it is to be someone who needs to be taken care of.

  3/4/09, 5:21 PM
streamfortyseven said...

  Back again... I agree with everything you say... except for oil and other commodities. I don't agree that prices will go so high that no one can afford to buy, at least not in a free market where everyone has equal access (i.e. governments don't monopolize resources). Prices will go so high as the market will bear and no higher. At some point the person who holds commodities will want to sell, and the person who wants to buy will buy, and depending on the culture and the personalities involved each side will go away feeling bad or good, but the trade will have been done. In the case of hyperinflation of the dollar, some other currency will be used as a store of value, cigarettes, whisky, bricks of Afghani hashish, ammunition, whatever, but trade will still continue so long as people produce more of something than they can use or store for a long period of time. The US dollar may soon fall; there will be something to replace it, because the convenience of cash as a store of value and medium of exchange will make it in itself a needed commodity for the continuation of trade.

  3/4/09, 6:15 PM
woodworker said...

  Thanks again JMG for an insightful post.
  Maybe because of my father's obsession with his own retirement, or maybe because I'm one on the margin, I've never wanted to retire. From the time I finished school up to the present, I have sought to live my life in such a way that it is sometime I never want to stop, to retire from. I want to do what I am doing now until I croak.
  It was sad to watch my father put in his time (40 years) at a job he had come to hate just so he could retire and live his "dream", the "American dream". And after he got his Floridian house and played golf 4 times a week, he found himself bored to tears. Meaning gone, roots pulled up, life experiences and lessons learned to pass on to his offspring forgotten. Now it seems he is just waiting for the bus.
  I knew back in 1980 that there would be no Social Security when/if I got to be eligible. Don't know how I knew, but I was convinced that what ever I put into the system would not come back to me. And that was and is okay. I haven't got a retirement fund to be worried over. I have skills that will continue to pay dividends long after money has no value. I feel very fortunate.

  3/4/09, 6:23 PM
Lance Michael Foster said...

  One of the things someone with money now could do is put money into CSA (community-supported agriculture), dairy farm startups, helping to train and fund cobblers, etc. You could put together a community-centered investment club. The people would buy shares, and then when young people or others who are money-short but with the abilities, skills, and manpower to create a small needed business for your community, you could fund the operation for a share of goods, services, etc. Maybe even some cash return. A smart older person could help insure their continuing needs by investing in the education and startup expenses of a young community health professional (sort of like the "Northern Exposure" situation). There are ways like these to put money right now in local investments and helping yourself and the community develop the local resources that will be needed rather than the illusion.

  3/4/09, 7:05 PM
sv koho said...

  JMG, you really stirred things up last week!79 comments so far and counting! This post seems like an epilogue to that one and I would have to agree with you on most of your points. I think it would be wise to back off on predicting events with a time frame in mind. What we are seeing now is an out and out panic with collapse of a mania in financial instruments not unlike panics from the Tulip mania in Holland to the South Sea Bubble and others. These occurred before cheap fossil fuels and manias and panics will probably be with us after we've pumped the last barrel out of Ghawar. The importance of this panic is that it is the first(last?)global panic on the downside of Peak Oil. It is a fundamental tenet of us Peak Oil True Believers that most of the wealth created by cheap oil will disappear with expensive or unavailable oil. But this panic has the potential to destroy wealth before Peak Oil can get its licks in and thus getting this sort of wealth back with expensive oil will be impossible. I agree with you that lots of nations will default. It's happened before. France defaulted about 8 times between 1500 and 1800. The Icelandic banking whiz kids piled up debt exceeding 800% of their GDP or about $400,000 per man, woman and child. How can that be repaid? The transfer of our wealth, real or chimerical, to oil producers means that if it continues, Persian Gulf oil producers could own many of our national assets from farmland to real estate and companies of all stripes. Why should they continue buying T Bills?
  This civilization will fall for reasons well written by you, Joseph Tainter and others. There are a myriad of factors that could hasten or delay it from a massive natural disaster to the usual factors of wars and disease. Within a hundred years or two, we will probably be like the typical Englishman of the 17th century who lived a lifetime within a radius of 10 miles.We will produce most of our food and goods locally, make music and dance to it in our own villages. It's this transition that has me worried. The entire nation is suffering from a collective cognitive dissonance from Barak on down. There will be a lot of people who are going to be real sore when they find out their promised pensions, social security, health care and retirement assets are toast.Because I like to write, I see a lot of good material coming my way but I'm afraid a lot of folks will not take the looming tumult with good grace.

  3/4/09, 8:31 PM
Eremon UiCobhthaigh said...

  JMG,
  After reading last week's report you mentioned the possibility of the US defaulting on it's foriegn debt. Since then I've had this black comic vision of foriegn navies steaming towards the continent like the French-led Mexican Adventure of 1862 (here is a link for those not familiar http://en.wikipedia.org/wiki/French_intervention_in_Mexico ). I'm not a believer in the Mad Max collapse scenario, but I wonder what the international reaction would be to such a move by the US.

  3/4/09, 10:28 PM
Jacques de Beaufort said...

  It seems like a great deal of what you are describing is already a reality in most of the "2nd and 3rd" world nations. Interestingly, recent studies on "Happiness" by Daniel Gilbert and others suggest that these "poorer" countries do not have lower happiness quotients as us "wealthy" Americans.
  True, it's a bummer to live in a squalid favela with open sewage and other privations...but this might be the extreme..
  The problem with America is our expectations. Lower the bar and there's a lot less angst.
  The urban conditions in poor semi-industrial nations might also be seen as temporary, as the predatory globalism and agricultural "revolution" that fomented such conditions are repealed.
  Still, the getting there is really going to suck.
  I wonder if any historical precedents exist in which a society has faced such a terrifying downscaling..?
  It seems like the Mayan collapse might be the closest in technical similarities. Rome's descent was more gradual...and the Polynesian Island catastrophes seem much more dire than our situation. Do you see a historical parallel that is particularly relevant ?

  3/4/09, 10:42 PM
Nnonnth said...

  JMG or anyone --
  How much survival value do good family ties have?

  3/5/09, 1:28 AM
das monde said...

  The enthusiastic drive to private pension funds was quite a transparent disaster. It is remarkable how the critics were (made) so indistinct. Al Gore certainly warned nothing of what is coming.
  But as for Social Security solvency - well, folks, its fund was calculated still to get income until 2018 or so. But that date (still quite distant for today's turbulent world) was painted as the end of Social Security!
  I can understand that people, after so many talking heads lying, may have serious doubts that a system like SS can last "forever". But the fact is: no public pension fund has ever collapsed yet. Their long-term "unsolvable" problems are still just a theory. But politicians work quite hard to make public pension funds collapse.
  Some even say that Social Security is as unstable as a Ponzi scheme. But the crucial difference is: Social Security does not need exponential corrections to correct its problems. The aging bumps could still be solved by proportionate corrections, still quite possible politically in a right climate. The stock market "solution" was an outright folly - baby boomers have to pay extra to enter the more competitive market, and then get less when "competitively" exiting.
  How would a decent pension fund suffer an economic crisis like this? The fund like SS would not suffer disproportionally much - unless it is used (since LB Johnson allowed) to fund bailouts or, say, wars. As for the stock market "solution" - well, it is one of the big
  reasons of the sharp boom-and-bust. Which way is a Ponzi scheme?
  Archdruid did not particularly criticize public pension funds, though his skepticism is clear. I see Social Security not that much as an entitlement but as a social construct to reduce some (elder care) burden for the middle class. I believed that SS worked quite well this way, and could work much longer if only the "for-the-people" political climate was sustainable.
  The thing is, the peak-technology collapse (that is constantly discussed here) is approaching much faster with the investment and consumption craze that was radically over-stimulated recently. This financial collapse is becoming (accidentally or not) only the first one of coming breakdowns.
  Today I posted this article, that tangentially touches similar theme.

  3/5/09, 3:00 AM
fernwise said...

  I tried discussing this with my 92 year old partially blind mother a few years back, when a cousin asked her help in caring for the cousin's grandkids. Mother claimed that due to her eyesight she wasn't qualified to help with infants. I pointed out that you feed one end, diaper the other, and if you confuse the ends the baby makes you VERY well aware of it.
  She laughed.
  Now, I'd probably not want her cooking using a fireplace with her eyesight problems (and she'd not be able to handle heavy cast iron well), and she doesn't do a good job of hand-washing dishes. But she still has many things to contribute to a household.
  Fern, survivor of OWO

  3/5/09, 4:51 AM
Twilight said...

  Excellent - it is so very important for people to adapt their expectations to the reality they will face. I gave up on the idea of retirement several years ago, at least not retirement as it has been portrayed in the US. I hope only to reduce my obligations so that I can survive by contributing in ways such as you describe.
  But I don't think that the idea of abandoning retirement will go over very big - it's too ingrained in our culture now, in spite of the fact that modern retirement is a concept that has only existed for a very short time and only for a small percentage of the world's population. And that's too bad, as so many will be so disappointed.
  This is another example of how the best preparation one can make is to embrace the coming changes - far more important than stockpiling supplies. None of us can anticipate the details of how this will play out, but those who cannot understand and adapt will be most vulnerable.

  3/5/09, 7:25 AM
Wendy said...

  The other day my husband and I were bringing wood into the house, and we were joking around about how we were out there working while our children were all snug in the house, and I said, "Damn kids. Why'd we have so many?" He waved his hands in the air and said in a mocking tone, "Retirement plan."

  3/5/09, 7:40 AM
StephenH said...

  I think retirement won't go away entirely, but will be far different than generations past. We will need to REBUILD the system so that it is not built on the motion of endless economic growth and instead a system which provides stability in times of negative economic growth. I predict that if the industrial system does fail, a lot of debt will be forgiven and at some point society discusses allowing individuals to take back the land from the hands of corporate liens and corporate control, and the "corporate profits at all costs" economic policy is dropped.
  When this happens, we will probably rework suburbia by bulldozing some houses to put community gardens on them and grow our food locally, and work to revitalize the shops and other things to produce goods locally. If we did this now, it would save an enormus amount of fuel and resources. I am not saying that there will not be ways for people to travel across the country or the world post-peak oil (i.e. boats, railroads, airplanes powered by Algae and Jatropa, etc) on a smaller scale than today.
  As to retirement, one might be asked to put save some money in cash (not stocks or bonds), and that savings could evolve over a number of years to have some money for retirement. Perhaps the retirement age will get raised to say 72 instead of 65. Perhaps younger people will voluntary help care for their elders. Maybe when relocalization occurs, we could provide a quality set of activities for seniors in their own community, and give them discounts on boat and rail if they want to go a few places. All of this needs to be thought out and put on a local level.

  3/5/09, 10:09 AM
fourpie said...

  No need to publish this - Just wanted to thank you profusely for the last two weeks posts.
  So very enlightening.
  Regards
  Phil Joyce
  Andover, UK

  3/5/09, 10:59 AM
seeker19 said...

  Thank you for providing your unique viewpoint on the current worldwide state of affairs. The time and effort that you have invested in this web page have benefited many people.
  In this current post you used the term "stable investment". Would you please give one or two examples of "stable investments"?
  Many people view a stable investment as one that does not lose value. Certificates of deposit and government bonds are commonly cited as stable investments. Yet these are denominated in fiat currency, and their stability is questioned when uncertainties arise as to the future viability of their underlying currency.
  Many people look at precious metals and land as stable investments. Yet precious metals can be confiscated and the exchange markets rigged with crippling mark-ups. Even land that one can live on and farm can be taxed to unaffordable levels by local/regional taxing authorities.
  Aside from investing in one's self to develop skills that would translate into earning compensation from other locals and developing self-discipline to lower one's cost of living/wants, I cannot think of a truly stable investment.
  I would appreciate any insights on this topic that you might be able to provide. Thank you in advance for your help.

  3/5/09, 11:16 AM
Robert said...

  Good article.
  As part of my preparation I would like to find resources that would allow me to use my scientific background in a world without the infrastructure we have now, e.g., how to do chemistry without HPLC or chemical supply houses.
  Does anyone know of any books on low-tech chemistry? All I can find are books on how to make soap.

  3/5/09, 2:03 PM
spottedwolf said...

  Aaaarghhh John, if ya don't sound like what I've been postulating for 30 years....
  Even my mom said this would come to pass.
  Great explanation and the example of money makes money and subsequently thru to money-poor from the bit on oil was perfect.
  I once had a dream after a friend tried to get me in one of those pyramid schemes where the world was a pyramid and everyone was wearing suits as they entered the main doors at the bottom....then changed into a volcano and blew everybody out its stack naked. I saw it as business is all built on pyramid schemes and the continuance of such would eventually strip its patrons of all gain.
  Great blog...

  3/5/09, 2:55 PM
Peter Dodson said...

  Hi John,
  Great work once again. I for one am kind of excited about the prospect of multi-generational homes. We've lost too much by living isolated lives, states, cities and countries apart from our families. And who knows, maybe having our parents actually doing something in retirement (rather than lounging in track suits) will be good for them as well. I know it will be good for our children.

  3/5/09, 3:10 PM
Matt said...

  As pointed out by many of the other commentators, I think the idea of "retirement" is already archaic for many folks. The only folks in my extended family that actually had a proper retirement were unionized mill workers (who ended work in the 1960's and 70's) and unionized teachers. Everyone else slogged away (or are still slogging) well past the time Social Security kicked in.
  My own retirement plan used to be Camel Filters, but I got on a health kick and feel much better now. I think I'll take up beekeeping.

  3/5/09, 4:35 PM
anagnosto said...

  For Robert, about low chemistry book:
  Henley's twentieth century book of formulas, processes and trade secrets; a valuable reference book for the home, factory, office, laboratory and the workshop, containing ten thousand selected household, workshop and scientific formulas, trade secrets, chemical recipes, processes and money saving ideas for both the amateur and professional worker. Edited by Gardner D. Hiscox
  First edition is 1907. From 1946 they are revised editions. Some 850 pages. You can find it as pdf at internet or second hand from $20. Still in press for much more.

  3/6/09, 5:51 AM
Apple Jack Creek said...

  @ Robert the Chemist:
  When I took Organic Chemistry in university, we went on a field trip to the local brewery - organic chem (and some biology) in action! Maybe you could read up on yeast and then set up a microbrewery. Or do distillation! There's always gonna be a market for alcohol. ;) I also wonder if perhaps old (i.e. pre 1940ish) science textbooks would have some of what you are after?
  @ the Archdruid: Along with the others, I want to thank you for the last two posts especially. They very clearly elucidate what I've been trying to get my head wrapped around - I even linked to you from my blog.
  I do count myself very fortunate to live in an area with good resources, good people, and land that'll feed us with hard work and plenty of canning jars (for the long winters). I'm "living with one foot in each world" at the moment, trying to ease our family's transition when the time comes.
  May the gods send you their blessings - your words are helping others to find their way in dark times.

  3/6/09, 7:40 AM
sofistek said...

  This is the kind of thing that needs to be driven home. The future is unlikely to be (perhaps even certain not to be) anything like most people imagine. People's aspirations HAVE TO change, for there to be any likelihood of engineering a smooth transition to sustainable societies. The comment to this article on Energy Bulletin illustrates the problem; it contains links to publications that are based on living in today's societies, and offer the opinion that the scenario mentioned here has only a 20% chance of occurring. We need to get our heads around substantial change, and we need to to it now.

  3/6/09, 12:40 PM
Fed up completely said...

  Then again maybe you can do like I did and retire 20 years ago when I was 40. Now that I'm nearly 60 maybe I'll look for a job, make a nice change.

  3/6/09, 5:45 PM
M.A. said...

  Oh dang, this looks all too plausible. And here I am, single, childless, disabled, on the verge of retirement, and probably out of luck at last. And probably not the only one, either. But I do thank you for saying outright what many of us have long suspected.
  Robert, do you have a copy of Henley's Twentieth Century Book of Formulas, Processes & Trade Secrets
  (Ed. Gardner Hiscox)? There are several editions available at AbeBooks. Much more than soap!

  3/6/09, 5:59 PM
Rhisiart Gwilym said...

  Siwmae Derwydd ffrind!
  Respect yet again, John Michael. Deep, and deeply needful insights. Power to your arm, fy mrawd i. Keep sluggin'.
  Respect to the commenters too. Who says Americans are all infantilised? Not these people, clearly. Good luck to us all as the Interestingness of the Times rises to tsunami-height.

  3/7/09, 3:09 AM
James said...

  I'm curious then -- for those your age and younger, would you recommend still trying to invest in a retirement plan 'just in case' things work out better? I'm guessing you would find it more prudent and generally worthwhile to 'invest' that money into developing the skills needed to subsist in the post-industrial future. Taking up crafting and gardening and such things, getting basic equipment and enrolling in classes and such.
  This crossed my mind tonight and I was wondering about your thoughts on the matter. I know my more fiscally minded significant other would throttle me if I stopped putting my 5% away into my 401K, but there's still other money to 'invest' in these ways.

  3/7/09, 10:18 PM
John Michael Greer said...

  Thanks to all for your comments! I had another out of town speaking gig, followed by a flurry of work, and so haven't been able to respond so far; I hope no one will be offended if I limit responses to a few comments.
  Danby, well, yes, I never was that good at math. Thanks for the link!
  North Coast, I'm no fonder of retirement parks than you are.
  Stream, given that we don't have a free market and governments are displaying a growing tendency to monopolize resources, I stand by my suggestions.
  Eremon, it depends on whether the US can continue to fund its bloated military budget.
  Jacques, most big empires downscale dramatically in their final years. I find the Roman example highly relevant, and there are also some good examples from the eastern Mediterranean after the terrifying collapse that hit around 1300 BCE.
  Das Monde, what makes social security vulnerable is the looming bankruptcy of the US government as a whole.
  Fern, good to hear from you again! Yes, a lot of elderly people are going to have to remember that they have skills and knowledge to offer.
  Stephen, when your car is hitting a brick wall, it's a little late to talk about getting the brakes fixed. We don't have the resources to rebuild a society like the one we're used to. It really is that simple.
  Seeker, right now in the US the only even approximately stable investments I can think of are deposits of less than $100,000 in federally insured banks.
  Rhisiart, diolch yn fawr!

  3/7/09, 10:25 PM
wylde otse said...

  so much useful information; so many brilliant minds !
  I believe I want you all in my transition village :o)
  JMG, You are braver'n'me with timed predictions, but we all see some writing-on-the-wall.
  Wall Street does look like a giant ponzi scheme. President Obama does appear to be wanting to prevent a complete economic collapse; but who are his advisors? (or maybe handlers) ...surely not agents for the fraudsters who set up the scam in the first place.
  I read that the way retirement age was picked in England was that the minister asked his staff at what age the miners were dying, he was told 65. He said "There we are".
  (this was a liberal time in the 19th century... around that time laws were passed that children under 9 were no longer permitted to work in the coal mines - and then children over that, no more than 12 hours a day /6 days a week.)
  The industrial age has seldom been concerned about quality-of-life for the people on whose backs it rode in. Why should anyone be surprised,if the ruling class openly loots the working public.
  In the financial field; stock brokers were manipulating the market by the device of "short selling" 'profit-taking'...they borrowed their client's stock certificates (left in their trust) to accelerate the fall of a falling stock and then buying it back at its nadir, fleecing their own clients. Lately this was refined to "naked selling"...where they could sell stocks that they didn't even have to "borrow".
  This way there was no limit to the amounts they could take, say, from large pension fund investors.
  Now if anyone is wondering where the government 'regulators' were;
  they were probably too busy.
  The elected government officials who hired them surely didn't slack off because of election 'funding' considerations.

  3/7/09, 10:59 PM
ceridwen said...

  All good news then - NOT! Though personally I'm glad I fall into the category of those within a few years of retirement and my pension is all Public Sector one way or the other - both the State element and the employer element. I admit I would be very worried about where my pension was to come from if I was younger. Thank God I am in Britain and a member of the "babyboomer" generation -as I literally couldnt emotionally handle having to continue working after my retirement age - I've not experienced virtually every problem one can have in employment and been bored out of my mind at work for literally decades to get told at 60 "Sorry - mate - you're in for even more of the same".

  3/8/09, 1:00 PM
ezab said...

  One of the best things I’ve read recently compares an economic bubble to a stretched rubber band. “You know that it will burst sometime, but it is impossible to predict when.”
  I’ve been thinking about this week’s post and also last week’s... the comments as well as JMG’s lead article. In many of the subjects we’re discussing here, timing is critical ... and also very difficult to predict.
  One of the things I like about your approach, JMG, is that you say civilizations decline over a long period of time, with ups and downs. This really makes intuitive sense to me.
  In a post in April 07, you wrote "The most likely course for the decline and fall of industrial civilization is a cyclic process, in which periods of respite and partial recovery punctuate the downward curve that leads into the dark ages of the deindustrial future."
  In another post, May 2007, you wrote: “...history does seem to be contingent rather than determined – which is to say, of course, that in human affairs slight causes can have vast effects, and trying to predict the future in advance is a risky proposition at best.”
  However, in our personal lives we need to make practical decisions based on what we think will happen over the next two, five or ten years. You know, that may be impossible to predict, and we just have to take our best guess. Personally, I think I’m going to divide my resources ... since I don’t know what’s going to happen in the short term, I’m going to try to be prepared for more than one possibility.
  I’d like to encourage the community of this blog to be a bit more cautious when making predictions about what will happen in the next two or three years. Let’s remember all those folks who were so certain that on January 1, 2000, we were going to wake up in a completely different world... and then it didn’t happen. Often you get a feeling in your personal life where you’re sure something is going to happen (your boss is about to dump you, or so-and-so is going to be your good friend) ... and then it doesn’t happen.... we all know that feeling, as if you stepped on a step that wasn’t there. Then you shake your head and adjust to a new reality.
  We realize we’re facing likely changes in the coming decades, and the better we can envision the probabilities, the better we can prepare for them. At the same time, let’s also keep a sense of the uncertainty, unpredictability, impermanence, of the future conditions we foresee.
  Last week, I posted information about developing skills in sewing machine repair. This week I want to add: I do think those skills will come in handy at some point in our future; I’m not predicting when.

  3/8/09, 3:23 PM
Megan said...

  I second the request for pointers on how to preserve the basics of modern chemistry. For example, I would rest easier in a deindustrialized world where surgeons and dentists still had access to ether.
  I can't recall if I've read Henley's specifically, but I've read similar material of similar vintage (or even of more recent vintage) and haven't been impressed from a health-and-safety standpoint. Also, many of them presume access to supplies that are already difficult for a layperson to find - how about some basic materials extraction?

  3/8/09, 11:29 PM
Nelson said...

  Dear Mr. Greer,
  The picture you paint for the elderly is limited to what happens to those who remain useful, and valued.
  Care to comment on the other side of the coin?
  Expensive medical conditions, painful joints, chronic fatigue, and hypertension are a more common starting point for the soon-to-be-unretired than diving into gardening and childcare.
  When my teeth are gone so that I can no longer chew the hides, will my son-in-law put me out on an ice floe? How long might this take to reemerge as an accepted practice?

  3/9/09, 4:49 PM
Robert said...

  Thanks to Apple Jack Creek and anagnosto for the response to my question. Henley's is available in a local library and I definitely plan to check it out. I'm also planning to get started in brewing and soap making.

  3/9/09, 4:56 PM
John Michael Greer said...

  Otse, well, going out on a limb is an occasional occupational hazard of Druids. ;-)
  Ceridwen, remember that the economy of employment will likely become a lot less important in the years to come; for many elderly people, the household economy will be a better bet.
  Ezab, one essential rule of thumb in the real world is always to have a plan B in place, in case the world you expect doesn't show up on time.
  Megan, I'd encourage you to take up the research yourself. There's more work to do right now than there are people willing to do it.
  Nelson, being useful and valued is at least as much a matter of the choices you make as it is of anything else. Perfect health isn't required; a willingness to make the effort is.
  Robert, I've long argued that anybody who can brew a good pint of beer can pretty much count on prospering even in the most apocalyptic future. Go for it.

  3/9/09, 5:07 PM
John Michael Greer said...

  Eric (offlist), if you'd like to trim the profanity from your post I'd be happy to put it through. Yes, I know I'm hopelessly out of date; deal with it.

  3/9/09, 5:08 PM
anagnosto said...

  Megan got me thinking that one of the most important advances in health research of the XXth century shall be as easy to keep as good beer brewing. Streptomyces or Penicillium (of the correct strains) are easy to grow. But we must hope once huge, massified hospitals dissapear they take with them also the new antibiotic resistant pathogens. Synthetic dessign antibiotics will not be available though.
  I must say too that in general terms, I think newer generations will probably not look with a lot of sympathy to the one just retiring, or the following one (mine). To build intergenerational bridges at personal levels becomes a priority, specially if family is disfunctional.

  3/10/09, 4:04 AM
ezab said...

  In this week’ s post, you outline four possible economic futures that might play out over the next decade:
  ** a long deflationary spiral
  ** hyperinflation
  ** a credit crisis; nations are forced into default
  ** a major debtor nation defaults on its foreign debt
  I wish that sometime you could devote a column to each of those possible economic futures. (I don’t quite know what to call your weekly post. Is it a column? An essay?)
  For example, I find hyperinflation very hard to picture. I know it happened in Germany between the wars, and in Zimbabwe today... but I don’t know any of the details. As a historian you could fill in some of the gaps. Does it come on gradually, suddenly, or could it be either way? Do people pay off their mortgages with the valueless money? Do charitable organizations set up soup kitchens? How have people coped, historically? Could you suggest a book to read?
  When I try to picture a long deflationary spiral, the first image that comes to mind is the early years of the Great Depression. Prices tumbled by about 30%, and the deflationary period lasted more than four years. For your other two possible economic futures, I don’t know any specific examples. I hope at some point, you will share more details ... with pointers to books or online resources for more information, if possible.
  Many thanks!!

  3/10/09, 6:00 PM
John Michael Greer said...

  Anagnosto, the only problem with pennicilin-style antibiotics is that many bacteria are resistant to them. We'll need to cultivate other approaches.
  Ezab, well, I'll put it on the list, but I have quite a few posts I already want to write. In the meantime, I bet your local public library can provide you with good histories of Germany in the 1920s, America in the 1930s, and so on.

  3/11/09, 11:05 PM
Bob Wise said...

  Hello, Mr. Greer-
  I appreciated your insights in this column and in "The Investment Delusion". However, there's more to be said beyond your point that "on average, all investments go down" in a shrinking economy. I hope I'm right, since I plan to retire next year. (Not silver-haired yet, but that will come.)
  Certainly, in an economy which is static or declining on average, "growth" stocks will be rare. Index funds will be sure of a net decline over the long run, and there will be no basis for the familiar yields from bonds or CDs. Solid creditors will not be lending money at such interest rates. "Inflation-indexed" bonds based on a wildly distorted CPI will only compensate for a third or so of actual inflation, and the proportion seems to be declining.
  Still, if you have money to invest, you can buy dividend-paying stocks and trusts in enterprises that seem to have a solid future. Oil, gas and coal resources and extraction are obvious choices- declining over the long term, but likely to pay dividends as long as a firm's resources last.
  As the "green" industries and energy sources develop and mature, there should be profitable companies offering dividend-paying stocks. Barron's last week had a few recommendations on this theme.
  Market swings and general asset deflation will hurt the market value of these stocks and trusts, but the objective is income, not growth in value. Naturally, you would try to buy when prices are relatively low.
  Though not easy or simple, you can invest directly in renewable resources such as cropland, orchards, groves or grazing land. These will hold their value, subject to the effects of climate change, and will pay a steady rent, though not as high as more common forms of income real estate.
  When your national currency seems poised for another decline in value, precious metals are a good temporary alternative. Government bonds in other currencies may be, also.
  In a world of "fiat" currencies, you can seek a Volkswagen: one that loses value more slowly than the others. Currencies of resource-rich countries may be good candidates, though I can't claim any success in this area.
  These are the ideas I've tried to apply, and I'm hoping they'll work well enough to support my wife and I in retirement. Social security will give substantial help, too, as long as it lasts.
  - Bob Wise
  bobwise32952@bellsouth.net

  3/13/09, 3:31 AM
Be Cool Carpool said...

  I hope the families in the multi-generational homes know how to grow food, too. I can cook from scratch -- which is unusual. A young friend watched me make brownise from scratch and said, "I didn't know you could make brownies without a mix."
  I'm learning how to raise chickens., too. It could be a hungry "retirement."

  3/13/09, 12:42 PM
Roboslob said...

  The problem w/ the boomers as they age is most have little useful knowledge to offer. Many won't be able to cook or do dishes even. Most of our ancestral knowledge, cultivated over millennia, has vanished with the CONveniences of the industrial age.
  Middle-aged and young people will have to learn survival skills over, and have to take care of the elder generation to boot!

  3/14/09, 7:46 AM
Matthew said...

  It is interesting to note that continued activity into old age is one of the things to which a National Geographic report attributed the incredibly high average life span of several communities in different parts of the world...
  http://ngm.nationalgeographic.com/ngm/0511/feature1/

  3/23/09, 6:45 PM
atomicat said...

  I think the biggest problem we may face this year, as many have said, is a massive collapse of the US dollar and loss of energy from other countries as the macro-economic system implodes.
  If your the president, and you have a choice in cutting 2 of the four items below? Which do you choose?
  1. Personal car transportation 25% energy
  2. Industrial farming system and delivery of food 25%.
  3. Industrial power for businesses 25%.
  4. Home heating and cooling. 25%
  Each of the above have about 25% of the energy usage. These are a little rough as figures but it's about a quarter of the energy to each.
  We could lose as much as 68% of our energy if all imports of fuel stopped. But Nafta has Canada tied at the hip and they will likely stay tied to our economy and provide us with 14% of our energy regardless. They will likely sink in the same mire. So that's up to 50% loss of energy.
  The 2008 Peak Oil conference which JMG and others sat at, last question and answer session mentioned going toward full organic. Bascically abandoning industrial farming and using rail. 50 million organic farmers and such.
  This might be a workable long transitional plan 20 or 30 years, but as a short term plan would probably not work. Why? Because we'd need to still try to repay some debt, even if our dollar collapses for some trading to continue and to hope to get our of our massive foreign debts we need to maintain some export value which is industry and farming outputs. This means Obama being in the pragmatic center and trying to please all and maintain the past will likely keep farming and industry.
  I think if we have to cut out in a shock dollar collapse two of the four listed in my post above, the two most likely to go would be:
  Personal transportation via cars. This by severe limits on gas per week ration per family (like a gallon a week.) That stops all driving dead.
  And we simply cut off the heating and cooling to houses. So severely that people must reconfigure and perhaps even house share and just board up houses. Heat and cooling would be supplied at work, and workers would stay at work and sleep in sleeping bags at work during the week. They would then travel home for the weekend with the family and use very little energy and perhaps tend to gardens.
  By cutting personal transportation and home heating and cooling, we cut back 50% of our energy use for a shock dollar collapse and still get food delivered and some kind of industrialized soup distribution as well as other foods.
  The other option to me, if it was a sped up option, of trying to go organic right away would result in massive starvation like they had in Cambodia. It would be a mass forced move to the coutryside like the cultural revolution in China. It would provide no excessive food exports because our energy would be going to railroads and warm houses, instead of producing food for ourselves and others.
  To think we cannot be food sufficient and maintain an industrial food production system, farmers are the MOST productive per capital, not the least, is to me looking at the short term shock problems through long term hopeful farming glasses. We need to think about the alternatives.
  I hope my post hasn't been to much off topic. Regarding change and retirement I talked to my father the other day and mentioned a neighbor thought he was a millionaire and he thought the old neighbor was as well. I said, you guys both think the other guy is loaded. My father (who was born in 1928, and lived through the depression as a child) replied and said, "well I am a millionaire, I have you." He was looking very pragmatically on the value of a child to aid the family.
  So there's the future Social Security and pension fund for you, you're children if your lucky.

  4/8/09, 11:43 AM

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