Monday, August 24, 2009

Diagonal Economy 1: Overview

I often have a difficult time articulating my vision of the future.  Some people think that I’m a “doom and gloom” type—that there will be small, fortified islands of farming communities trying to fend off the starving masses after civilization collapses due to energy shortages.  Others, of course, think that I’m either hopelessly optimistic or a hopeless romantic, and that I’m suggesting we can replace modern society wholesale with some fantasy-world of cooperative networks of suburban homesteads.  While I understand how these misperceptions have come about, I haven’t done a very good job (yet) of articulating how I do, in fact, see the future of civilization unfolding.  That’s my hope for this Diagonal Economy series:  to outline the major forces and systems driving the evolution of our civilization and economy, including in-depth analysis of major forces and thoughts on how we can help, or gain from, the resulting trends.  This first post in this series will provide an overview of my vision of the Diagonal Economy--you can keep track of the larger series at the Table of Contents .
This civilizational and economic evolution will, under my theory, give rise to what I’m calling the “Diagonal Economy.”  I initially planned to use the phrase “Parallel Economy,” but that sounds too much like a mere shift to black and gray markets, instead of addressing the more fundamental, structural shift that I predict away from hierarchal organization to a flatter, peer-to-peer form of organization that I have called “Rhizome ” elsewhere.  Perhaps “envision” is a better word than "predict"—I advocate for this shift, and think that it makes sense from several perspectives (fulfilled ontogeny and true sustainability in particular), but what I am not doing is suggesting, like some Marxist prophecy, that this shift is somehow our civilization’s destiny.  I think this shift will occur on some level, but that it will meet powerful resistance.  In the end, it is primarily a set of tools that will become increasingly available to those who wish to shape their own future.
Here, I think that “diagonal” best captures this shift—movement along one axis (energy consumed and scale) and along a second (degree of hierarchal order of organization).  The term also draws from a discussion (using the same label) in the Intermezzo section of Antonio Negri’s and Michael Hardt’s “Empire.”
So what is the Diagonal Economy?  Ultimately, I see it as a structural response to the various forces that will increasingly shape the coming century and beyond.  A limited list includes energy descent; other resource constraints; imminent ecological and climatic pressures; the limits of human ontogeny; information processing burdens; and the breakdown of the nation-state system.  I use the term “structural” quite a bit, yet I rarely define what I mean by it.  Each of these forces, for reasons that I will explore in individual posts in this series, have particular impacts on hierarchal structures.  Likewise, each force interacts differently with what I’ve called “Rhizome ” --topologically flatter, peer-to-peer networked structures that exhibit scale-free self-sufficiency.  While I don’t suggest that we will—or could—abandon hierarchy entirely in favor of rhizome, I do think that each of these forces will more negatively affect hierarchal patterns of organization than they will affect rhizomatic patters.  For that reason, while I actually predict a reactionary response by hierarchy, when confronted by these patterns, to enhance the hierarchal nature of existing structures, I think that there will be the opportunity to instead confront these forces with increasingly rhizomatic solutions.  So, in that sense, the Diagonal Economy is my proposed solution to humanity’s current and dawning challenges.
That may work as a statement for the intent of this notion of “Diagonal Economy,” but it isn’t much of a description.  I hesitate to articulate a vision for the Diagonal Economy, not because I’m worried about being proven wrong (I’m quite confident that will happen often enough), but because I don’t want to limit the modes of expression of the basic principles that I will articulate.  That said, I think it’s worth describing one possible manifestation:
The diagonal economy might rise amidst the decline of our current system—the “Legacy System.”  Using America as an example (but certainly translatable to other regions and cultures), more and more people will gradually realize that there the “plausible promise” once offered by the American nation-state is no longer plausible.  A decent education and the willingness to work 40 hours a week will no longer provide the “Leave it to Beaver” quid pro quo of a comfortable suburban existence and a secure future for one's children.  As a result, our collective willingness to agree to the conditions set by this Legacy System (willing participation in the system in exchange for this once "plausible promise") will wane.  Pioneers—and this is certainly already happening—will reject these conditions in favor of a form of networked civilizational entrepreneurship.  While this is initially composed of professionals, independent sales people, internet-businesses, and a few market gardeners, it will gradually transition to take on a decidedly “third world” flavor of local self-sufficiency and import-replacement (leveraging developments in distributed, open-source, and peer-to-peer manufacturing) in the face of growing ecological and resource pressures.  People will, to varying degrees, recognize that they cannot rely on the cradle-to-cradle promise of lifetime employment by their nation state.  Instead, they will realize that they are all entrepreneurs in at least three—and possibly many more—separate enterprises:  one’s personal brand in interaction with the Legacy System (e.g. your conventional job), one’s localized self-sufficiency business (ranging from a back yard tomato plant to suburban homesteads and garage workshops), and one’s community entrepreneurship and network development.  As the constitutional basis of our already illusory Nation-State system (.pdf) erode further, the focus on #2 (localized self-sufficiency) and #3 (community/networking) will gradually spread and increase in importance, though it may take much more than my lifetime to see them rise to general prominence in replacement of the Nation-State system.  Ultimately, the conceptual “map” of the American Nation-State will re-open, and those pockets that best develop a Diagonal Economy to fill that gap will enjoy the most success in what will otherwise be a time of substantial—though I think largely subconscious—transition.
That might be unsatisfactory as a description of the Diagonal Economy in action—I’m happy to elaborate in comments.  In upcoming posts, I will articulate this vision in more detail by focusing on component forces and phenomena within this shift to the Diagonal Economy.  Hopefully a coherent picture will emerge, and a set of principles and tools will be clearly defined.  But, if this vision is only clear in my own head, please let me know.  My goal here is to figure out how to translate something that is half intuition and half foggy notions into a comprehensible essay . . .

Readers may also find my litigation checklist of interest.


Tom said...

Will be very interested to follow your coming posts. I am so tied to the Legacy System that I have some difficulty seeing how a rhizome organization will handle things that require large scale coordination across nation-state boarders; like roads, pipelines, communications infrastructure, etc.

Rice Farmer said...

Ever since I first read about your rhizome concept, I have been enamored of the idea, so I look forward to seeing how this series will develop.

I'd like to suggest something to take into consideration (with the full realization that you might already be planning to write about these). Since last year, it has been very apparent (i.e., much more so than before) that the globalized system we've built -- thanks to cheap energy -- is no longer under anyone's control. We've come to the point where even the major players on the global chessboard are just being dragged around the game board. Major governments have pumped huge amounts of money into their economies to deal with the crisis, but (despite Helicopter Ben patting himself on the back) no problems have been solved. We're just more saddled with debt than before. We field huge military forces and get nowhere. And the age of economic growth is behind us. So I see a breakdown coming, followed by a period of considerable chaos, during which the complex systems (global, national, and local) that govern us will be greatly simplified. The simplification will come because we've reached an unsustainble level of complexity, something that has happened to past civilizations. So to sum up, we will have CHAOS and SIMPLIFICATION.

The question is, how do we (1) prepare for and (2) take advantage of chaos and simplification to build a platform for desirable new socioeconomic systems and new forms of governance?

My own thoughts on Tom's question is that large-scale infrastructure like roads and pipelines will become progressively more difficult to maintain, and they will gradually (or maybe even quickly) degrade, the reason being that these are dependent on lots of cheap energy. A good example of this is the US highway system, including the Interstate System. Virginia has shut down about half its Interstate rest areas, and I have heard that rest area closures are under consideration in other states. Also, some states have cut back on mowing their highway median strips and shoulders. And of course we all know about crumbling bridges and potholes. This is just the beginning. These vast road systems were built when energy was much cheaper, so at higher energy prices they are impossible to maintain. Thus, our existing large-scale infrastructure will gradually crumble, and at the same time we will increasingly fall back on pre-modern strategies for transportation and communication (I don't think we're going back to the Stone Age).

But I look forward to Jeff's take on this.

Matt Holbert said...

I think that revenues in most municipalities have already hit the skids. While some loss of revenue has been reported extensively in areas such as California, it hasn't been realized here in eastern Washington. In the last two days, I have been clearing up a title error on an 89 Vanagon that I just bought. The DMV (Division of Motor Vehicles) office at the county courthouse did not have a single other customer during my visit and the state trooper inspection station had only one other customer for the entire day.

While I will not regret the disassembly of the insane hierarchical system that is in place, I would like to see an orderly transition to something else. ( I realize that this is unlikely, but I prefer to focus on the possibilities.) I'm currently looking for feedback and trustees for a concept that I've been developing for some time now. Current working label is It has become quite clear to me that the credit system has been the source of much of our downfall.

The Skald said...

I too am very interested in reading your follow up posts concerning the notions of a diagonal economy and a rhizome organization. Like Tom, I am so tangled up in the legacy system that doing much more than imagining other possibilities is difficult. Some of your initial posts on this topic strike me as popular notions in some of the science fiction and cyberpunk literature.

I am especially interested since I found much of "EMPIRE" a tedious rehashing of old ideas (an almost religious zealotry tied to classical Marxism) in order to synthesize the notion of an Imperalist globalism. Worse, where the authors have a failure of confidence in their own ideas is precisely where they become the most academically obtuse.

I've really enjoyed your ideas and perceptions so far - anticipating further posts!


Jeff Vail said...

Tom: I think most of us are so tied in to the legacy system that the first major obstacle to overcome is the mentality that we cannot remove ourselves from total reliance on that system. That won't be easy, but it will be made easier by the gradual and increasing inability of that system to provide what we exepct it to provide. As for some elements of the legacy system such as major roads, pipelines, etc., I think this is a good example of two things: 1) the legacy system isn't going to *poof* disappear overnight--I think it will be around for quite some time, just not in a "cartesian" sense where the nation-state is the exclusive sovereign. Instead, we'll see increasing blur and overlap between the nation-state and non-state actors, some of which will even perform functions such as pipelines and roadways under the theoretical auspices of the nation-state, but in reality under their own financing and security plans. 2) Those infrastructure elements that require such large-scale coordination, that fundamentally *can't* be performed in a peer-to-peer manner, will gradually fade. They probably won't fade away, at least not any time soon, but they will recede in importance, become more expensive, less inclusive, etc. I think we'll be surprised at how many of these kinds of functions can be replaced by localized and peer-to-peer-coordinated or emergent alternatives. They won't necessarily be identical replacements--it seems more likely that localized alternatives to water or natural gas pipelines, for example, would come not in the form of new pipelines but in the form of replacing the need previously met by such pipelines with local water and energy solutions...

Jeff Vail said...

Rice Farmer:

I agree that many of our hierarchal, centralized responses are becoming increasingly unmanageable. I think this is part of a larger trend--something that I will talk about in depth--of the impact of declining net energy surpluses on economies of place and scale. It's also discussed in Tainter's concept of diminishing marginal returns on investment in complexity--something that I think has been occuring for quite some time, but that has been masked by our (former) ability to effectively divert our massive energy surpluses and North/South leverage into our complexity engine.

Jeff Vail said...


While I think that revenues at the municipality level are under serious pressure, I don't think we're quite at the point where municipalities/states/nations are cutting services that truly undermine their constitutional basis of providing for their constitutuent nation. But I think we're very close. California may be the canary in the coal mine here--lots of municipalities will go under first, but these will be less visible because 1) there will often still be state programs or funds to come to the rescue, and 2) they will often fly under the media radar, so we'll hear less about it. California won't go so quietly, and the federal government likely won't step in to bail it out. Watch carefully how California addresses the issues--how it spins the reduction in services as temporary, etc.

Jeff Vail said...


I definitely draw on some cyberpunk concepts here--though, personally, I prefer a more rural and agrarian "cyberpunk" vision than the often gritty, urban versions we've been provided to date (opportunity for reversioning existing stories??).

In general I agree with your take on "Empire." Rehashed Marxism, exessively academic, etc. However, in the "intermezzo" section, there was a discussion of the notion of "diagonal" (if I remember correctly--I'll have to go dig my copy off the shelf and look again). This brief (only a few sentences, which, for that book, is very brief) discussion of the notion of diagonal really struck me--not in a dogmatic or specifically Marxist way, but in the notion of paradigm shifts out of phase with but coexisting with our current system. I'm actually pretty sure this isn't the way they even intended this to be interpreted, but it's been a useful construct for me...

Joel said...

"Pioneers—and this is certainly already happening—will reject these conditions in favor of a form of networked civilizational entrepreneurship."

Have you read the first couple chapters of Novella Carpenter's Farm City? She talks about exploiting the un-developed land and state of near-anarchy in Oakland (particularly, Ghost Town) to turn dumpstered food into Tuscan-style artisanal pork products.

Somewhere, she describes slaughtering a lot of fowl after her neighbors complained about the noise. They were still gaining weight, but better to have a harmonious neighborhood and slightly less meat.

She seems to sell lots of biodiesel and not a few books, as well.