Monday, August 03, 2009

The Rise of the Diagonal Economy and the Transition to Decentralization

Below is an outline of the general chapter structure of my next series of posts—these on the notion of a “Diagonal Economy” (drawing from the use of the term by Hardt and Negri ).  I hope to 1) outline my positive vision for a post-peak-everything world, 2) outline a set of principles and forces for use in decision making and strategic planning, and 3) spur further discussion on the topic.  I’ve linked this Table of Contents on my side bar—I won’t necessarily proceed through these chapters uninterrupted over the next 13 weeks, so this TOC may be useful in pulling the overall process together into one coherent piece:
1.  Overview of the Diagonal Economy - (Lay out vision, discuss the similarities and differences between the Diagonal Economy and existing gray and black market economies, the meaning of “diagonal” compared to parallel overlapping systems)
2.  The Diagonal Economy and Energy Descent – (Why declining energy and net energy will lead to reduction in the ability of hierarchal and centralized systems to function, and why as a result we’ll need to revert to more localized and smaller scales production systems, at least for most physical goods.  Hierarchal and centralized systems don’t voluntarily downsize well, and may not be able to adapt effectively to lower energy environments, resulting in both a growing need/demand for the Diagonal Economy and a growing low-competition space for it to flourish)
3.  The Diagonal Economy and Sustainability – (Why the legacy hierarchal economy is fundamentally unsustainable; the opportunity to build an economic system compatible with true sustainability)
4.  The Diagonal Economy and Human Ontogeny – (Why the legacy hierarchal economy is fundamentally incompatible with human ontogeny; why that won’t be resolved by merely allowing current institutions to collapse and reconstitute on smaller scales; why the Diagonal Economy shows promise in being able to overcome these issues and provide a high quality of life when measured by a human-ontogeny-relevant metric while simultaneously dealing well with energy descent and sustainability issues.  Propose new metric based on fulfillment of humanity’s genetic ontogeny while providing opportunity or spiritual growth)
5.  The Diagonal Economy and The Power of Networks – (The Diagonal Economy is not a regression to a less sophisticated form of organization—on the contrary it is arguably a more sophisticated form of organization that combines some elements of historical economics with new understanding of network and information theory that is only now widely understood.  This allows the Diagonal Economy to significantly fulfill human ontogeny while simultaneously maintaining its own in direct competition with the legacy hierarchal economy merely on “sales pitch” items of material consumption—discussion on legacy-economy-sponsored states and use of force later…)
6.  The Diagonal Economy and the New Map – (Gray markets, non-Cartesian and uneven conceptual terrain, and the re-opening of the map.  While all politicians maintain that we live in “Nation-States,” this is already a shallow statement, and energy descent will further the minimal extent to which the state fulfills its constitutional promise to its theoretical “nation.”  In reality, we’re slipping in to a market state system (some places faster than others, or in different ways than others) but on universal constant is the increasing ability for the Diagonal Economy to gain ground)
7.  The Diagonal Economy:  A Society of Entrepreneurs - (and Entrepreneurial Communities)—and why this will be necessary as we transition from Nation-State to Market-State.  Sharon Astyk (sp?) has written a book called “A Nation of Farmers.”  I think we must take this a step further—“A Society of Entrepreneurs.”  It goes unstated that farmers are entrepreneurs, but all of us are ultimately entrepreneurs—it’s just that for most of us, the business we choose to engage in is the sale of our time and services to (usually) one customer in a specific job market, otherwise known as a “job.” 
8.  The Diagonal Economy and Localized Diversification – (People who work a standard job don’t tend to think of themselves as entrepreneurs—and that’s a poor entrepreneurial business plan. Family/Community Systems Design, and the Resiliency of Multiple “Careers.  We all do several things, but we need to start designing these systems of activities to most resiliently provide for the goals of our families and communities, rather than assume that the State will do so for us.)
9.  The Diagonal Economy:  Surge Capacity as a Measure of Brittleness – (Surge Economics and why working under capacity is beneficial)
10.  The Diagonal Economy:  Resilient Quality of Life Metrics and the Resurgence of Vernacular Technology - (how, when we begin to focus on maximizing the resiliency of our quality of life, we will simultaneously begin to shift toward the use of “vernacular” technologies that require fewer concessions to unsustainable and hierarchal “other”)
11.  The Diagonal Economy:  Localized and Peer-to-Peer Design and Manufacturing – (Localized manufacturing, collaborative and open-source design, and the potential boundary layer between the Diagonal Economy and the Legacy Economy)
12.  The Diagonal Economy:  Interface, Parasitism, and Boundary Layers with the Legacy System – (Economic, Political, Legal, and Military interface and relationships between the Diagonal Economy and the legacy hierarchal global Nation-State/Corporate economic system)
13.  The Diagonal Economy:  Overlaps and localization in law, sovereignty, and the use of force in a post-peak-Nation-State World – (Lessons from Mexico, the breakdown of exclusive legal systems, and the potential for adaptation and resiliency by the emergent Diagonal Economy)
One possible complement to this series is my plan to gradually go through several strategic principles, systems thinking principles, game theory concepts, and show their application to the ideas discussed on this site.  I may intersperse these chapters with such strategic commentary where appropriate, or I may integrate them into these posts.


TH in SoC said...

Jeff, I look forward to your series.

I have a comment on point 2: "Why declining energy and net energy will lead to reduction in the ability of hierarchal and centralized systems to function... Hierarchal and centralized systems don’t voluntarily downsize well..." One temporary response I see from the masters of centralized, hierarchal systems is to try to make things very difficult for people who are pursuing emergent alternatives. One example of this is the spate of "food safety" bills introduced into Congress, bills that don't make food safe, but that impose huge regulatory burdens that drive small producers out of business.

I also think that the masters of our centralized, hierarchal systems will continue to retain power to jack ordinary people and make their lives miserable for a while longer (although things like accelerating oil production declines and/or the sudden refusal to finance additional American debt might bring a sudden end to this power).

It will be important to learn to recognize the "growing low-competition spaces" in which an emerging diagonal economy can flourish.

ryan said...

good stuff - i'm particularly interesting in a "positive vision of the post-peak-everything world."

hopefully its going to be more of a "post-peak-everything-that-fuels a-destructive-imperialistic-shallow-and-unsustainable-world."

i agree that one of the most difficult aspects of this transition will be convincing hierarchical systems and their beneficiaries to radically change. i think of it in terms of memes - which often fight it out until the death of their hosts. it is doubtful that the older generation and powers that be will adopt alternative and adaptive behaviors. US policy planning papers for near future energy extraction also suggest no major changes.

i imagine decentralized, local scale resource production will be relegated to different sorts of black markets and these will have to defend themselves constantly. check the youtube videos of community organic gardens in LA here:

real solutions to energy, resource, and environmental issues must begin to recognize the difficulty in applying valid solutions in a world run by robber barons. another recent example - Hunt Oil just moved in on Peruvian amazon after the recent state-driven slaughter:

also looking forward to more on how diagonal economy, networks and sharing systems can fit better into human ontogeny.

keep up the great work!

Robert Martini said...


I've always wondered about a fundamental basic characteristic of centralized and decentralized systems. My theory is that centralized systems leverage power and decentralized systems leverage raw efficiency. The idea is that Centralized system can organize a process and streamline it to produce things fast, but tend to sacrifice efficiency and produce waste because of the energy required to concentrate energy, materials and the associated transportation and infrastructure cost. Decentralized systems because of there nature of having the production process at the location of the resource node and therefore having little or no transportation cost tend to maximize full uses of resources and efficiency. They lack the centralized capital to be able to streamline and increase the the resource can be utilized. The reason centralized systems are so prevalent are their resistance to isolated shocks or competition, whereas in times of resource scarcity, decentralized systems tend to prevail.

Even in biology the body size of creatures is a good indicator of the resistance to extinction. One could argue body size is an indicator of the centralized nature of a certain amount of biomass, and that an extinction period is due o relative resource scarcity? The larger a creature though, the more resistant is it to isolated shocks such as a predator or threat of competition. Good analogy or no??