And when bad stuff happens, you’re better off being somewhere else.

Where?

Generally, bad stuff seems to happen most often in cities. Why is that? Cities are where most people live. It is where governments are. And it is where the labor force is most specialized.

There are no subsistence farmers living in cities. Nor do urban populations “live off the land.” Instead, they depend on complex networks of commerce. The typical city dweller produces neither food nor energy. He sits all day in an office — completely dependent on others to provide power and food. Then, he goes home — still completely dependent on the division of labor for his most important needs.

Progress can be described as the elaboration of the division of labor. In man’s most primitive state, specialization is extremely limited. From what we’ve been told, the early man was the hunter. Early woman gathered…that’s about the extent of it.

As the tribe grows larger, specialization increases. One person might tend the fire. Another might be in charge of making clothes or arrows.

The advent of sedentary agriculture and towns caused a big leap forward in human progress and, not coincidentally, the division of labor. Some townspeople went out to tend the fields. Others began to focus on woodworking…or iron mongering…or making weapons…or clothes. Some played cards and hung around at bars. There was soon a homebuilding industry…and, not long after, merchants, prostitutes and bankers…and even shyster lawyers and tax collectors.

As the division of labor expanded, the average person became richer…and more dependent on others. In order to eat, someone else had to plant…and till…and harvest…and hunt…and gather. And then, when agriculture became mechanized, he depended on faraway people who produced oil and gasoline…and people who built tractors and combines…and bankers who financed industries and factories. And, of course, he was more dependent on money too. In the days when he bartered, money was no threat. Then, when he traded only with gold and silver coins, there were no monetary breakdowns…no hyperinflations…and no financial crises.

As the 20th century progressed, more and more people gave up agriculture, moved to cities and took part in other industries. Today, cities may have millions of residents — like Bombay with 14 million…or Sao Paulo with 20 million…or Mexico City with even more. All of these people are dependent on vast, stretched lines of communication and commerce.

Even the farmers themselves are now dependent on these sophisticated networks of commerce. They depend on money…and what it will buy. Agriculture has become monocultural. That is, a farmer is likely to produce only wheat. Or only rapeseed. Or only barley. Or only cattle. Gone are the chickens around the farmhouse and the pig in the back pen. If the system of transport and trade breaks down — or the money itself goes bad — thousands of farmers could go hungry too.

There are black swans all over the place, waiting to be discovered. And when a black swan appears, people in the cities seem to suffer most.

In the hyperinflation in Germany in 1923, for example, farmers had so much food they ran out of storage space. But they wouldn’t sell it to city slickers. The mark was losing value so fast, farmers preferred to hold their crops off the market, knowing that the price was soaring…and that if they sold, the money they got would soon be worthless.

People in the cities, meanwhile, were starving. Soon, gangs roved the countryside, raiding rural barns and houses…and occasionally killing farmers who tried to resist.

Plagues hit city dwellers hard too. Proximity seems to be a curse when an infectious disease appears.

And, of course, in time of war and revolution, cities tend to be the battlegrounds.

Advancing armies are rarely polite. But even if they are advancing through the countryside, they are usually advancing towards cities, which they attack. In the old days, cities were besieged, starved out, and then, when they were taken, the attacking soldiers were given three days in which to sack the cities. In other words, they had three days to commit whatever mischief and mayhem their imaginations suggested.

When bad stuff happens, progress goes into reverse — so does the division of labor. When an economy goes backward, much of the specialization that developed during the boom years turns out to be uneconomic, or unaffordable, or unwanted. People may be willing to pay someone to park their car when they are flush. But when they are broke, they will park their own cars.

As the division of labor goes backward, people also find they need to tend to their own food and energy needs. Here is where it gets very tough for people who live in cities. They have no stores of mason jars with food from their own gardens that they have canned themselves. They have no hams hanging in the barn or stocked away in the larder. They have no animals on the hoof that they can slaughter. They get no eggs from the chickens they don’t have…and they can hardly go into the local park and shoot squirrels to make a pie.

Instead, they are out of luck.

Generally, when the black swans come out you are better off in the country — with country-boy skills and old-time farms supplies.

We once met a fellow who had a keen appreciation for apocalypse. He was sure it was coming. So, he moved to Arkansas where, he said, “I’m protected by 300 miles of armed hillbillies.”

That’s something else to think about. Not only do you have to worry about food and energy, you also have to worry about your neighbors. If you have a nice little vegetable garden next to a large apartment complex, for example, you might have a hard time protecting your crops. And don’t count on fattening a calf in Central Park during a famine.

You need to be somewhere else. Where?

Regards,
Bill Bonner
Whiskey & Gunpowder

February 18, 2011

Urban Magnets for Disaster was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

Among the qualities most visible in the recent ruins of that lost society is the secure confidence expressed in its buildings. Even the most modest factory or business establishment built before the 20th century included decorations and motifs devised for no other reason but to be beautiful — towers, swags, medallions, cartouches — as if to state we are joined proudly in a great enterprise to make good things happen in this world. This was true not just of Cleveland, of course, but the whole nation, for a while anyway.

Equally arresting are the changes visible in the collective demeanor from the mid-20th century, especially after the Second World War, when the adolescent panache of a rising economy had morphed into the grinding force of a place devoted to the production of anything. The memory of the Great Depression lingered like a metabolic disorder, and the spirit of the place was no longer caught up in the muscular exuberance of self-discovery but the sheer determination to stay powerful and alive. This phase didn’t last long.

By the 1970s, signs of a new illness were clear. Production was moving someplace else, incomes and household security with it. An existential pall settled over the city as ominous symptoms of waning vitality showed up in the organs of production. Steel-making and car-making staggered. Even the Cuyahoga river caught on fire, as if fate was a practical joke. Major retail was moving elsewhere — to the suburban outlands — where so many of the people who worked in the downtown towers had already fled. The population that remained in the city center was made of recently uprooted agricultural quasi-serfs who had only just come up to the city a generation before to make better livings in the factories that were all of a sudden shutting down. It seemed like a kind of swindle and they were understandably angry about it.

These days, reading what remains of the city by the lake — like so many other cities on the lakes and big rivers of the USA heartland — you see a place outfitted for different obsolete pasts with almost no sense of a plausible future. Most of the efforts directed at “economic development” in our industrial cities have been aimed at recapturing those pasts, and it is not surprising that they uniformly fail, because we are not going back there. We could conceivably take ourselves toward futures to be proud of, but they are not likely to be the kind of futures we are so busy projecting in our techno-grandiose fantasies about machine “singularities.”

Being an actualist, I’m in favor of getting real about things, and the reality we’ve entered is one of comprehensive contraction, especially for our cities. One of the reasons places like Cleveland (and Detroit, and Milwaukee, and St. Louis, and Kansas City….) continue to fail in their redevelopment efforts is because they are already too big. They became overgrown organisms a while ago, unsuited to the realities of the future — especially the energy resource realities of the future — and they have tried everything except consciously contracting into smaller, finer, denser, differently-scaled organisms. In fact, the trend up until the so-called housing bubble of recent years was to just keep on expanding ever outward beyond the suburban frontier, which left our cities in a condition like imploded stars — cold and inert at the center, with debris speeding uselessly outward to an unreachable infinity.

This future we’re entering, which I call the long emergency, compels us to imagine our society differently. Our cities and towns exist where they do because they occupy important sites. Cleveland is where a significant river empties into the world’s greatest inland sea (which has the additional amazing benefit of being fresh water). Some human settlement will continue to be there, very probably a place of consequence, but it will not be run under the same circumstances that produced, for instance, the civic center of Daniel Burnham with its giant Beaux Arts courthouses, banks, and municipal towers.

This disintegrating nation is woefully distracted by Web 2.0, iPads, Avatar movies, Facebook, and the idiot celebrity spectacles of TV, not to mention the disasters of job loss, foreclosure, medical extortion, bankruptcy, corporate loot-ocracy, and the squandered moments of politics. We know we have to go somewhere.  We know that something like history is leaving us behind. We have no idea how to get to a new place. And we’re spending most of our mental energy gaping into the rear-view mirror, which is the last place to look for your destination.

The confusion is apt to get a lot worse before it gets better. I’m not saying this to be ornery but because I believe it is true, and it will benefit us to know the odds we’re up against. The confusion is going to generate a lot of ideas that are inconsistent with reality — especially involving the seductive nostrums of technocracy. Our redemption will be found closer to the ground in the things we do by hand. But we don’t know that yet, and we’re going to try everything except looking there before we find out.

Regards,
James Howard Kunstler
Whiskey & Gunpowder

March 18, 2010

Leaving Behind Industrial Civilization was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.

Some 9,000 homes and lots went up for tax foreclosure auction in the American symbol of industrial urban failure…yet 80% of them remain unsold despite a minimum bid of $500.

How the world turns.

Once Detroit was a dynamic city, the urban equivalent perhaps of a can-do, modern woman, the kind who could have easily attracted money and devotion from deep-pocketed suitors.

But now the ol’ gal just ain’t what she used to be. “Motor City” must sting like an accusation. Her industries are gone and the political props have only prevented the sort of changes that she needed to retain her vitality.

Now she’s lost her looks…and her dignity…and the only ones willing to touch her aren’t willing to pay very much. But apparently a few banks are hoping to buy claims to pimp Detroit out, while making absolutely no investment in improving her lot.

“Critics say the poor showing at the auction underscores the limits of using a market-based system to clean up property tax problems.”

No kidding!

Critics are always blaming a market-based system…even when it was politics fighting the market that made things so bad in the first place. And God forbid that the market tries to clean things up.

There are plenty of people who would love to buy Motor City’s properties cheap and actually move into the city…but the banks keep outbidding them for the decent properties.

The banks, of course, are hoping to make a quick profit…but property prices improve only when the right kind of productive, mindful people move in and form strong local economies.

By buying up the properties, banks are pricing out precisely the kind of people who would make their investments pay off!

I suspect the banks believe that they can simply count on the government kicking off another real estate bubble with the old bag of tricks: by manipulating interest rates and the cost of money and debt. And who can blame them?

We’ve all been conditioned to believe that politics will trump markets forever, that the universe runs on votes instead of physics. Things will–predictably–get worse until this belief is temporarily wrung out of our collective consciousness.

In the meantime, consider homesteading in Detroit. In a little while, the banks will have lost their taste for speculation…along with another chunk of taxpayer money.

Living in Detroit would be rough at first, like living on the frontier full of hostile natives: Mad Max meets the Ol’ West. And it may not pay off. Cities do die occasionally, you know.

But that’s what smart investment is all about. The gains are puny when the chances of success are high. If risk has its rewards, then Detroit’s abandoned streets may be hiding gold under the grit.

Regards,
Gary Gibson
Managing Editor, Whiskey & Gunpowder

October 26, 2009

Detroit Real Estate: Down and Out at Market Value was originally featured on Whiskey and Gunpowder. Visit Laissez Faire Books for the best selection of libertarian book titles.