Re: Alternative Investment Code
Thomas Lunde said: I agree with your exposition that the net flow of capital outside of communities destroys those very communities and it is with great sadness that I and many others who had that type of childhood feel when we stop chasing the buck for awhile and think of the childhood we had as compared to the childhood we are currently giving our children. My girls, know more about the Spice Girls than they do about their great grandparents and the 50 years of community living, friendships and relationships that were developed when small local communities existed. If I find any consolation in the current world situation, it is that capitalism may self destruct on the global level and that electronic technology may destroy those great capitalistic sumps that suck the life out of the country into cities. The land of my childhood is a wasteland of specialized people growing specialized crops that are determined by the need to generate income so they can farm larger so they can make more income. Their life is no different except that their "job" is in the country. Their lifestyle is as empty as it is for the rest of us living in the suburbs and fighting the morning rush hour. This is all rationalized under the concepts of opportunity - but from my standpoint, this is a word from George Orwell. Well, enough of my morning rant, I get frustrated with words. The land of your childhood does sound rather wonderful. Even though I grew up in much the same area - all over the western provinces - mine was quite different. My parents were immigrants who came from eastern Europe just before the Great Depression. They tried to farm in Saskatchewan, but could never quite get themselves established. My Dad, like so many other would-be farmers and farmers' sons of the time, rode the rods and became an itinerant farm hand just to provide some money to keep us alive. We followed him around and lived wherever there was a job for a few months. There may have been country dances wherever we lived, but I don't remember ever attending them. There were undoubtedly some wealthy farmers around too, but the ones I remember were dirt poor, so poor that they could not afford to pay my Dad wages for the work he did, which meant we had to move on again. Many of them were indebted; that is, they relied on capital borrowed from others, and since there was very little capital in the area, it must have been imported from elsewhere. Things changed after the war. Farms became much more prosperous, but they also became more mechanized and efficient. They did not need many people. Fortunately, capital was moving into the cities at the time, urban population was growing, and there were plenty of jobs. When my father returned from overseas, we moved from a small town in rural Saskatchewan to Winnipeg where he found employment as a carpenter. I'm not saying that the world of your childhood was imaginary, but it was probably quite exceptional, doomed to last for only a brief period until economic and technological change did away with it. You appear to view yours with nostalgia; I would not want to relive mine. And I'm very thankful that I did not have to raise my children in the wretchedness of the prairies of the 1930s. I have not read Douthwaite, but if he is making the point that capital should be used only where it is being generated, then I would strongly disagree. Capital spells opportunity for a better life. If capital does not move to where it is needed, people will move to where the capital is located. And it is very difficult to prevent them from moving. The media are full of stories of Mexicans trying to get into the US and of the Americans trying to keep them out. The same thing is going on in many other parts of the world. In my view it is much more humane to move capital from surplus to deficit areas than to expect people to uproot themselves and participate in the perils of migration. Ed Weick
Re: Alternative Investment Code
In reply to Ed: Well, I can certainly appreciate your experience and to a large degree it was reflected in my family as well, but you are talking about the experiences of the depression and I was referring to the experiences of the 50's. That two decade difference is a big difference. I guess the personal story I was trying to tell Douthwaite was based on the complaints I heard from my grandfather as he watched his 5 sons leave the farm. He maintained that it was the price the cities were willing to pay for farm production and that because they controlled the market and the capital, the farmer was forced to take what he could get. Grain in a granary has no value, so withholding his production from the market and waiting for a better price wasn't an option. This transfer of wealth from primary industries in local areas is the "profit" that makes cities possible. Cities on their own cannot build without wood, manufacture without metals, eat without large agriculture and that is not to say that cities provide no benefits - it is to say that miners and loggers and farmers don't set the price - the markets of the cities do. And there in lies the distortion. People will stay on the farm or in the bush if they can make a decent living. That means that those small communities with their required infrastructure create a lifestyle that is equal to the city lifestyle and many would choose it. The economics of capitalism and power reduce the amount of money in the countryside while the rich in the cities grow richer. Now we talk of the global economy. This idea is driven by the myth of lower prices. The idea as I understand it is that business should be allowed to produce where costs are lowest and sell in markets where they can receive the most and that this differential will provide them with a higher rate of return on invested capital. The glitch in this scenario is the found through one of our fellow posters, Jay Hanson. A global market only works when the cost of transportation is low. Once the true price of gas and oil comes into effect, there will be a huge surge of capital to local markets because goods that are carrying the price of high transportation costs will be more expensive than goods created for local (and by local I would generally mean within a radius of 100 miles) markets. This is the de-massifying effect predicted by Alvin Toffler and Marshal McLuhan. I might add that the increase in communication technologies assists this reversal by bringing all the advantages of the city to the rural. Douthwaite and I observed in our lifetime the denuding of our respective rural communities and the massive increase of our cities. Now, with large hydro companies being forced to allow local generation, we can begin to see the start of this trend. It will happen in monoculture agriculture as farmers find that tomatoes from Florida and California can't compete because the cost of transportation has risen past the point of greenhouse and hydroponic gardening using waste heat from local co-generation. Even things like coffee will be grown locally once the cost of fuel rises sufficiently. So why is all the smart money betting on globalization. While fuel prices are cheap, the most capital can be accumulated with a global strategy. When fuel prices rise, the ones with capital will be able to invest in and dominate local economies. For a capitalist, the strategy is always remarkable simple - to keep your eye on the ball - always invest where the rate of return is the largest. These guys will have no trouble getting out before the global collapse of trading because they are all drinking the same brandy as the oil producers and will have advance warning on when to convert investments into capital and re-invest locally. The oil producers don't care, we are a petroleum economy and we will need petroleum for local rural communities as long as it lasts. So, why MAI, NAFTA and other international treaty's. If I am right, they won't be worth the paper they are written on in 10 years as their will be little or no global economy. However, until then, let's weight the roulette wheels for the highest rate of return and besides it sets up all the investors not in the know as they see the big guys trying to protect themselves, not realizing it is feint. So, Ed, even though we had slightly similar experiences we have drawn totally different conclusions. I think that as we de-massify, which is happening in Canada with Quebec leading the way and the rest of the Provinces demanding more rights and more local taxes, that when the fuel prices go up, the governmental infrastructure will be in place. Even those capitalists who make it into rural economies are going to have to change, because as Douthwaite pointed out, local owners have to invest in their community rather than taking capital out. Respectfully, Thomas Lunde
Re: Alternative Investment Code
Dear Mr. Douthwaite: First, let me say with unabashed admiration that I found your book "The Growth Illusion" to be seminal in my thinking. Second, let me apologize for using extensive quotes from your book to post on FutureWork some of the ideas that you have so elegantly outlined. Third, I would ask that you share with me any list addresses on which you post regularly as I would like to continue to monitor and learn from the clarity of your writing. Now, in response to your answer which was posted on FutureWork in response to Colin and Ward, (who I do not know) regarding the ideas of external investment. Canada, is currently the largest country in the world with a tiny population of less than 30 million people - it has jokingly been referred to having a Canadian Passport as belonging to the cult of Canada, so small is our population in regards to the 6 Billion currently in the world. In my case, I grew up partially on a farm in Alberta which had been homesteaded out of wilderness by my grandfather in the 1920's. A thriving community with churches, community halls, schools every ten miles and small towns of only 50 or 60 people existing for most within that 10 mile radius. I can clearly see them know in my mind's eye as they were in the 50's as I traveled with Grandpa on Sunday outings, neighbor visits and purchasing expeditions and group work projects. In this area, from 1910 to 1950 the small mixed farmer had opened up virgin land and built a community with roads and services. Family's became known through several generations and it was expected that many would stay in the area, taking over farms or developing small businesses to serve the agricultural community and for a mere 40 years this was true. Now, when I go back, many of the farms have only deserted houses, there are no local schools, the school buses take kids for a radius of over 30 miles to what was once a village but has now grown into a small town. The other small towns have disappeared, often without even a sign telling where the were. Farmers now think nothing of hopping into the big V-8 pickup truck to drive 20 miles to pick up a couple of pounds of nails. Women who once cooked meals from farm produce, now drive up to 50 miles to go shopping for food in a supermarket and in the process they have lost the basic skills of food preservation and food preparation. Children do not know their neighbors and those wonderful old country dances were the kids and grandparents all went are things of the past, the churches have closed down and the kids stay at home with the TV. In fact most of them don't even learn the farming skills of their fathers as it is accepted that an education will lead to a good job in the city and that Dad and Mom will sell the family farm to provide for their retirement - usually in the city. I agree with your exposition that the net flow of capital outside of communities destroys those very communities and it is with great sadness that I and many others who had that type of childhood feel when we stop chasing the buck for awhile and think of the childhood we had as compared to the childhood we are currently giving our children. My girls, know more about the Spice Girls than they do about their great grandparents and the 50 years of community living, friendships and relationships that were developed when small local communities existed. If I find any consolation in the current world situation, it is that capitalism may self destruct on the global level and that electronic technology may destroy those great capitalistic sumps that suck the life out of the country into cities. The land of my childhood is a wasteland of specialized people growing specialized crops that are determined by the need to generate income so they can farm larger so they can make more income. Their life is no different except that their "job" is in the country. Their lifestyle is as empty as it is for the rest of us living in the suburbs and fighting the morning rush hour. This is all rationalized under the concepts of opportunity - but from my standpoint, this is a word from George Orwell. Well, enough of my morning rant, I get frustrated with words. Respectfully, Thomas Lunde
