Our Philosophy

Festina lente
-make haste...slowly

Tuesday, September 11, 2012

Business in Contractionary Times

We humans did just fine before the Industrial Revolution, whether we were members of an agricultural, horticultural, or foraging society.  The move to agriculture from foraging or horticulture wasn’t, and still isn’t, a self-evidently desirable adaptation.  Many people, even today, know all about farming and choose not to join the movement.  The Kung! bush people of Africa, when asked why they don’t adopt farming practices, famously reply “why should we farm when there are so many mongongo nuts?”  And they have a good point.  Why toil from sun-up to sun-down to produce a surplus of a few high-calorie crops when you can eat a wide variety of foods offered freely by Nature? (And please don’t say to have more free time!) It’s been estimated, from prehistoric midden analysis, that the Cherokee people, indigenous to the southeastern United States where I live, utilized over 200 plant species regularly in their diet.  By contrast, the modern farming world derives 2/3 of its calories from just 3 crops: rice, corn, and wheat, with rice feeding fully half of humanity.  Efficient, considering our energetic reality at the moment, but about as far from resilient as we can get (think Irish potato famine). 

We tend to think that farming brought an end to hunger, but famine was unknown before agriculture.  Consider a diet based on over 200 species of plants, plus the occasional animal meat, insects, and a variety of wild mushrooms: how could one possibly go hungry with so many options??  No, it’s highly unlikely that foragers had access to as many gross calories as we do today, but nutrient density in their food was probably far superior to ours, and obesity was largely absent, as was the tooth decay I mentioned in an earlier post.  Foragers were healthy, nearly across the board I would wager, trim, fit, and with the absence of social hierarchy, probably a lot more relaxed than we are.  By contrast, Americans are pudgy, pasty, and neurotic.  Yes, let’s definitely keep doing this…
The way I see it agriculture relies on expansion.  Expansion of land use, expansion of markets, expansion of population, and expansion of the money supply.  Let me point out that the expansion of the money supply is the only one of these that can continue indefinitely (theoretically), and that’s because the money we’re talking about isn’t actual wealth, it’s fiat currency.  It doesn’t have any stand-alone value.  If it were backed by gold, or silver, or mongongo nuts, there would be hard limits to it as well.  But there is only so much land on offer, so many markets to infiltrate, and so many humans that the Earth can support.  If a commodity or process is declared “infinite,” or virtually so, one can almost bet that the limits to that commodity or process are near at hand.  If there were really still plenty, no one would be talking about the vast quantities remaining.  Ever heard anyone mention “peak sand?”  Why not?  We use it to make glass every day.

Agriculture is the embodiment of growth.  It has had a successful 10,000 year run, from (largely accidental) inception to (teeth gnashing) breaking point, and has been the most influential movement ever known in Earth’s history.  But expansion and growth are over now.  In a recent post we talked about the serious decline in EROEI figures for our favorite energy technologies over the past 80 years, and we now know that the time has come for us to slowly divorce ourselves from fossil fuels in favor of higher returns (like from firewood!).  That’s just what biological populations do.  Continuing to use an energy source whose EROEI is less than half that of a stone-age technology like firewood suggests to me that the industrial world has been officially, and in every other way, mentally enslaved by fossil fuels.  The divorce is unlikely to be pretty, or easy.  But the divorce must proceed nonetheless.  It WILL proceed, too, whether we like it or not, at least at globally-meaningful levels. 
In order to maximize our transition potential – potential that will hopefully be redirected into more useful strategies once we “fess up to the guvnah” about our situation – we will employ a host of other technologies as their EROEIs become more competitive with oil.  What we thinking people must do to help guide this process in the least wasteful way is boycott green-washed false starts, like ethanol and nuclear, and throw our support behind energy transitions that might actually be useful to us, like new hydro projects (away from the migration routes of diadramous fish naturally) and wind power, where applicable.  The EROEI for photovoltaic solar, spiffy as it is, is so low that it should only be employed in small amounts, and only where there is no better option.  At Small Batch we have a whole 11.8 watts of PV solar employed to drive a box fan, and we’ll probably never have much more than that.  Not that we weren’t thinking about it at one point, but we know better now.  Acquiescing to hard facts, and adapting our thought patterns to the new data, will be critical as we proceed within an energy descent context.  In other words, behavioral innovation is the most useful new technology in our arsenal.  Anti-climactic as that might be…

With this new worldview we should be able to outline some useful patterns for approaching business activity and the making of “money” for our sustenance.  We hit on it two posts back, but I’ll work through this facet of life in a bit more detail this week.  And I’ll start by making the suggestion that we need to change the way we think about “money” itself.  “Income” is a very natural word.  Ecosystems themselves make income, in the form of various earth energies like sunlight and wind, water moving through and across the landscape, inorganic nutrients eroding downhill, and animal manures collecting in the leaf litter.  A healthy ecosystem has no qualms about taking energy and nutrients from a weaker one, but it doesn’t involve “money” in the process.  In a non-expansionary future, money is likely to follow highly nonsensical patterns, cause a lot of anguish, and delude lots of people.  Getting used to thinking about income as something largely separate from “money” might be a useful new perspective to gain.
Real income, by contrast, is something almost anyone can increase at any time.  Land or access to land, fertility/biomass, water retention structures, trees and plants in general, medicinal herbs, education, etc, can all be thought of as real, money-independent income.  And most Americans, at this point, are still so blind to this idea that they will happily bag up their wealth and set it on the curb for you to pick up in the fall.  I can’t help but chuckle every time I take a shipment of biomass like wood chips, leaves, grass clippings, manure, straw, and spoiled hay, free of charge, from some dupe who thinks he’s dumping his “trash” on me.  It’s hilarious really.  Land is probably the hardest of these to come by, but land in the U.S. right now is fairly cheap – it’s hard to say if the value of land will start increasing again – and there is generally plenty of excess energy in the typical American household economy being used for non-essentials that could be redirected into something more important during critical times.  This is that time.  Trees, herbs, fruiting plants, education, water retention, etc, can generally be acquired at will.  I’m always happy to give away, or sell cheaply, comfrey starts, strawberry daughters, and scion wood.  Find people doing these things and you’ll find inexpensive starts for your own project.

From a larger business perspective, the industries that run our daily life are quite large at this point, generally interstate outfits, if not international.  That's what works best when energy is basically too cheap to meter.  But, coupled with declining real incomes, today's energy costs are starting to hit people hard already, and "local" is perhaps the biggest buzz word to hit the market in decades.  You can see it everywhere, from tiny upstarts like Small Batch Garden to large multi-national corporations, the word local is making a come-back.

In our case, we are paralleling the local organic food model with local organic simple medicines and household products.  Think of us as a tiny Burt's Bees.  We make herbal bugspray, linen waters, lip balm, skin and muscle creams, an eye health oil rub, and will soon be offering bulk herbs and teas, essential oils, and old homestead liquid soaps made from rainwater and wood ash.  It's what my wife and I love doing.  And I believe that the business world in general is opening up graciously to relocalizing businesses.  Working in the farmers market and festival scene, I'm seeing new local versions of cured meat companies, dairies, doughnuts, orchards, bakeries, honey, print stock, sewn goods, mobile wood-fired pizza, popsicles, plants, handmade pots, and organic soil conditioners, etc, etc, just waiting to take hold in a more local economy.
I see the business world as wide-open right now, if one can muddle through the uncertain transition.  A part-time job doing something crappy, that famous "underemployment" sector of the economy so popular just now, might be just enough to support a budding local business of your own design as we head into the economic transition from huge structures to small.  Family support is an extra special bonus in that endeavor, and one we've been fortunate enough to have access to as well. 
I don't want to pretend that we are over the hump and in a position to be giving financial advice.  We're not.  But Small Batch is growing steadily, slipping into retail outlet after retail outlet, seeing bigger profits at farmers markets every month, and expanding our product offerings organically, incrementally, as we have the time and money.  I think this is due to having a trained eye on where the world is headed.  But whatever it is you enjoy doing, or are at least good at doing, will probably be open to a more local version in the years ahead.  Just because Coca-Cola is who they are doesn't mean that a decent living couldn't be made making and selling soft drinks at local markets, and Coca-Cola's success in the growth world does not guarantee them success in the contractionary one.  Matter of fact, the psychology of previous investment is likely to get in the way of mammoth organizations like that soon.  Businesses like your tiny soft drink company and Small Batch Garden are like the little proto-mammals scurrying around the feet of the dinosaurs as the giant asteroid cruises in, largely unnoticed (both the asteroid and the proto-mammals).  Now is probably not a good time to be a dinosaur.
And consensus is not something we should be concerned about just now either.  Natural selection is driven by having a wide variety of options from which to choose.  Some options are adaptive, some are not, but we won't know which is which until they've been tried.  Even Nature doesn't know yet.  Consensus is useful during periods of constance, like the constant energetic reality we've all known for the past century or so, but once that driver of consistency no longer applies, we need options more than anything else.  Right now we need the nuts to try something different, even if it's only for difference's sake.  It certainly helps to have some knowledge about how the future may go - we can pretty much rest assured that energy will be harder to come by from here on out - and, with careful consideration, that knowledge will help us know where to turn for an income.  The lower energy future will be one of necessities - food, water, medicine, shelter, as well as art and entertainment of some sort, but I believe these needs can still form a rich cloth of existence around us, especially if we apply our remaining fossil fuel-derived affluence to the task of relocalizing our activity to a smaller scale.
They say that for every two jobs WalMart brings to a community three are lost.  Perhaps it would be good to keep that idea in mind as we lament the decline of globalism.  We haven't found Utopia in fossil fueled excess, so we are probably unlikely to find it in the day-to-day grind of energy descent, but as far as work goes, there should be no shortage in a more local future.
Cheers, friends.
Tripp out.


  1. Interesting little factoids about agriculture (as compared to foraging) at:


    Me, I want to talk more about horticulture...

  2. Tripp; I agree that relocalizing is under way as well as inevitable, but here in the midwest, farm land is definitely becoming less cheap very quickly.

    Here is one of several recent articles describing the trend and dynamics. It is driven partly by speculation and ethanol subsidies, but I think a lot of people may well be considering the Will Rogers quote as well as considering that it's less about returns and more the fact that tangible goods can't disappear overnight.


  3. All that farmland is worthless, though, without people to work it in a way that is appropriate to the current energetic trajectory (which doesn't include that much of modern agronomy).

    "A prediction in a recent advertising campaign from Monsanto Co. (NYSE: MON) illustrates the immense demand that's just around the corner. The company said the world's farmers will need to produce more food in the next 50 years than farmers have produced in total over the last 10,000 years."

    Followed by this gem:

    "Soaring demand for grain has already affected the market. Monsanto said global grain consumption has exceeded total production for seven out of the last eight years."

    Call me crazy - I'm used to it - but I don't see these two comments as compatible within any context that resembles reality-based thinking.

    The people in this article are looking to make money trading pieces of paper, which in my opinion (and probably Steve's too) isn't going to work this time. The North American human ecosystem is calling its humans back to the land to live a simpler, lower energy, more localized life - the exact opposite of the multi-decade (century?) trend that informs the opinions of almost every investor.

    If that land can be profitably rented to smaller producers, piecemeal, then maybe it pans out (if the land isn't already too damaged to be productive without ever more costly fossil fuel inputs in the near term); if the buyers are simply counting on net profits from farm products increasing over time, then I say "welcome to the real world; enjoy the ride."

    Doesn't help the good people of this country get back to the soil where they belong, though, does it? If this works it will be because of novel social contracts between land owners (likely speculators residing entirely within the teriary economy, completely lost in the primary, biological one; or overwhelmed inheritees) and willing and knowledgeable stewards of the primary economy who don't possess much financial backing (during the transition, anyway, while the latter is still temporarily considered inferior the prior).

    Buy land if you can, but not to sell for a profit...

  4. Curiously, I followed up this post with a bit of research on Coca-Cola, only to find out that Coca-Cola achieved the sort of market dominance they captured early on via a local franchise model! I know in my home town of Tifton, GA, there is an old Coca-Cola manufacturing plant - it's a lawyer's or accountant's office now, I can't remember - so they may end up being more adept at this contractionary business than I first thought. Start that soda company, though; there's going to be plenty of room for everyone.

    And for god's sake, will someone please tell the FDA to dump their asinine prohibition on sassafras so we can get some decent root beer in the future??!! Thanks.