Charles Hugh Smith: Fixing The Way We Work

I've thought a lot about tribalism lately, and wondered what got us to the current predicament of an overly complex energy-dependent civilization ruled by sociopaths.  I am stepping out of my area of expertise here (I'm an engineer, not an anthropologist or sociologist) but I believe that smaller tribes could either kick out the sociopaths and the "useless eaters" or, better yet, train them to pretend to care and thus bring out the best in all tribal members, for the greater benefit of the society. 
What population level is needed for the tribal structure to work?  We may find out when our energy-dependent complex systems break down and we revert to smaller, more connected communities. 

Can we build or maintain complex societies with a socioeconomic model that is not capitalism nor communism?  I'll ponder the question while reading Charles' book.

It would seem That there is a push factor and a pull factor.
Some point to the failings of the Savannah ape. That Is what I would call a Push factor. Our instincts push us in the wrong direction. We are not designed for the environment that we have created for ourselves. The obvious answer is that we must shorten  the slow process of evolution. By the time Mr Darwin arrives he will have no fine material left to work with. The Age of abundance has allowed womenfolk to slacken off in their breeding program. Either we seize the nettle or resign ourselves to Mr Darwin's tender mercies. 

And the pull factor. We need to solve this paucity of materials and surplus of Apes.  An asteroid has just whooshed past us.  It was made of platinum. And is that all the platinum out there? Do crocodiles swim in the water? Can you see where this is heading?  Of cause you can. With a strong enough desire for la dolce vita we stand a better chance of not going ape again.

And this whole "money" thingo will seem so quaintly archaic. After all as Asimov pointed out, the only free people have been slave owners. And now our slaves will be machines. That was why he wrote the entire "I Robot" series. He cleverly wrapped his vision up in candy so that people would actually read his stuff. 

I offer a re-visitation of Gregor MacDonald's PP blog on Joseph Tainter's slant from January 17, 2012. I think it's great that, as a civilized (?) society, we continue to seek alternatives. However his blog highlights the inevitable conundrum that large scale social groups face. They run out of resources, as the fundamental PP site elaborates very well. It happens to ants, bees, geese, you name it. Scarcity and complexity always bites you in the behind, eventually, no matter how smart you think you are. I think it is referred to as a sine function.

I'm new to this forum and these podcasts. Thank you for an insightful and thought-provoking segment. I agree with a lot of what you say, but I'm in spectacular disagreement with your dismissal of a Guaranteed Minimum Income (GMI) as a solution to robots stealing jobs. Your argument goes along the following lines:

  1. Software and robotics will become so capable that many (or most) jobs could be automated.

  2. This wave of job killing will displace a significant fraction of the American workforce, who will then have no traditional means of financial support.

  3. Total government expenditures currently stand at $6.2 trillion and this number will not change despite point #1.

  4. Taxing automated businesses will not be sufficient to raise the $6.2 trillion plus the several trillions more required to provide a GMI, assuming the cost of living remains at the current level.

I've highlighted the portions of points 3 and 4 where I think you've made a major boo boo. How is the $6.2 trillion government budget currently spent? A large part goes to the salaries of government employees so they may provide government services. But this will all change with advanced automation (as per point 1). In other words, the government will be able to do more with fewer employees, just like any other business. You don't expect the private workforce to drop by 60% while all the state and federal government agencies, who have access to the same software and robotic tech, keep their payrolls at the current levels – do you? No, the $6.2 trillion figure will be drastically reduced, even as the services improve (think robots repairing roads, fighting wildfires, building hospitals etc.).

Not only will the government budget be drastically reduced, but so too will the general cost of living. A GMI will have to provide for the basic necessities of food, shelter, education, health care and so on. And all those items will cost less (much less) when labor prices are taken out of the equation. We have to be consistent with our forecasting!

This is an interesting and very important topic. I don't know how much automation will change the numbers, but those changes will likely be dramatic. And they need to be factored into both sides – reduced costs along with reduced employment. I would love to see you recalculate the numbers with these ideas in mind.


Just other view this reminded me of

Seems like a good point  to me, Homer, about government and cost of living being much less in a society with mass AI and robot production.  That doesn't deal with the problem of capital fleeing taxation, but one thing at a time…
And thanks a lot for your thought-provoking tour of new possibilities, Charles! 

It’s generated a great discussion.  I don’t agree, Dave, that human nature is a fixed thing that can’t evolve, but maybe not in a way that makes a practical difference.   My sense is that while human nature itself can evolve, its rate of evolution seems glacial, and likely way too slow to adapt to the global problems coming at us at a high rate of speed.    The global economy is so complex, status-quo defensive and denial based, it seems much more likely to break than bend when confronted with a rapidly changing environment - at least back to simpler, and more regional or local economies.  My impression is that your new economic model, Charles, might be designed to also function in a more regional or fragmented global economy, if/when it comes to that.

Ultimately, as I think Chris and others have said many times, the good news is that globally, we probably have the capability and resources to actually create a pretty good life for the vast majority of people on the planet, maybe all.  The big problem is figuring out how to imagine, incentivize and create the change to an economic system that could support that, which is what you’re writing about.   I’m interested to hear more of what you have to say.

I'm going to load up your ebook to read on my vacation to Mexico next week.  It might even be indirectly funded by the trip's addition to my gradually devaluing load of United Mileage Plus miles -  value accruing to me while vacationing and consuming instead of working and producing.  Hmmmm…maybe we could set up an economy in which you're paid to consume instead of work.  Oh, I guess we kind of already have that if you pretend debt doesn't exist or matter, which society seems to be doing. 

Ultimately, economies are systems for incentivizing social behavior (or not).  Some Keynesians like Krugman seem to believe that you can create endless debt as a means of incentivizing certain outcomes – building infrastructure, paying medical costs for the society, etc.  They say the debt isn’t important - it's more like an artist’s palette of paint for guiding economic activity.  That doesn’t make sense to me.  I’ll be interested to see how your imagined system works around that.

You can empathize at a tribal level but not with a civilization. It's the personal element that makes the difference.

Last time I priced AutoCAD it was $11Grand, Aus. Out of my league. I have an idea that will make the James Webb telescope instantly obsolete. But I need the drawing package. Am I unique?  Not really. Once people are made redundant you can expect a lot of intellectual fire power to be freed up.


Because evolutionarily, tribalism made sense. Civilization never has. One was created by nature through the same processes as every other life form on this planet, while the other was created by humankind. One lives in balance with its surrounding environment by necessity (not really by choice, despite common misconceptions about hunter-gatherers being all nature-lovey-dovey), while the other deigns itself above such trifling concerns, much to its imminent destruction. The problem isn't​ solved by this form of government or that one, by this economic model or that one. The problem is civilization itself. Daniel Quinn's book "Ishmael" outlines this fairly well, and is a good read besides,.

As much as I love the things civilization has brought to this planet, the destruction it has wrought hasn't been worth it. If we could somehow scale tribalism up, we might make it work. However we haven't been able to so far. Regardless, it seems that if we don't nuke ourselves tribalism may very well be the only form that survives at the end of our 10,000 year experiment with civilization.

AutoCad light is $360 per year or $1,200 for a perpetual license.
Being an amateur astronomy enthusiast, I've noticed that there are some really decent minds already at work in that area.  There are a lot of people developing equipment and implementing ideas, either in their garage (or basement) or at a university.  Innovations are too numerous to mention, but adaptive optics comes instantly to mind.

There are also a lot of "cottage industry" participants in astronomy.  Heck, a semi retired dentist in my own astronomy club designed and manufactures the Obsession line of dobsonian telescopes.  The larger ones are quite impressive, but expensive.

It is clearly possible to compete with orbital telescopes.  An excellent example of this is the most distant galaxy ever imaged.  NASA released an image of a galaxy over 13 billion light years away.  The light from this galaxy is over 13 billion years old, thus the image is of an early galaxy in the life of our universe, assuming you subscribe to the big bang theory.  Anyway, a couple of amateur astronomers decided to attempt to duplicate the image from their back yards.  One was located in California and the other in Europe, Germany I think.  They both owned 20 inch Ricthey Chretein telescopes, expensive by amateur standards.  The short version of the story is that, with a few months of effort, these two amateur astronomers were able to image the same galaxy that the Hubble imaged, over 13 billion light years away.

However, there are unique costs associated with optimizing ground based telescopes, just as there are unique costs associated with running a telescope in space.  I won't even get into how cost ineffective a government organization like NASA is, or the issues associated with government funded "science."

But, there are a lot of first rate minds working on both ground based and space based telescope design.  

One thing that will be difficult if not impossible to duplicate is the efficiency of an orbital telescope.  Ground based telescopes excel only in good to ideal "seeing" conditions.  Orbital telescopes are not constrained by weather conditions.  Sure, a ground based telescope can meet or exceed a space based telescope under ideal conditions.  But ideal conditions are not all that frequent.

Having said all that, a few years back, I was climbing down off of a ladder after viewing Omega Centauri through a 24 inch Obsession telescope.  When I hit the ground I found an older man I was unfamiliar with had joined the group on the ground.  He extended his hand and said, hi, I'm Al Nagler.  Amateur astronomy is a relatively small subset of our pint sized planet.

Thanks to everyone for adding to the discussion. These are big, long-term issues and there can't possibly be a single "right answer."
In general, though, I think the "righter answer" is increasingly decentralization and opt-in communities, as opposed to further centralization and coercion.

A big heart warming thank you for not just this article/book but your entire body of work. This goes for anyone that is willing and courageous enough to put their ideas and thoughts out into the complex world of social structures we inhabit. Last night my dreams spoke of my past history of social pain and disillusions. And I want everyone to know I support and celebrate them. I can hear your humanity and am encouraged by it. Thank you! Big hugs!  Rose
Nod to CHS, T2H, Dave, Les, Snyd, OOG, Arthur, Kelvin, SC, Homer, Uncle T, Waterdog, WCJ, Granny, Mark and The PP. 

Peace will naturally come when justice is served.  Without justice there will be no peace.  Justice first then peace will come.  There are ten apples for ten people (one each), until one guy decides to grab nine and throw one back out for the other nine guys to fight for the one.

The one statement in this discussion that jumped out at me was that there is an abundance of capital.
There is an abundance of money, but it is not earned money, which is how I think of capital  (or earned assets, as capital doesn't have to be in the form of currency).

Jim Kunstler has been outspoken about how the lack of capital is going to prevent us from doing many things we'll want/need to do, such as re-building rail lines and fixing infrastructure in general.  Think he is dead on, and it's a subject getting little attention.

It appears overall wealth is contracting.  How can that not lead to shrinking capital?  The causes for the contraction of wealth are many.  Gotta believe the trillions spent on war the past decade or two are a contributing factor–war destroys wealth through it's high cost and incredible destruction. And oil that cost more to produce than it sells for could be another source of major wealth destruction if it continues long enough. At the very least, oil is no longer a source of vast wealth creation.  The astronomical rate of borrowing would be another major cause of contracting wealth.

One thing I took from the podcast is further confirmation that we are all going to end up broke, or at least unable to afford our current overall standard of living.

VALUES. The problem with values is that values are *not independent of the socio-economic system.* 
I am uncertain of you can escape my pretend wrath with that Asterix Charles, but allow me to differ. 

Is this statement correct?

" Values are a subset of Quality."*
If so, then Persig has pointed out that Quality is a thing in and of itself. Quality belongs to neither the subject nor the object. No, beauty is Not in the eye of the beholder, (subject) nor in the thing of beauty (object) but is separate from them both. 

Quality is not manipulated.  It has an independent existence. .

This observation is a stake through the heart of Moral Relativism. I do hope that we do not have to address this distressing subject again.

* For instance some values have low Quality and others have high Quality.  An example of a low Quality value is to despise the achievements and efforts of your ancestors. A high Quality value  for instance may be spiritual harmony with the astounding fact of your existence.

Arthur, your commentary on values is nuanced and deep–what is the foundation of values? As you suggest, relativism is not a solid foundation, yet to some degree relativism is the core of Modernism.
Quality is precisely what's been lost: the quality of physical tools/appliance, and the quality of time, which is now scarce for those trying to keep up with multiple devices/tasks/duties.

I suppose my point is that values–(no asterisk, heh)–are to some degree built or torn down by the incentives of whatever system we're participating in.  If the system encourages deception, cheating, free-riding, exploitation, etc., then participants will either join the party or they will choose not to participate. For example, the mortgage origination /MBS packaging industry circa 2002-2008.

Systems that encourage collaboration, transparency, productivity, etc., and that disincentivize deception, exploitation, free-riding, etc. encourage a much different set of values. People tend to assign the blame for failed systems to human nature, but it's the system that generates behaviors and choices based on what the system incentivizes.

As for capital being abundant–Chipshot, your point is well-taken–what we might call "real" wealth/capital is eroding. Much of the 'wealth/capital" is phantom wealth–assets whose value has been pumped up or is kept on the books at inflated levels.

I think Spence is referring to credit as capital, because to the owner of a business buying robots, cheap credit is almost as good as actual cash. The cost to use cash is zero, but if the cost to borrow capital is 1%, hey, that's almost as good as cash.  This is the logic of stock buy-backs–since credit is so cheap, let's borrow a ton of money and boost our stock price, which is an asset we can sell.

the bottom line is capital (cash) earns nothing, which is why people like Warren Buffett are buying railroads, canned food companies, etc.–real enterprises with income streams. That's what scarce: reliable income streams…

I just finished reading the e-book and first of all - thank you Charles so much for pointing out a problem and THEN SUGGESTING A SOLUTION! How rare is that? We read so many books about our incredibly deep and systemic problems these days and they author's give the obligatory "hope" message at the end that equates to "well, maybe it's not as bad as I say." 
So first, I hope PP will do a follow-up podcast on the essence and details of your CLIME system. I was very excited to read about it and especially that "money" creation could be based on work done and not just capitalist profits and financial engineering of the Elites. I immediately thought of my local community and several of us who have some land to farm and have irrigation but we don't have the labor to do it and we can't afford and don't want giant machinery or chemicals. We want to work the land the way Mother Nature intended with human labor. But given the world we live in it appears to be impractical. Your CLIME system as I understand it could pay the workers with Largents. This food grown would be sold or distributed locally and would also sequester carbon and clean water systems. Largents would have to be able to meet most of the workers' needs so initially it would be necessary for local stores like our local farm supply store to accept largents. This would be a barrier until it became widespread enough to be acceptable to the worker that the largents would be worth things they need to live. 

I would love to see a meeting of some of the groups that already are trying to cut down on carbon emissions and live more sustainably and see if they could use this CLIME monetary system using the organizations that already exist as the community groups. Transition Towns, Post Carbon Institute, whatever Naomi Klein is doing, Permaculture leaders, ecoagriculture leaders, Quivira Coalition, all the Farmer's Markets, etc etc. could be the initial community groups. Heck, maybe the Pope would join in! And of course international leaders like Vandana Shiva. The movement is already out there and adding an umbrella over it that allows for funding basically, that is really an exciting concept.

So I think the biggest problem will be it's democratic nature which as you say is messy and prone to chaos. And if it begins to succeed I can't imagine that TPTB won't come down hard and try to tax it to death or something. It's the first thing I've ever seen that is a potential replacement for our disastrous debt based money system and it seriously threatens the existing system if it could become widespread. So I hope you will do another podcast on just the financial aspect. 

thank you, Jandeligans, for reading the book and giving it a chance, and for sharing your thoughts about how it could be implemented (or suppressed). I am very honored by your praise and completely agree with your assessment of its potential to reduce carbon/waste/resource depletion at the ground level. 
You are right–if we don't change the way money is issued and distributed, we can't really change anything.

I tend to think the CLIME system is most likely to be tried in places where the currency has evaporated and the elites have lost control of the money. An existing NGO or faith-based organization might have the wherewithal to start enough CLIME groups in one campaign to get the project launched. Once a critical mass of CLIME groups are up and running, the system self-organizes as local leaders emerge to organize and launch new groups.

Nothing breeds success like success. If members of CLIME groups have better lives and opportunities than those depending on the existing status quo, people will naturally be drawn to opt-into a CLIME group just out of self-interest.