Charles Hugh Smith: Why Local Enterprise Is The Solution

"if you can relocalize your income streams and your enterprises and live close to work and school, you’re already tremendously more resilient and have a much more sustainable household regardless of what happens."

The problem is how to localize your income streams and localize your enterprises. Localize your business might be a wrong move. Out  Source your business might be a better  choice. That is what many people did.

The local Fire department had a note that our ceiling tiles need a two hour fire rating. The fire will not penetrating the tile for two hours if there is a fire. The space shuttle don't have two hour fire rating, but they asked a Chinese restaurant for it. One day my manager called me like crazy said our water was shut off by utility department while we were cooking.(chicken chow mein no water? LOL). The reason was they did not receive our fax for the invoice of grease pump every three month. We did fax it but the city single fax machine could not handle that many fax. The fax papers were always on the floor like a long carpet. Later we found the trick, fax it three times in intervals, won't miss it. Fifteen years ago, I try to take my company for franchising, American dream, huh? First obstacle was setting up a legal department. It means that I need to be a lawyer before I can expend my business. There are too many law problems and one mine goes off, you lose the whole company. How about labor law? There was a "where were you born" in a local Walmart job application. Walmart was fined 360K. By law as a reference 360K can apply to everyone if whoever accidently step on it. For an enterprise, hiring, lay off, firing employees are normal. In todays labor law, basically you cannot fire employees,especially minority employees. Any lay off employees can take their employor to court without paying the lawyer. Over other hand, the employor need to pay $250/hr lawyer's fee to protect. In court process, employor must choose to compromise to avoid the danger of lose the entire company, pay the lay off as requested. If there are many not- qualify worker which you cannot get  them out of  your company. The company will be gone very soon. Americans lost jobs is not their high wages, is the government run them away.

In other words, no matter what resilient effort we think, there will be no much security if we cannot get government's hand off our back. I have no question that government will never go back off and drive the system to collaps. That is given.

One day governemnt may say it is illigal to dig holes in your back yard (garden) and should share your harvest in some fashion.

In Chinese" if you can't fight for it, you should escape from it.". Our resilient effort may not be a good escape tactic. The big solar pannels right there. The green vegetables are right in the yard, and you are the target, can't escape. So I don't have solar pannels, but I do stock up rice, a lot and cheap.$2,000 for 2 1/2 year food supply for family of 4, why spend more money to dig holes in my back yard? (My personal opinions, may not be correct.)

Great interview, thanks for that. I think I'll get that ebook, now that I got my iPhone today (you Americans are still doing something right!)

I'm glad Chris mentioned wood as an energy source because that's something I have been thinking about lately, specifically how to turn it into electricity. It makes a lot of sense, especially for temperate climates.

In summertime, generating enough electricity to power your home and electric car isn't too difficult, provided you have a decent sized lot. Solar panels will do it no problem for most situations and you wouldn't really notice too much of a difference in your ability to do things that require energy -- even drive 100 miles if you want. Throw in a wind turbine in appropriate locations and there you go.

But in winter it's a different story because you aren't going to get enough energy from your solar panels. But then in winter we are also doing something else to get energy ... we are burning wood in our wood stove. I don't know about everyone else, but when our stove gets going, we have to open the windows to cool the place down. They aren't highly efficient either as lots of heat goes up the flue. To keep the fire going they have to be a certain size which means they are going to waste a lot of heat.

Wood contains 15 megajoules of energy per kg so if you burned 10 kg and let's say converted 10% of that into electricity then that's 4 kilowatt hours, not too bad! And the other benefit is that the other 90% is waste heat, which is exactly what you are burning wood to produce in the winter anyways! This is "cogeneration" which takes advantage of the inefficiencies inherent in the second law of thermodynamics to do useful things with the byproduct heat.

I did some preliminary internet searching and found some Canadian guys who made a wood fired steam generator to make electricity but this is not at all practical for the average person because it is noisy, complicated, and dangerous. It uses a complete Rankine cycle which reuses the same water to make new steam.

But a much simpler system would just be an open steam generator. You'd fill up a reservoir with clean water and this would feed a series of tubes or plates on the shell of the wood stove. This would basically be a boiler, and the water would boil and feed into a low pressure storage tank and then run through a little steam turbine to vent outside. The turbine would charge your battery bank, just like a wind turbine. You could also put the exhaust steam / water through a heat exchanger to recover some of the heat for your hot water tank.

It would use up water of course but around where I live we have more water than we know what to do with in winter. And because the water wouldn't likely be pure (although you could run it through a de-ionizer), then you'd get scale build-up inside the boiler section but once a month you could soak it in vinegar.

So far I haven't seen these things available but I imagine they will become more common as energy becomes more expensive. With this setup you really wouldn't have any noticeable impact to your overal energy constraints between summer and winter (assuming you aren't living in an apartment and have room to set all this stuff up), you'd simply be using different methods to harness energy (solar panels and steam turbines) and different ways of using it (electric cars).

Wood is pretty common, and with no more new houses being built for a very long time into the future, all that construction lumber that is no longer being bought needs to go somewhere, like ground up into wood pellets! Plus wood is sustainable; many of Canada's forests just burn to the ground if they aren't cut down by us first, so we might as well burn them in our stoves to produce electricity instead!

Back in the day studying forestry, we learned about how a lot of the forests held privately in eastern North America are not very productive at producing biomass because they have been selectively logged several times, which basically means that they were "high graded", ie the best trees were taken out and the remaining poor stock left to occupy the site and prevent young vigorous trees from getting establishing. This has also stifled the monetary gains that the owners of this land can realize, because it isn't producing good wood. I imagine a program to improve the productivity of these degraded forests would help increase the ability of local woodlots to provide energy for homeowners.

Edit: I just found this video of a miniature steam turbine. Pretty easy.

You would be technically correct if we could have infinite growth in a finite world as most economists believe. With re-localization the focus will shift from capital to labor and productive activity.

Govenment interference and support for Wall Street that make outsourcing a better choice in the short term will be forced to change once it is generally recognized that the global economy can not be sustained.

An ancient Roman saying: The fates lead the willing and drag the unwilling.

Our original growth/wall street system may have to collapse first but hats off to the few attempts at local currencies in the states to promote keeping the money in the community like Berkshares in the Berkshires.  They are tied to the dollar when you purchase them so I'm not sure what would happen to Berkshares if the dollar collapsed and was worthless?

MrEnergyCzar

Wow- this was hands down my favorite guest interview ever. I can't wait to read more of his work. 

Chris said he doesn't know "how to counsel individuals on how to change the macro system," but I'm not so sure it's about changing the macro system anymore. The best we can do is follow CM's lead and step as far outside it as we can, and then hold open the space in which new constellations of enterprise- I like that word- can evolve. Posts like this help us do just that. 

Betsy

PS. re MyEnergyCzar's comment about the Berkshares- I've wondered that myself. There is a good deal of social capital involved in that currency; I wonder if it is enough to allow it to behave differently from the dollar in a currency crisis. Unless, of course, they are able to back it with a basket of locally produced goods, as I've heard they are working towards.

Hello Mark,

Depending on where you live in BC what you say about winter may be correct, but good solar design should be based on the low sun hour times of the year so that the system will meet your necessary electric loads.  Among other things, I design solar water pumping systems many of which are installed in Canada and they pump the required water volume year round.

Here in Tennessee we have an off grid cottage and are building a totally off grid home at the moment.  Last winter while living in the cottage we had several extended periods of unusually cloudy weather and we did not have a single low voltage event.  Visit http://www.nealcreekfarm.com to see the cottage and the progress on our steel structural insulated panel super insulated house progress.

The house will operate on 2,200 watts of 24 volt panels (10 panels) using an 80 amp MPPT (maximum power point tracking) charge controller and a 3.5 kW sine inverter.

Efficiency is key.  We will be using low voltage for refrigeration, lighting, ceiling fans, ventilating fans and water pumping.  There will be no 230 volt loads in the house.  The only propane use will be for cooking gas.

The majority of our heat will come from an earth heat exchanger (earth tube) buried under 35 tons of limestone rock which will store the heat gain during the day from an 8 x 40 foot attached greenhouse porch.  Air conditioning will come from pumping water from Neal Creek, which never gets warmer than 66 degrees F, and circulating it though a fan coil and putting the water back in the creek.

If you need help with solar visit http://www.sunshineworks.com.

Cheers,

"I want to get your thoughts on this idea of needing to choose between growth and prosperity – they’ve been linked for a long time. We’ve always had both and I think they have been conflated and they are actually separate ideas in my mind."

Essentially this question is expressed in corporations as the choice between Sales Driven or Profit Driven.   A Sales Driven corporation will rarely walk away from a deal, instead choosing to cut margin to gain sales at all costs.  A Profit Driven corporation will understand the marginal costs of its business and walk away when the profit is not enough compared to other opportunities. 

The FED is essentially a Sales Driven corporation managing our Money (as Chris stated and to paraphrase: managing the Currency of Societal Trust).  That is scary thought.

I call them the "Great Linearers"; those who are running/ruining our world because everything looks like a nail to them since all they have is a hammer.

I looked at Hugh Smith's graphs on his blog.  First of all, graphs are nice but given that the statistical data re GDP and similar is nonsense what use are they?   The household wealth in stock market graph does not factor in Private Equity.  PE is black box. and I am not fond of many PE companies who are serial credit defaulters using the legal system to screw creditors.   Hugh Smith has some interesting ideas, but I would not put much into graphs to make a point. 

You are romanticizing a morally bankrupt and collasped way of life. In the 60s not every baby boomer freaked out on acid. The future is likely to look more like the 40s and the 50s--we won't have iphones--but why do you think that is bad?

Technet wrote:

....... anyone for communal free love ?

Yessssss

sar·casm

http://dictionary.reference.com/browse/sarcasm

1. harsh or bitter derision or irony.

2. a sharply ironical taunt; sneering or cutting remark: a review full of sarcasms.

Frobn and Crackor 

I think you had your sarcasm detector switched to the off position when you responded to Technet’s post. His outrageous exaggerations were the tip off. The third paragraph made clear the authors true thoughts. It is well not to read too fast or depend on smiley faces for meaning.

Now Johnny O was right in the spirit of things, as usual.

Travlin

"He not busy being born is busy dying"  is from It's All Right Ma (I'm Only Bleeding)

and there is more......

"The masters make the rules, for the wise men and the fools"

"Although the rules of the road have been lodged, it's peoples games you got to dodge"

Sorry, its those pesky skipping reels of rhyme to my tamberine in time

It seems very ironic that Smith exhorts everyone to "relocalize their incomes" while he pursues the broadest national and international audience he can get with his writings (which the internet does very well).   Following his advice should lead him to only publish articles to be read by a very limited group in his own immediate locale........???

Just a fan of people doing precisely what they prescribe others to do.

Maybe that's why in his interview he seemed to have a lack of down to earth examples of local economic investing.    It also appears he lives in Berkeley, CA.   For someone concerned about U.S. societal disruptions, it seems he would be heading out of dodge.

Marc, in my studies of this topic and review with other engineers I finally concluded that the best near-available technology would be scroll compressors for automobile air conditioning, run backwards, to convert near steam temperature heat energy to mechanical motion (generator to make electricity).  An auto air conditioner could be converted to use methanol or other alcohol (its not as flammable as many other hydrocarbons and you dont need so much of it-regarding safety) and some seals would need  to be replaced to handle the methanol, but you could use the slightly lower temperature  exhaust to boil the alcohol in a small enclosure around a heat source to run the air conditioner backwards at fairly high efficiency, using mostly off the shelf mass produced (low cost or pre-used) parts........  If you were to use or make a (low efficiency steam turbine) the waste heat from THAT could be further exploited with the slightly lower temp alcohol based system............