The next economy will be a salvage economy.
Dear America,
Consensus is a powerful force. Things happen in history because they seem like a good idea at the time for enough people. So, after the Second World War, building the American suburban utopia seemed like a super-deluxe winner. Practically everyone climbed aboard that consensus wagon.
Then, in the last years of the 20th century, a movement arose to assess the grotesque effects of suburban development on the American landscape, and especially the insidious ways that this living arrangement was damaging every aspect of community life, from family relations to town finances. The Covid-19 virus episode has only accentuated and accelerated the damage. Of course, you could tell just by surveying the everyday scene with your eyeballs that something had gone terribly wrong in the creeping eczematous spread, from sea to shining sea, of grim housing subdivisions and the accompanying highway strip wastelands with all their ghastly, glowing accessories. These weren’t neutral environments. They literally punished your soul while they drained your income and wasted the precious hours of your life with mandatory motoring (often going nowhere in stalled traffic). At the cosmic level, suburbia was even worse: it was literally entropy-made-visible, entropy being the force in physics (i.e., nature) that you would least want to consort with because it is the bringer of death. Yes, it was that bad.
And so, in the 1990s, a new recognition arose that this scheme-of-things was a kind of plague upon the land — along with the inspiring idea that we could actually do something about it. The reformers of the New Urbanism said: Look, you could furnish the same number of houses, shops, and offices in much better places if you just design and assemble these things differently. That is, they explained, in the form of traditional walkable, mixed-use neighborhoods. And this group of reformers actually proved the point by going forth and building dozens of excellent projects all around the country. In sheer real estate terms, these New Urbanist projects succeeded brilliantly. The market loved them and bid up the prices much higher than the standard suburban schlock in any given locality. The main point they proved was that Americans pined to live in places worthy of their affection.
As usual in the muddle of human affairs, things didn’t work out as expected. At first, back in the 1990s, it looked like America was cruising blindly into a crisis over our oil supply, and the assumptions around that reinforced the New Urbanist rationale that we’d have to step back from extreme car dependency. By 2008, we were importing about three-quarters of the 20 million barrels per day we consumed. Indeed, the soaring cost of oil to $150 per barrel was one reason for the financial crash of 2008 — though it is not generally acknowledged.
But then the shale oil industry got up and fracking.
Now it happened that the shale oil miracle was made possible by the very Federal Reserve policies that papered over the 2008 crash: ultra-low-interest policy. The problem, you see, was that hardly anyone could make money producing shale oil. It’s been a net money loser from day one, though it certainly was an impressive stunt, goosing U.S. production to 13 million barrels per day, far surpassing the old 1970 peak of ten million. Ten years later, the first round of investors has nothing to show for it but bad loans, and since the shale producers have proven so convincingly over a decade that there’s no money in it, they won’t be able to attract new investment money to keep the stunt going much longer. And the stunt can’t continue without incessant borrowing. It’s as simple as that. Since 2019, U.S. oil production has fallen by over two million barrels a day.
In the meantime, the U.S. public was snookered into believing the fairy tale that we are “energy independent,” and that the American living arrangement could just keep rolling on indefinitely. It provoked a national epidemic of wishful thinking. A lot of that revolved around a new religion of technological rescue remedies. Smartthis and smartthat would allow humans to overcome any obstacle nature or history threw at us. Wasn’t the shale oil “miracle” proof of this?
Meanwhile, another consensus arose that climate change was upon us, and that it might possibly put the human project out of business. Burning fossil fuels was a big culprit, including, ironically, the shale oil that had just saved our way of life. The response to the climate change scare was not a renewed call for walkable, traditional communities but rather a proposal to switch out all the gasoline and diesel cars and trucks for electric cars. Wasn’t the fabulous technology for all this coming along nicely? Couldn’t we rig up some kind of system to produce “alt energy” with solar and wind, and more techno-wonders not yet known, and keep the whole kit going — suburbia, the interstate highways, Walt Disney World, Walmart, the U.S. military, and so on. Of course, the psychology of previous investment was operating here: We’d dumped all our post-World War Two wealth into that infrastructure for daily life and we wouldn’t even consider changing it.
Much as we wish for that “Green New Deal,” some combination of techno-miracles that will extend the useful life of all that, the hour is getting late. Other strange trends are afoot. For instance, the Happy Motoring program that has entranced America for a century is failing not on the basis of how we power the vehicles but on the pauperization of the former middle class, who can no longer buy any kind of car the way that Americans are used to doing it: on installment loans. The car industry has tried virtually every trick possible to keep it all going. They’ve extended the length of the loans to keep the monthly payments lower. But that leads to the quandary of car’s value going to zero with many payments still due. Lately, the situation is so desperate that the car dealers are actually trying to entice people who previously defaulted on their car loans to come in and take out new ones, just to move the merch off the lot.
The decade past the financial crash of 2008 tells us one thing very clearly: we won’t change our mode of living unless circumstances compel us to—and even then, we’re going to be dragged kicking and screaming into the next disposition of things. The tension and anxiety in that dynamic is behind the political craziness of the moment, everything from MAGA to Wokesterism. It’s just too difficult to think about the practical problems we face. Suburbia is obsolete and so is the megacity. The hyper-complex, just-in-time global economy is winding down. The sun is setting on oil production. Nuclear won’t work without the support of oil. Our techno-fantasies about an AI robotic future of leisure and entertainment are not going to pan out. So, we’re diverting ourselves with battles over race and gender instead. It’s absorbing and fun but none of it will get us where we have to go.
The next economy will be a salvage economy. We produced a lot of valuable stuff during the industrial extravaganza, and now we’re going to have reuse it. A lot of what you see out there will have to be disassembled and repurposed. We’re going to have to do it at a smaller scale with less complexity. There will be fewer of us. We’ll have to abandon a lot of places that just won’t work without local food production or an artificial water supply. All the supersized cities will contract and there will be battles over the districts that still have value, like the waterfronts. Quite a few of our big cities will disappear altogether, and not necessarily just because of climate problems. We’ll relearn a lot about geography, like why some spots on the landscape are better suited for human settlement than others. We’ll certainly rediscover the value of North America’s tremendous inland waterway system.
I think the term that describes where we’re headed is neo-medieval. Most of the advanced technological systems we enjoy today are too deeply linked to each other’s fragilities to survive. Think: trucking plus the oil industry plus the road-building industry plus the vehicle assembly industry plus the tire industry, and so on and on and on. We’ll have to move stuff another way, probably by boat, and most stuff won’t move very far from its point of origin. The same goes for people. The monuments of suburbia, or the memory of it, will seem like the traces of a bizarre fantasy world undone by its own self-induced catastrophe. Imagine what the people of 12th century England thought about ancient Rome, if they even thought about it at all. The difference between us and Rome is that we produced way more useless junk than they did and what of theirs survived the ages deserved to be regarded with reverence. Ours may inspire a mix of reverence and mockery. Whatever’s left of Manhattan Island… Jeff Koons sculptures… Teletubby videos….
The places we build (and rebuild) in that neo-medieval future are likely to follow the same human neurocognitive programming that is seen in towns around the world and has been for millennia, even though styles differ from place to place. One thing I’m sure of: people will be grateful to live in them. They will nurture and comfort us instead of provoking anxiety attacks and despair. They will perhaps provoke the religious notion that the universe welcomes us here after all.
Yours,
James Howard Kunstler
James Howard Kunstler’s new book is Living in the Long Emergency. Previously, he authored The Geography of Nowhere, the four-book World Made by Hand series of novels, and over a dozen other books. He lives in Washington County, New York, north of Albany.
Read “Entropy Made Visible: An Interview with James Howard Kunstler” appearing in Terrain.org.
Header photo by ArminEP, courtesy Pixabay. Photo of James Howard Kunstler courtesy IMDB.
