A Non-Corporate Model for the Localized Economy: Guilds

Guilds offer a dynamic, flexible model for relocalizing and reinvigorating local economies. 

The primary reason the U.S. economy is stagnating is that it is dominated by an increasingly dysfunctional Central State and the private cartels it protects. The solutions, therefore, cannot come from State central-planning or from global corporate cartels. The solution is to develop alternative models that reinvigorate the local, community-based economy and that leverage the new tools of productivity: the Internet, freely available software tools and new technologies such as desktop fabrication.

Though guilds have been around since ancient times, the Western model developed in the 1200s. The guild model is broadly based on mutual benefit and the conservation and sharing of applied knowledge. According to the Wikipedia entry:

An important result of the guild framework was the emergence of universities at Bologna, Paris, and Oxford around the year 1200; they originated as guilds of students as at Bologna, or of masters as at Paris.

While the Medieval guilds had an income-protection purpose much like a trade union or a cartel, modern incarnations of the model are aimed at serving both members of the guild and customers by establishing trusted information about local small-businesses.

To get a better understanding of the emerging guild movement in the U.S., I interviewed Mike Hartrich, guildmeister of the Santa Cruz Construction Guild(SCCG) in Santa Cruz, California.

1. What inspired you to start the Guild?

"I have always worked by word-of-mouth and never needed advertisement. The 'Great Recession' affected me personally in 2009 when the calls stopped coming in. That was a shock. I had been learning about online marketing so I looked into what was available for contractors to market their services online. I looked at Angie's List, ServiceMagic, Diamond Certified and others. These are all large national companies that use the power of computers to provide online referral services nationwide. Some do this better than others.

The bottom line is that while these companies focus on local business they themselves are not local. Construction is really a local business. You build up your business one job at a time through a growing referral network. Word-of-mouth is the essence of that.

Also, these companies are impersonal, not personal. They are not made up of people who connected through being part of the same community. They are strictly a business, and only secondarily concerned about the local area.

I decided to set up a local online referral site that would use the Internet to draw attention to the members. At the same time the focus would remain strictly local. That's how this adventure started. Little did I know what I got myself into. I had help from a webmaster and selected Wordpress as the platform so I could make changes myself. There was a lot to learn.

The basic principle is a LOCAL online hub for quality builders and constructions pros who are invited by REFERRAL.

The Santa Cruz Construction Guild (SCCG) grew quickly. We had our first meeting in March 2010 at Big Creek Lumber. Ever since then the guild has developed a life of its own. Members are getting leads and work. Not everyone, of course, but the site draws an average of 450 visits/week.

One of the main benefits is the ability for members to meet other good builders, subs and professionals. The members really like that. Our renewal rate is over 90%.

2. Please sketch out the basics of your Guild model for those of us who are unfamiliar with guilds.

Membership is based upon a referral. If the prospective member does not know an existing member then I check him out - contacting three recent clients, checking his status with the Contractors State License Board, look at his current web presence etc - and I refer him. This system has worked really well so far. As a member you get your own member page. This is customized with your text, images, videos logo etc. If you have a web site I usually copy, paste and edit from that. The end result is a custom one-page web site that gives you a real web presence as part of a quality trusted local group. If you have a web site then we link to it. Same for Facebook and Linked-in. Once you have your page you can invite testimonials from your past customers.

You also get signed up to our email list. This simple way of communicating with the members works really well. Members can ask questions, offer tips, look for help , buy/sell items, etc. I forward their email to the general membership. Right now the latest email covered the County of Santa Cruz late-fee structure and penalties for prior unpermitted work. I also got an email from a member who was told that he could not have his over-the-counter permit request approved for at least 52 days.....

These days if you don't have an online presence you get left behind. The guild uses the Internet to connect members with customers, as well as with each other.

I just started our Facebook strategy. This really is the ideal avenue for members to publicize their projects with images and posts, complain about the heavy-handedness of the County etc. I have a hunch that our Facebook strategy will be quite popular with the members.

I just checked the Facebook status of the 163 members of the Santa Cruz Construction Guild (SCCG). 60 have Facebook business pages and over 103 do not. Of the 60, only five or six are actually using them. So this is an area where the Guild can help build their business presence for next to free.

The cost for membership is currently $240/year with a $60 discount in place right now. I intend to keep it as low as possible because even at that it's expensive for some members. Everyone is watching their nickels these days. My intention is to give members the best possible deal for their money.

We also have meetings. These are usually held at Big Creek Lumber, a local family-owned yard. There is a natural alliance between the guild and the local lumberyards. I intend to build on this alliance. Members like these meetings. They are a good way to meet your peers. We also have had meetings held at member offices. The topics of the meetings vary. Recent meetings covered construction financing ( at Lighthouse bank ) waterproofing details at Myles F. Corcoran Construction Consulting, Building Science by Scott Milrod, etc etc.

Over the past three years the guild has taken on a life of its own. We have good local press. We've been featured five or more times in the local paper (see our media page). We now have hats with the guild logo, bumper stickers, etc. Members like that.

I set up a member-referral program that rewards members $60 for each new member they bring in. But almost no one has used this. It doesn't seem to be a big driver. Big Creek Lumber used this for our charity drive and is donating these to Second harvest Food Bank.

3.How is the Guild’s model different from the national/commercial “contractor referral/recommendation” services?

We use the Internet & computer to create an online presence. But this presence is a reflection of a very real local presence. That's what makes the guild different. It's all based on real local people, local reputations, local histories. We all need an online presence these days. Customers want to check you out first. That's what all the big online services offer.

Angie's List is good. Yelp is questionable, Diamond Certified is expensive - $7,500/year - SeviceMagic charges for leads, etc etc. They can be useful. It's not an either/or choice. You could subscribe to one or all of these. I want to make the guild so valuable to the members that it becomes the foundation of their online presence.

We also started a Member Recommended Services. These are local companies that provide our members with a 10% discount. This is a new service/feature.

4. Do you see the Guild as part of the “relocalization” movement which seeks to emphasize the local economy rather than the global-corporate economy?

Yes, I certainly do. Members love the LOCAL focus of the guild. That's what makes it work.

5. The risk in any recommendation/referral model that is open to the public such as Yelp is that one customer can unjustifiably damage the reputation of a contractor/service. On the other hand, customers need to be confident that comments from previous customers haven’t been screened to hide legitimate complaints. How does the Guild manage feedback from customers and members?

A customer makes a bad comment on a member's page. I get to see that that before it gets published. I send the comment on to the member and ask for hi s side of the story. So far all three cases have been resolved quickly this way. I published one complaint in order to get a quick response from the member. That happened. Amazingly, we have had only three complaints in three years. Two of them were old grudges - 3-5 years old. Not much you can do about that. They preceded the guild so I did not leave them published. One member did not renew because of that. The third complaint was for a missed appointment. The member contacted the customer and made it right.

Any member who is a bad apple will not remain a member for long. Membership is not a right, it's a privilege. If you mess up seriously you won't be a member for long.

6. Is the Guild model one that you believe can be duplicated elsewhere in the nation?

That's the challenge. Chad Cornette, an architect-builder in Green Bay WI contacted me after our first big newspaper article about two years ago. We started the Green Bay CG a little over a year ago. I quickly realized that any expansion required a huge expenditure of energy and back-end infratructure: Shopping Cart, CRM module, SEO, email, web site replication, etc etc etc. AAAAaaargh.

After a year-plus of working on this I have come full circle to my original assessment, but with a deeper understanding. The key to duplicating this model lies in each community. I can provide the template, the model, the 'business-in-a-box', the back-end IT, etc. But I cannot make the local connections because I'm not a local.

That connection requires a local lumberyard, to act as the hub, AND, primarily, a local 'guildmeister' to build the membership. That is the hurdle. So now I am thinking of how to attract the right kind of guildmeisters who want to do this in their community. They get compensated between $60 - $100 for each member renewal.

150 members x $100 = $1,5000/year or $1,250/month. That is not a full time income, but a comfortable extra income for doing very part-time work in your existing field of business.

I'd like to see guilds grow in all kinds of places across the country. It's a good model. I'd like to be able to offer group business and health insurance to the members once we get large enough."


Thank you, Mike, for sharing your experience in building and expanding a local guild model that can be copied in other locales. Guilds, like co-operatives, are an extremely flexible model that could be extended beyond craft guilds.

One sure way to improve the local economy is to keep more of the community's income in the community itself rather than send it to distant corporate cartel headquarters. Guilds can play a dynamic role in that relocalization movement. 

---

Resistance, Revolution, Liberation: A Model for Positive Change (print $25)
(Kindle eBook $9.95)

Read the Introduction (2,600 words) and Chapter One (7,600 words) for free.

We are like passengers on the Titanic ten minutes after its fatal encounter with the iceberg: though our financial system seems unsinkable, its reliance on debt and financialization has already doomed it.We cannot know when the Central State and financial system will destabilize, we only know they will destabilize. We cannot know which of the State’s fast-rising debts and obligations will be renounced; we only know they will be renounced in one fashion or another.
The process of the unsustainable collapsing and a new, more sustainable model emerging is called revolution.Rather than being powerless, we hold the fundamental building blocks of power. We need neither permission nor political change to liberate ourselves. A powerless individual becomes powerful when he renounces the lies and complicity that enable the doomed Status Quo’s dominance.

Thank you, Stephen W. ($10), for your much-appreciated generous contribution to this site--I am greatly honored by your support and readership.

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The Three-and-a-Half Class Society

The top 20% are supporting the entire Status Quo. This is an unstable arrangement.

The U.S. has a three-and-a-half class society. According to demographer Joel Kotkin, California has become a two-and-a-half-class society, with a thin slice of "entrenched incumbents" on top (the "half class"), a dwindling middle class of public employees and private-sector professionals/technocrats, and an expanding permanent welfare class: about 40% of Californians don't pay any income tax and a quarter are on the Federal Medicaid program.

I would break it down somewhat differently, into a three-and-a-half class society: the "entrenched incumbents" on top (the "half class"), the high-earners who pay most of the taxes (the first class), the working poor who pay Social Security payroll taxes and sales taxes (the second class), and State dependents who pay nothing (the third class).

This class structure has political ramifications. In effect, those paying most of the tax are in a pressure cooker: the lid is sealed by the "entrenched incumbents" on top, and the fire beneath is the Central State's insatiable need for more tax revenues to support the entrenched incumbents and its growing army of dependents.

Let's start our analysis of the three-and-a-half-class society by noting that the top 25% pay most of the Federal income tax, and within that "middle class" the top 10% pay the lion's share of all taxes.

The top 25% of taxpayers--34 million workers out of a workforce of 160 million and 140 million wage earners--pay almost 90% of all Federal income taxes. Where Do You Rank as a Taxpayer?

An adjusted gross income (AGI) of $66,193 or more puts you in the top 25% of earners. The top-earning 25% of taxpayers reported 65.81% of all AGI and paid 87.30% of total federal income taxes ( $755.9 billion).How much do you need to make to be in the top 50% of earners? Just $32,396. Fall below that level and you are in the bottom half, along with nearly 70 million of your fellow taxpayers. All told, that group earned just 13% of the income reported on 2009 tax returns. And they coughed up 2.25% of all the income taxes paid.

The second class is made up of the working poor: 38 Million Workers Made Less Than $10,000 in 2010-- Equal to California's Population (The Atlantic magazine)

2011 real median household income was 8.1 percent lower than in 2007.

Only 104 million tax returns actually pay any Federal tax: Many Unhappy Returns? (America's aggregate 1040, from IRS tax data).

In 2009, the IRS reported 140.5 Million personal income tax returns were filed. From this starting point, 36.3 Million returns (or, one quarter of the total) are lost to the tax base because of losses, exclusions or deductions. By line 43, taxable income, only 104.2 Million returns survive. In aggregate dollar amounts, total income from all sources falls from $7.7 Trillion to $5.1 Trillion — a decline of more than one-third. This latter amount is what truly constitutes the tax base, since it is the income ultimately subjected to tax.

Soaring Poverty Casts Spotlight on ‘Lost Decade’:

According to the Census figures, the median annual income for a male full-time, year-round worker in 2010 — $47,715 — was virtually unchanged, in 2010 dollars, from its level in 1973, when it was $49,065. 

After including earned-income tax credits, the bottom 60% of households paid less than 1% of all Federal income taxes, and the households between 60% and 80% paid 13%.
The top 20% paid 68.7% of all Federal taxes: Income taxes, Social Security and Medicare, excise and corporate taxes. The top 10% of households paid fully 72.7% of all Federal income tax, the top 5% paid 60.7%, and the top 1% paid 38.8%.

Here are the source documents:
Historical Effective Federal Tax Rates, 1979 - 2005.
Tyranny of the Majority, Corporate Welfare and Complicity (April 9, 2010)

A number of commentators have noted that the incomes of the super-wealthy (which I define as the top 1% who own most of the productive assets of the nation) have risen even more than their taxes. They also note that the Social Security tax of 7.65% (employee and employer each pay 7.65%) is regressive, as those making $500,000 a year only pay tax on the first $108,000 of income: 47% Of American Families Pay No Income Tax! Really?

My conclusion is this: by heavily taxing earned income, the system extracts the highest taxes from the most productive citizens, leaving the less-productive with essentially no income taxes and the super-wealthy with the huge tax break offered to capital gains and other unearned income.  As I noted in Tyranny of the Majority, Corporate Welfare and Complicity (April 9, 2010):

In essence, this is a vote-buying scheme by the Status Quo: the top 1% control the policies of the State in alliance with the State's own Elites, and together they buy the complicity of the bottom 60% to passively accept their dominance.

In other words, the bottom 60% pay relatively modest taxes or are recipients of Central State aid and the top 1% who "own" the political process limit their taxes by favoring unearned income (what they collect from sales of securities, stock options, rents, etc.). Thus the productive quintile (top wage earners) pay the highest tax rates and most of the taxes. 
It's a partnership of "Tyranny of the Majority" and "entrenched incumbents Elites."If the political Status Quo alienates the majority by making them pay more taxes, they risk losing power in the next election. If they alienate the top .5% who fund their multi-million-dollar campaigns, then they will also lose power. So they heap the tax burden on what remains of the middle class.  When that 20% rebels, falters or opts out, the system collapses for want of tax revenues. Not coincidentally, that happens to fit the Pareto Distribution: the 20% "vital few" exert outsized influence on the 80%--once the pressure cooker blows.

---

Resistance, Revolution, Liberation: A Model for Positive Change (print $25)
(Kindle eBook $9.95)Read the Introduction (2,600 words) and Chapter One (7,600 words) for free.

We are like passengers on the Titanic ten minutes after its fatal encounter with the iceberg: though our financial system seems unsinkable, its reliance on debt and financialization has already doomed it.We cannot know when the Central State and financial system will destabilize, we only know they will destabilize. We cannot know which of the State’s fast-rising debts and obligations will be renounced; we only know they will be renounced in one fashion or another.
The process of the unsustainable collapsing and a new, more sustainable model emerging is called revolution.Rather than being powerless, we hold the fundamental building blocks of power. We need neither permission nor political change to liberate ourselves. A powerless individual becomes powerful when he renounces the lies and complicity that enable the doomed Status Quo’s dominance.

Thank you, Marilyn B. ($60), for your exceptionally generous contribution to this site--I am greatly honored by your support and readership.

Read more...

Narcissistic Consumerism and Self-Destruction

Health is horribly unprofitable; illness, anxiety and alienation are highly profitable. That is the destructive essence of our sociopathological "engine of growth," narcissistic consumerism. 

Saturdays are typically reserved for my serialized comic novel Four Bidding For Love, but today I want to extend the discussion of a topic that I believe is absolutely central to "why things are falling apart": our dependence on a peculiarly adolescent narcissistic consumerism for identity, meaning and economic growth.

Understanding the consequences of this pathology is the core of my books, Survival+: Structuring Prosperity for Yourself and the Nation, An Unconventional Guide to Investing in Troubled Times and Resistance, Revolution, Liberation: A Model for Positive Change.

Correspondent/physician Birgit insightfully extends the narcissistic consumerism at the heart of our economy to its self-destructive conclusion: an essentially suicidal cultural antagonism toward any intact ecosystem.

Thanks for your concise way of connecting consumerism and narcissism. I frequently wonder at the energy my patients devote to television, three-colored hair streaks, the right shoes and purses, expensive cars, big vinyl houses, and then are completely aghast when I tell them to just plain turn off the TV and go for a daily walk and cook some actual vegetables; somehow these are too time consuming and expensive. The cognitive dissonance is painful to the point where I feel a very strong suicidal impulse from our culture. (emphasis added, CHS)

I know you are aware of the recent results of the human microbiome project, showing our heritance includes 10 times more bacterial genetic material than human DNA; and it is becoming very obvious that this is an obligate relationship, and we need our microscopic flora at least as much as they need us (skyrocketing food allergy, MS, Type 1 diabetes, celiac disease, autism rates all attest to this). I think that our cultural antagonism toward an intact ecosystem is suicidal. Actually, I know it is suicidal, but I think it is manifesting more and more strongly in our capitalist subconscious. So much sanitizer and plastic!

Strangely, I see a cultural refusal to acknowledge our dependency on an intact ecosystem most strongly when driving my in suburban neighborhood. All those mulch volcanoes, frantically trying to hide any hint of roots branching underground. The good citizens somehow feel the soil that supports all life is obscene and must be completely covered. Luckily the fermentation underground is there to balance the sterility impulse (Sandor Katz's new fermentation book is like a bible, I recommend it).

I also wanted to thank you for your career advice. I finally gave notice at my conventional healthcare practice and have cast myself loose in a private practice, with low overhead, no support staff, and my own ideas. Thanks to you I see the complexity of the insurance and Medicare systems as the marker of their unsustainability, and I know that business as usual won't be for too much longer.

Thank you, Birgit, for a brilliant and incisive description of permanent-adolescence narcissistic consumerism. For readers who are unfamiliar with the microbiome, here is an excellent overview Your Inner Ecosysem: Your Microbiome Community Brings New Meaning to "We the People" (Scientific American) and Explore the Human Microbiome.

As mentioned in yesterday's entry Narcissism, Consumerism and the End of Growth, the culture of narcissism is based on fear: of emptiness, worthlessness and whatever else the marketing machine can make you fear.

In our heavily sanitized culture, that includes anything related to micro-organisms, i.e. "germs," dirt, etc. Those of you who know basic biology understand the irony of this sanitization: in killing off bacteria, we not only eliminate "good" bacteria we need to stay healthy, we also eliminate the weakest "bad" bacteria and leave only the most resistant few to reproduce.

This heavily marketed obsession with sanitization of everything has led to super-bugs which cannot be killed by conventional antibiotics.

In a way, the self-destructive consequences of obsessive sanitization is an apt metaphor for the self-destruction at the heart of the entire narcissistic consumerism project. Where does reacting to constant, exaggerated messages of fear lead to? To the loss of the ability to make realistic assessments of reality.

Permanent adolescence is the state of resolving insecurity, fear and social defeat by buying things that promise the invulnerability of a fantasy self and world, and by indulging in instant gratification to mask the self-destructive derangement of broken ecosystems: not just in the natural world, but in our bodies, in our society, in our economy and in our politics.

Nurturing permanent adolescence, anxiety and alienation are highly profitable, for people responding to the fear and anxiety of Thanatos (the instinct for destruction) will not only become malleable consumers, they will lose their grip on Eros, the instinct for life and love. Once lost to the Dark Side, they have no way to experience health or intact ecosystems; their world darkens as there appears to be no alternative to the Status Quo.

Health is horribly unprofitable; illness, anxiety and alienation are highly profitable. That is the destructive essence of our sociopathological "engine of growth," narcissistic consumerism.

---

Resistance, Revolution, Liberation: A Model for Positive Change (print $25)
(Kindle eBook $9.95)Read the Introduction (2,600 words) and Chapter One (7,600 words) for free.

We are like passengers on the Titanic ten minutes after its fatal encounter with the iceberg: though our financial system seems unsinkable, its reliance on debt and financialization has already doomed it.We cannot know when the Central State and financial system will destabilize, we only know they will destabilize. We cannot know which of the State’s fast-rising debts and obligations will be renounced; we only know they will be renounced in one fashion or another.
The process of the unsustainable collapsing and a new, more sustainable model emerging is called revolution.Rather than being powerless, we hold the fundamental building blocks of power. We need neither permission nor political change to liberate ourselves. A powerless individual becomes powerful when he renounces the lies and complicity that enable the doomed Status Quo’s dominance.

Thank you, Dennis C. ($50), for your supremely generous contribution to this site--I am greatly honored by your steadfast support and readership.

Read more...

Narcissism, Consumerism and the End of Growth

The Cultural Contradictions of Capitalism now include narcissistic consumerism and definancialization. 

Today I'm going to tie together the major themes I have been discussing in the context of Japan being the bellwether of economic stagnation and social recession. The basic idea is that Japan offers a limited but still insightful experiment in what happens to advanced consumer-driven economies as definancialization hollows out the economy.

What happens is that economic malaise leads to profound social recession that affects society, workplaces, families, individuals that then feeds back into the economic stagnation.

Definancialization is the process in which excessive speculation, debt, leverage reverse, crushing the economy with malinvestment and legacy debt while the crony-capitalist Central State attempts to stem the resulting deflation with massive, sustained Keynesian stimulus (fiscal deficits).

What we're seeing in Japan is the confluence of three dynamics: definancialization, the demise of growth-positive demographics and the devolution of the consumerist model of endless "demand" and "growth."

Japan is the leading-edge of the crumbling model of advanced neoliberal capitalism: that consumerist excess creates wealth, prosperity and happiness.

What consumerist excess actually creates is alienation, social atomization, narcissism, and a profound contradiction at the heart of the consumerist-dependent model of "growth": the narcissism that powers consumerist lust and identity is at odds with the demands of the workplace that generates the income needed to consume.

One theme that weaves together this week's essays on Japan is the cultural/economic shift that is eroding the traditional Japanese corporate workplace.

Japan and the Exhaustion of Consumerism
The Hidden Cost of the "New Economy": New-Type Depression
The Future of America Is Japan: Stagnation
The Future of America Is Japan: Runaway Deficits, Runaway Debts

The younger generation of workers raised in a consumerist "paradise" are facing an economic stagnation that reduces opportunities to earn the high income needed to fulfill the consumerist demands for status symbols. Given the hopelessness of earning enough to afford the consumerist lifestyle, they have abandoned traditional status symbols such as luxury autos and taken up fashion and media as expressions of consumerism.

But the narcissism bred by consumerism has nurtured a kind of emotional isolation and immaturity, what might be called permanent adolescence, which leaves many young people without the tools needed to handle criticism, collaboration and the pressures of the workplace.

Narcissism is the result of the consumerist society's relentless focus on the essential project of consumerism, which is "the only self that is real is the self that is purchased and projected."

Christopher Lasch (1932 – 1994) wrote The Culture of Narcissism: American Life in an Age of Diminishing Expectations in 1979. The book's subtitle captured the angst of the 1970s; though rampant financialization and the Internet reinvigorated the U.S. economy in the 1980s and 90s, the subtitle accurately expresses the New Normal.

While his analysis cannot be easily summarized, he zeroed in on the ontological essence of narcissism: a fear of the emptiness that lies at the very core of consumerism.

Sociologist Daniel Bell's 1988 book, The Cultural Contradictions of Capitalism brilliantly laid out the contradiction at the heart of all consumer-dependent cultures:

This classic analysis of Western liberal capitalist society contends that capitalism-- and the culture it creates--harbors the seeds of its own downfall by creating a need among successful people for personal gratification--a need that corrodes the work ethic that led to their success in the first place.

In the modern iteration of the Cultural Contradictions of Capitalism, the narcissism that results from the focus on personal gratification via consumption cripples the person in the workplace. Ironically, the flattening of corporate management and the demands for higher interpersonal skillsets has eroded the security provided by the strict hierarchy of previous eras.

Instead of working less and doing easier work--the implicit promise of "endless growth"-- the work is becoming more challenging and insecure even as compensation declines.

If there is any personality that is unsuited for the "New Normal" workplace, it is the narcissistic consumer--the very type of person that our consumption-dependent economy creates, nurtures and demands. That is the new Cultural Contradiction of Capitalism.

"Personal gratification" is the driver of narcissism and consumerism, which are two sides of the same coin. Consumerist marketing glorifies the "projected self" as the "true self," encouraging self-absorption even as it erodes authentic identity, self-esteem and the resilience which enables emotional growth--the essential characteristic of adulthood.

Personal gratification is of a piece with self-absorption, fragile self-esteem and an identity that is overly dependent on consumerist signifiers and the approval of others.

No wonder Japan's "lost generations" are lost: not only are expectations of secure, high-income jobs diminished, the work is more demanding and the security and pay are too low to support the consumerist lifestyle that society has implicitly promised everyone who goes to college and works hard as a birthright.

Jesse recently wrote a brilliant, insightful essay, Empire of the Exceptional: The Age of Narcissism As he observes, narcissism has been on the rise for 30 years in advanced neoliberal economies.

In my analysis, this is the direct consequence of the supremacy of a consumerism that is dependent on financialization: an economy dependent on debt-fueled consumption to power its "endless growth" is one that will necessarily implode from its internal contradictions: debt and leverage eventually exceed the carrying capacity of the collateral and the national income, and the narcissism of consumerism leads to social recession, a crippling state of "suspended animation" adolescence and great personal frustration and unhappiness.

The ultimate contradiction in this debt-consumption version of capitalism is this: how can an economy have "endless expansion and growth" when pay and opportunities for secure, high-paying jobs are both relentlessly declining? It cannot. Financialization, consumerist narcissism and the end of growth are inextricably linked.

As I wrote yesterday, this leads to a dispiriting "no exit": It's as if there is a split in the road and no third way: some young people make it onto the traditional corporate or government career path, and everyone else is left in part-time suspended animation with few options for adult expression or development.

We need a third way that offers people work, resilience and authentic meaning. In my view, that cannot come from the Central State or the global corporate workplace: it can only come from a relocalized economy in revitalized communities.

---

Resistance, Revolution, Liberation: A Model for Positive Change (print $25)
(Kindle eBook $9.95)

Read the Introduction (2,600 words) and Chapter One (7,600 words) for free.

We are like passengers on the Titanic ten minutes after its fatal encounter with the iceberg: though our financial system seems unsinkable, its reliance on debt and financialization has already doomed it.We cannot know when the Central State and financial system will destabilize, we only know they will destabilize. We cannot know which of the State’s fast-rising debts and obligations will be renounced; we only know they will be renounced in one fashion or another.
The process of the unsustainable collapsing and a new, more sustainable model emerging is called revolution.Rather than being powerless, we hold the fundamental building blocks of power. We need neither permission nor political change to liberate ourselves. A powerless individual becomes powerful when he renounces the lies and complicity that enable the doomed Status Quo’s dominance.

Thank you, Edward P. ($50), for your splendidly generous contribution to this site--I am greatly honored by your support and readership.

Read more...

Japan and the Exhaustion of Consumerism

Japan's faddishly fantastic fashions illustrate the exhaustion of consumerism as a driver of wealth creation. 

Japan is known for artful handcrafts, high-tech gadgets and outlandish fads. All modern economies depend on fads and fashions to drive consumption, and so Japan's leadership in fads reflects its advanced state of consumerism: it is a very wealthy nation, and its wealth has been distributed widely enough that the vast majority of its citizens have access to the "good things" produced by modern industrialized economies.

Thus it is unsurprising that Japan generates sufficient surplus on a national scale to support elaborate fads and fashions such as those on display in the Harajuku district of Tokyo:

Every Sunday, young people dressed in a variety of styles including gothic lolita, visual kei, and decora, as well ascosplayers spend the day in Harajuku socializing. A cosplay enthusiast will usually dress as a fictional or iconic character from a band, game, movie, anime, or manga. 

The fashion styles of these youths rarely conform to one particular style and are usually a mesh of many. Harajuku is also a fashion capital of the world, renowned for its unique street fashion.

The global reach of manga and anime is well-known, and so the overlap of fad, fashion and media (young people dressing up as manga characters) is also unsurprising.

There is even a weekly television program on NHK (Japan's English-language network) that covers kawaiifashion. (Kawaii means "cute," though with a different range of meaning that "cute" in English. Kawaii includes what we might call cutesy, sweetly nostalgic or cartoonishly cute.)

There are certainly positives to this opt-in "public fashion show": self-expression in a conformist society, a bit of healthy rebellion against convention and good fun to share with friends, to name three.

But there is a less positive aspect, too: it is a phenomenon of extended adolescence, a state of "suspended animation" of young adults facing truncated opportunities for adulthood--secure careers, marriage, family, homeownership--who are stuck in a seemingly permanent adolescence.

It's as if there is a split in the road and no third way: some young people make it onto the traditional corporate or government career path, and everyone else is left in part-time suspended animation with few options for adult expression or development.

What few seem willing to acknowledge is the solipsistic, narcissistic nature of this reliance on public display of consumerist fantasy for self-identity. All consumerist fashion is based on superficiality and self-indulgence, of course; but if we look at the energy, money and attention "invested" in fashion lifestyles in Japan, we might conclude it is strong evidence that there is plenty of "money and time to burn" in Japan. While that is certainly true, this reliance on consumerist excess for self-identity and pastime is also evidence of a deeply troubled economy and society.

Young people have money and time to burn on outlandish costumes because few earn enough to have their own families or flats. They work part-time for low wages and live at home or in tiny one-room apartments. Few own cars because they 1) don't earn enough to support a car and 2) they're uninterested in acquiring status symbols or prestige signifiers.

This is not just a generational shift: it reflects a realistic understanding that opportunities for secure, high-paying employment have diminished over the past 20 years. There are plenty of low-level jobs, but few with the guarantees that their parents took for granted.

Sound familiar? This reality is playing out in Europe and the U.S. as well.

If all this is new to you, I strongly recommend you read my essay The Non-Financial Cost of Stagnation: "Social Recession" and Japan's "Lost Generations"(August 9, 2010).

Here are a few highlights:

-- Once-egalitarian Japan is becoming a nation of haves and have-nots.

-- More than one-third of the workforce is part-time as companies have shed the famed Japanese lifetime employment system.

-- The slang word "freeter" (for part-time worker) combines the English "free" and the German "arbeiter" or worker.

-- A typical "freeter" wage is 1,000 yen ($7.80) an hour.

-- As long ago as 2001, The Ministry of Health, Labor and Welfare estimated that 50 percent of high school graduates and 30 percent of college graduates now quit their jobs within three years of leaving school.

-- Japan's slump has lasted so long, a "New Lost Generation" is coming of age, joining Japan's first "Lost Generation" which graduated into the bleak job market of the 1990s.

-- These trends have led to an ironic moniker for the Freeter lifestyle: Dame-Ren (No Good People). The Dame-Ren (pronounced dah-may-ren) get by on odd jobs, low-cost living and drastically diminished expectations.

-- Many young men now reject the macho work ethic and related values of their fathers. These "herbivores" reject the traditonal Samurai ideal of masculinity. Derisively called "herbivores" or "Grass-eaters," these young men are uncompetitive and uncommitted to work, evidence of their deep disillusionment with Japan's troubled economy.

-- These shifts have spawned a disconnect between genders so pervasive that Japan is experiencing a "social recession" in marriage, births, and even sex, all of which are declining.

-- The trend of never leaving home has sparked an almost tragicomical countertrend ofJapanese parents who actively seek mates to marry off their "parasite single" offspring as the only way to get them out of the house.

-- An even more extreme social disorder is Hikikomori, or "acute social withdrawal," a condition in which the young live-at-home person will virtually wall themselves off from the world by never leaving their room.

Is it any wonder that in the face of such a bleak and maladaptive future, young people seek identity, community and solace in a fantasy world of fashion? When an economy is dominated by a Savior State that issues unsustainable promises, and a society is dependent on a consumerist frenzy of ceaseless fads, status signifiers and shopping for identity and what passes for community, then narcissism, restless emptiness and the aloneness mentioned yesterday in The Hidden Cost of the "New Economy": New-Type Depression are the inevitable results.

Beneath the surface of Japan, Inc., bullet trains, cute robots and exuberant fashions, this is the Japan few outsiders understand: the exhaustion of consumerism.

---

Resistance, Revolution, Liberation: A Model for Positive Change (print $25)
(Kindle eBook $9.95)

Read the Introduction (2,600 words) and Chapter One (7,600 words) for free.

We are like passengers on the Titanic ten minutes after its fatal encounter with the iceberg: though our financial system seems unsinkable, its reliance on debt and financialization has already doomed it.We cannot know when the Central State and financial system will destabilize, we only know they will destabilize. We cannot know which of the State’s fast-rising debts and obligations will be renounced; we only know they will be renounced in one fashion or another.
The process of the unsustainable collapsing and a new, more sustainable model emerging is called revolution.Rather than being powerless, we hold the fundamental building blocks of power. We need neither permission nor political change to liberate ourselves. A powerless individual becomes powerful when he renounces the lies and complicity that enable the doomed Status Quo’s dominance.

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