Water and Food are Strategic Resources

When people talk about strategic resources, they typically mean a few bits of materiel reserved for use in the event of the outbreak of war: uranium, titanium, and oil lead the pack. Oil is the sine qua non of modern strategic resources. Without it, no military can operate. It has been so since the Second World War. But before the WWII there was a saying: "an army marches on its stomach". Did we forget that adage, or was it simply taken for granted that so long as we could fuel the lines of supply there would be enough food? The latter sounds right to me. Food is taken for granted, whereas before, it was central to military affairs. How now? Is food important as a strategic resource? Does its scarcity have the ability to destabilise populations? Are national policies put in place to control the distribution of and access to food? Yes, yes, and yes.

Recent events in the Middle East have pointed to a deep and abiding need for democratic reform. They are signs that grassroots populist movements can rise and demand regime change. But what methods are used to keep down these uprisings? Well, there seems to be a clear pattern:

2008 MAR: Yemen - "In March 2008, in the middle of a world food price crisis, the cost of wheat more than doubled in the space of four months, leading to weeks of protests and riots across the country. In the past two weeks, the price of wheat in Yemen has risen by 45 percent, and the cost of rice by 22 percent, according to the World Food Programme. The value of the Yemeni rial is also in decline, while the U.S. dollar is increasingly difficult to come by in the capital."

2008 JUN 16: World Bank gives Yemen $100M to lower food prices (the Houthi Rebellion has gone on since 2004, but aid came only after food riots in March)

2011 JAN 14: Zine el-Abidine Ben Ali pledges to reduce prices on staples of bread, sugar, and milk

2011 JAN 16: Kuwaiti Emir Sheikh Sabah al-Ahmad al-Sabah orders food distributed for free for 14 months. As of yet, no Kuwaiti uprising has materialised.

2011 JAN 20: Jordanian Prime Minister Samir Zaid al-Rifai announces increased subsidies on heating oil and food.

2011 JAN 30: Hosni Mubarak orders maintenance of food subsidies.

2011 FEB 04: King Hamad bin Isa Al Khalifa of Bahrain orders increased subsidies on food

And so on.

Even after political change has been won, there is a further problem to be faced: political freedom does not emancipate the poor from poverty. In Egypt now, the decision to end subsidies may triple the cost of staple bread. Subsidies are touted by governments as a way to redistribute the wealth and give the poor more buying power when it comes to the daily necessities. I can understand. I have said it before, the basis of any decision to work for a low wage is predicated on whether I can feed my babies or not. The inability to do so would instil me with vitriolic rage or abject hopelessness. The haunt of hunger is the home of hyperbole. Given the opportunity to live on a meagre wage, so long as my kids were fed, I might choose to eat bitterness and shovel my 16 tons. Subsidies might keep the peace, and ensure adequate food gets distributed to the poor. Still, something is missing from this picture.

Subsidies are funny creatures. We think that they are geared at helping people live from day to day, helping people feed their families. But who actually benefits from them? Now that we've seen the natural progression of thinking for a regular ordinary bloke trying to feed his kids - from despondency to the capacity to bear poverty - what can we truly say subsidies have done? They've driven down the cost of labour, that's what. Subsidies are passed directly to corporations by increasing the public's capacity to bear poverty. The alternative, as we've seen, is rioting. But is it the fault of the government for being unable to provide adequate subsidies, or is it a problem of labour being underpriced?

Subsidies may be defined as helping the poor buy food, but let's call them what they really are: a stopgap measure to address the structural failure of an economy to distribute wealth fairly. Price controls on foodstuffs (and other consumables) are the same thing. Why should the nation tread the razor's edge between deficit spending and riots? In a constant balancing act between two extremes, the key is not to play one side off against the other, but to move the razor. I would much rather balance between a wall-mounted LCD display and not having a wall-mounted LCD display rather than balance poverty against hunger.

And yet, here we are. Subsidies were necessitated by wages that never increased while the price of everything else did. Therein lies the secret to the source of a great deal of hyper-wealth: the disparity between growth in wages and growth in prices. If wages had increased with the price of food - an essential input to labour - then I wit there would be far fewer hyper-wealthy individuals out there, and governments would have less of a deficit. As it stands, we've eaten ourselves into a hole... and done so by spening the money we should have had lying around to dig ourselves out.

So, food fuels labour, labour fuels industry, industry fuels growth, and growth fuels the economy, right? Well, except that growth of the economy will equal greater consumption of those basic consumables, which makes them more scarce, which should make them higher-priced. But if the join between food and labour is based on a subsidised price, then that price signal will not be correctly interpreted by the market. The cost of food stays low, labour stays low, industry stays low, but growth continues (and makes the wealthy extra wealthy!). Which means the price of stuff should be higher... but there's this fantastical wall of subsidy that makes the price of food imaginary. So consumption increases because of growth, and growth doesn't cause a price increase in food, so production of food has to be artificially stimulated to keep up with growth. If price increase doesn't happen, production increase isn't naturally incentivised! The government has to do it itself. Enter agricultural subsidies.

What's already a drain on the treasury has become an even greater drain, precisely because the treasury was being drained to begin with. In this way, an ongoing cost begets and ongoing cost. The government gets trapped propping up its labour and agricultural sector, and where does the money go? Industrial profits. Agricultural subsidies increase supply of food, food subsidies maintain the low price of food, which maintains the low price of labour, which allows for a bigger profit margin for industry because while the cost of goods is going up, the cost of labour stays the same. Subsidies are a band-aid solution to a structural problem. If you leave a bandage on for too long, your wound can fester, but ripping it off is a temporary pain. Sadly, there isn't a single government in the world that wants to be the one that stops subsidies. In an autocratic system, you've already seen what happens... and when the proverbial faeces hit the proverbial impeller, the leaders there reverted to doing what's always worked before when there were problems with the plebians: they gave them bread. This last time, it didn't work (except in Kuwait). In a democracy, the government that removes subsidies doesn't get re-elected. There we are, stuck in a pickle where food prices can't increase to temper demand, where the government can't pull out of the incessant need to subsidise food, and can't stop artificially stimulating the supply of food. Until now.

Now, we hit a wall. Now we tap out our aquifers. The Middle East is the natural place to begin the adjustment to the reality of market forces because the aquifers won't replenish themselves. With subsidies reaching the extent of their ability to keep up with actual food prices, food production is getting to the point where artificial stimulation (including the massive irrigation projects of the gulf and Maghreb) by money can't push yields any higher, and growth runs into the wall of economic reality: eventually, the market undergoes a correction.

The Arab Spring is a great and noble thing, but we need to learn our lessons from it as well. This is certainly more than a market correction - it was a humanitarian correction - and it continues as I write. But Egypt and Tunisia are the first to emerge free of political oppression only to find economic repression there waiting for them. The first to find out that all those subsidies and economic smoke and mirrors cost ungodly amounts of money. The correction happens now, and higher wages are going to be the order of the day, or history will repeat itself. The wall that economic growth is hitting is not imaginary; it is quite real. Only when the real cost of food is known will it become a matter of importance. As the Middle East has shown, food is a strategic resource. We can't afford not to pay for it.

Wages and Subsidies: the Sri Lankan Case

I was talking before about a simple model of an economy with food as the basic component. I had said "... food fuels labour, labour fuels industry, industry fuels growth, and growth fuels the economy". It's totally simplistic, but when it comes to economic models, simplicity can be a blessing. Since any population increases over time, that population needs to bring more land under cultivation and requires more inputs to increase production. The prices of those inputs (under the current industrial farming paradigm) sadly track oil prices, so the cost of cultivating more land more intensively fluctuates. The tendency, as with all non-renewable and scarce resources that are being extracted more and more intensively, is always that price increases over time.

Food cost is a major consideration for a huge proportion of the global population. Excepting we in the super-rich West, people tend to spend the largest part of their salary dollar on food. A tiny increase can be telling. I remember during the War in Sri Lanka when the cost of coconuts rose drastically. I remember saying at that time that it didn't matter how many southern Sri Lankan sons died in the conflict up north, the next election would be decided on the price of a coconut. Coconuts, being a staple food in Sri Lanka, were a daily necessity. The careful shredding and use of coconut meat in such delicious (and ubiquitous) foods as pol sambol:

...necessitated a constant supply. When the price went up, news programs were filled with stories of ladies going to the market to purchase half a coconut where before they had easily bought a whole one. First of all, my mouth is watering just looking at that picture of pol sambol (that is some GOOD food). Second of all, hunger is a primordial signal to the human body that something's wrong. If you're hungry, you're motivated. You can even say that euphemistically: if someone is "hungry" it means they have an objective in sight and will do anything in their power to get it. Hunger is one of the things that can create unrest, so it's to be avoided if at all possible.

How did this play out in Sri Lanka? Let's remember that this is a country terminally short on capital. The basic and fundamental source of the value of the Rupee was (and likely still is) foreign currency reserves sent home from the Gulf States where Sri Lankan women work as housemaids and men work predominately as cooks. Without this influx of capital, the Rupee would be utterly meaningless. As a matter of fact, I was completely unable to exchange Rupees for dollars anywhere outside Sri Lanka. The Sri Lankan government was always short on liquidity and paying for war materiel is expensive, so, on 21 July, 2007, Ag Minister Nanayakkara announced a program to expand food production through land grants. No money was available, but the government could give up land for production so long as the companies gave back profits and financed the industries themselves. Food (and fuel) imports, it was understood, bled the economy dry of foreign currency reserves:

Sri Lanka spent US $ 2 billion only for food product imports during 2006. The country spent the same amount of money on petroleum imports, a commodity that cannot be produced locally.

The problem with Sri Lanka, as with so many other developing nations, is that it is a victim, to a degree, of its mercantilist past as well as the IMF's idiotic focus on cash crops for the purposes of economic development. On little island, stuff has to be imported. Better it be luxuries than staples. Luxuries you can live without. Staples, not so much. Sri Lanka got it backwards, exporting tea and workers for food, and keeping wages low locally to keep more seats at the local cotton-gins.

The land-for-profit-sharing under Minister Nanayakkara clearly wasn't getting the desired results in the pipeline because in November of 2007, King Dutugemunu himself announced further subsidies for rice farming and an elimination of VAT on rice purchases. Another problem was the breakup of prime coconut land (which is predominantly also scenic coastal sandy territory) which was also solved by fiat:

The government was also planning to ban the break up of coconut land and putting them to alternative uses. There is a strong political lobby to prevent coconut land being in fast developing areas for purposes which generate a higher economic value.

Still, in early 2008:

Coconut production rose by 3.0 per cent during the year benefiting from favourable weather conditions but the prices of coconut and coconut based products increased sharply reflecting the world trend of increasing demand for organic oils to produce bio-fuel as a supplement to expensive fossil fuel.

The concept of coconut price going up in response to biofuel production is a canard. The Rajapakse regime maintained a very tight control on the media, and dissenting presses found their machinery sabotaged if they dared violate lèse majesté. Some journalists have even been kidnapped or shot and hacked to death for these violations - so when reading SL media be certain to take the pro-government bias with a pound of salt. The cause and effect are plain: coconut prices rising, reliance on foreign currency for war materiel as well as oil and food, government attempts to stem the conversion of coconut plantation to luxury hotels by fiat, further increases in price of coconut. Would there be a wage increase commensurate to the cost of food?

2009.08.26 No, there won't.

2010.01.24 Election promise: there will be private sector wage increases!

2010.02.11 Maybe they'll fulfil election promises?

2011.01.11 No, the promises won't be fulfilled. We've also run out of money for subsidies!

That the government is forced to stave off hunger by subsidising the increase of agricultural input and subsidising the cost of food seems like a really unsustainable idea. As a matter of fact, that's how it played out in SL. Sure, you can offset the costs for a little while, but in the end, you'll run out of money. The sad part about all of this is that the reason for keeping food costs artificially low is to maintain wage competitiveness. Wage competitiveness is all about luring industry, and industry comes not to better the country it sets up in, but to exploit lower operation costs. Labour is a major consideration. China has been a great beneficiary of this as well. I know another government that is running out of liquid capital due to war expenditures, but at least it produces its own food. How much of that food is bought locally? How much of the cheap food is imported? What if there was to be a sudden down-valuation of the US dollar that increased the cost of that low-cost food? The knock-on effects of relying on food imports and low wages are rather profound.

So, when we are talking about industrial inputs, we are talking about raw materials, labour, and energy costs. Labour is a huge cost in the developed world, and a portion of the cost of labour is the cost of labour's input: food. If food prices go up (which they basically must... food production is finite), then labour costs should go up. The only way to stop this from happening is to intervene artificially in how the market sets prices. When labour says they haven't got enough food to live, and industry says they haven't got enough money to pay salaries, should it be government's place to perpetuate the low cost of labour by subsidising food production? Should it be government's place to allow the weak corporations to survive? Should we let the exploitation of labour and government continue at the hands of industry?

We need to stop subsidies. In the end, many subsidies simply perpetuate bad business practices by enabling industry to keep the cost of labour low. That sends the wrong price signals, and bases our economy on a dream rather than reality. As we all know, dreams come to an end.

Predicting Future Economic Behaviour: The Price of Food Will Rise

Pretty lame, isn’t it? I mean, pretty much everyone knows that the price of food is already rising. It’s really quite a do-nothing hypothesis when you think about it. “The price of food will rise”. Is that it? Stating the obvious? Does that kind of statement make a guy some kind of economic wizard? No. But I must say this, on the anniversary of Copernicus’ birthday: stating the obvious worked for him.

The reason why the simple statement “the price of food will rise” is so important is not the statement itself. Saying “the earth rotates around the sun” is not, in itself, earthshaking. It’s what follows thereafter. All of a sudden the orbits of the inner and outer planets make sense. When you see the obvious, sometimes other facts that are difficult to reconcile become reconcilable.

The Price of Staples Will Rise

We all know that the price of food is rising, but we’re also hearing about droughts causing crop losses in the US and now Russia is feelingthe pinch, too. With the world’s biggest corn producer and the world’s biggest wheat producer putting out fewer crops, economists have already been able to project that beef, for example, will likely be more expensive toward the middle of this year due to the raising price of feed grain. With more droughts happening lately, the pressure on staples will be constant, and while we can’t necessarily say that the base price of staples will go up, it will fluctuate higher and, on average, be more expensive. When this happens, the meat downstream becomes more expensive by extension. Keep it in the back of your mind now that Russia has shut its doors to grain exports – likely until June – and many previously self-sufficient countries (I’m looking at you, China) are no longer self-sufficient. India is another case where, while they appear to have food under control, the per-person consumption of food calories is lower than in many other food-importing countries and I fear that lowering these calories-per-person is simply not something the Indian market can absorb. Americans can stand to eat fewer calories. Indians may not be able to. Will feed lots be profitable anymore if grain becomes too pricey? Perhaps there will be a rise in grass-fed cattle, which will increase demand for range land. Either way, the meat gets more costly and land gets more scarce. Mid-term result of grain no longer flowing from Russia? The Maghreb, one of the main importers of Russian grain, may have even more unrest to deal with. Watch Egypt.

Inflation Will Rise

The majority of the world spends the majority of its pay on food. North Americans and Europeans are something of an anomaly that way. I’ve already mentioned that inflation in China is on the rise, and when I left China, inflation was high – until they changed the proportions of goods in the grocery basket used to calculate inflation. In effect, inflation in China is a shell game: they don’t want the official number to be too high, so they change the make-up of the products it’s based on. The items they reduced in the basket: food. Sadly for the central government, the people know what’s going on, because they are spending most of their pay on just that. Salaries are going up to cover food price increases. Workers would not go back to the factories after the economic crisis for the same pay they worked for prior. Workers are desperate for enough cash to pay for food – and I’ve already argued that food determines the base price of the workforce. If the cost of food goes up, the cost of work goes up, and food-importing countries will be impacted more. This is one place where the First World worker has the advantage: we can absorb a price rise in food. Others cannot. In the long run, scarce food may start to make us more competitive than we currently are.

Trade Imbalances Will Shift and Potentially Reverse (eventually)

The Chinese have a long memory, and the Opium War is almost a current event on the time scale of that ancient civilization. To oversimplify the reasons China and England became embroiled in this one-sided conflict, we can say that there was a massive trade imbalance between the two countries. In effect, China grew tea and England bought it for gold. The natural problem being that tea can keep growing forever and gold is finite. In order to reverse the flow of bullion, England started assisting opium dealers in trading a different plant product for precious metals. This made the Chinese angry, and they started burning things. That gave the British the opportunity to go in and blow things up, and make the Chinese take the opium – illegal or no. To sum up, trade imbalances make people touchy. Currently, the Chinese hold a trade imbalance against the US which – to a degree – works in both nations’ favour. The Chinese are building an enormous pile of US dollars (not having learned anything from the Opium War, I suppose), and the US gets cheap goods and an endless supply of loans. Once food becomes more expensive, however, the flow of those dollars will slow. This will not require gunboat diplomacy, drug running, or any other kind of shenanigans. It will occur naturally as a consequence of more expensive staples. While there will be volatility in the staples market as the US and Russia have alternating bumper/poor crops (this hurts only the farmers, though – everyone else is more or less unscathed, but farmers start killing themselves when prices do this), eventually the average price of staples will rise. China will be unable to increase its own internal staple production to meet its needs due to overuse of chemicals, lack of groundwater, and desertification. With the relaxing of restrictions on domicile imposed by the hukou system, farmers will start moving to the city in droves. Who once were productive farmers will become consumers in the food system, and leaving large tracts of land to be turned into real estate deserts. I contend China’s food production will never rise in a meaningful way unless a miracle happens and they all of a sudden have a Green Leap Forward. Not bloody likely, but I remain open to serendipity.

This means there are implications for Chinese productivity. Its growth once predicated on cheap unskilled labour, the cost of hiring in China will rise with the price of food. The same kind of production will become untenable in China. Foreign investment – already seeking alternative places to flow such as Vietnam and the Philippines – will threaten to dry up. What may this mean? It may make China blink on monetary policy. One option would be to allow the Yuan to float, the other option would be to unilaterally have the Yuan to rise in value against the dollar. Trade imbalance is going to force changes in monetary policy one way or the other, but this one thing I will say: do not underestimate the power of the US dollar. While its value is more or less based on the fact that it is the global fiat currency for petrol purchase (and the reserve currency for many other international transactions), even in an era of decreasing oil demand due to high price, the USD will retain value because we’ll be buying grain with it – or at least the Chinese will be.

Will there be a grain war? A more exciting reporter than I might say “maybe”. I say “no”. Will there be very boring high-level discussions about monetary policy amongst the grand high mucky-mucks of the Chinese Communist Party and Indian Cabinet? Yes. They may even get into heated arguments. I know. Perish the thought. We live in such turbulent times.

And then There’s the Death and Famine

Oh yes, I forgot. The over billion people that live on between one and two dollars a day will go hungry in droves. This will not have an economic impact on you. I guess you can decide for yourself whether this issue matters to you or not.

The Copernican Economic Shift

So once the economic shift begins, several bets are off. One may be the direction in which trade imbalances begin to flow. Another will be the ability of China to retain its growth in manufacturing centres. Will China shift its monetary policy? Will arable land become a highly desirable asset class? I think there are strong chances of these things happening, if only moderately, in the coming years. One thing I think is a certainty is the increase in the cost of arable land due to interest not only from investors but other states scrambling for the single most important strategic resource in any nation’s arsenal: food. As the old yarn goes, “buy land – they ain’t making any more of it”.

Pollination and Food Security

Now, most people will recognise that - if you work in a company that extracts resources - the best way to do it is to get workers who know their trade, extract resources safely and efficiently, and do so with minimum impact on their environment. It's of course a good idea to give your workers adequate safety gear so that the expertise you maintain in your workforce is protected from harm. A company that harms its workers physically or mentally is going to be hard pressed to hire more workers (well, unless the money's more important than all that). The case study of Chinese mining companies in Zambia shooting their workers when the workers militated for reasonable pay is perhaps the example of the worst way to maintain a cadre of loyal and productive workers in your company, perhaps doubly so because the Chinese mining company also found a way to make sure not one of those bosses was touched by the long arm of the law.

It's funny how corporations - entities described by one of my friends as being solely developed for the purpose of diffusing blame - are able to get away with treating their workers so badly. Well, there is a very troubling case of worker mistreatment going on in North America that is threatening the very food security we enjoy on our vast open expanses of farmland: the killing of millions of honeybees by pesticide use. Though USDA scientists have previously danced around the issue, the topic has been broached more openly at a DC luncheon where - while blame was not directly assigned to the people at Bayer - the causal lines could be drawn by the observant. What's more obvious is the fact that the UK is acknowledging the source of the problem directly and several nations in Europe have banned pesticides that have been shown to harm bees. Never mind the fact that the call to ban these pesticides is years old.

What really ticks me off is that we pay bees nothing and they provide - free of charge - both honey and an invaluable pollination service that secures our food resources but also allows for the multiplication of our biomass. We're shooting workers who work for free and provide us with two invaluable services. That's just bad labour relations strategy right there.

So food security is one of the most incredibly fundamental factors in the survival of a nation. China is exposing its Achilles' Heel by importing more than it produces in recent years. Food, as China has known from decades ago, is one of the most basic strategic resources. China instituted a draconian system of internal movement control called the Hukou system that was essentially used to force farmers to stay in the countryside and grow food. We need to understand food with the same level of importance. The world is running out of productive arable land, and we want to make certain we don't go hungry. If we kill off the honeybees each winter, our pollination services die with them, and with those services our biomass. The less we produce, the less we can export, the less we can use to feed ourselves. Scarcity will drive prices higher, and we will wonder what we thought we were saving by using pesticides in the first place, because in the end the cost to the consumer will be higher than that of a temporary crop failure due to pests. The long term economics of pesticide use equals high priced food plus pesticide. The lack of pesticide means higher priced food minus pesticide.

The math isn't that hard. Food will rise in price. We can control the why and the how, and in my mind, we save more money and time overall by eliminating pesticide rather than maintaining it.

Fiscal Responsibility - Part 1: Wealth Redistribution, Chapter III: Labour Laws

The Economist noted that:

Wages still account for a much greater slice of income than profits, but labour’s share has been in decline across the OECD since 1980. The gap has been particularly marked in America: productivity rose by 83% between 1973 and 2007, but male median real wages rose by just 5%.

So, why are profits going up and salaries staying flat? I personally don't care. The only question to ask is whether salaries are equitable. I doubt many who read this would disagree. There may be some holdouts, who argue that supply and demand determine what goes on in the market, but supply and demand works with only certain things. Work puts food in kids bellies, and sometimes any work is better than hunger. Sadly, many companies are able to depend on that fact to enlist unskilled labour at bargain prices. As the song goes:

What force leads a man to a life filled with danger,
high on seas or a mile underground?
It's when need is his master and poverty's no stranger,
and there is no other work to be found.

One's ability to eat is a hard limit on one's choices for work. If everyone's needs were somehow fulfilled by fantastic food faeries who fed, clothed, and housed the entire population to a minimum standard, then the value of work would truly be set by supply and demand. Then and only then would the worker's want for greater wealth be a determining factor in whether he or she actually wanted to clean toilets for six bucks an hour. Given the choice, I wouldn't clean toilets. If my kids were hungry, and there was no other work, I might reconsider.

The same people might argue that having children is a choice. Well yes, it is. It's a choice the government has been actively trying to encourage for years because of the need to grow the population to grow the economy. It would seem odd to penalise someone for doing something the government wants him or her to do by not allowing him or her to earn enough to feed his or her family. The hundred bucks a month per child is a help, but it doesn't go far when the household is earning part-time minimum wage.

We've already talked about redistribution of wealth through a more progressive tax regime. Now, I would like to talk about how corporations can contribute to equitable wealth distribution. This will happen in two ways: first, through fairness in staff reductions; second, through fairness in base salaries. What corporations will get in return is more freedom to hire and fire, and they will pay a little less income tax. What some currently low-paid workers get in return is a living wage and the freedom from fear of being let go.

REDISTRIBUTION OF WEALTH
Labour Law: from downsizing to conservation

Corporations are able to find ways to cut costs by cutting people, keeping wages low, and forcing salaried workers to do more for the same pay. Large companies, and by large I mean companies that span more than one province or employ more than 200 people (if some king hires me to write policy, I'd try to get someone to help me figure out what that number should be, but for now I'll just pull something out of the air), should no longer be bound by simple provincial regulations. I propose a set of labour relations laws that kick in once a company crosses the line from small to my above definition of "large". These would be national labour laws, instituting a minimum wage for large companies as well as terms of release for workers. The laws would mandate overtime payments for salaried and hourly workers alike. None of these solutions are elegant, but they are necessary, in my opinion, for low-paid workers to stop getting the short end of the stick. Remember, all of this only applies to "large companies". Everyone else abides by existing regulations when it comes to employment. This will give startups a competitive edge to allow them the leeway to become a large company.

Part one, and the first piece of legislation, is quite simple. Every worker earns a $10k or one month salary payout (whichever is larger) per year of work upon leaving the company. After the initiation of the program, this amount can be scaled to inflation, but inflation would not affect the amounts of previous years' payments. This is for a full-time equivalent year, meaning part-timers will have to work longer. For the sake of argument, a full-time equivalent year will be 52x37.5 hours of work (1950) and paid holiday. If a worker is let go by the company in the first year of work, the worker qualifies for the leaving pay. If the employee leaves in the first year of work, the employee does not qualify for the leaving pay. After the first year, whoever terminates the employment, the pay is the same. The application of the concept is simple, but there would have to be details added to protect both worker and company from either gaming the provisions for first year payouts. Funds for this purpose must be set aside in an escrow on a month-by-month basis to ensure the money is there should the company go under. In the event of bankruptcy, this cash would be completely protected from creditors by bankruptcy protection. The company would not have to pay the escrow's interest to the employees, and may use it as it wishes. As a side benefit, this increases the amount of money invested in the market. Companies would be allowed to hire and fire employees more or less freely in exchange for this simple payment, since every transaction has an opportunity cost. This would also eliminate the need for employment insurance. This benefit would not be subject to income taxes.

The next little piece of legislation would be a regulation setting the "national" minimum wage for hourly workers in large companies. This would be set at $15.39 to begin with, and would be reviewed every year based on inflation. Minimum salary per annum would be set at $30,000. 'Nuff said. Finally, large companies would be forced by law to pay salaried as well as hourly workers 1.5x overtime for work in excess of 9 hours per day or 37.5 hours per week. This would allow for flex time within reason. Salaried overtime would simply be prorated to their salary divided by 1950. These two very basic points are not simply a brute-force solution to wage inequity, they are hopefully an equaliser that will help little companies make a market niche for themselves by being nimble and lower-cost. The playing field has to be levelled so that small companies can compete with large companies, and the way to do that is to force the big boys to pay their employees a living wage. Big businesses that can derive enormous profits can either afford to pay, or they can leave and give back the niches smaller stores once filled. While it seems counterproductive to drive off big businesses, the efficiency and profit maximisation that these big businesses can benefit from actually translates into fewer, lower paid jobs for the regions they move into. Small to mid-size businesses drive the economy, and big businesses will either give their employees enough money to feed a family, or they will vacate the market niche and let small companies re inhabit it.

The reasons why I don't fear driving big, efficient corporations away are going to be covered more in the next part, specifically, in a chapter on equalising the "runaway leader" problem in businesses: big companies make more money and can then choke out competition, which is bad for overall innovation in business. Big companies are also making lots more money, but not passing it on to their workers. This national level labour law is just a brute force solution to that systemic problem that kills two birds with one stone: it forces big companies to put a little more of their profit into their salaries, and allows for leaner small companies to enter niches in the same industries as corporate giants because of their relative salary advantage. Of course, big companies would be rewarded for their adherence to the relevant laws and regulations through lower corporate income taxes. Deadbeat companies would be penalised with standard taxes. If companies come up with a less draconian method to right the wrongs that share-price motive inflicts on workers, I'd love to hear it. For now, however, I think that this is the one thing that strict regulation would solve better than simple incentive measures. 

The China-Killer

In 1853, Commodore Perry arrived in Japan with four black ships and a piece of paper. The piece of paper requested a treaty from Japan that (to make this short) cracked open the previously closed nation.
In 1875, a small flotilla of Japanese warships sailed close to the "Hermit Kingdom" of Korea on a "survey mission". Passing the fort of Kanghwa, Korean guns opened fire on the IJN Unyo,(trivia: in English, ship names are supposed to be italicised) to which the Unyo responded decisively. The port was silenced, the Unyo went on to obliterate another port, and in 1876 (to make this short), the Japanese forced the Koreans to open their borders.

Humans learn and imitate. Ideas are readily diffused from person to person and culture to culture. The Japanese learned from the West that to be strong, and to be considered part of the team, you had to open up other people's countries to foreign trade. All well and good. Then there was that thing about kicking other people's asses and making them produce raw materials for your industrial machine. It was called Imperialism, and it was in its dying days in the end of the 1800s and the beginning of the 1900s. That is equally to say it had reached its peak. Japan saw France, Prussia, England, and Russia beating concessions out of China. In 1894, they found their excuse to do so as well. While the Tripartite Intervention took away their land gains on the continent, it still won them an ally in England. This Imperialism thing didn't necessarily fizzle out with the Tripartite Intervention... Japan still had the opportunity to live up to its promise to England by containing Russian expansion in 1904-5, and this became a jumping off point for further expansion on the continent: Manchuria.

The problem was that, by 1937, Imperialism was becoming somewhat (to make this short) uncool. You could say this was because European nations suddenly realised that pounding other people into being their economic slaves was mean. You could also cynically say that the European nations had gotten all they wanted out of Imperialism and didn't want those Asian upstarts cutting into their fun. Either way, a bunch of Europeans and Americans decided the world needed to change paradigms. Out with Imperialism (it was too expensive after a while anyhow) and in with... I dunno. Something else. There was a war on, they didn't really have time to think about it. Rapidly after that war, the British Empire began to disappear. Colonial possessions were spun off into independence... to be swallowed up into one of two opposing sides in the Cold War.

This wasn't Imperialism... this was somewhat different. This was a war of ideas. Two really powerful countries each had their own really nifty idea. Each wanted the other to try it out. They wanted everybody to try it out. It was like Christmas. Either way you went, you got all kinds of presents. Side with one idea, and all of a sudden you got factories, aid, a secure oligarchic vice grip on power legitimised by political theory, vodka, and... secret military installations. Side with the other and you got factories, aid, a secure oligarchic vice grip on power legitimised by economic theory, bourbon, and... secret military installations. The nice thing about the factories in each case was that not only did you get them for free, the two nations who gave them to you wanted to buy your stuff and even sell you stuff at subsidised low prices!  Eventually, one of the ideas was more resilient than the other, and both big nations stopped buying a lot of that stuff from everybody, and stopped giving them aid and subsidising their sales as much. That sucked, just a little. We called it the development of a multipolar world. Multipolarity didn't last long. People don't like having to make up their own ideas about how to do stuff. They tend to take their cues from other people. Or other "isms".

I was trying to keep this short. I promise I'll get to the point eventually.

The issue was that the paradigm shifted again. The people who lagged in the paradigm were the people who were latecomers and ended up following the lead of one of the big guys. All of a sudden, all those dictators who had kept their countries - willingly or unwillingly - toeing the line of one or the other ideology, were uncool. They started to fall in rapid succession, starting from those who picked (or were picked by) the losing side in the Cold War: Najibullah, Jaruzelski, Kádár, Krenz, Husák, Zhivkov, Ceauşescu... the list goes on. But the winning side also began turning against its original groupies: Pinochet, Khan, Rhee, Marcos, and even finally Hussein. All of a sudden, it was more important to be democratic than aligned with a given idea. All the dictators who clung to power - now unsupported by the largesse of their selected big nation - slowly withered on the vine unless other revenues filled their coffers. As an aside, history has recently shown that even those dictators with secure sources of oil income are subject to forces of popular discontent.

From around  the year 1990 to now, we have been in a kind of realignment period. The USA has maintained the policy of (to make this short) currency supremacy through import. As long as the US buys enough stuff, specifically oil, the world will have to buy oil in American dollars. The European Union has tried to maintain a strong unitary currency, but also constructed a Byzantine legal environment that, oddly enough, produces a grand variety of industries (and protects indigenous ones). China has made money by producing a lot of stuff cheaply and quickly. It is assisted in this by pegging the Yuan to the American dollar. While this means the cost of raw materials is relatively high for the Chinese, they can make their margins in the economy of scale and the relatively low pay of their workers. This necessitates inputs that can not be reliably found in China: R&D, technological innovation, and management expertise.

Yes yes yes, China has some managers and some engineers and some scientists. They do some neat stuff. Typically they do neat stuff that makes things cheaper, not better. That's how you do better in business in China. You make something cheaper than the other guy. I know, I live here. Best Buy just pulled out of China. To quote the article, "Mao Xinlie, 78, said he will miss Best Buy's reliability. "The good thing about Best Buy is the quality of stuff they sell, but their prices for products and services are higher," said Mao outside the retailer's store in Xujiahui". Quality doesn't get you sales in China, price does. Best Buy's business model is service-oriented. Service does not get you sales in China, price does. Best Buy's competitor, oddly enough sporting a dark-text-on-yellow bold logo, is local, and competes where it counts here. Price. The corollary: when the nouveau riche throw their money around, they don't care about quality - they simply want to buy lots of high-priced stuff. It's not about quality. It's about showing your wealth off, and you can't do that unless you blow it on stuff, no matter how crappy that stuff is.

So price is the motivator, so that means the market privileges items that offer the same basic services as innovative products (like, say, the iPhone) cheaper. It makes sense that if a product is successful, it gets reverse-engineered and built cheaper. So yes, there are engineers and scientists here. The price signals tell them to build it cheaper and sell a lot, not to build it cooler. The three things this market niche depends on is stable prices for industrial inputs, a low currency value, and low salaries. These things are pretty much the three legs of the Chinese economic stool. The problem is that these things are being disrupted.

Raw materials prices are going up. Copper $3.50 to $4.50 USD/lb in the past six months. Nickel: $10.00 to $13.00 USD/lb in the past 6 months. In addition, China is a net food importer now and has just suffered a drought in Yunnan and may lose a large portion of its wheat crop this harvest season. Food prices are skyrocketing - I can tell you that first hand. China has always tried to engage primary resource producers to sell in large quantities at substantially reduced prices in order to fuel its economic machine... but spot prices are making this an uneconomical way of doing business for the producers. The demand is still there, and selling to the market is more profitable. This is why China has an aggressive development strategy around the world, especially notable in Africa: to get access to those desperately needed raw materials at fixed (or near fixed) prices. Those prices will not last for long.

Raising costs for things such as food are also a problem. After the Economic meltdown in the end of 2008, China basically shut down huge portions of its manufacturing industry and let the migrant labourers who work in factories simply go home. When work picked up again, many labourers were not keen to go back for the same price. Food has been creeping up in value, and workers wanted better conditions. Interestingly, they are sometimes getting them. Labour unions (which have miraculously started by restricting themselves only to petitioning foreign companies and nobody else - I wonder how that happened) have started to form. Labour costs are going up, and workers will be demanding more with the increase in food costs. Two of the legs of our hypothetical stool are therefore a bit wobbly.

The last is currency value. This is a bit of a damned-if-you-do, damned-if-you-don't problem. With so much foreign pressure on China to float its currency, no Chinese leader can do so without being perceived as weak-kneed in the face of Western Imperialism. If China doesn't float its currency, it may be priced out of the raw materials market. More importantly, now that it is importing a good deal of its food, it will be priced out of the food market, too. Chinese food production is in a downward trend with more and more land producing less and less food. Imports are not a temporary glitch, imports are here to stay for China. With high food prices comes the need to raise salaries or face food riots. Riots are already becoming commonplace in the countryside (it's just not reported that much). They are called "mass incidents" by the government and they are rising in frequency. This isn't to say China will be toppled by a bunch of mass incidents. It may, but that isn't what I'm talking about at all. The mass incidents are simply an index of discontent. If China does float its currency, all bets are off. "Central planning" goes to the whim of the currency markets. If the Yuan rises, exports halt, the low salary bonanza ends, and all of a sudden China has to develop a completely different type of industry simply to survive. End of story.

All this to say that China is in a precarious position right now. It is going into a period of stagflation, the growth of the economy is financed by very bad debts, two of the legs of the Chinese economy's stool are starting to get wobbly, and the last one can't be cut to measure accurately enough to counterbalance these forces. This doesn't make the position of the USA or Europe any more rosy. Each of these paradigms are feeling stresses. So what would push one to the forefront and leave the others in the dust? A paradigm shift.

North America, the US in particular, is really good at coming up with crafty ideas, fun ideas, interesting ideas. These ideas get financed, then sent to China to manufacture. The thing is, the North American market is rather diverse even though less populous than China. It actually doesn't obsess about price as much as service. Do you think to yourself "I want an air conditioner from GE" or do you think "I want this room to be cooler right now"? Do you think "I want a brita water filter", or do you think "I want fresh water to drink"? Our so-called obsession with stuff is actually not so much an obsession... we buy stuff to fulfill a need, and then when it breaks, we buy a new one. It's cheap, we end up focusing on the stuff and not the service. But if someone came up to you and said "I can make your house the temperature you want for $700 per year, no cost for repairs or replacement of the equipment", would you be tempted? The market in North America could easily become one of services.

The purchase of services would create a demand for quality over quantity. Service providers that use machines to provide their services would go for the best value over the amortisable life of the machine. The longer that life, the bigger their margin. The better the spare parts services and distribution, the bigger their margin. Economies of scale start to lose traction.

But there's more. Rapid prototyping and 3D printers and fab labs would make spare parts even more available, especially if designs were provided to decentralised manufacturers over the web. With local CNC operators and manufacturers turning out spare parts, there is no transport of huge masses of bits to nodal points for further distribution down the logistical chain. A design company makes an air conditioner design. They can test it by firing off designs to CNC millers and fab labs in their region to prototype it. When they have a working model, they put the design online and license its parts on a per-click royalty system - kinda like a printer service contract. Individual millers and fab labbers could make money off other people's designs, and kick back a small percentage to the designer. Local manufacturing that was nimble as opposed to efficient would win the day. Economies of scale be damned - in this model, local economies, durability, and innovative design win.

So, that was a really long story. To sum up: the leader wins in a paradigm shift. If North America switched to a service economy, decentralised manufacture, and paid designers their due, economies of scale would be relegated to the compost heap of economic history. That paradigm shift would be the China Killer, and China imperils itself every day by not developing indigenous high-tech industry that focuses on product and not on price.

What's the Big Idea??

A big problem of mine is assuming that people can read my mind. I realise, yet again, that a lot of the things I have been thinking about for a sustainable living project have simply never left my tiny little brain. To the end of airing these ideas, I thought I’d write down what I have been thinking about for the past few weeks. It centres on a kind of thought experiment: a row-house complex with four units on a plot of land. Four families, all living and perhaps working in the complex, and attempting to make a go of living functionally (if not actually) off grid. The reason for building a rowhouse complex is pretty clear: when building to a passive house standard, the money is all in the envelope of the house. That means that building a row unit saves on insulation of at least one quarter (and at most more than one half) of the total outer wall area, allowing for more square footage at a lower per square foot cost. Heating (which would likely amount to no more than $400/yr for the whole complex based on the passive house standard) would then be shared through the condo association.

First off, I imagine a lot between 25-100 acres, 50-75% treed, mainly with hardwoods would be preferable. In my most specific preferences, those hardwoods would be ash and birch, but I realise I can’t necessarily be choosy in this regard. The project I am imagining is a mixed-revenue and rather holistic economic enterprise that does not focus on any one product, instead it’s meant to produce a number of “crops” while taking into account the general laziness of the occupants, so the forested portion of the project is geared toward a kind of slow silviculture. Birch and ash, you see, have a couple advantages. Both are good saleable woods, but they can also both be coppiced, which is perhaps one of the most sustainable modes of forestry around. Coppicing produces the same kind of succession that the typical forest cycle naturally produces through the occasional fire or catastrophe, allowing for the meadow-dwelling ecosystem to remain more or less undisturbed on the land for as long as it is coppiced in a proper cycle. Ash and birch work well on a 12-15 year cycle, so the forested region would be divided into 15 and coppiced regularly in sequence. Ashwood makes good poles, axe (and other tool) handles, longbows, you name it. Both ash and birch can be tapped.  It would allow me to regularly make the joke to people that “I’d tap that ash”. Just that is worth the lulz.

Clearing would be required for a house, and I have it in mind to get subdivisible land. One of the things about having a real estate family is that they are quick to point out the market facts that theory doesn’t take into account. One of those things is that owning a house that is part of a housing cooperative instantly makes it both difficult to resell and therefore drops its market value. I understand that, in theory, housing cooperatives SHOULDN’T have this saleability problem, and in theory, they are just another form of house ownership that can be transferred like any other… but in practice, it don’t work that way. Cooperative housing enthusiasts would be quick to give me an earful of counterarguments, but my reality is the market. I would like a multi-family project, but I want it to be a project that is based on ownership of a whole house and not of a share in a cooperative. Luckily, condominium ownership is more mainstream and provides the capacity to 1) own a unit in the rowhouse complex, and 2) have a cooperative vehicle by which the collective can share access to common areas. This division between personal and public is key. A member of the project owns a house and through the condo association owns access to the common land and greenhouse attached to the complex.

My idea calls for a greenhouse to be located on a south-exposed slope and attached directly to the house. This is because it would allow for some of the greywater filtration and urine processing concepts that I’ve already talked about before. Each greywater system would be separate for each house, so there can be no recriminations about who threw the candy wrappers in the loo. While I still believe it is possible to edify adults to the point that they can transcend the tragedy of the commons, it is hard to do this for unsupervised children. Realism should prevail when it comes to this kind of systems design. The greenhouse would contain aquaponics systems that should also run separately, if only for the purposes of sustainability: one linked system that fails leaves everyone hungry; one of four individual systems is just a temporary stress on production. Vegetables can be produced year round in such a system, and fish can be harvested on a routine basis after a year. I am planning on experimenting with a “bioponics” system here in the Philippines that requires no fish food inputs to be purchased. If it works, that would be a substantial savings on traditional aquaponics methods and would integrate food waste processing into the whole house system. Any organics that cannot be processed easily in the black soldier fly and vermiculture bins can be pyrolised for biochar in a biochar gasifier. There are commercial units available that are virtually fuel-neutral, since running the system from a hopper requires only propane to start the gasfication process, and continuous processing would not only not require further fuel but it would heat the greenhouse too. This is another reason to keep woods other than hardwoods on the lot: fuel for the biochar gasifier that produces heat for the greenhouse and biochar for the garden.

Some people have become convinced that what I am interested in is “farming”. No. It isn’t. Farming is not something I really want to do. That said, a limited amount of farming would be good to offset food costs and perhaps create some value-added assets for the project. Farming is simply a small part of a greater project I am interested in.  I am actually more interested in small-scale manufacture or value-added production. To me, the perfect industry would be a brewery or cider operation, since it produces so much organic by-product.  Mixing this with an oyster and shiitake mushroom operation would be advantageous, and both are reasonable profit for work input. Such an operation already exists elsewhere and is tried and tested. Raising grain would be great if quantities could be adequate for very small scale brewing. Still, there should be a minimal dependence on any one product, and the production should move to where the resource is most abundant in any given year.

I’m painting a lot of blue sky. This is because the end result is more important than how the project gets there. The end result that this project aims for is not some kind of anachronistic pastoral dream or a retreat from society. The aim is sustainability – for sustainability’s sake. The aim is to have a place where basic needs are fulfilled - food, water, clothing, and shelter – and the occupants can take several different tacks to create value for their products and make money enough to cover the stuff they can’t make themselves. I’m not attempting to re-create an old way of life but – even if it never gets past the thought experiment phase – moving toward creating a lifestyle that’s more focussed on satisfying human needs without requiring recourse to working in an office. Consider this: if you own a car, you’re paying about $150 per month in gas, $200 per month in car payments and $50 in insurance. That’s $400 of your after-tax salary, which is about $500 real dollars. What if you took a $400 pay cut and walked to work? You’d be saving money, you wouldn’t have the sudden outlays that are occasionally necessary for cars (and the thousand natural shocks that tyres are heir to). What if we then thought that way about food?

What if we decided that, instead of enslaving ourselves so another person can become wealthy from our toil, we just unhitched ourselves from that treadmill and went happily away to a place where we provided for ourselves? That’s the idea. Not farming, not some form of country lordship… just taking care of your needs without getting beguiled by the dollar signs.

An Idea for an Organic Farm

So I made an open call to a group of my friends to see who would be interested in buying in to a sustainable farm. This is something of a dream of mine, and one I’ve talked often about, but not been able to be totally serious about until now. If the housing market holds up, I will hopefully be able to put together a grubstake to build a rather good house in the country. The catch is that I think it would be better if other families (specifically those with some young kids like mine) came along too. Quite selfishly, I want the clean living lifestyle with food security for my family without giving up the close socialisation my kids get in a city environment. While it’s still my own dream, the family is what’s important.

It struck me, after talking to one of my friends, that people just saw an idea and a price tag and didn’t really picture what I had in mind when I made my offer. Well, here it is in black and white: a concept for a self-sustaining organic farm… with high-speed internet (that’s important). I’ve been researching the technology and everything that I am going to talk about here is mature tech – not pie in the sky tech that might come out in a few years. This is stuff on the ground, now. As many of you know, a lot of our great energy-saving concepts came out of the gas crunch of the 70’s, so these things – while not going mainstream – have nonetheless seen improvement since then. Such things as methane digesters and composting toilets have come a long way. Frankly, a lot of this tech could be implemented in a low-tech low-cost way, but I rather wanted to use stuff that kept the comfort of modern living with the added bonus of being sustainable. Cost reductions are therefore possible with simplification, but only if necessary.

Also, I have been attempting to build a realistic plan by putting together possible alternative income streams other than crops. Growing Power is an inspiration in this regard, as they conceive of the working urban farm in terms of dollars per square foot and attempt to extend profit-making activities beyond simple food production. The modern organic farm concept is something of a highly diverse business venture, with chances to tap income streams all over the map. Additionally, organic farms have the odd habit of attracting cheap labour (WWOOFers et. al.) because they are a shared passion amongst we greeners. Spinoff enterprises include everything from cob and cordwood building courses (which serve to populate the property with guesthouses and outbuildings) as well as aquaponics and organic farming courses that would be a source of income outside the traditional farming model. With a good sized stand of sugarbush, spring tourism would be a possible revenue stream during the sap run. With existing contacts, a yearly Japanese maple syrup tour would be more than possible, and would represent a source of labour that incurs a negative cost: a revenue stream that creates another revenue stream.

So, I am not too concerned about the opportunities to derive profit from an organic farming operation. The issue then is to talk about what exactly the operation would work. My core theory is that of Jacobsian extension: the longer you keep stuff in your system, the more opportunities you have of making profit from it over and over again. The basis is then an attempt to create an almost closed loop system. A closed loop system is functionally impossible – sunlight is an external input that simply keeps on giving, therefore with that external energy source, there is no such thing as a closed-loop system. The key, then, is to make that sunlight input last as long as possible in your system and be a gift that keeps on giving.

LAND: Optimally, I see 100 acres of land with 30-40 acres clear and 60-70 acres in mainly maple. The clear would hopefully have only a small gradient, but the treed area could have a diverse landscape with bogs and hillocks. That’s my preference, but my ideas can be scaled to reality if need be. I would prefer it in a good growing region (6 or 7) but a high 5 will do fine. Access to local water sources preferred but not totally necessary.

HOUSE: The main expense of the operation, the house would be designed to qualify for a Passivhaus certification, meaning it would effectively pay for itself over the long run. Passivhaus design started decades ago (the inspiration came from a hyper-insulated house in Saskatchewan) and is the most strict energy-saving certification in existence. Most Passivhaus designs do not require central heating, even in the depths of a Canadian winter. They are heated primarily with human body heat and lightbulbs in the house. For additional warmth, there is radiant floor heating produced by a solar-powered geothermal heat pump. Since HVAC is almost totally eliminated, as are gas services and heaters, you actually save enough money to pay for the hyperinsulation. Passivhaus designs are being built for about $150 per square foot. Heating costs are near nil. The house would require hyperefficient appliances and solar panels, but again, these pay for themselves over the long run.

SYSTEMS:

This is where things get fun. The core of the farm is the people. The farm must supply food and utilities for the families, and take care of their waste products. Let’s start from the showers, shall we? Showers, sinks, and washing machines produce greywater. Greywater is dirty water that you can’t drink, but if you use the right soaps and detergents, plants can drink it. As a matter of fact, greywater treatment is a main feature of Earthships. It even occurs right inside the house, providing plants that clean the water as well as the air. The water is then used to flush toilets (because using drinking water for that is simply stupid). The treated greywater then gets flushed and becomes blackwater… that’s water, only with poo in it. The poo water goes to a methane digester, which produces both methane (natural gas) and natural fertiliser. Part of the input to the digester must be carbon-rich, and therefore sawdust and other biomass would occasionally be put in from foresting and farming activities. In order to back up the solar power units, the methane could be used to run not only the stove (with three families, there’s enough poo for a lot of methane for cooking), but a natural-gas powered fuel cell. One of these can make sure there is always enough current in the lines. Eventually the poo water becomes spent, and ends up as natural fertiliser on the Fukuoka-style grain fields. Eventually that grain becomes bread and beer, which continues the poo and pee cycle. Pee, by the way, should be separated from the poo by diverting toilets, because it is the perfect nutrient for an algaculture bioreactor – and also can be used directly on fields if diluted. Pee is really useful.

With people eating, there comes food scraps and other organic garbage. That stuff is great, and needs to be kept in the system as long as possible. Its first stop is to the black soldier fly buckets, where oodles of little creepy-crawlies reduce everything except cellulose. They can even eat meat and cheese and other milk products, stuff worms can’t eat. This system produces several products: heat, compost tea, compost, and black soldier fly larvae. There is a use for every one of those things. Heat is useful most of the time in Canada, so we’ll leave that be. Compost tea can be diluted and applied to the land as a very potent source of soil microbes to improve soil health. The compost is moved over to the next processing stage: vermiculture. Worms actually seem to prefer black soldier fly castings to raw foods, and they can process the cellulose that black soldier flies can’t. This process has been tested and it has been proven that not only are the two processes complimentary, the vermicomposting goes faster when the compost has been preprocessed by black soldier fly. This process produces vermicompost for the fields (a compost so rich that it should be mixed with other soil before applying to the ground), and compost tea. The black soldier fly and vermiculture units leave us with a surplus of creepy-crawlies with which to feed our tilapia in the aquaponics unit.

Aquaponics has been talked about before, but for the uninitiated, it’s a system that takes the best of aquaculture and hydroponics and puts them together. There is no cycling of water out of the system: fish poo fertilises planting trays, the nitrates are transformed into nitrites by the resident bacteria, the nitrites fertilise the plants, the plants thereby purify the water. The water can be cycled indefinitely as opposed to flowing through wastefully. The only input required is food, and worms and black soldier flies provide part of that. With an algae bioreactor, tilapia can also eat algae (for which they are adapted because of filters in their gills). Tilapia are omnivores that can truly eat anything. After all, they naturally occur with hippos because they can eat hippo poo. With constantly cycling and recycling nutrients, the only thing a person has to do for an aquaponics system is plant, maintain, and harvest. The amount of food produced by a small system is staggering… and it is tried and tested tech. The aquaponics system would require a greenhouse to be able to produce all year round. Yes, even in Canada, in minus 20 degree weather. How, you ask? Well, I have a mind to incorporate rocket stoves with thermal mass as well as a potential solaroof design. All possible, all tried and tested. With the aquaponics unit would come a flock of Muscovy ducks for pest control, meat, and eggs. Duck poo is perfectly welcome in an aquaponics system, and ‘scovies are at home on the range, capable of foraging and generally taking care of themselves. If necessary, chickens could be added to the system to add heat and carbon dioxide. An odd thing, you may think, to add to a greenhouse… but if it’s near airtight and plants consume CO2 to make sugars, you need a source of CO2 in the greenhouse. The added heat of the coop (as well as the eggs and pest control services) wouldn’t hurt.

A key to the functioning of the farm, then, would be water storage. A pond would be highly useful for not only water storage but production of biomass. Duckweed, a nigh indestructible water weed, is an exceptional converter of sunlight to protein, and can multiply on still water faster than you can say photosynthesis. Opening up a nice pond with duckweed on top would allow for green forage for the tilapia that can be frozen for storage over the winter. Another aquaponics enthusiast does this for his fish, and the nutrient composition of duckweed is superb for fish feed when supplemented with other stuff like black soldier fly (which, itself, is actually superior to most commercial fish feed). Additional water tanks for runoff collection would also be useful for dry periods.

What you see above is a reasonably brief discussion of some pretty nifty thoughts for just the central systems of the organic farm. A woodlot makes a great deal more activities possible, especially if it is maple. With a big enough woodlot, the income from sustainable forestry would also supplement the bottom line, and the use of a pyrolizer for heating in the greenhouse would produce not only heat but biochar – useful in making terra preta. On top of those things, an open expanse of clover would allow for beekeeping, a couple possible dairy cows, goats, you name it. That’s just gravy, as all the necessary calories are already being produced in the systems I’ve just talked about. Excess produce can be sold through the middle of winter. A little bit of cottage industry, and secondary products are also possible. Add in WWOOFers and farm vacationers, as well as weekend courses, the place can become quite an earning proposition.

So, that’s the basic idea. Any questions?

Phase Two: Food Waste

Taking the focus back down to the subdivision level, what might be possible to achieve once an algae biodiesel plant has been set up. The central location in the subdivision where the plant and gas station can be set up would also be the site of several other pocket industries. In most of the next developmental phases, these industries are waste management related. This development can happen either within or outside of the waste management concept I've already talked about. The reason for this is simple: throwing away garbage creates no revenue. Processing it creates revenue. We are simply foolish to let the opportunity to generate revenue get buried in a landfill instead of exploiting it. It also happens to be more environmentally friendly. Funny that, eh? Both making money and saving the environment! I love it.

Right, the first waste stream to begin work on is the one it seems most people don't have any time for: organics. Food waste. A two-tier system would be highly useful in this phase. Black Soldier Fly (BSF) could compost the organics received first, and vermiculture could be used in the second tier. I've already talked a lot about BSF and vermicomposting is a reasonably well-worn technique. One thing to note: the two systems are complimentary. BSF digest food very rapidly, on the order of kilograms a day. Worms are slower to digest whole foods. When the worms process BSF waste, however, they process it much faster. What's more, items high in cellulose, which BSF find hard to digest, are easily digested by worms. BSF reduce the total volume of waste by 10 or 20 times each day so long as there is adequate surface area. Worms can then take those castings and turn them into superb humus. In the process, the byproduct of loads of BSF larvae and worms are produced, along with compost tea and vermicompost. These things are eminently marketable.

In the case of the worms and BSF larvae, the nutritional profile of the little beasties just happens to be rather good for fish feed. This, with a little algae residue left over from the biodiesel, would combine into a protein-and -fat rich fish pellet if properly processed. BSF and worms also produce chitin, which is oddly enough a useful flocculant in helping algae settle out of solutions. If the BSF and vermiculture operation was paired with a fish feed company that also harvested chitin, it could feed back into the algae biodiesel processor to increase efficiency in algae recovery! The system would then feed back into upsteam products as well as take leftover algal biomass (typically equal to the weight of oil extracted) and put it into a nutritious dry fish feed.

The nice thing about this arrangement is that all the byproducts of the biodiesel process are now spoken for (except the trace glycol, but I have heard of systems that feed the glycol back into the process). We are now handling food waste - which could be collected on a daily basis, feeding in from restaurants as well as homes - and producing a nutritious dry fish feed for profit. We also have leftover vermicompost and compost tea to sell into the next phase of the program.

An Open Letter to Mom and Dad

Dear mom and dad,

I love you guys. I really do. Though you didn't have a lot of money to start with, you kept us living more or less beyond our means in order to keep us kids in a positive environment. You made our meals, you kept us fed and clothed. You gave us good values: sharing, caring, and fairness. You gave us a respect for law and education. You gave us a love of diversity and fostered our circumspection about prejudice and hate. You elevated the ideals of selfless altruism and evil-conquering justice. It's for these reasons I feel there are a few things I need to tell you.

In order to talk about this stuff, I thought I'd talk a bit about history. Your history, in fact. To tell you the truth, I learned a lot about your history - but not necessarily from you (though you did give your own personal anecdotes). My life, and the lives of my co-generationists, were actually filled with endless reminders of your youth. As you know, I was born on the cusp of Generation X and Generation Why. We bore witness to the cultural and demographic domination of your generation over everything we did. You didn't and couldn't notice: you were and are part of the generation doing the dominating. You were simply doing what came natural to you. Being numerically and financially superior, the boomer generation was glacial in its force and staying power. I remember little things, like playing Trivial Pursuit, watching any sitcom on TV, listening to the nostalgic music of your youth constantly played on the radio... these activities were and are permeated with references and sensations that were known specifically to you. You should know this: the weight of demography has made us feel utterly without voice for decades.

This isn't some great "j'accuse". I'm just pointing out that we absorbed a lot about you, and that didn't leave a lot of room for us, at the time. Generation X never really found steady work. They were economically overshadowed by you guys because they were looking for jobs while you were in your working prime and stagflation still had its death grip on the economy of the western world. It was only when your generation started to retire, and Generation Why started becoming financially potent, that our culture started bubbling up. Nowadays, references to the boomers are diminishing as, more and more, my generation becomes the economic power on the planet and your generation starts to muse about retirement and think about buying that bungalow.

Some of us are kind of vicariously nostalgic about the past you had. You had your period of "sex, drugs, and rock n' roll". You had your flower children, your anti-war protests, your draft-dodgers, and your love-ins. Truth be told, many of us non-boomers still listen to and enjoy the Beatles; Rolling Stones; and Crosby, Stills, Nash and Young. A lot of us have dreamed of another "summer of love" to call our own, or a Woodstock, or a cause as deep and unifying as the anti-war movement, but every generation is different. We know what was important to you. We heard a lot about these things, but some of us have been forced to wonder if you've heard about what's important to us. In order to help you understand what's important to us, let me re-tell a bit about your history from the objective (ish) perspective of someone who didn't live through it.

You were well-meaning. With the coming of the "Age of Aquarius", the young, disenfranchised youth of your generation were poor and under the thumbs of rather authoritarian parents - many of whom had witnessed some real tough times. Your parents had lived through the dustbowl era, Fascism, and World War Two. These were not happy events, they were not even mildly discomforting events... these were hell. They came through all this into the after-war economic boom that gave them jobs, the opportunity to own a home, have an extended family, and bring their kids up in a peaceful environment. They went through experiences that may have affected their psychologies deeply. Most of all, perhaps, they exhibited two characteristics: they felt that their suffering helped build calm, stable, and peaceful society you lived in and eventually (in their eyes, ungratefully) chose to reject; and they defended their world order with conservatism and the rage of a damaged youth that had, for once, found some serenity. While I won't say that you yourselves upset this serenity, a lot of kids from your generation did. The peace movements your generation participated in, the drugs your generation enjoyed, and the lifestyle your generation attempted to flirt with, these were generally offensive to the established order.

And so it should have been. We respect that. There was a lot of wrong in that order. You stood up to it, and you achieved some great successes. You righted many wrongs that needed righting.

Going into the 70's, there came the birth – albeit painful - of a general understanding of how the world worked. Since your parents' generation was retiring, there were plenty of jobs for you, and finding work without an education was not a problem. Into this world where you found a new source of income came a shock: specifically, there were oil shocks. In 1973, your money went a lot less far than it used to. Your gas-guzzling land barge couldn't get enough miles to the gallon (it was still MPG then, mom - Trudeau had only just introduced metrication in 1970 and it didn’t take hold until the 80’s), and the west started to realise that a few countries in the middle east actually had us by the short-and-curlies. You had started a real job, you had just gotten into society, moved out, gotten married, and now there was this crisis... well, it's no wonder it took you so long to have me. You went into a work life under incredible stress - not only from the old order your parents still hadn't let go of, but from the fact that their order was now existing only as an hallucination in their own minds. You were entering a harsher reality that necessitated a change. It makes sense that the "back to the land" and "self-sufficiency" movements started in earnest in the 70's. It's no wonder fuel efficiency, methane digesters, the re-emergence of the homestead movement, rediscovery of vernacular house construction all reappeared. You started digging for solutions, and the solutions started to appear. 1979 and the fall of the Shah reinforced the idea that you needed to change the world. Something was wrong. You recognised that the way we were going was no longer sustainable.

But then, something happened. For reasons of expediency, I will simply remind you of the names Thatcher, Mulroney, and Reagan. I still remember you telling me, when I was a little boy and perhaps you thought me incapable of remembering, that “Ronald Reagan wanted to destroy the world”. The 70's were a somewhat frightening time, but they were full of promise, too. You were learning new ideas. Your flower child past told you that something had to be done to live with the earth, to live without taking more than we needed. Some of you thought we could wean ourselves off foreign gas imports. Well, modest efficiency improvements and the failure of many industries took its toll on oil demand and also oil prices: by 1986, the taps were open and less people were buying oil. Even in the midst of the period of stagflation, industry started slowly to pick up again. With oil prices so low, for so long, all of a sudden growth was possible. Oil was indispensible to that growth, and you became accustomed to that cheap oil.

For some reason, when the taps opened up, the advances of the 1970's were completely forgotten. Environmentalism was once again relegated to the closet reserved for the socialist predilections of youth. You advanced in your jobs, and your parents’ generational old guard shuffled off to retirement. You stayed in those jobs, too... so much so that a lot of our brothers and sisters in Generation X couldn't find steady work. The only way many could compete was to get one or more university degrees – something I know you may have resented when younger people with degrees stole your promotions - but there you have it. We are probably the most educated generations in the history of North America, and part of that drive came from the fact that we had to compete for jobs your generation held onto with an iron fist. You know it well: I’m the only person in the history of our family to get a university degree. Nowadays, it’s mandatory. There were layoffs and hiring freezes on many parts of the Government of Canada and the US through the 80's and 90's that reflected private sector freezes, such as that of Cognos in 1985. Many OECD nations had the same issues. That meant your generation filled the jobs you had and didn't let anyone else in until the tech boom of the 90's. That's when my generation went to University. Luckily I wasn't a full-fledged Gen-X-er, or I might not be doing as well as I am today (knock on wood). I got my degree and nosed my way into the job market, taking part-time jobs to bide time while something more long-term opened up. That took about two years.

The problem was that during this 15-year period in the 1980s and 1990s, you experienced an environment where leaving your job was not practicable, and very little new blood came in to make an orderly change in culture from the older to the newer – so culture froze with the hiring. Our generations didn’t have a voice because we were either pre-employment or working in the jobs your generation didn’t want to take. You worked to put food on the table, kept your head down, and did what you had to do to survive. All those fancies of your youth? They were impractical. Besides, once the locks came off your salaries in the later 90's and the world started booming again, those fancies became more the nostalgia of a youth well-spent rather than the reality of the here and now. You certainly reflect on those periods often - in movies, song, and Jeopardy trivia. Up until just recently, I must admit to thinking most forms of entertainment in North America were simply boomer fan-service products. Now, your grip is slowly loosening. The culture that had kept you your job, though, had paid off. You became the old guard - OUR old guard. Your culture firmly entrenched from well before we arrived on the scene in numbers. For a long time, our culture simply didn’t stand a chance. Many of your generation think we Gen X and Gen Why’ers are apathetic and uninterested in political change – or even politics itself for that matter. Nothing could be further from the truth. We are interested in change, but we are being crushed underneath a demographic boulder that is the boomer generation. We can’t change anything as long as you guys keep thinking in the old economic mode and keep voting for the same people. We are accustomed to our vote being worthless because it can’t overcome yours, no matter how hard we try… so many of us don’t bother.

And now, after the past 10 years of economic upheaval (2000-now), you are - perhaps - wondering what happened. Perhaps not. You've come to the end of your working lives, and many of your friends have a nice retirement to fall back on. Your days of being concerned about the world are more or less over. The next issues for you are going to be keeping fit and healthy, eating right, and enjoying the occasional visit to your grandchildren. But there's a problem. Mom, dad, the path you didn't travel back in the 70's and early 80's - it's coming back to haunt us again. I don't want to sound rude, but someone has to say this directly or it just won't stick: there is a reason the boomers are called the "me" generation. During your lifetimes, the oil production of all oil-producing countries has already more than likely peaked. You have been the beneficiaries, at the expense of an entire generation, of a great deal of corporate largesse that no longer exists. The path not travelled - that of sustainability and living within our means - is now staring us in the face as the only path with a future. The choices you made - and failed to make - have doomed your children to clean up your mess. Oprah is still preaching to the Cult of Taking Care of Number One, and many of your generation are still listening.

The fact is that you, and your generation, have to hear this from us: your kids. We're just starting out now. Your grandkids are just being born. We are in that same precarious place you were in the mid-70s trying to get your financial bearings. We're going into an economic crisis that makes the 80's look like a minor blip on the line graph of economic history. We're running out of fuel. We're running out of food. There is only one thing I can guarantee you: your generation has made certain that your grandchildren will lead very, very uncomfortable lives unless something is done now. I know you have always protected and taken care of us, and for that you have my unflagging respect, love, and loyalty - but now I have children. Not even you are more important than they are, and your choices might harm them irrevocably. If that comes to pass, I must admit, I will not be able to forgive your generation, ever. I'm sorry, as much as I love you, these are my children. It would be them, not you, who would bear the future punishment for your generation’s failure to act now.

Unless something changes - and by something, I only partly mean you - we are headed for difficult times. Ordinarily I wouldn't come out and say this. I hate doomsayers. They are typically wrong. I would very much like to be wrong, too, but the signs are there for all to see. I lived through the food shocks in Sri Lanka. China, wher I live now, is about to have a food shock of its own. Everyone is having oil shocks. Housing prices are rising faster than inflation, and the younger generations are being priced out of living space. Food is going to become more costly, as petroleum-based fertilisers become more expensive to make and ship, pesticides are reducing yields. Soil productivity is dropping even with all the power of the green revolution’s technology (and sometimes because of it). Coffee and cocoa are just the tip of the iceberg. The people who grow these cash crops are going hungry… precisely because they are growing cash crops and depending on the big breadbaskets to produce their staples. I know it sounds weird, mom and dad, but the third world countries that produce tea, coffee, sugar… all those cash crops… they don’t actually produce enough food for their own populations to eat. When I was in Sri Lanka, the only nation in the region with a rice surplus was Thailand, and the rest of the region literally went begging. We’re one of the breadbaskets that produce ample staples, but if we start going without, our governments will hold back grain exports, just like Moscow did after the fires last year. We will do well for a little while longer on the strength of our industrial food output, and the third-world cash-croppers will starve as they make the painful and difficult shift from cash to staple crops. In the end, there will still be scarcity, and scarcity means higher prices. Higher prices means I pay more for my kids’ food and I have less left over for mortgage payments. Or I pay my mortgage and my kids eat a bit less. The old paradigm - which is leading into the "new normal" -  will end one way or another. Ending it mindfully, consciously, and conscientiously will be less painful than letting it end on its own.

We're at a historical tipping point. There is still time to do something about it, but the job of my generation now is to force you to care. We've got to snap you out of this late-life reverie of a paradisiacal post-employment existence in the south of France, sipping wine. The economic system is buckling. If we keep thinking of things in the terms of well-worn economic adages (you know, the same theories that said such a thing as stagflation couldn't exist - the same stagflation you lived through?) we will keep getting the same economic results. We need a change. We need you to wake up that dormant war-resisting flower child. We need to pull the cobwebs off your sleeping inner homesteader. Didn't you notice that the American boomers - the ones who grew up as flower children - were the same parents who proudly sent their kids off to war in the Middle East?

Didn't that raise any alarm bells with you? How could the boomers have so forgotten their past that they support the activities they once decried? That revolutionary youth you once were, was he or she right to believe peace and understanding were better than blind consumerism and resource conflicts? Do you remember how that youth thought?

Bring all the old memories back, mom and dad! Bring out your civil rights protester. Bring out your peacenik. Bring back the spirit of your youth. We need you now. We need your numbers to bring sanity back to our civil discourse. We need to start thinking about how to build a sustainable future - not how to buy a motorhome. Get out and vote with your feet. If you aren't with us, we may miss our window of opportunity. It's possible to make change. You did it once before. I believe in you. I love you. Come with us.