Nicole Foss: Community Resilience in a Century of Challenges
Nicole Foss, co-editor of Automatic Earth, outlines eloquently in this video the dynamics when the economy shifts from an expanding to a contracting phase. The key message is that as the economy becomes contracting and depressive, many institutions and governance structures established during the economic expansion phase will either collapse or lose their legitimacy. To ride out the storm of the collapsing phase, solutions will have to be local and formed by small scale structures which are responsive, flexible, accountable and cheap.
We are entering phase 2 of the contracting phase of the economic cycle. Phase 1 took place during the global financial crisis in 2008.
During the prior expansion phase, a lot of debt and leverage was created on top of a limited set of wealth producing assets, resulting in multiple claims to the same assets. We have reached a natural debt limit, and the deflation of credit will bring on a liquidity crunch.
Finance will be the leading edge of the deflationary and contraction wave.
Trust, a critical factor and foundation of economic activity, expands during economic expansion, and retracts during economic contractions.
Trust determines effective organizational scale. When trust withdraws, it leaves large governance structures behind as stranded assets and without political legitimacy.
Re-localization is the only solution to rebuild trust from the ground up. All solutions will be profoundly local.
Communities need to build local resilience in order to limit the effects of contraction which is unavoidable at this point as it is built into the cake.Full article: https://vimeo.com/66770756