What future will you choose? Will you chose to stay in the machine world and so increase your investment in it? Have you given up? Or do you choose a different world and are you making this new reality your own?
I see that the signs are that we had better consider choice #3 soon. I see clear signs that more investment in the old world is a very bad idea.
Let's start with Bacon.
I have just got back from a visit to my local farmer's market where I chatted with my pork person about what is going on with pork. She had been in the machine model. She had 350 sows and sold the piglets on in the big system. But her 350 sow operation was too small. Even combined with her cousin with another 250 sows, they were too small. They could make a major expansion, fold or do somethng different.
She chose the radical different. She now has less than 30 sows. She sells direct and locally. Now she makes money rather than loses it all the time. But she too might have to be even more radical. If she is to survive at all and you and I will have any bacon.
Only huge scale works in the machine world. Machine meat depends on corn and soy. Which in turn depend on oil and water. This year's drought has driven up corn prices from $200 a ton to nearly $400. There is talk of corn at $800 a ton if we have drought next year. First of all this means that all the huge operators who have been at the scale demanded by the machine system, are now cooked. They have no moves in this scenario. They cannot find any alternatives at this scale. Their fixed costs are so high that their cash flow cannot survive another year like this. They will have to fold.
My local pork person has a chance though. She has her own market and buyers who are personally connected and she has rock bottom operating costs. She might also be able to hook into new food supplies such as the waste stream from local restaurants and households. This is how pigs always fed. She also has the room to change her breeds to pigs such as Berkshire, who can live outside all winter and also forage better.
She has still choices and room. The Big Pig Operator has none. She also will be still here to take advantage of higher prices. For when all the pigs in the system have been killed, there will be a shortage. Bacon will be scarce.
I see a pattern here with Jobs in large institutions.
Scale is the issue here too. To play at the high end in business you have to be a giant now. With being giant comes giant fixed costs. But the entire enterprise also depends on cheap oil and other cheap inputs. Any disruption to these inputs and the cash flow kills the operation. When you are at that scale, you only can shed labour and hope.
So the smart giants will continue to hire in cheaper markets and replace labour with technology. The well paying jobs in North America and Europe cannot come back. They are gone forever. And when the crisis in inputs takes place, as with corn for meat, then they will have to fail.
What will be left are the small operators like my pork person. There is no safety in a Job Job. There is no safety in the huge organization.
After the crash has settled, will the old system comes back? Will it be smart in an ever more uncertain world with risks attached to water and energy to rebuild a machine system based on the hope of secure key inputs? I doubt it.
Every year that passes, the key inputs to modern life become more fragile. Water, oil, topsoil are all at risk. And so is the underlying human capital. For a while, many seem just lost and incapable. But I also see signs that many are also taking their lives into their own hands and starting, like the pork person, to operate an economic model that works for them.
Smart people are dramatically reducing their own fixed costs and so attachment to the machine system. Just like the Pork Person. They too are making their own stuff and selling it directly. They too are investigating how to use their network to help them do better.
So this then is why the pork person is such an important story. She had to make the choice - scale up - fold - or change radically.
We all have a choice though like the Pork Person. We can stay in the old game and increase our investment in it. We can just give up. Or we can try the new model. We can rely on them or on ourselves.
The stakes are high. Time is short.
I expand on this in my new book - You Don't Need a Job - which I plan to launch next week on Amazon. Watch this space.
