Around the world these days there are numerous regions facing declining / collapsing economies, from Europe to the Middle East, and more on the verge of such a collapse should there be another significant interruption to trade and confidence.
One of the tensions that forms in these times is rooted in powerlessness and dependency. People feel powerless to change their own situation, and feel firstly dependant and then, necessarily, betrayed by government. This leads to extreme politics, increasing social tension, and in many cases fragmentation and eventually war.
We are not immune to this in the West, not even in Australia. We may be more sheltered, but we are not invulnerable. And we know it; our national concern over the inflow of illegal immigrants is a reflection of this, as is our increased rate of savings. We are preparing for hard times whether we acknowledge that logically or not.
So as part of this preparation, what measures can be taken to see us through with the minimum of unrest and chaos? For once I’d like to look at the role of government here rather than the individual.
There are two major changes government can make to provide greater capacity for self determination , and they have to do with localisation and flexibility.
Firstly, it is critical that government does not ‘betray’ it’s people, and yet at a state or national level it is near impossible to manage because the demands become so great. Counterintuitively, the only way I see for a government to manage a collapsing economy is to early on, intentionally fragment and delegate power, to localise government to the degree that people relate to one another in community in resolving their immediate needs. It must be done early, because relationships take time to form. It must be done intentionally, because otherwise it will happen arbitrarily and without oversight. It must be sufficiently small that people have a sense of their own ability to influence outcomes, and a sense of their own responsibility in decisions that are made. If this is done, the burden of any loss can be shared and accepted rather than be transformed into blame.
Secondly, the capacity must exist to change the nature of land use quickly and repeatedly. Times of difficulty are inherently times of change, as desperate people make decisions unpalatable in easier times. One of the biggest changes is movement – locally or further afield. It is critically important to make this change as easy as possible. The loss in terms of stability and relationship are significant enough; arbitrarily adding unnecessary economic costs can mean that the required changes either happen at significant loss, happen later than they should or both. This increases the damage caused, stressing relationships and stability as people seek to avoid economic losses. It doesn’t need to be that way. In Tasmania, the biggest culprits are stamp duty – imposing an arbitrary cost on movement – and our use of freehold title, which imposes asset losses rather than reducing costs in difficult times, exacerbating the situation. Eliminating or minimising stamp duty, and resolving our land title problems either by making a transition to Flowhold title or by imposing a corrective land tax, will set us up to pass through difficult times with the least loss.
These changes are important, and it is important that they are made prior to being needed. Changing early lets people get used to the ideas implicit within them and have a degree of familiarity with those concepts before they need them in desperation.