Why is acknowledgement of economic contraction vitally important for Transition initiatives?

Economic contraction will hit us first.

Of the triple crisis issues, the timeline for economic contraction is the shortest; it will hit before we feel the worst of peak oil (which will hit most of us before climate change). Our economic predicament is also the most volatile, the most sensitive to shocks. Particularly here in the U.S., it will be felt the most tangibly. Peak oil and climate change will probably be first felt economically by most of us.

Economic contraction tempers the types of solutions that are available. Many high-tech proposals such as solar energy, electric cars, and LEED buildings are vastly expensive. In a future with ongoing economic contraction, these types of “solutions” become accessible only for the wealthy niche and won’t achieve widespread application because the economic growth necessary to create surplus cash flow to create investment pools simply won’t happen. Lack of funding will pull the rug out from underneath the best-laid plans. Acknowledgement of economic contraction as the “third crisis” helps us stay on track with low-tech, low-input, relatively inexpensive proposals.

 

Economic contraction will impact your Transition Initiative entity.

Funding schemes such as grants depend on surplus cash flow. As economic surplus disappears, so do grants programs. We have already seen the days of “peak nonprofit”; we are currently into post-peak. Grant dollars are precious, and will become even more so as the years go on. The same goes for charitable contributions, no matter whether these are from members or from strangers. We need to set up Transition initiatives as organizations that will endure, rather than go bankrupt. We need to set up Transition initiatives as organizations that can focus on the real work that needs to happen to prepare our local communities, rather than having to spend all their time chasing fundraising to keep the doors open. Rather than the corporate-styled “nonprofit organization” model of the past 30 or so years, Transition initiatives might more wisely structure themselves as “the way of being” within a given local circle of community, pooling the volunteerism of all. (More at “Resilient nonprofits”)

 

Economic contraction will impact the people of your local community.

It is widely stated that the “recession” has touched nearly everyone. If it didn’t hit you, it hit someone close to you. Call it “double dip recession” or the beginning of the Greater Depression, but my opinion is we’re in for a lot more. We will need to support each other, and support our fellow community members. That means we will need to create local economic structures to help people in need, in extraordinarily long-term fashion. We will need to put in place local “inner work” professionals (mental health professionals, counselors, spiritual and religious leaders, etc.) who are prepared to work with the issues that arise as people cope with economic contraction. It turns out that with Transition understanding, we are superbly positioned to do this, but our Transition initiatives need to embrace this role. (See Part III.)

 

 

 

This post is an excerpt from a longer paper, "Economic Resilience," which is being posted online in serial form.  Part I explains the problems, because we have to understand what we are working with in order to begin to solve it.  Part II critiques what several economic theorists see as possible routes forward for the “big picture” economy.  But the central question of this document is what we can do at the grassroots level.  Part III (approximately 70% of the document) offers a panorama of ideas for building local economic resilience. Links to the full document can be found here.

 

Joanne Poyourow is the initiator who brought the ideas of the international Transition movement to many areas of Los Angeles.  She is actively involved in the Transition Los Angeles city hub.  She was a CPA in public practice for more than 13 years and holds a degree in Business Economics from the University of California at Santa Barbara.

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