A number of factors have gelled for me into an important understanding, however unlikely it is to be original: Neither money, real estate, precious metals, nor any other tangible good or floating trade medium possesses rigorous intrinsic value - in each case, their value can be corrupted or undermined through various manipulative processes (e.g., stock market shenanigans, currency policy, fraud, etc). Even food, energy, or water, when provided by a producer to a consumer, can be manipulated in similar ways. But when something is produced by the consumer, pure economics is at work in how it is used - you have begun the process of vertically integrating your own personal economy. Such a move must necessarily begin with energy, so I will examine its purpose, implications, and how it may be approached.
I. Purpose
Marxian-derived theories and market theories both ultimately fail in practice due to a single fact: The rate of adaptive feedback in a political system is too slow to account for the consequences of policies or lack thereof, so eventually a point is reached where the costs of localized economic failure add up to total system crash.
In a highly regulated economy, these failures will be manifested by irrational, politically-driven decisions that retard efficient movement of goods and services, with policy reform occurring much too slowly to deal with the incurred costs. Meanwhile, in a more market-oriented economy, they will occur as increasingly innovative mechanisms for the wealthy elite to steal from everyone else, avoid paying taxes, and further demolish legal barriers to their doing so by corrupting the government.
We laymen may have been fooled at times into thinking that markets were a magic system due to the paper growth created by stock speculation, but eventually we learned reality the hard way - when the markets inevitably crashed, the result was a net decrease in real economic value, with a significant part of the remainder being shifted to the richest of the rich. Likewise, it's easy to glance at the massive growth still taking place in China and the enviable social welfare states of Europe and conclude that the right combination of regulatory policies can produce such results consistently, but they too are hemorrhaging - just from different places than the US has been.
All it took was one tiny member state, Greece, to expose the extreme vulnerability of the European market, and China's enormous growth - made possible only by constant influx of external financial resources - just barely keeps it ahead of its own rapidly-advancing entropic shockwave. With all things taken into account, none of the world's nations is in the black - everyone is burning resources they don't have just to stay one step ahead of systemwide failure.
Now, a large part of the problem is lack of environmental sustainability: Nations are failing to transition to renewable energy and efficient practices quickly enough to outpace the costs of resource depletion. But when you get right down to it, even renewability probably isn't enough in an interdependent system - resources are exhausted locally at a more rapid pace than they can be replaced through broader economic movement, and the same failures noted above can take place even in environmentally efficient economies. Nothing stops the rich from sucking up every last drop of extra margin created by renewability in a market economy, nor growing bureaucratic barnacles until it can't function in a more heavily regulated setting.
Yes, political reform can occur in both cases, but the point is that it does not - cannot - occur thoroughly or quickly enough on a consistent enough basis to stay ahead of continuing costs. Drives for regulatory reform in a rigid economy can remove some of the wasteful bureaucratic plaque, but it almost certainly will not be able to produce an optimum situation; and drives for more regulation in a laissez-faire economy can curtail some of the predatory business practices taking place, but hardly enough to put the ball back in the court of employees and consumers. The costs are local, but the solutions are national or global, so we encounter a problem more fundamental than lack of renewability: Economies are too big.
This does not mean "big" in the sense of being too wealthy - there is no such thing except in relative terms - but in the sense of involving too many transactions among independent actors within an interdependent system. So two potential approaches present themselves: Either force economic decisions to be made on a highly coordinated, interdependent basis, or else increase economic localization and independence. There are short-term arguments to be made for the former, given how rapidly a nationally- or globally-coordinated response can be implemented, but this is (a) politically difficult to bring about through consensus, and (b) inflexible to subsequent adaptation.
In other words, interdependence is part of the problem, not the solution - it is the reason that fossil fuels have dominated economics for so long, because distant oil fields could be more cheaply accessed than building on locally available energy. So while it may satisfy some "kumbaya" sentiment to think of a world united in cooperation and common interest, the reality is that global interdependence is unstable, unsafe, and vulnerable to catastrophic disruption even in the short-term. Global or national adaptation is simply too slow to account for the exhaustion of non-renewable resources or the buildup of inefficiencies in how renewable resources are utilized.
Of course, there is nothing new about economic localism - there has always been a school of thought dedicated to preaching its advantages, and its credibility has radically increased with the emergence of the environmental movement and standards such as LEED: It is plain common sense that using local resources would be more efficient and sustainable than relying on far-flung trade goods for the needs of daily life.
But even in a local economy, the same problems can crop up if that economy is interdependent: One person may come to dominate and become a "town boss"; a group of owners and businessmen may collude to dominate the town council as an effective oligarchy; or a city with great public infrastructure and predominant unions may constantly be grinding to a halt and services unmet because of slow work and frivolous strikes.
This goes to the heart of something that has been both a boon and a problem for humanity in modern times: Economic specialization. It is far easier and more practical for most people to be a component in someone else's economy than to build their own, so we end up with a situation where people are economically little more than machines - a fact that ultimately dominates their political status as equal human beings, resulting in oppression either by employers or distant, weakly accountable political organizations. We can thus say that economic interdependence poses risks to individual freedom, environmental sustainability, and social and technological innovation stifled by dominant interests.
So let us chart a solution by conducting a thought experiment: Let us imagine self-sustaining personal economies, beginning with household energy independence.
II. Process
- Get out of debt.
I am aware this is much easier said than done, but it is doable with planning, discipline, and a decent amount of luck. And I say luck because I recognize that there's nothing you can do if the universe is truly out to fuck you, so there's no point in protesting that this isn't practical because _____ might happen.
Being debt-free is not essential in the short-term, of course - you can finance household energy independence by going deeper into debt, and then use its advantages to get in the black later, but there are greater risks involved: You have much less margin for error or misfortune. Ultimately, however, being out of debt is a basic requirement for a self-sustaining personal economy, so you might as well start at the beginning.
- Own the land on which you live.
Homeownership is an oft-touted status in America, but it's valued for all the wrong reasons: People regard it as an investment for later resale, a sentimental attachment, or a security against economic fluctuations. Very rarely is residential real estate treated as what it is - productive capital. People buy a home to live in, but the definition of "live" has generally come to mean passive existence and entertainment rather than productive endeavor: Productivity is something one does for someone else in exchange for the money to go home and be entertained - something done in an owned home rather than a rented property merely for reasons of convenience, security, or sentiment.
If you treat real estate as productive capital, however, it can be worth a lot more in the long-run than as a resale good or security blanket. So, while any home can have some value in this respect, the first step is choosing the best location: One that is not only good for household energy independence, but also has potential for stronger localization of other inputs over time.
There are, unfortunately, some intangibles that serve as confounding factors - for instance, if the area is full of rednecks who will regard you as a Commie for having solar panels, your interactions with the community would only get worse as those people indirectly benefited from your foresight. So you have to choose communities where the people are more or less reasonable and decent - a fact that sadly rules out much of the otherwise superb, cheap land in the continental interior. Other intangible problems would include political corruption, authoritarian culture, and extreme religiosity, among other possibilities. Crime, on the other hand, has an easily measurable economic impact and therefore can be rigorously accounted for.
With respect to affordability, there is no direct relationship between the price of residential real estate and its productive potential - demand is largely based on the property's relationship to other property, not its intrinsic value: How close it is to businesses and schools, how beautiful the nearby environment is, how nice other people's houses look, etc. In other words, it's priced according to what people use it for - entertainment. So there are probably great deals out there for people looking toward an energy-independent household, if you don't mind living in a community a few rungs below what you can afford: Not to the point of having to buy kevlar wall-paper, of course, but at least choosing an area where you are on the upper end of the local income scale. You also don't want to be hamstrung by homeowner's associations who dictate what kind of systems you can install.
- Start with efficiency.
This is the cheapest and most straightforward step on the pathway to energy independence: An efficient household. Technological solutions to efficiency are proliferating, but there are common-sense practices one might also adopt as modest lifestyle changes in the interim - e.g., turning off lights when not in the room, unplugging "vampire devices" when not in use, wearing a sweater in mildly chilly weather, etc. The best way would be to design and build your house from scratch for passive efficiency, but this would require a significant up-front investment, so perhaps more realistically one would incrementally renovate an existing house over time. Roll the savings from each step into further investments in efficiency until you get where you want to be on that front.
- Choose your generation strategy.
Solar thermal, photovoltaic, and wind are by far the most practical options for a household energy system, and they are not at all mutually exclusive. Just because you have wind turbines doesn't mean you can't have a solar water heater; and just because you have solar panels doesn't mean you can't have wind turbines - in fact, there is no essential reason these systems have to be fixed rather than storing and deploying different ones at different times of year. It will all depend on the balance of your local weather conditions, and whatever zoning regulations and homeowner's association bullshit you chose not to avoid in picking that particular location.
This too can be done incrementally, although there are probably sweeter short-term deals for people who can save up the money to go all-in. Still, I myself would choose to take an incremental, experimental approach and try out different combinations of systems to see what kind of cost/benefit balances I could get. Experimentation costs money, but the savings from energy efficiency and whatever output any given system provides should greatly offset what you have to spend. There's also the fact that, as stated before, you have chosen to live in an area somewhat beneath your means, so you have a little extra income.
It would help with your choices if you knew as much about electrical systems as an electrician - not nearly what an electrical engineer knows, of course, but having the ability to know what electricity is, how it works in principle, and being able to measure and deal with it in practice. This only requires trigonometry, some basic physics, and a passing acquaintance with how circuits work, so it's something an amateur can learn independently - although you will naturally want to be as conversant as possible in safety procedures.
Once you have found an optimum configuration, then you would want to save up and invest in a more dedicated, more highly efficient version of it that minimizes operational costs while maximizing robustness. Still, you should probably continue experimenting on a low level as new options become available and new ideas occur to you.
- Own your generating equipment.
There are many financial options these days for clean energy, including leasing arrangements where (for instance) a company owns solar panels it installs and maintains on your roof, and you simply buy the power from them at a drastically reduced rate while they sell the remainder to the grid. This is great for reducing greenhouse gas emissions and expanding the solar power economy, but it doesn't help achieve household energy independence - you don't own the panels, so you don't own the power, and therefore you might as well just be buying from a distant solar utility as much as from someone else's panels on your roof.
PV solar panels are particularly suited to private ownership because they are arbitrarily modular and downward-scalable, and are exceedingly likely to become commoditized over time. PV material will eventually be churned out by the square meter, so quality and reliability will be less and less of a problem over time, and maintenance needs will therefore be less significant. This is less true of wind turbines, which continue to get bigger and more industrial as time passes, but it wouldn't surprise me if small-scale turbines can be found that have a large proportion of user-serviceable components. Nevertheless, I believe PV solar is probably the strong favorite on this count.
Furthermore, leasing and other financing arrangements tend to require long-term commitments and full-system installations, which would tend to preclude much in the way of experimentation. Better to remain flexible, and keep options open.
- Choose storage options.
Solar and wind are intermittent, so you need to find a storage strategy that best fits your system and usage patterns. This too is open to incremental development and experimentation, so it's probably best to remain flexible on this rather than immediately committing to an integrated system. As with the generating equipment, own the storage equipment.
- Sell excess electricity to the grid.
Once your energy storage queue is full, your system should be able to sell the energy back to the grid - because you should (obviously) have chosen a location where utilities are willing and able to buy power from anyone connected to the grid. At this point you will have achieved household energy independence, but this is not the end of the story: The money from selling electricity back to the grid provides resources to pursue other forms of efficiency, and in some cases can lead to further areas of independence.
- Pursuing greater independence.
The ultimate purpose is to establish, as closely as is practical, your own self-sustaining economy with only the resources of a single household, so you do not want to install any subsequent system whose power needs put you back in the position of buying electricity from the grid. So that is the first criterion for closing additional resource loops such as water - the next logical subject to address. It would make no sense for these purposes, for instance, to install a water recycling system that causes you to lose energy independence, so you have an energy budget to stick with - although you can increase it over time as the state of technology and economies of scale improve. But since you have an energy surplus, you can dedicate an increasing amount of energy to systems dedicated to material efficiencies.
- Water efficiency.
The first step on this road is relatively cheap - in particular, putting aspirators on faucets and showerheads to drastically reduce water output: They passively inject a much larger amount of air bubbles into the stream so that, even though it feels like the same amount of water, it's actually a lot less. I've heard numbers between 30% and 60% reduction in water usage from a given tap / shower with aspirators.
The next step, which is much costlier, is installing a tiered graywater system: Rather than having toilets, kitchen sinks, clothes/dish washers, and shower heads all tapping directly into the same water supply, and the wastewater from all going directly out of the house, different systems get a different quality of water depending on their needs. Instead of washing your hands in the sink and the water going straight out of the house, it will be directed to a queue that the toilet taps into - so you would use the same water twice. Showers would also feed into both toilets and clothes washers - the thin film of grease and dirt washed off one's body in a shower is trivial compared to the gunk soaked into clothes over the course of a day, and is no match for laundry detergent.
Low-flush toilets are generally not a good idea, since people end up having to flush twice for #2 and use more water on balance. Instead, dual-flush toilets are a superior option, since they allow the user to optimize based on specific circumstances. Likewise, water-efficient clothes- and dishwashers are a good idea, once you can afford them.
There are a number of other passive options to increase water efficiency, although passive often involves some awkward limitations or practical difficulties. For instance, chaining applications as described above can most effectively be done if the faucets are higher than the outlets where its wastewater will be used - e.g., if they are on a higher floor, or else just higher up on the same floor. In that way gravity can be used rather than requiring water pressure, but this is somewhat awkward: Locating your kitchen upstairs or putting the sink at chin-height might be a little strange, but I'm sure there are innovative and non-ridiculous ways to make use of gravity in this manner. There is also, of course, caching rainwater if you live in an area with a significant amount, which would naturally make use of gravity as well.
Additional steps would involve replacing or eliminating foliage whose only purpose is decoration, if it can't survive on rain alone: Water should be directed toward expanding the productivity of your personal economy, not making total strangers' eyes glaze over at the suburban banality of your house.
- Water independence.
This is quite a doozy, given the amount of energy involved in water treatment and non-passive circulation, but it can be approached to a greater or lesser degree depending on the rainfall stats of your area. There are passive water treatment options - e.g., solar thermal evaporation, which is conveniently more available the less rainfall there is - but I don't pretend to know the relative practicalities. I do know there are high-surface-area, grooved metal sheets that can passively evaporate thin films of water a lot more quickly than a standing body with unbroken surface tension, but I'm loath to dive into the physics to figure out details. How practical this is, I would love to find out.
- Food efficiency.
Buying food from local farmer's markets is something a lot of eco-conscious people already do, and they may also grow gardens in their yards to modestly augment their food supply. Your approach to this must be guided by the facts of the local ecosystem - if local "farmers" are expending tons of energy and water to grow crops in an environment that doesn't suit them, you aren't necessarily doing anything useful by buying from them. And the same is true if you violate your internal energy / water budget growing gardens, so that has to be taken into consideration in forming a strategy for food efficiency.
But if we posit that the energy/water budget is satisfied, then there are common-sense steps one can take: First, eat modestly. Instead of gobbling down everything in sight and then wasting the energy working it off at the gym, just eat less. Second, eat healthy - you won't crave to eat more and more food if what you do eat satisfies your body's needs. Third, enjoy your food - savoring each bite rather than cramming it seems to result in healthier eating patterns, as far as my personal observations go. And fourth, recycle the food somehow - either by composting leftovers for fertilizer or using it as an augment fuel.
- Food independence.
This is not yet feasible, but progress in hydroponics, drip-irrigation, and aeroponics points the way. It seems inevitable that "urban agriculture" - i.e., vertical farming - will eventually be cheaper and more efficient than using up huge plots of land to grow crops, so time will definitely make household food independence a practical possibility. In the meantime, there is no reason - apart from money, har har - that you cannot roll over the savings gotten from energy and water independence, and food efficiency into incrementally experimenting with hydroponics, aeroponics, or drip-irrigation equipment.
This may lead to amusing hijinks, as your local law enforcement will probably suspect you of growing marijuana - so if they raid your premises with a SWAT team, flashing around submachine guns, you would have a pretty solid basis for a lawsuit and perhaps a six-figure settlement (seven would be stretching it unless they shoot you). But then they might simply get a court order, politely knock, show you the warrant, and then calmly tear your place apart, which would be douchey of them, but perhaps not douchey enough to get a good settlement. But I digress.
- Transportation.
Eventually you'll want an electric car, and when you do you'll want to own both the systems and the batteries: Ideas like Better Place where the batteries are owned by the company are great for addressing climate change and global renewability, but not for personal economy. So instead of purchasing disposable batteries or ones optimized for swapping, what will most likely be the case is you would want a dedicated one optimized for long-term robustness and maximum charge capacity. That way you can charge entirely at home, using your own energy, so that you can stay within your household energy budget.
So long as you continue to use fossil fuels for transportation, you cannot really be energy-independent - you still rely on distant oil fields and their controlling entities for a critical part of your personal economy, so shifting to fully electric transportation is necessary to achieving household independence.
- Beyond.
Even if you were totally energy, water, and food independent - which isn't technically possible in absolute terms - you still would not be completely economically independent: It is not and never will be practical to mine the ground beneath your house for metals and organics, process them, refine them, and manufacture all the complex products that you choose to have. Time may give us cheap printers that can churn out PV material from "ink" catridges containing various suspended metals, but even then you would have to get the cartridges from someone else.
Nevertheless, you can continuously increase your level of household independence over time without sacrificing expectations, by making use of open source hardware and manufacturing systems, 3D printers, and other systems developed specifically for the purpose of decentralizing manufacturing.
III. Ramifications
Now imagine a world where household energy, water, and food independence are the general state of things (or at least in developed countries): Where most people provide their own energy, rarely need to buy more water, and their own infrastructure provides them with more food than they need utilizing only the land footprint of a single residential plot. What does such a society look like?
First of all, it's quite peaceful. People still kill each other over money, but I suspect it would have more to do with the social status accorded to the money rather than the money itself, and probably much less commonplace. Wars for resources would be much less likely, since chief scarcities would occur in commodities that are not central to the functioning of the economy, but rather in rare metals that are mainly important to specific industries.
Second, it's quite civil. What the hell is there to get worked up about? Oh, I know people would find excuses, but excuses are not the same things as reasons - an abstract philosophical disagreement is not the same thing as heartfelt fire stemming from personal knowledge of desperation. People might still grumble about immigration, but they wouldn't resent it beyond aesthetics, and it would offer invigorating cultural energy.
Third, it's quite democratic. When people have no leverage over you, their only options to get your cooperation are to persuade you or put a gun to your head, and the latter just isn't likely to succeed in this context: Terrorizing a world full of people with economic surplus and their own time at their discretion would be like trying to affect armed revolution in Malibu.
Fourth, it's quite robust (i.e., secure). If an asteroid destroys a city in China, what follows will be a worldwide memorial service and talks about asteroid defense - not the total collapse of every economy on Earth because everything made in that city is suddenly unavailable. This wouldn't make civilization invincible, but it would make it a lot more difficult to destroy.
Fifth, it's quite diverse. Without interdependence, there is no corporatized McMonoculture - every single home; every single community would carry some level of uniqueness. Yes, there would still be standardized systems and thus standardized lifestyles, but they would be endlessly customizable for a given environment and weather patterns. Since the systems would draw from nature and be configured for the local environment, people would in an abstract way be reconnecting with nature, and forming a new kind of cultural synthesis.
Sixth, it's quite economically just. The social fabric would look rather different when a waitress in Compton who lives in her grandmother's house can boast comparable economic viability with a middle-manager living in an affluent suburb. They would have widely divergent incomes, and yet all that would affect is the breadth of entertainment options - food, utilities, and even ground transportation would be effectively equalized (although the latter's might have leather seats and state-of-the-art GPS).
Is it utopia? No, but the bars for "poor" and "rich" would certainly move in a positive direction, and social ills would become a lot more complicated than the usual depressing bullshit.
IV. Obstacles
- Desire.
Not everyone actually gives a shit. In fact, most do not. They wouldn't turn down a free gift of an energy-independent house with hydroponic gardens and an electric car, but they have no interest in personally spending decades experimenting with systems in order to build one. This can only be dealt with by demonstrating the benefits of such a lifestyle.
- Awareness.
Such a concept just doesn't occur to most people. The point of life is either fame and fortune to the Idiocracy crowd, or love and family to the emotionally insightful - and this has nothing to do with either of the above: You might become wealthy with such systems, but you will never be rich - never have the license to be an arrogant asshole pissing away tens of thousands at a poker table like a typical idiot dreams of becoming. And you might gain more family time to a point if less work is needed to live comfortably, but you don't need economic independence for that - just some modest assets and a home business: A much easier proposition. So most people just wouldn't think of it. This can be dealt with through passive means - i.e., word of mouth as more people come to pursue it.
- Money.
This is, of course, obvious. Most people (myself included) would find it very challenging to get past Step 1 - getting out of debt - and those for whom it is a practical possibility would still mostly have a problem of motivation if their lifestyle is primarily geared toward entertainment rather than an impulse to create. But each incremental step carries its own immediate benefits, so there are reasons that even someone with a more leisurely lifestyle (and I'm practically The Dude over here) might find the pursuit of economic independence attractive. After all, you don't need to roll over all savings from efficiencies into pursuing the next step in the process - you could just take it slow and enjoy yourself along the way. Life interferes in all plans, but you're in a better position to deal with vicissitudes the more economically independent you are, and you can get there by taking baby steps.
V. Conclusion
If the individual (or family) is the fundamental unit of humanity, shouldn't that also be the fundamental unit of an economy? And yet, with increasing specialization, this fails to be the case - individuals and households are not units at all, but sub-components of economic units (i.e., corporations or institutions are the units). The result is politically problematic, and over the long term causes economic failure. The solution, which conveniently also addresses climate change, is economic decentralization all the way to the individual household. Achieving this would be good for society, good for families, good for communities, and good for the environment, and it can be approached incrementally at relatively low marginal cost each step of the way. I intend to try this some day.