September 15, 2010
Dallas, Texas USA
Think about all the various things most people depend on as they go about their days… they get up in the morning, flip the switch, and the lights come on. One turn of the faucet and the water starts running. They open the refrigerator to a cornucopia of food and beverage.
They get in their cars and make an uneventful drive to work down the highway, perhaps making a stop at the local store whose shelves are filled to capacity. At the cash register, the money changes hands without thought of its value, and everyone goes on about his/her day without considering the complex systems that made it all happen.
Just in the normal, mundane course of life, we all depend on these systems– the money system that is run by central bankers, the highway system that is run by bureaucrats, the day-to-day system of jobs and commercial activity that is so heavily influenced by politicians.
Even more, consider things like the electrical grid, or the logistical network that transports our food and fuel, or the water treatment facilities, or the availability of maintenance support to fix homes and vehicles, etc.
Are any of these truly fail-safe? Can we guarantee without doubt that the next time we flip the light switch in the morning darkness that we’ll suddenly be able to see?
It’s not something to obsess over, but one should definitely consider the possibility that these existing systems in place– banks, governments, utilities, etc. are prone to failure, obviously some more than others.
I have argued repeatedly that our governments, politicians, and central bankers have already failed. They are desperately trying the same old tactics to prop up a system that is now defunct, lying to their constituents that everything is just fine.
Even our private utility infrastructure, however, is prone to failure. Quite often, the likelihood of failure is tied to economic conditions, and I’d like to highlight Argentina as an example.
Once the shining beacon of prosperity in Latin America, Argentina’s years of unsustainable fiscal irresponsibility took a massive toll on the economy. 10-years ago, the government finally capitulated by defaulting on its debt, and the subsequent fallout has been a rough ride for the locals.
The Argentine governments’ responses may as well have been ripped from the pages of Atlas Shrugged; in one instance, they fixed the price of electricity across the country to a level that was attractive to voters, but unprofitable for the utility companies.
After a few years, two things happened:
1) The electrical infrastructure in Argentina fell into a state of disrepair since the companies had no profits to reinvest;
2) Due to artificially low prices, the system was being overused by residents who gave little thought to conserving electricity as a means to save money.
Naturally, the combination of these two factors has led to blackouts and brownouts being a part of normal life in Argentina… you cannot always assume that the light will come on when you flip the switch.
Argentina is also the sort of place where you cannot simply assume that the gas stations will have fuel that day, or that the grocery stores will have fully stocked shelves. Again, reactionary government policies have reduced the free trade of goods and services, resulting in frequent shortages.
Perhaps most pointedly, though, crime has risen rapidly in Argentina. Brazen armed robbery is unfortunately commonplace in the country, even during broad daylight in the best neighborhoods of Buenos Aires.
Given their poor salaries and the greater economic opportunity that exists in extortion and bribery, the police have become an absolute joke. They routinely fail to serve and protect the citizens.
If you think it can’t happen in your home country, think again. Economic decline leads to strain in essential services and systems. People that place their trust in the old systems that worked so well in the past will absolutely have their lives turned upside down.
One of the pillars of self-reliance is hedging the system– planning for system failure and mitigating the consequences.
You understand me well enough at this point to know that I’m an unabashed optimist; I’m not calling for some sort of biblical meltdown here… but I think it’s a reasonable assumption that as economic conditions deteriorate in certain countries, the basic systems we take for granted will suffer.
Overall, we shouldn’t dwell on the negative; it stifles our motivation and keeps us from enjoying and making the most out of our lives. But, we should take precautions and hedge our bets.
In my opinion, the most powerful steps we can take towards achieving this are planting multiple flags, buying land in a foreign country, learning valuable skills, and having an alternate sources of food and water.
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