California vs. the Productive Class

California is sinking fast economically, as we explained in States in Budget Crisis.

The Los Angeles Times points out that California placed 48^th in a study of business-friendly states, trailed only by New York and New Jersey -- and that was the good news. A few weeks later, the Times reported even more dismal information.

Leading with the news that Chief Executive magazine had named California the worst place to do business for the eighth year in a row, they went on to detail some of the reasons.

Its 10.9% unemployment rate is only lower than Nevada's and Rhode Island’s. A third of U.S. welfare recipients live in California, the report noted. High state taxes and bundles of red tape make operating a business in the state unaffordable to many companies, critics say.

Last year, 254 California companies moved some or all of their work and jobs elsewhere -- 26% more than 2010. Most chief executives in Silicon Valley said they won't expand in the state, according to the survey.

In The California "Austerity" Trap, Robert Upshaw points out that California's expected budget shortfall has mushroomed to $16 billion and in response, Governor Jerry Brown offered a plan that ups the top tax bracket rate by 3% for the next seven years and increase sales taxes by one-fourth of 1 percent for four years.

In response to these woes, California's solution is to attack its underground economy, estimated by the state at between $60 and $140 billion, rather than lowering the tax and regulatory burdens that have driven that substantial portion of the economy underground, as Reason reports.

Licensed to Live: Occupations

Author's Note: Just below the masthead at the top of the page you'll see a new Contents link. The linked page lists all Tireless Agorist columns, arranged loosely as a table of contents or reading list by category. I hope you find it useful for exploring The Tireless Agorist.

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In 1787 one could get most any job or open most any business without seeking the government's permission to do so. Today, nearly one in three U.S. workers needs a license to pursue their chosen occupation, and starting a new (legal) business without the involvement of both a state-licensed attorney and a state-licensed accountant is a fool's errand. Two recent studies do much to explain the rapid growth of the underground, apolitical economy that we explored in The Apolitical Economic Superpower and the rest of the Phoenix Society series of columns.

Occupational Hazards

The Institute for Justice recently released Occupational Licensing in 50 States and D.C., a study examining the impact of licensing on 102 low and moderate-income occupations. In 1950, only one in 20 U.S. workers needed a license to pursue their chosen occupation. Today, the ratio approaches one in three.

The Underground is Surfacing

So far in this series about the Phoenix Society, we've addressed the massive size and rapid growth of the underground, apolitical economy, the rising decentralization and individual empowerment in response to the ongoing failures of centralized, top-down control, detailed specifics of new technologies that hold the promise of decentralizing production, new tools for and attitudes toward collaboration, and the decentralization of production. But the story of the Phoenix Society is not only in the depth of the changes occuring at the edge of the future, but the breadth of support for these changes, even among those who have yet to realize their depth.

Stories that explore the widespread acceptance of this new decentralized paradigm are everywhere, and a number of those stories have been told here at The Tireless Agorist. In Detroit: America's Greece, we saw examples of residents reclaiming homes taken by banks and government agencies, community gardening projects, voluntary cleanup efforts, neighborhood watches, and new sorts of microbusinesses, all the result of individual initiatives, not government programs.

Accidental Agorists Rebuild A Road tells the story of a community of volunteers repairing a road vital to their well-being because the government couldn't or wouldn't get the job done and they weren't willing to set around and watch their livelihoods destroyed. Meanwhile, Tombstone, Arizona Clings to Life as the citizens still wait after more than a year for permission from the government to repair vital water systems that are in an area protected by the Wilderness Act.

The Homebrew Production Model

In earlier columns in this series, we've explored technologies that promise to challenge mass production and distribution of goods, much as decentralized arts have begun to challenge the major media outlets and local farming is becoming a nascent threat to factory farming; technology that will soon be as readily available to the local craftsman as farming implements are to the local farmer.

Both an ecological and economic case can be made for the wastefulness of the current production-push model of goods creation. Making cheap, disposable goods centrally and distributing them globally in a never-ending cycle uses considerably more resources and energy than crafting durable, repairable goods for a smaller geographic area. As with produce, the hidden costs of socialized infrastructure account for a considerable portion of the supposed economic advantages of mass production.

The counter-argument can be made that only centralized production lines can produce many goods, such as today's sophisticated electronic consumer goods. To continue down the path toward a more decentralized economy, new models of decentralized production will be necessary. Fortunately, some models have already shown themselves to be viable, and others offer great promise.

Open-Source Freedom

A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insects.
Robert A. Heinlein
Northwestern Localist asked an interesting question in response to the column Homebrew Production is Coming.

How many years are we from designing and building our own farm equipment, transportation, etc. etc.? This kind of technology makes massive centralized government control less viable.

I happened to know the answer is zero, which sent me searching for something I vaguely remembered, and that led me to the today's column. While Northwestern Localist won't be printing up a tractor on a RepRap machine any time soon, his question goes far beyond that, to the concept of shared knowledge.

Homebrew Production is Coming

Author's Note: The Homebrew Industrial Revolution, by Kevin Carson, goes into great detail about many of the concepts underlying this series of posts. A number of columns will focus on information gleaned from there. Well worth the time to read. Highly recommended.

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In the first column in this series, The Apolitical Economic Superpower, we discussed the rapid growth of the untaxed, unregulated economy that currently provides 50% of the world's jobs, and is expected to provide two-thirds of the world's jobs by 2020, according to the Organisation for Economic Co-operation and Development (OECD).

In The Rising Phoenix Society, we learned of David Obi, who brought electricity to the masses in Nigeria by working an underground distribution deal with a Chinese manufacturer. We looked at local and urban farming as an example of the growth of apolitical employment in the US, and touched on regulation and infrastructure costs as two reasons that smaller-scale production may prove increasingly more competitive with factory farming in the future.

We also noted the great changes in the creation and marketing of literature, music, photography and other arts over the last few years, thanks to the largely unregulated and tax-free internet. We mentioned the grassroots effort that arose in opposition to the corporate-driven attempt by government to squash that great blossoming of creativity. We also observed that education (as opposed to government managed and financed "schooling") is on the cusp of a similar great transformation.

However, there's one major element of society that has and always probably will remain within the Domain of the Dinosaurs; the holy trinity of mass production, mass marketing, and mass distribution. Like it or not, that model is a keystone of the modern economy. The current assumption is that centralized mass production, with its requirements for massive capital investments, high energy and transportation costs, reliance on nation-wide infrastructure, considerable administrative overhead, and reliance on a production-driven throwaway consumption model is the only viable model for production.

Can that model be challenged by one without all those drawbacks? By the process of negation, that model would include low capital requirements, low overhead, local distribution, and build-to-demand production of durable, repairable goods. Unless goods can be economically produced in much smaller batches on much less expensive equipment, that model is a non-starter. But innovations on the horizon suggest a strong possibility that those conditions will be met in the not-too-distant future.

The Rise of the Phoenix Society

In the first column in this series, The Apolitical Economic Superpower, we discussed the rapid growth of the untaxed, unregulated economy. According to the Organisation for Economic Co-operation and Development (OECD), it already provides an estimated 50% of the world's jobs. And in only eight short years, they estimate that two out of three workers world-wide will be employed in jobs outside the control of government, in the apolitical economy that this article from Foreign Policy refers to as System D.

By 2020, the OECD projects, two-thirds of the workers of the world will be employed in System D. There's no multinational, no Daddy Warbucks or Bill Gates, no government that can rival that level of job creation. Given its size, it makes no sense to talk of development, growth, sustainability, or globalization without reckoning with System D.

The Apolitical Economic Superpower

Christiane Amanpour of ABC News is the latest to grasp the significance of the world's off-the-books, untaxed, unregulated marketplace. This surprising economic superpower was featured in her Around the World segment on February 1^st.

This market is most often referred to by government spokesmen everywhere as the "black market," in the hopes that people will equate dodging the taxman and bureaucratic busybodies with slavery, child trafficing for pornography, murder for hire, heroin sales, and other, such unsavory pursuits. But people are waking up to the reality behind the hype. When a market is the second-largest in the world, topping 10 trillion dollars, second only to the United States $14.26 trillion, and currently provides approximately half the world's jobs, it becomes increasingly hard to conceive of it as fundamentally evil.¹

The future holds only increased respectibility, as estimates indicate that by 2020, 8 years away, fully two-thirds of the world's workforce will find themselves employed outside of officially-approved channels. This is occurring in an official world-wide economic slump where every new job is considered reason for celebration and pontification. It becomes ever more obvious that the biggest contributor to the growth of the global standard of living is not government programs, but avoiding government involvement in the economic realm to the greatest extent possible.

As Christiane puts it, "far from the canyons of Wall Street, far from the banking capitals of the world, the economy of the streets is booming." The same can hardly be said for the listless, if not moribund, state of the officially-recognized economies. Even in the United States, where avoiding political class meddling in the economy grows more difficult every day, $1.2 trillion, or about 8.3 percent of the economy, is off-the-books -- although the US is among those countries with the smallest percentage of such activity.