Satoshi's Sidewalk #17: Local Yokels
The Game of Sovereigns has begun and its Main Streets vs. the Megalopoli.
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Hey y’all - I’m back in the saddle after an unplanned weekish-long hiatus. Shit happens occasionally and the time I allot to writing gets blown out by work or life or et cetera. I’m glad to be back writing again - so, on to the show!
Localism is a concept of governance, commerce, and dependency at the most “local” level. Small groups of people living, working, socializing, deciding, trading, and working together where, quite literally, everybody knows your name. No external influence on decisions from the next town over let alone the nearest metropolis, state legislature, or federal anything.
Local decisions discussed, made, and enforced by the local yokels.
Localism in the US would be akin to the population scattered from coast to coast in midwestern towns or smallish cities. Large cities can and would certainly exist along major trade routes by not as a symptom of centralization. Today things are a bit different. Coastal states are an assortment of large cities coalescing into a singular metropolis, or a string of metropoli tethered together into a megalopolis.
This centralization of inter-city dependencies is the opposite of localism. Large cities becoming so entirely dependent on one another where the failure of one metropolis brings about a cascade of failure in surrounding metropoli. No single metropolis can sustain its own basic needs.
The metropolis is akin to a market place where the expansion of credit forces companies to perform mergers and acquisitions, growing ever larger and performing as much cost cutting as possible to compete with other mega-firms (think food companies, but for cities). Today’s metropolis, city, and town is entirely dependent on a non-stop, fragile, global supply chain - known as globalism - to provide basic necessities to denizens.
Globalization allows for goods and labor to be sources around the world. Providing labor opportunities to those who otherwise would not be working, extracting idle resources otherwise unconsumed. These supply chains to extend all around the world - yet, conversely, these supply chains extend all around the world.
Ask yourself this, could the town/city/metro where you live survive a week without trade from the nearest city in any direction? Got toilet paper? Or butter? Or eggs?
What about provisions from surrounding towns? Is the food you eat dependent on trade from two states over? If you’re in California and wonder about where your power comes from, your first guess ought to be “not California.”
As 2020 COVID debacles made abundantly clear Americans now know for a fact how dependent on China for basic goods and services we’ve become. The US doesn’t even manufacture basic health serums to supply hospitals let alone basic household items.
How does this happen? The US was the manufacturing power house of the 20th century! Americans built everything and exported those everythings to the whole world, damnit! What the hell happened?
We started off making, trading, and deciding things in our home towns. Now our home towns are subject to the machinations of (unelected) central bankers around the world? Was this in the fine print of the social contract? I digress.
Well, now we know. The US has the privilege of reserve currency status with the US dollar - also known as the petrodollar - suffer from the Triffin Dilemma. US dollars must constantly be exported to meet foreign demand, cementing US dollar reserve currency status. A side effect of running structural trade deficients is the dependency on imports and inability to manufacture within the reserve currency country. This further induces economic system fragility over time, until, eventually, moderate stress breaks systems left and right.
COVID was the moderate stressor and the import-reliant supply chain’s fragility was exposed, tested, and broken.
Let’s bring the size of things back down. Think of localism as a sliding scale - on one end, total individual self-reliance to total intra-global reliance. I am of the opinion the scale’s fulcrum is position much closer towards the intra-global reliance end. Buying cheap goods from far away is nice when it’s not life threatening, but that’s no longer where we are. The situation has become life-threatening because everything we need has to come from so far away.
Does bitcoin fix this?
Allen Farrington’s recent essay “Bitcoin is Venice” remarked that Bitcoin Urbanism could be “baby steps towards feasible localism.” With this statement, I agree. Power derived from the (far away) printer’s brrrr’ing-purse-strings is being dismantled one confirmed block at a time. Each passing bitcoin block is another nail in the coffin for central banking and with it the influence provided by fiat money is closer to being laid to rest.
Examples I harp on often is parking minimums, which are locally-made decisions to require X amount of parking spaces per Y units or square feet, and federal highway funding. Highway funding is doled out by the federal government to the states to construct new or maintain existing highways. The idea for highways (interstates) was easy: Eisenhower wanted to drive troops from New York City to Los Angeles if need be. Today, the federal government uses highway funding as the offer which cannot be refused. Literally. The strings attached to highway funding are notorious a means by which the federal government accomplishes policy goals sought at the state and local authorities and governments (because states and local government are broke AF). No greater damage has been done to cities than by the huge swaths of land bladed for the scars that are highways.
Bitcoin is the counterweight to central banking’s short term decision paradigm. To the federal government’s ability to attach loathsome demands to their funding. Bitcoin is also a counterweight to the paper gold markets - which are notorious for rehypothecation. There is currently no tool to measure and coordinate price through time and space. The US dollar is not held together by a limited supply, production difficulties, or trust - but on inertia and (waning) confidence.
Bitcoin does not have to replace fiat - although it may in time - to have an effect on the decisions made by those who hold power over the printing press. The US dollar may be too far gone, the political to turn the ship exhausted, and too few bitcoiners to make a dent - but the technology exists. It would be unwise to discount a future we aren’t able to predict or have not experienced.
Bitcoin reduces the fragility of globalization by making globalization unfeasible. Too long has fiat money distorted the allocation of capital to goods and processes which would not otherwise exist without central banks. Decentralized money begets more decentralized governance in the real world. Without direction, subsidies, or coercion from centralized authorities, people can go back to making decisions for themselves in smaller, self-sufficient, more manageable - and, better yet, totally voluntary - communities.
That’s a small-town dream worth fighting for.
I was recently on the Rabbit Hole Finance podcast with my college fraternity brother, Matthew Baltzell. Check out the episode on Youtube, Spotify, and Apple Podcast.
We discuss @BitcoinUrbanism, bitcoin, real estate, more bitcoin, the super cycle and what I think the new all-time high will be…my price target: the moon!
Glad to have you on the podcast Kelly. Keep writing kickass articles on bitcoin, I read every one :)