The Oil Drum

Which leads ... where? The Chinese making all our stuff find their inventories getting bloated, layoff workers, slow down production. Unemployed city dwellers, unable to buy necessities, start home craft businesses, or try to grow survival gardens. The rural population has been moving into the cities pretty steadily over the past ten or twenty years. Making a living in the rural areas is not going to be that easy here on out, especially for an ex-city dweller!

In the U.S., there will be a huge crop of educated, or semi-educated city folk, hitting the job market en masse. The U.S. still is home to the corporations that guide the manufacture of most products; most of the managerial and support functions occur here - product design, manufacturing process design, logistics, finance, marketing, packaging, and distribution. When the plastic crap from overseas starts getting expensive, many of these people will also be laid off, meaning their buying power drops as well, contributing positive feedback to the equation. Less buying, means less production, which means more layoffs, which means less buying, and the cycle continues.

Of course, those who have steady work might find their situation improve a bit, as prices are pushed down and incredible bargains are offered to entice the rarer and rarer customer. In the coming global depression, the definition of "steady work" might get a little mangled.

These being educated folk getting laid off and fired, they will be in a position to think of socio-political "reforms", to change the rules of the game now that so many are losing. Whether they will be able to act upon their ideas remains to be seen. How far down can they go without upsetting the apple cart? Wherever it is, we're likely to get there, somewhere on the far side of Hubbert's peak.

The tipping point, where revolution or 'reform' is seen as so desirable that people risk their comfort for it, might occur when enough people who are still doing ok during the depression decide to take sides with the portion of the population that isn't, since they see that their situation isn't all that stable, and they are soon in the same boat. If the situation happens to get to be that the majority would do better with a new socio-political paradigm, it's a sure thing.

Meaning that the U.S. would probably drop free-market capitalism in a heartbeat.