Why a De-Centralized Economy is Unfeasible
A person I know online asked me to watch a YouTube video where some post-grad student with no practical experience with the world was talking about how important it is to de-centralize our economy. For the most part he was talking about food resources, but he emphasized over and over that the same plan could be put in place for almost every industry (picking out car making in particular).
The overall idea to eliminate the huge costs involved in transporting good from where they are produced to where they are used. This is not an insignificant cost. With some goods the cost of transportation can consist of as much as 90% of the end cost of providing the goods to market.
There is one simple fact that he completely ignored in his lecture, it only works if raw-resources are evenly distributed. It makes the foolish assumption that all the different kind of foods you might want can be grown locally. He did admit that there would be some few things that wouldn’t be available based on location, but they would be limited and most of them aren’t critical.
Let me show you how much of an idiot this guy is.
Examples of things that would be impossible in a de-centralized economy:
Produce and Goods Based on Produce:
I live in Minnesota. Here is a short list of produce and goods based on produce that cannot be grown out doors in Minnesota. Yes, they can all be grown in-doors. However, to produce those in sufficient quantity for commercial use would require more energy (and money) to maintain an appropriate indoor climate for them than to ship them from places where they will grow without climate control.
· Pineapples
· Bananas
· Red-wine
· Citrus fruit (which could lead to an out-brake of scurvy)
· Tequila
· Pomegranate
· Olives (and olive oil)
· Vanilla bean orchid (hope you don’t like anything with vanilla in it)
· Cocoa beans (people won’t mind giving up chocolate)
Gallium for Electronics
There is a material called gallium that is essential for electronic manufacture. It is used in semi-conductor production for making things like lasers, integrated circuits, diodes, and transistors. In other words, if it uses electricity it probably has tiny amounts of gallium in it. In fact, if you are reading this you are in the process of using a gallium containing electronic device. Since those involved in promoting a de-centralized economy also tend to promote green power usage, they should know that without gallium it’s impossible to make solar panels or LED light bulbs.
The most abundant source of gallium is bauxite (aluminum ore). The availability of bauxite and other gallium containing ores is minimal in the United States. In fact its availability is so small that the U.S. doesn’t have any industry level production of purified gallium. We buy almost all of our gallium from over-seas sources (there is a limited U.S. production from recycling of electronic devices).
With a de-centralized economy there would be no electronics production in the U.S., and based on the concepts of a de-centralized economy no electronics. That also means no modern manufacturing, and would basically set the entire U.S. back to the early 1900s in terms of technology. All because we consider shipping gallium from the parts of the world that have abundant resources of it a waist.
Iron & Steel:
For those that don’t live in Minnesota (or Michigan) I hope you don’t want anything made out of iron or steel. 97% of usable ore produced in the U.S. comes from Minnesota and Michigan. Florida has no ability to produce iron ore at all, it simply doesn’t exist in their geology. I don’t think I need to list the things that you’ll have to give up without access to iron and steel. I’m pretty sure none of us wants to go back to the Stone Age.
Centralized Economy and Trade
The result of one group of people having an abundance of one resource, and others having an abundance of another is trade. I arrange to have my iron brought to you in Florida and you send your oranges to me.
However, Florida and Minnesota are awfully far apart and there are lots of other places that need my iron and your oranges. Also, just because they need my iron doesn’t mean they have anything I need. So instead we sell our iron and you sell your oranges to people in Chicago, and those people in turn sells the iron and oranges to people that need them. We then use the money they paid us to buy all the things we need.
Welcome to a centralized economy.
The overall idea to eliminate the huge costs involved in transporting good from where they are produced to where they are used. This is not an insignificant cost. With some goods the cost of transportation can consist of as much as 90% of the end cost of providing the goods to market.
There is one simple fact that he completely ignored in his lecture, it only works if raw-resources are evenly distributed. It makes the foolish assumption that all the different kind of foods you might want can be grown locally. He did admit that there would be some few things that wouldn’t be available based on location, but they would be limited and most of them aren’t critical.
Let me show you how much of an idiot this guy is.
Examples of things that would be impossible in a de-centralized economy:
Produce and Goods Based on Produce:
I live in Minnesota. Here is a short list of produce and goods based on produce that cannot be grown out doors in Minnesota. Yes, they can all be grown in-doors. However, to produce those in sufficient quantity for commercial use would require more energy (and money) to maintain an appropriate indoor climate for them than to ship them from places where they will grow without climate control.
· Pineapples
· Bananas
· Red-wine
· Citrus fruit (which could lead to an out-brake of scurvy)
· Tequila
· Pomegranate
· Olives (and olive oil)
· Vanilla bean orchid (hope you don’t like anything with vanilla in it)
· Cocoa beans (people won’t mind giving up chocolate)
Gallium for Electronics
There is a material called gallium that is essential for electronic manufacture. It is used in semi-conductor production for making things like lasers, integrated circuits, diodes, and transistors. In other words, if it uses electricity it probably has tiny amounts of gallium in it. In fact, if you are reading this you are in the process of using a gallium containing electronic device. Since those involved in promoting a de-centralized economy also tend to promote green power usage, they should know that without gallium it’s impossible to make solar panels or LED light bulbs.
The most abundant source of gallium is bauxite (aluminum ore). The availability of bauxite and other gallium containing ores is minimal in the United States. In fact its availability is so small that the U.S. doesn’t have any industry level production of purified gallium. We buy almost all of our gallium from over-seas sources (there is a limited U.S. production from recycling of electronic devices).
With a de-centralized economy there would be no electronics production in the U.S., and based on the concepts of a de-centralized economy no electronics. That also means no modern manufacturing, and would basically set the entire U.S. back to the early 1900s in terms of technology. All because we consider shipping gallium from the parts of the world that have abundant resources of it a waist.
Iron & Steel:
For those that don’t live in Minnesota (or Michigan) I hope you don’t want anything made out of iron or steel. 97% of usable ore produced in the U.S. comes from Minnesota and Michigan. Florida has no ability to produce iron ore at all, it simply doesn’t exist in their geology. I don’t think I need to list the things that you’ll have to give up without access to iron and steel. I’m pretty sure none of us wants to go back to the Stone Age.
Centralized Economy and Trade
The result of one group of people having an abundance of one resource, and others having an abundance of another is trade. I arrange to have my iron brought to you in Florida and you send your oranges to me.
However, Florida and Minnesota are awfully far apart and there are lots of other places that need my iron and your oranges. Also, just because they need my iron doesn’t mean they have anything I need. So instead we sell our iron and you sell your oranges to people in Chicago, and those people in turn sells the iron and oranges to people that need them. We then use the money they paid us to buy all the things we need.
Welcome to a centralized economy.