The Reality Crunch

Last week a shock wave rippled through 2010 Transition Network conference. A last minute change to the programme, an intense 90 minute lecture titled Making Sense of the Financial Crisis in the Era of Peak Oil brought an inconvenient truth to light: we are facing a reality crunch, in which a global financial collapse is the defining event.

The intellectual rationale behind economic expansion has shaped our society for decades. Milton Friedman's Chicago School of Economics underpinned the pattern of corporate rule throughout the world since the 70s. In the aggressive defence of free markets the rich have become immensely rich, the poor more numerous, and public services everywhere have been dismantled in favour of the private sector. It's a pattern this week's Budget is set to uphold.

But even though we are a civilisation obsessed by money, the financial system itself is rarely discussed. Though banker and credit crunch have became household terms, it's not until you look at the relation between credit and real wealth that you realise you are looking at a chimera and at some point it's going to disappear into desert sand.

With the exploitation of fossil fuels the financial bubble has expanded like never before in history. 1600 trillion dollars of virtual money in 30 years. For every slice of real wealth pie that exists there are one hundred claims. Because credit expansion is built on illusion the spell eventually breaks and deflation sets in. Credit disappears, house prices go down, prices for essentials go up. People start hoarding and without the lubricant of money trade halts. What do we need to do now? Nicole Foss (who writes as 'Stoneleigh' in the financial blog, The Automatic Earth) advised a packed lecture hall: look at your structural dependency, deal with debt, and make relationships you can trust.

In a workshop the next day 300 Transitioners looked at the future. We explored in images and words what would happen in one year's time, then five, then ten. What did it mean that we had so much debt? Everywhere you saw a split between breakdown and breakthrough, fall and transcendence; in amongst the dark scribblings emerged butterflies and the phoenix.

What we experienced after the shock was a different pattern emerging within ourselves. We were shifting from individualism towards community. We realised that if everything was falling apart we needed to be coherent. In a time of strife we needed to be harmonious. The culture of the credit bubble – with its exclusive dwellings and high-maintenance lifestyle, the Shangri-La of every shopping mall in the kingdom – was ceding to one where people had very little except the wealth they had inside - a wealth they were prepared to share.

It's a pattern that is emerging everywhere. Countries that have weathered the free market zeal that brings corporations and the IMF into play forces them to hand over real wealth – their natural resources – and reduce their vibrant people into a voiceless underclass, are turning their fortunes round. It's a pattern of neighbourhood engagement, workers' co-operatives and localised networks that foster the diversity and inventiveness that make all eco-systems resilient. Instead of being shut-off and in competition the people are getting together and working out how to rebuild their lives.

Meanwhile it becomes clear in Britain that we have a government that for all its talk of Big Society is not here for the majority, but to protect the priviledged. There will be no bail out for ordinary people, so we will have help ourselves. And the first step is to realise we are not on our own: there are billions of us in the same boat. This lifeboat called Earth.

This piece was originally published by the Eastern Daily Press as part of the collective weekly OneWorld Column,