Interview With Charles Hugh Smith: Why Local Enterprise Is The Solution

Tyler Durden's picture

From Chris Martenson

Charles Hugh Smith: Why Local Enterprise Is The Solution

A growing number of individuals believe our economic and societal status quo is defined by unsustainable addiction to cheap oil and ever increasing debt. With that viewpoint, it's hard not to see a hard takedown of our national standard of living in the future. Even harder to answer is: what do you do about it?

Charles Hugh Smith, proprietor of the esteemed weblog, sees the path to future prosperity in removing capital from the Wall Street machine and investing it into local enterprise within the community in which you live. 

"Enterprise is completely possible in an era of declining resource consumption. In other words, just because we have to use less, doesn’t mean that there is no opportunity for investing in enterprise. I think enterprise and investing in fact, are the solution. And if we withdraw our money from Wall Street and put it to use in our own communities, to the benefit of our own income streams, then I think that things happen."

"We have to solve our own problems. The savior state and these institutions are not going to reform themselves and they are not reformable in any way that is meaningful. And so, I think what we’re talking about is taking your capital, which is your human capital, your skills and your experience; your social capital, the people you know and trust that you’ve created in life; and your financial capital and investing them in local solutions. Things that people need, like energy and food and shelter and a low energy lifestyle."

"There is opportunity for technological innovation in greatly increasing the efficiency of our appliances and the rest of our lifestyle, as well as tremendous technological improvements in productions and so on. But there’s also what we might call social and behavioral innovations, which the United States is really poor in recognizing. The simplest way to cut your energy is to live close to the things that you need to get to. And if you have your own enterprise, then we might benefit on a household and a social scale of just living close to your job. So being dependent on corporate America and a job a hundred miles away - that’s a really fragile, vulnerable lifestyle. So if you can relocalize your income streams and your enterprises and live close to work and school, you’re already tremendously more resilient and have a much more sustainable household regardless of what happens."

Also in this interview:

  • Why keeping capital in the financial markets puts you at increasing risk of mis-aligned Wall Street incentives as well as declining asset prices
  • How de-globalization, de-legitimization, de-centralization and de-finacialization will be major trends driving our economy in the future
  • How investing in your local economy can yield a higher quality of life, even if your relative "standard of living" decreases

Click here to listen to Chris' interview with Charles Hugh Smith (runtime 43m:35s):

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Or click here to read the full transcript on



Charles Hugh Smith  has been an independent journalist for 22 years. His weblog,, is a daily compendium of observations and analysis on the global economy and financial markets, as well as notable political, social, and cultural trends. Charles has authored a number of books across several genres, including Survival+: Structuring Prosperity for Yourself and the Nation and his recent e-book An Unconventional Guide to Investing in Troubled Times.


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    anynonmous's picture

    tune in to bloomberg tv


    good inteviews noon hour

    Herd Redirection Committee's picture

    double post

    "Who's Afraid of the Gold Standard?"

    Check out the latest from the Capital Research Institute

    "Japan has massive amounts of debt, relative to their GDP, but most of it is owed to the citizens of Japan.  In contrast, much of America’s debt is held by the Japanese gov’t, the Chinese gov’t, and financial institutions all over the world.  The difference is that not only does America still currently have the world reserve currency, their debt is owed in large part to foreigners.  Those two facts could very well create a perfect storm down the road, as foreigners liquidate their Treasuries (US gov’t debt)  and then look to buy tangible goods with the proceeds.   As America does not produce much in the way of goods they are unlikely to see much benefit.  In fact, that the US dollar still serves as reserve currency makes it more likely, IMO, that foreign dollar holders will use their dollars to buy commodities such as oil, wheat, timber, natural gas, copper, silver, and of course, gold.

    As a natural consequence, the price of Treasuries would drop, and commodity prices in general would surge higher.  When, well that is any body’s guess..."

    bigdumbnugly's picture

    Smith is right.

    my local Enterprise will pick me up.

    potatomafia's picture

    Are CHS & Larry David the same person?

    That Peak Oil Guy's picture

    I recommend anyone interested in urban or suburban food production check out aquaponics.  A relatively small greenhouse and solar power system for it could be an incredible investment for the future.

    The info tab on this site is a good place to start the research:


    mkkby's picture

    "Going local" may be the solution, but only in a parallel universe where big business doesn't control government, and use it to put up legal and regulatory barriers.

    I suggest Charles Smith get in touch with reality and find a political solution first.

    OpenEyes's picture

    Hmmm someone's been reading James Howard Kuntsler!

    carbonmutant's picture

    A bunch of us have been working on this model.

    We have to rebuild from the local level.

    whstlblwr's picture

    I like it, we need vision for future. This seems right.

    DeadFred's picture

    We have to keep our fingers crossed. This is the right way to improve things but it's going against some really strong corporatist head winds. Everything TPTB are trying to do is the exact opposite of this.

    narnia's picture

    the centralized death star has already been built through massive, unsustainable federal, state & local political intervention (through building codes & other legal protections, transportation infrastructure, public works, wars for energy control, and tons of other subsidies).

    the questions come down to:  are you vested enough in this beast & its local symbols to ride out the rocky fracture into a series of politically & ethnically diverse independent de-centralized societies... or is the cost of inevitable reform/collapse so overwhelming you are better off searching or creating the next plymouth rock?


    MachoMan's picture

    Call me a pessimist, but I don't think the natives are gonna go for the small pox blankets and fire water routine again.

    Hacked Economy's picture

    "...centralized Death Star..."

    <chuckle> I like it!  A perfect way to start referring to the Fed.  An overweight behemoth with only one destroy the little people and rob them of their wealth.

    And now we picture the image of Ron Paul in a Rebellion flight helmet, zooming toward the trench in his X-wing fighter, torpedo trigger finger ready to go...

    malusDiaz's picture

    Aye, that we have. Small as our voices are, my dirt digging, gardening, and farming are no small acts.

    fuu's picture

    I am a big fan of  John Robb and his work on resilient communities.

    carbonmutant's picture

    There are lot of different way to approach this but from the real estate perspective  "Walkability" is the key. And support your local Farmers markets.

    Check your walkscore:

    onelight's picture

    carbonmutant , you are right -- good to have Charles on board, and many have been working in this area for years, have developed useful ideas and templates, and are too busy building them out to be better known for it.

   is just one of many

    the whole local enterprise thing will likely become a leading social meme in decade ahead, for all the reasons described -- hopefully it will build up into a better national political economy ..

    LawsofPhysics's picture

    Yes, but a localized economy is not something the NWO will permit.  Moreover, it eventually leads you to a system dominated by black markets and a sitiuation much like what you see in the Middle East, India, and Afghanistan.  Think about it, how much access to cheap energy sources do most truly local economies have?  The flux of cheap energy is the only thing that matters, period.

    whstlblwr's picture

    Instead of all your negative nellies, why not try to be positive? Where is can do attitude? Come on LawsofPhysics, put little smile on sour puss. We can find a way, there is always a way.

    Flakmeister's picture


    The hopium just hit...

    Cue Pink Floyd:

    "There is no pain, you are receding...." 


    Vic Vinegar's picture

    Dare I say this is the best comment ever on Zero Hedge.

    (yes, the writing-style is a tribute to CompassionateFascist)

    Vic Vinegar's picture

    Here’s another one spacemonkeys…

    …it’s pretty obvious that whstblwr is a foreigner.  I mean, his English is shit.

    However, he has a pristine attitude, one I see a lot in the people I meet here in the USofA who were not born in this country. 

    Why are most of the cool people I meet in this country foreigners?  Why are so many of the cracka-ass-crackas who were born here either bitter or fucked up in the head (and I mean in a bad way)?

    malusDiaz's picture

    Then I would conjecture your not looking hard enough.


    When I hear someone say "Everyone is lazy." I immediatly note to myself... that person is lazy.


    When I hear someone say "Imposible, can't be done." I note to myself... they will never atempt it.


    When I hear someone say "Your crazy!" ... "Your probably right... but I think I know who is more sane."




    Most people are good, moderately intelligent, and emotionally driven (Oh and opportunistic).

    Vic Vinegar's picture

    The poor, the unsuccessful,
    the unhappy and the unhealthy
    are the ones who use the word
    tomorrow the most. 

    ~Robert Kiyosaki


    OMG, I just quoted that Rich Dad/Poor Dad dude here on Zero Hedge! 

    malusDiaz's picture

    A positive attitude may not be 'all you need'...


    But a negative attitude will kill you.


    When lost in the woods, you chances for survival drop dramatically as soon as you sit down and say "I can't go on."


    As soon as you start thinking "Someone will find me, I don't need to try." Your about 80-90% more likely to die.


    Attitude isn't everything, but it is responsible for the actions we take, and 'pulling the trigger' on life style changes ahead of being forced to requires one hell of a attitude.

    Vic Vinegar's picture

    I like it and agree.

    The concept of life is 10% what happens to you and 90% of how you react to it should be absorbed by more of those who comment here.  Yeah, yeah, yeah, I get it, you’re not really angry but you keep coming here each day and saying the same things.  Think on it.

    However, since this is a ‘perma-doomer’ site, I’m willing to say life is 20% of what happens to you and 80% of how you react to it.  Paraeto Principle, bitchez.

    malusDiaz's picture

    80/20 rule is a good rule... holds up 80% of the time ,and the 20% edge case can be applied to the 80% of the 20...


    When designing software, getting 80% of the good cases working is the first major hurdle... in the end, 80% of the code written is for the 20% edge cases

    Vic Vinegar's picture

    Nice to see you added a picture. :-)

    Speaking of designing software, I'm going to reply here to Tyler:

    Tyler I had a hard time sleeping last night.  No joke - I was soooooooooo excited about the possibility of being able to receive comments made on Zero Hedge directly to my email.  Yeah, I know I'm weird.

    In no particular order, this would be the first batch of people for whom I want to see everything they write.  Don't ask me to explain, the cognitive dissonance of doing so would be too painful :-)

    • RobotTrader
    • Mr. Lennon Hendrix
    • chumbawumba
    • slewie the pi-rat
    • baby_BLYTHE
    • janus
    • B9K9

    Please make it happen, Tyler.  Pretty, pretty please.  And if I'm too stupid to figure it out as the feature already exists, I'd appreciate a heads-up from anyone.

    Vic Vinegar's picture

    I don't think anyone appreciates how badly I want to see everything baby_BLYTHE says and have it come directly to me on my iPhone.  I don't think anyone cares, either :-)

    I would sacrifice my first born, your first born, or anyone's first born to have this in my life.

    mkkby's picture

    I hope baby blyth blows your perv nuts off with a 12 guage.  Then you can whack off to something else.

    RockyRacoon's picture

    Good lord.  Don't you get enough email?  I'd pay NOT to get more.

    InconvenientCounterParty's picture

    take away entitlements! ...for those that do not deserve it.

    Naturally, I deserve them because I've been here many years and my parents and their parents were here decades before that and they built this sumbitch.

    I don't mind a few immigrants, as long as they observe the conservative hierarchy and don't try to change anything.


    Vic Vinegar's picture

    Nice work.

    Come to think of it, between you, Flakmeister and about a hundred other people, the list of commenters that I enjoy seeing what they write is too long to list. 

    OK, Tyler: revised list - baby_BLYTHE, followed by about 100 others.  If the day comes where I can get these comments sent directly to me, it's going to be one of the greatest days ever.

    RichardP's picture


    The phrase get a life comes to mind.  I'd be tempted to utter it if I actually thought you were serious about what you are saying here.

    RockyRacoon's picture

    I'm hurt 'cause I wasn't on the list.   Harumph.

    Vic Vinegar's picture

    I have different reasons for noting that crew of commenters.  But to you Rocky I must say thank you.

    LawsofPhysics's picture

    There is always a solution (I work on many everyday in biotech).  But there are also very real constraints to what the laws of physics and thermodynamics allow you to do.  Chance favors the prepared mind my friend, hedge accordingly.

    RichardP's picture

    Then there is the process of being in solution, where all of the malcontents precipitate out.

    EnglishMajor's picture

    Agreed, although you should consider that the original diesel engine, as designed by Diesel himself, was meant to run off of peanut oil.  Diesel's vision was that farmers could produce bio-diesel (not to be confused with Ethanol or other bio "fuels") on a local level.  We cannot produce alternatives as cheaply and abundantly as we have produced petroleum products in the past, however we do have alternatives to develop if people are willing to change their thinking and their vehicles.

    Of course, back to your original point, Diesel mysteriously disappeared from a ship in the middle of the ocean, and shortly thereafter Mr. Rockefeller and Standard Oil introduced diesel fuel...

    Henry Krinkle's picture

    So we're talking about changing civilization so it can function without ever-increasing inputs of resources.  Reducing our requirement for energy to the point where non-fossil-fuel sources can satisfy it.  We're talking a massive psychological change to build a way of life that can run well on it.

    Cull Morgan's picture

    Actually, if I remember correctly, Diesel's initial idea was to use coal dust as a fuel, not oil.

    The peanut oil in particular was suggested by the French hosts for some exhibition where Diesel demonstrated his engine. I think France had an African colony where peanuts were growing like weeds and they were looking for useful applications.

    The Diesel engine is one of my absolute favorite inventions ever! At high compression ratios the efficiency is outstanding and they can use almost any type of oil as fuel. Hell, at high enough compression ratio you could probably run them on gravy...

    Bolweevil's picture

    You speak of this "black market" like its a bad thing. Black is not the absence of color, it is all the colors combined.

    LawsofPhysics's picture

    Er, incorrect sir.  The electromagnetic spectrum that we can see (white light) is in fact made up of all colors.  Black is what you get when a substance adsorbs ALL those colors leaving NOTHING for anyone else or you to see.  When a substance adsorbes all color except for say green, then you "see" that wavelength with your eye.

    So to be precise, black is a substance that sucks in, adsorbs, and retains all frequencies of electromagnetic radiation that you eye can percieve. Educate yourself before making such statements.