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Thursday, March 18, 2010

How to Prosper in a Salvage Economy, by Tamara W.

A salvage economy is a post-production economy. The economy is based on salvage and then reuse or remanufacture of salvaged materials. The current modern equivalent of this are those individuals who sort through trash heaps and dumps for recyclable materials. The historical equivalent of this are the stone masons in Egypt who tore down ancient monuments for building material. For example, the lost Pyramid of Djedefre was thought to have not been built until its foundations were found, including a mortuary temple and queens’ pyramids. Where did it go? Must of it was used to build buildings in Cairo from 1300 through the 1700s. It was easier and cheaper to take apart an existing pyramid near the city than find, mine and transport new limestone blocks from now-distant quarries.
Salvage occurs when the manufactured product is unavailable in a new state, has become too expensive for anyone to purchase, or has a supply chain that has fallen apart to the degree that the product is often unavailable most of the time.
For all of the discussion on survival, why focus on long term survival on a salvage economy? First of all, many people will not set up a refuge in the wilderness. Their best survival opportunity seems to be within the city. While difficult, it is not impossible, especially for those who prepare. Secondly, if we do slide to a post-technical or “eco-technic” society, we should not expect to return to “Little House on the Prairie”. More than half of the world’s population lives in the cities. Those cities will still be there even if some catastrophe, be it nuclear, chemical, biological or EMP, manages to kill most of its inhabitants. And we should not expect all cities to be lost, even if several major ones are destroyed in terrorist strikes or war. If those untouched but partially depopulated or damaged but re-buildable cities can be utilized to rebuild civilization, which should be part of a larger goal. This rebuilding will then requires a salvage economy. And last but not least, if we have a multi-generational decline, we will fall into a salvage economy as manufacturing capacity fades. Even if we retain the capacity for a high-tech manufacturing capacity and find it crippled by environmental regulation and economic depression, we will find a salvage economy as has exploded in California.
If faced with a salvage economy, the question then rises: how do you survive long term in such an economy? More importantly, how can you prosper in a salvage economy?
1. Use creative recycling within your own household. If opportunities present themselves that can be ethically utilized, do so, but avoid scavenging for a living. (Hunting and gathering of food are excluded from this discussion. Here we are only discussing physical materials.)

2. Do not be a scavenger or salvager of materials yourself. This is to literally be at the bottom of the economic food chain. Be the collector or buyer that buys goods from the salvagers and then sells it at a profit to the recycler or craftspeople. This level of the supply chain is safer than doing the manual labor of salvaging, and your supply is both more diverse and continuous than those who do the actual salvaging. There is also less personal risk of injury or illness than salvaging. By becoming a collection point or “depot”, your own time is still mostly spent on survival related activities instead of searching for materials one only hopes to trade for items and resources needed for survival.

3. Have close and direct ties to multiple smelters or material re-processors. This provides more stability in sale price than if there is only one customer. A single purchaser can set their purchase price based on their ability to refuse to buy until you are hungry enough to sell at their desired price.

4. Invest in the replacement materials and goods that will replace salvaged product. After all, salvaged goods will eventually run out. This may be smelting equipment that can melt down the newly recycled metal into yet another material, compared to smelting equipment that melts down old steel beams into new steel goods. It may be plastic grinders and pellet makers that can turn new plastic materials into another form. It may be the act of investing in green energy projects as Peak Oil runs out and salvaging wood and plastic to burn winds down.

5.  Supply the material working tools needed by re-processors. This may be forges to be sold to metal workers or fuel to smelters. It could be molds or presses that can be sold to those recycling plastic. Create or produce what is needed for the salvage economy to turn salvaged goods into useable goods. The additional benefit of this is that there may be more than one re-manufacturer to sell these industrial essentials to, and one can always have the fall back of setting up the re-processing facility on their own property or help a neighbor do the same if the main re-processor shuts down.

6. Help develop the distribution market for existing salvaged goods, whether finding new uses for old salvaged goods or new demand for recycled products. By creating new markets or new customers, the profit margin is higher than competing with the existing salvage economy.

7. If shortages of obviously long-term useful materials are clear, consider stocking up on them. However, it is best to do so only if you can use them in your own business or own property. For example, copper tubing can always be used in plumbing projects or manufacturing of stills – or be sold to those manufacturing their own equipment. However, it is unwise to have hundreds of pounds of copper tubing sitting in storage if the money and space could be used to items with greater value to your household. Having a large stockpile of [cables or] solder wire may be critical if you are an avid ham radio operator and can generate extra income fixing and selling older rigs. But if you have no significant personal or business use and cannot barter it in sufficient quantity to acquire goods needed for life, use the space for food, water, or more valuable tools. However, if you have a small business that could use the materials or goods and it is a critical supply for those who may need it to rebuild technology as we rebuild, consider stockpiling it as a way to profit from the salvage economy.

8. Have the skills to fix salvaged items yourself. This may range from fixing broken toasters and radios to making small car parts to restore a heap of junk to a functioning car. Those who salvage are a dime a dozen. They could have been the migrant poor before the collapse, or they may have been hedge fund managers and bureaucrats who have no others skills than looking for and collecting salvage and scrap items. However, those who can take those broken things and make them functional will be a precious minority. If you do not have these fixer-upper skills, consider learning them.
Consider encouraging younger family members to learn these skills – be it wiring, tool and die cast, equipment repair or even complex mechanical assembly. Learning to read blueprints and manufacturing instructions would be an engaging project for any elementary school child. Fortunately, many of use have already stocked up these kinds of books in our homes, if only in the form of repair manuals for equipment and appliances we already own. Make it a reading assignment for yourself or your family members. Having these skills makes your labor valuable and your teaching ability even more so – and a non-tangible trade good that cannot be taken away.