In discussing utopias, a number of people have brought up various groups, such as the Hutterites, the Catholic lay ministry group and others.

An interesting feature of the ones that were brought up was that they are all patriarchies. The key to their success is not patriarchy (if you look at the small Bessemer forge steel plants, another utopian labor movement, they are not patriarchies), but social stability. These groups also flourish in areas where technological change is slow (and thus control of intellectual capital does not create dividing lines), where economies of scale do not force growth over the social control limit (of about two hundred adults) and where it is easy to measure individual contribution (a key to successful labor managed firms).

The economic side-note I’m about to go into has to do with “stimulus” spending. While I will leave it to others to debate whether the stimulus was too large or too small, I would like to point out that on all sides of the debate, everyone acknowledged that in the long run the drag caused by the debt will outstrip the benefit from the stimulus. Most neutral economists put the “go negative” date at about ten years.

Setting aside that debt is an important part of the American fiat money supply (inflation does not create more monetary units, in America we do that with government debt), government debt tends to compete with private debt and create some interesting problems. Greece is facing those now. Lets say your budget is ten dollars a week and you are spending twelve. To cease to go into the hole, you need to cut spending back to ten, a twenty percent change (relative to the baseline of ten). To start paying back the debt, you may need to cut back to eight dollars a week. That is a swing of four dollars against a base of ten, which is huge.

In people’s lives I often see it when someone is having an affair. They spend savings and credit and don’t pay existing debts. Then the divorce happens, child support kicks in and the money runs out. Suddenly they have a lot less to spend. It is interesting to see the “friend” (now the new spouse) blame all of that on the ex-spouse’s greed. No, it is just an example of an end to deficit spending.

But most failed Utopias start with a version of deficit spending, where the community starts with a great deal of outside money or a sponsor, and is not self-sustaining.  When the money runs out, so does the community.  The crash is often catastrophic, because instead of building reserves, the community is well in the hole.

So, how do you build economic stability, avoid deficits and have strong social structures that are not stifling or modeled on social norms from the 1800s that many would find unacceptable?

That is the next post.  But it helps if the community is renegotiating its identity.  Which is why many modern utopias are not recognized as utopias by the societies they are in.