Adam Smith vs. ERE

Simple living, extreme early retirement, being wealthy, ...
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7Wannabe5
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Re: Adam Smith vs. ERE

Post by 7Wannabe5 » Sat Sep 22, 2018 6:35 am

Concrete example being that since AC is rated as necessity at low-level of Maslow model for Jin+Guice in his current locale, he could learn the skill himself with intention to share/barter it with his personal tribe of 150 OR he could make the effort to add somebody who has that skill to his personal tribe of 150. However, in order for this to work, Jin+Guice will also have to have a skill, or set of skills, that are rationally traded at the local tribal level.

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Re: Adam Smith vs. ERE

Post by Farm_or » Sat Sep 22, 2018 7:38 am

Time. Efficiency. Productivity.

In a hyper competitive economy, these are very important metrics. Capitalism, fathered by Adam Smith is the best system to contribute to the wealth of nations. Without a successful system, early retirement would remain the dream that's just out of reach.

Having achieved some kind of goal of financial independence, you can remove yourself from measuring efficiency based on time. There's a lot of things that I can do as well as a professional, but it takes me longer. The freedom is realized when you can afford the time to make your "T" of the bold faced font.

Specialization is the opposite of boredom. The deeper you go, the more the pioneering adventure is to be discovered.

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7Wannabe5
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Re: Adam Smith vs. ERE

Post by 7Wannabe5 » Sat Sep 22, 2018 8:14 am

Farm_or wrote:Specialization is the opposite of boredom. The deeper you go, the more the pioneering adventure is to be discovered.
Only if what you mean by "specialization" is "mastery." Not so much if your specialization is staring at an assembly line to spot defective pins all the day long. Most people do not even make use of the level of mastery they acquired during their period of education and their first few months of training while engaged in their 40 hr./week job. That is why most jobs are boring.

Image

OTOH, IMO being self-employed at a generalist avocation OR even having/maintaining clear sense of ownership of career can be as well correlated with flow as FI. Probably because they all have roughly equivalent "F*ck you" level of freedom and challenge.

Example: Yesterday I was helping my DD27 do some work on her new house, and she was anxious about using a jigsaw. I spent maybe 10 minutes teaching and encouraging her and in just that short time she went from anxious to happy with her new skill. People get stuck any time they avoid facing anxiety. You actually don't need enough money to live on for the rest of your life to choose to quit your current job and hop on a new learning curve.

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Re: Adam Smith vs. ERE

Post by Seppia » Sat Sep 22, 2018 10:05 am

Thanks to all for another very interesting discussion. Only on this forum.

I've had a similar approach to Tyler's, meaning I specialized kinda deep in one field and I'm trying to become competent enough in many.

I define "competent" as "someone would realistically pay me a wage for me to do this".
It could be a low wage obviously.

The reason why I like this approach is that I believe there's a more than 50% chance I will live my whole life (I'm 38, so no longer than the next 50-60 years) in some sort of functioning economy.
In such a situation it makes sense to optimize earnings and accumulate assets --> specialization in a lucrative field is the most efficient way to do it, especially in my case (I enjoy my job).

I also try to become competent in other fields (mostly stuff I really enjoy) because
- I could decide to start doing something else I enjoy, even if pay is lower, once I have accumulated enough assets to render "more money" something with no utility
- I would have more chance of earning more than enough money for survival should I be laid off or something.
- I generally like learning new stuff

I'm still lacking most of the traditional "prepper" skills*, because since I estimate the chances of a SHTF scenario to be significantly lower than non-SHTF scenarios, they have lower priority.

*i haven't dug much into the prepper world, but from a very superficial glance it seems to me that skills such as "being liked by others", "have the ability to smell danger and flee the country early" etc are underestimated.
One of my best friend's mothers is the daughter of Czech Jews who smelled danger and fled to the UK well before the nazis took over.
They didn't have any "survival" skills per se but their sixt sense allowed them to escape what could have been a tragedy completely untouched.

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Re: Adam Smith vs. ERE

Post by Farm_or » Sat Sep 22, 2018 11:13 am

@7wb5- that reminds me of a job that I had one summer between college years. I was employed at HP building calculators on an assembly line. My first day was at the battery spring and overlay station. It was torturous, those first eight hours. But I wasn't the only one suffering.

There was another guy on the line, his first day too. After the lunch break, the supervisor came by and that guy told her that he hated this work. IIT was beneath him and he requested a more dignified position. She showed him the door. I put my head down and redoubled my vain attempt to keep up with the line.

I was the bottleneck for a few days, but after getting the hang of it, starting piling ahead of the line. Then I donned head phones and cruised for a little while. So they moved me to another station. After I'd mastered most of the stations, they put me at final inspect. That was the "dignified" position that the lesser guy wanted on the first day.

Enjoying life isn't maximizing self gratification. The fabled Nirvana where everyone lives in constant bliss is a disservice. There's times of suffering, struggling, growing and there's times of reward. The key is finding the interest and appreciating the zeal during the struggle periods. The greater your knowledge, the easier it is to find interest in seemingly boring tasks?

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Re: Adam Smith vs. ERE

Post by daylen » Sat Sep 22, 2018 11:27 am

There is also the idea of uniqueness. It is easier to replace a T-distributed skill-set than it is to replace someone with multiple specialties of varying degrees who can uniquely synthesize their perspective into actionable intelligence which could not be achieved by a team with a similar aggregate skill-set. Maybe for the long term it pays to be in the top 10,000, the top 1,000,000, and the top 100,000,000 in three entirely different fields that combine into more than the sum of their parts.

How important uniqueness is to you factors into what strategy you employ. There is an appeal in feeling that your contributions cannot easily be replicated in the near future, but perhaps at some point we all have to accept that we are just little components that all look the same from the outside.

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Re: Adam Smith vs. ERE

Post by ThisDinosaur » Sat Sep 22, 2018 11:44 am

7Wannabe5 wrote:
Sat Sep 22, 2018 8:14 am
You actually don't need enough money to live on for the rest of your life to choose to quit your current job and hop on a new learning curve.
I know this, and yet I do not act on it.

You bring up some good points about what exactly is being optimized. It should be "quality of life." But I dont know how to quantify that. So I'm focusing on minimizing drudgery instead.

Most self reliance skills involve drudgery. Which ones do or dont is determined by individual interests. Maybe you think being a subsistence farmer or a hunter gatherer is dope AF. Lucky you. Alternatively your favorite thing to do is also something people will pay you for. Again, lucky you.

I am not, as far as I can tell, in either of those two groups. As soon as my livelihood depends on doing a thing, I quickly lose interest. I'm too much Banker and not enough Mexican Fisherman.

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Re: Adam Smith vs. ERE

Post by 7Wannabe5 » Sat Sep 22, 2018 1:29 pm

Farm_or wrote:Enjoying life isn't maximizing self gratification. The fabled Nirvana where everyone lives in constant bliss is a disservice. There's times of suffering, struggling, growing and there's times of reward. The key is finding the interest and appreciating the zeal during the struggle periods. The greater your knowledge, the easier it is to find interest in seemingly boring tasks?
I agree that almost any job imaginable can constitute an interesting challenge if only attempted for 3 months in the summer between years of attending college. It also helps if you look cute in the uniform ;)

In my experience, what really helps with getting through the rough patches is alignment with purpose or values. For instance, tutoring inner city children on basic reading skills is not exactly a cake walk or extremely intellectually stimulating or very well-paid, but it doesn't make me feel like a hamster on a wheel or like what I am doing to make money is actually in opposition to my purpose. Of course, what is contrary to values system will vary from individual to individual, therefore many other people would not choose to cover their entertainment expenses by exhibiting competence in the role of travel concubine. They might even decline such an opportunity due to being beneath their dignity. What those people don't know is that if you work real hard at being travel concubine with Akron, OH as initial destination, in just a couple years you might find yourself in Paris!

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Re: Adam Smith vs. ERE

Post by BRUTE » Sat Sep 22, 2018 3:32 pm

ThisDinosaur wrote:
Sat Sep 22, 2018 6:04 am
frequently, DIY requires more work for the individual than it would for a relevant specialist with economies of scale.
yes, that (productivity) is one side of the balance. but as mentioned here, there are also downsides to (over)specialization: alienation (like DLj felt when he wrote papers only 5 humans could ever understand), overoptimization that leads to lower productivity than the optimum, personal preference to feel like a handy-human.

if ThisDinosaur doesn't care much for any of the typical DIY skills, maybe being a handy-human isn't something he should optimize for. maybe he can just continue calling the plumber and shopping for groceries, but instead develop skills in investing, public speaking, gun shooting, first aid, whatever. brute is convinced there are plenty more skills besides "growing food, building shelter, and unclogging the toilet".

it is also interesting that not all individuals seem to follow the same pattern of breadth and depth of specialization. there is the T model mentioned above, but brute himself is more a "brute of 5 trades". sure he's nailed together a piece of furniture once (think wooden box), but brute pretty clearly is not "somewhat competent in most things". but brute considers himself extremely knowledgeable in 5 or so fields, maybe world class in 2-3 of those. none of them are direct contributors to sustenance farming or surviving in the woods, but there are plenty of layers that can still contribute to web of goals thinking and anti-fragility in absence of SHTF.

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Re: Adam Smith vs. ERE

Post by BRUTE » Sat Sep 22, 2018 3:34 pm

Jin+Guice wrote:
Sat Sep 22, 2018 12:06 am
@brute: I agree with most of what you said but "the more the better" is economics. The argument warrants another thread (maybe the your libertarianism thread). If this thread already exists please point me to it. See: https://en.wikipedia.org/wiki/Monotone_preferences and https://en.wikipedia.org/wiki/Local_nonsatiation
does Jin+Guice care to explain? wiki links are math babble.

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Re: Adam Smith vs. ERE

Post by Jin+Guice » Sat Sep 22, 2018 5:11 pm

@brute: "More is better" is the econ 101 explanation of "monotonicy of preferences," which is one of the assumptions of consumer theory.

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Re: Adam Smith vs. ERE

Post by BRUTE » Sat Sep 22, 2018 7:23 pm

and there is no limit to the "more"? then this theory seems obviously wrong. (btw, brute doesn't put much faith into mainstream econ)

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Re: Adam Smith vs. ERE

Post by 7Wannabe5 » Sat Sep 22, 2018 7:29 pm

@BRUTE:

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Re: Adam Smith vs. ERE

Post by Jin+Guice » Sat Sep 22, 2018 11:01 pm

@brute: The short answer is no, according to the theory there is no limit. It was amazing to sit through the classes on this and have no one say "uh, what?"

There are some qualifiers though.

Firstly, it's important to note that it's tempered by diminishing marginal utility, i.e. once you have a bunch of something you don't value having more of it that much. Since resources are limited, eventually it is likely that you would not buy the 85th oz of the big gulp but instead buy the gas station hot dog.

Some other explanations are that there are "bads" as opposed to "goods." Bads are things one would pay to not have, such as pollution.

There is also the local part of local non-satiation, which is the idea that wants are unlimited only over the interesting economic range.

This leads to the idea of a satiation point, after which the "goods" turn into "bads." I think this is an idea from behavioral economics, which is an attempt to address the obvious flaws in consumer theory; however, we're reaching the edge of my knowledge.

Note that according to the actual theory, only the diminishing marginal returns part is true.

I finished reading the "brute says things about libertarianism" thread today. I gather you are a fan of the Austrian school. I would like to become more familiar with the Austrian school as well as Marxism. My understanding of markets, choice and market equilibrium is from the current paradigm, which is neoclassical.

I was planning on posing some questions I was surprised were not asked on the libertarian thread. These questions are about the known problems of neoclassical economic market theory. If you are not a fan of mainstream (I'm assuming this is neoclassical, if not correct me) economic theory, what does believing in free markets mean to you? To me this means that you believe the best system to be the system described by neoclassical economics.

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Re: Adam Smith vs. ERE

Post by BRUTE » Sun Sep 23, 2018 2:41 am

brute is looking forward to questions in the libertarian thread. indeed brute likes Austrian economics and is mostly versed in that school, not the more mathy schools like neoclassical.

brute would say that economics doesn't just describe one system, it describes how all systems work (or don't). in Austrian economics, free market means a market unrestricted by government intervention. the smaller the intervention, typically, the better (though there can presumably be local maxima).

brute's main problem with neoclassical (or other mathy schools) is that he simply doesn't understand what any of the theories mean. for example, despite having read 2 wiki pages and 3 explanatory posts by Jin+Guice, brute could not answer how "monotonicity of preferences" leads to "more is better" in general or why it would be true.

it seems to brute that the "monotonicity of preferences" is an observation, not a recommendation. consumers want more things more cheaply. this does not mean, to brute's understanding, that this should be a prescription. or is brute misunderstanding?

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Re: Adam Smith vs. ERE

Post by 7Wannabe5 » Sun Sep 23, 2018 5:11 am

What is the bliss point for ownership of productive assets? Self-referential because unlimited budget assumed in theory?

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Re: Adam Smith vs. ERE

Post by 7Wannabe5 » Sun Sep 23, 2018 6:11 am

@ThisDinosaur:

I think it comes down to asking yourself why you are spending money on items/services you don't value or in which you have little interest. If you do value and have interest in every item/service you purchase then why would that value/interest not point to a realm worthy of knowledge and skill acquisition?

For instance, you might answer "I spend $50/week on food, but I don't really care about food except as fuel for my pursuit of Karate, so I don't particularly want to learn how to cook or garden." Right there you have created a new potential niche profession for yourself as an expert consultant or producer of Karate Fuel Superior Burn Powder. If you can make just enough profit to cover the production costs of your own weekly tub of powder, you have achieved Renaissance Man competence in that realm and reduced the denominator in your SWR calculation by $2600= $86,667 you don't have to earn doing something you enjoy less than producing just enough of a product for people you naturally like because they like/value the same stuff/services as you.

OTOH, you might look at another line item in your monthly spending and realize that you really don't value it when you perform the exercise of imagining yourself producing or providing it for others as a profession, so then you can simply stop spending money on it which will result in similar savings of time spent doing current job.

What about "head tax" items you might ask? Simple answer is part-time public service employment and self-insurance. I read a book on the topic of setting up your own extended family and friends insurance company and it made the same sort of sense as books on the topic of incorporating yourself or your family business. Another possible answer would be creating a business that makes just enough use of a line item in head tax to turn a profit. If you truly don't value the market basket of items that constitute the sum of head tax in your current locale then moving would be another obvious option.

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Re: Adam Smith vs. ERE

Post by Farm_or » Sun Sep 23, 2018 8:37 am

There is no working man's "badge of honor". My whole life, I have known people who were/are jealous of me. Snapshot examples are all that I can offer to make a point. Capitalism is an excellent contributor to ERE.

I've told so many stories and attempted relatable examples to illustrate the point that the reward doesn't precede the sacrifice. Mostly, I get the response of attitude, " well, I am smarter (better) than you, so I should not have to suffer (as much as you) for my reward."

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Re: Adam Smith vs. ERE

Post by 7Wannabe5 » Sun Sep 23, 2018 9:49 am

@Farm-or:

We are likely more on the same page than seems evident. This thread was just giving me the not unfamiliar grouchy feeling that I am the only one here who actually read Jacob's book. Your anecdote read more like Cliff Notes for a popular late 19th century work ethic novel such as "Ragged Dick" by Horatio Alger. I agree that "ERE" to some extent encompasses that ethic, but I don't agree that it is equivalent or boundaried by that ethic.

I also agree that looking to those you admire, or more superficially those whose lifestyle inspires envy within you, is a good exercise towards personal values clarification. I don't envy most of the members of this forum for the simple reason that I lack the quantity of imagination necessary to go more than maybe half a minute deep into thought exercise of "If I were a man...?" I am not even very concerned with the fact that, for instance, work that requires muscular exertion to repair infrastructure pays more than work that requires patient interaction with small children, because it has been my experience that most men are generous when they don't feel trapped, deceived or coerced.

Unfortunately, most female peers I encounter in real life seem to be fairly miserable (although often in a superficially attractive managed by too many glasses of red wine every evening kind of way) so I don't envy them. My personal ideal would be something like a morph of Carol Deppe and Gwen Stefani. My personal frustration is that I had that 82% going on and then it fell apart. I believe in agency, but I simply do not comprehend how choosing to suffer working on an assembly line until I could pay cash to purchase every item that might form a picture, as opposed to the reality of that model, would constitute an efficient fix? It seems kind of like going to a gym to build enough muscle to be able to work a shovel in my garden. Why not instead simply attempt the function actually desired until you achieve the functional fitness?

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Re: Adam Smith vs. ERE

Post by Jin+Guice » Sun Sep 23, 2018 6:40 pm

@brute: I'm moving the econ discussion to your libertarian thread, hopefully I'll have a post before I go to bed tonight. I read back over the answers I gave you and they're not very clear, I had assumed that the Austrians and neoclassicals had a shared market theory and therefore thought you had a deep understanding of the theory, but after some very light googling I see that I am mistaken. Your feeling on the "more is better" assumption is correct, it is observational rather than prescriptive, and it's a good jumping off point for the most confusing part of the neoclassical micro model.

@7w5: Productive assets are capital on the producer side, so the "bliss point" is whatever point maximizes profit given the costs of other inputs and the price of the good produced. Note that "bliss point" is generally a consumer side idea as is the "budget" which is not unlimited but actually one of the primary constraints, it's the desires that are unlimited. Anyway, this shit is super confusing if you haven't been shown the mechanisms of the underlying framework and aren't familiar with exactly how certain terms are used. It's also possible that I've totally misunderstood or missed the point of your question.

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