Posted: Sat Jun 04, 2011 4:53 pm
I have been reading The Ugly Civilization by Borsodi, as recommended in the blog. I enjoy this book very much and find it extremely well written. The author seems to be able to make incredibly insightful statements using just a few words.
In googling the The Ugly Civilization, I came up with another text, The Homebrew Industrial Revolution, http://www.mutualist.org/id116.html
This text would seem to advise to purchase a home and garden and pay off any debt as a first strategy. In the real world this could be more complicated, for example, one may not be able to earn money in the place one would prefer to buy a home. But the text does provide another strategy to follow after accumulating capital: buy the land and tools one needs to live free of debt and largely outside of the cash economy.
From Chapter 7:
B. The Advantages of Value Creation Outside the Cash Nexus
We already examined, in Chapters Three and Five, the tendencies toward a sharp reduction in the number of wage hours worked and increased production of value in the informal sector. From the
standpoint of efficiency and bargaining power, this has many advantages.
On the individual level, a key advantage of the informal and household economy lies in its offer of an alternative to wage employment for meeting a major share of one's subsistence needs, and the increased bargaining power of labor in what wage employment remains.
How much does the laborer increase his freedom if he happens to own a home, so that there is no landlord to evict him, and how much still greater is his freedom if he lives on a homestead where he can produce his own food?
That the possession of capital makes a man independent in his dealings with his fellows is a self-evident fact. It makes him independent merely because it furnishes him actually or potentially means which he can use to produce support for himself without first securing the permission of other men.
Borsodi demonstrated some eight decades ago—using statistics!—that the hourly “wage” from gardening and canning, and otherwise replacing external purchases with home production, is greater
than the wages of most outside employment.
Contra conventional finance gurus like Suze Orman, who recommend investments like lifetime cost averaging of stock purchases, contributing to a 401k up to the employer's maximum matching
contribution, etc., the most sensible genuine investment for the average person is capital investment in reducing his need for outside income. This includes building or purchasing the roof over his head as cheaply and paying it off as quickly as possible, and substituting home production for purchases with wage money whenever the first alternative is reasonably competitive. Compared to the fluctuation in value of financial investments, Borsodi writes,
the acquisition of things which you can use to produce the essentials of comfort—houses and lands, machines and equipment—are not subject to these vicissitudes.... For their economic utility is dependent upon yourself and is not subject to change by markets, by laws or by corporations which you do not control.
The home producer is free from “the insecurity which haunts the myriads who can buy the necessaries of life only so long as they hold their jobs.” A household with no mortgage payment, a
large garden and a well-stocked pantry might survive indefinitely, if inconveniently, with only one part-time wage earner.
In googling the The Ugly Civilization, I came up with another text, The Homebrew Industrial Revolution, http://www.mutualist.org/id116.html
This text would seem to advise to purchase a home and garden and pay off any debt as a first strategy. In the real world this could be more complicated, for example, one may not be able to earn money in the place one would prefer to buy a home. But the text does provide another strategy to follow after accumulating capital: buy the land and tools one needs to live free of debt and largely outside of the cash economy.
From Chapter 7:
B. The Advantages of Value Creation Outside the Cash Nexus
We already examined, in Chapters Three and Five, the tendencies toward a sharp reduction in the number of wage hours worked and increased production of value in the informal sector. From the
standpoint of efficiency and bargaining power, this has many advantages.
On the individual level, a key advantage of the informal and household economy lies in its offer of an alternative to wage employment for meeting a major share of one's subsistence needs, and the increased bargaining power of labor in what wage employment remains.
How much does the laborer increase his freedom if he happens to own a home, so that there is no landlord to evict him, and how much still greater is his freedom if he lives on a homestead where he can produce his own food?
That the possession of capital makes a man independent in his dealings with his fellows is a self-evident fact. It makes him independent merely because it furnishes him actually or potentially means which he can use to produce support for himself without first securing the permission of other men.
Borsodi demonstrated some eight decades ago—using statistics!—that the hourly “wage” from gardening and canning, and otherwise replacing external purchases with home production, is greater
than the wages of most outside employment.
Contra conventional finance gurus like Suze Orman, who recommend investments like lifetime cost averaging of stock purchases, contributing to a 401k up to the employer's maximum matching
contribution, etc., the most sensible genuine investment for the average person is capital investment in reducing his need for outside income. This includes building or purchasing the roof over his head as cheaply and paying it off as quickly as possible, and substituting home production for purchases with wage money whenever the first alternative is reasonably competitive. Compared to the fluctuation in value of financial investments, Borsodi writes,
the acquisition of things which you can use to produce the essentials of comfort—houses and lands, machines and equipment—are not subject to these vicissitudes.... For their economic utility is dependent upon yourself and is not subject to change by markets, by laws or by corporations which you do not control.
The home producer is free from “the insecurity which haunts the myriads who can buy the necessaries of life only so long as they hold their jobs.” A household with no mortgage payment, a
large garden and a well-stocked pantry might survive indefinitely, if inconveniently, with only one part-time wage earner.
