Early Retirement Extreme Forums

I was reading an old ERE blog post where Jacob talks of being rich vis-a-vis being wealthy. Following the thoughts expressed there, I find myself wondering, idly (I'm retired, and often idle!) : Suppose we do move to a post-consumerist society, where ERE values are mainstream, what would that kind of world be like, economically and socially?

Low interest rates, certainly.
Also, low inflation.
And low growth too.
Dividends would tend to be higher than at present, is my guess.
Mega businesses would be fewer, perhaps none.
On the other hand, stable mid caps would be more in number. (The grow-or-perish dictum would no longer hold.)

Goods and services available would be fewer, dearer and of better quality. Frivolous goods and services would no longer be available, except in fringes.

Wonder how high-investment and high-intensity professions would play out? Healthcare would shrink (healthier people ; also, less money blown on unnecessary healthcare), but would remain necessary : so why would people become doctors? Probably it would become very highly paid, and require no more than a few hours' work a day.

And the military? Probably smaller. Probably compulsory conscription for a few years (because no one would do that sort of thing willingly or long).

Fascinating, isn't it, to try to imagine what that kind of world might look like?

Jacob would be king

Or, possible, a world of free individuals where work was done on a more voluntary and democratic basis, motivated by personal interest rather than just financial interest. No managers dictating to you what to do, no propagandists persuading you to buy stuff you don't need. People having a genuine say in decision making. People been educated and informed enough to engage in rational decision making.

Even just reducing the working week to a few days would be a great step in the right direction, and is perfectly feasible.

It would kind of depend I think. If everyone only worked 5 years then gave resultant money to other people to make money for them, those other people would have to be amazingly productive. And if everyone scaled their lifetime consumption back 80-90%, then it would be hard to find ways to make the kind of money required to start the process. Seems like that would devolve into sort of a tribal lifestyle where people can't really retire, but work part-time their whole lives, or some other largely subsistence-style living (without the big cash grab at the beginning).

It's sort of like index investing. You count on a substantial fraction of the world taking a dissimilar approach and provide the playing field. With indexing you only need a minority of participants to create an efficient marketplace for investments. With ERE you probably need a majority practicing relatively high lifelong consumption in whatever society you participate in.

chenda wrote:Jacob would be king

And we would be the new feudal aristocracy. Let’s start thinking up cool new titles. Look out, consumerist peasants, your days are numbered!

Unfortunately no, xenophobic laws will not let Jacob become President. But he would definitely bag the Nobel for Peace.

IlliniDave wrote:Seems like that would devolve into sort of a tribal lifestyle where people can't really retire, but work part-time their whole lives, or some other largely subsistence-style living (without the big cash grab at the beginning).

It's sort of like index investing. You count on a substantial fraction of the world taking a dissimilar approach and provide the playing field.

That’s the old No-Everyone-Can’t-Do-It again. Of course, that’s what it had been all along, but you bring it out in the open! (But I wasn’t merely baiting, I was also actually only trying to fantasize about that world, wondering about some of the specific details of that world.)

You know, actually what you say could happen. That is possible, certainly. But I would wager that things would not turn out that way at all.

In fact, basis what you say, how does this sound? The “workforce” would comprise two categories of people. On the one hand there would be the full-time workers, comprising both younger people just starting their career, as well as those who, for whatever reason, decided to embark on a new career at a later stage in their life. These full-time workers would probably need to work longer than the 5 years now needed to go FI, but it would still not be a very long servitude, probably no more than say 10 years. I’m guessing that even that period will be fairly pleasant, since there will be a far greater preponderance of DWYL (actively choosing professions one would actually like) in that world. And the other class of the workforce would comprise older and more experienced people, the experts, who would be FI and work only sporadically, for just a few hours a week perhaps, in very highly paid advisory roles.

Some decentralization would be inevitable, but it doubt that it would degenerate into the tribalism you apprehend. I myself imagine it would be ‘good’ decentralization, and not an anarchic chaos.



Of course, we’re only imagining things and building fantasy worlds here, but in the spirit of trying of keep the fantasy real and consistent (in a sort of magic realism manner) : this would be, in one way, a far better and more moral world. Not as a result of widespread ERE/FI, but the other way round. The ERE/post-consumerist world will come about only when people are (at least in some specific ways) far better than they are today. Less covetous than most are now, less greedy, more inward-looking (as opposed to blindly apeing the mores they see around them), more reasonable, and with more substance and less ostentation. So in contemplating a post-consumerist ERE world, we are by definition contemplating a world that is in many ways a much better world (or at least, composed of much better people—better, that is, in these specific ways).

Our current broken-glass economy would be replaced with a more rational one. Can this transition happen peacefully, or would an intervening period of chaos and anarchy be more likely? Could happen either way (starting with the assumption that the end of the story is a happy one, that is) : but which back-story is more likely, a peaceful transition, or a violent and painful transition? Which is more likely? I don’t know : and I don’t think I even have an opinion on that at this point (as some others among you might).

Devil's Advocate wrote: In fact, basis what you say, how does this sound? The “workforce” would comprise two categories of people.

Elois and Morlocks?

With everybody shoveling 75% of his income into Investments, asset prices would skyrocket. Yields would drop. A drop of aggregate demand would ruin the real economy. We would have a feudal reign of those who were well invested during the boom over those who were not and are then out of income and without assets. So quite similar to what we have now only a lot more pronounced.

Ecologically it would be pretty good as consumption would be very low.

Devil's Advocate wrote: That’s the old No-Everyone-Can’t-Do-It again. Of course, that’s what it had been all along, but you bring it out in the open! (But I wasn’t merely baiting, I was also actually only trying to fantasize about that world, wondering about some of the specific details of that world.)

You know, actually what you say could happen. That is possible, certainly. But I would wager that things would not turn out that way at all.

...

Some decentralization would be inevitable, but it doubt that it would degenerate into the tribalism you apprehend. I myself imagine it would be ‘good’ decentralization, and not an anarchic chaos.

What I meant by some sort of "tribal lifestyle" ("tribalism" is your term, not mine) is the observation from modern day primitive societies where people work for gain about 3 hours per day several days a week to sufficiently meet their needs. I believe things will spread out farther than just the 5 years -> 10 years as you propose in your solution to the thought experiment. I see 5 years -> lifetime but part time.

I suppose someone could arrange some complicated schedule to manage all the sequencing of people's 10-year work periods to keep things moving along, but that seems complicated and dependent on centralized control and I'm an Occam's razor kind of guy.

I do think it's a case that "everybody" can't be extreme early retirees in the context of the implementation proposed by Jacob in our current society. That doesn't mean everyone cannot espouse the underlying principles of maximum self reliance and moderate, efficient consumption in theory. But not every successful implementation of those values is "ERE" per se, which as I understand it, as a process, seems to rely on a high consumption cultural backdrop (hence the "extreme" and the "early").