The Freedom of the Independent Yeoman
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Klearchos Kapoutsis The financial crisis is resurrecting the oldest economic tension in the country. Will it finally be the day of the independent yeoman? (See also: Self-Sufficiency, Self-Reliance, and Freedom)
Never mind that they were always more mythic creature than reality. Thomas Jefferson's model for the U.S. economy was built around the yeoman farmer.
The Freedom of Self-Sufficiency
The yeoman farmer was free, because he was self-sufficient. He owned some land and the tools he needed to produce the necessities of life. When possible, of course, he'd produce more than that — a surplus to sell, so the family could afford more than the bare necessities. But even in bad times they could produce enough food, clothing, and shelter that they wouldn't starve or freeze.
Jefferson thought this was critical. Men who worked for wages were dependent on their bosses for their livelihood, and that sort of dependency was dangerous for a democracy. There was always pressure on employees to vote their employer's interests, rather than the country's interests.
Industry and Finance
On this issue — and even more so, on the issue of finance — Jefferson was the loser. The prevailing view was that of Alexander Hamilton, who wanted an industrial, financial basis to our economy.
This was anathema to Jefferson, who thought bankers were even worse than bosses. (Jefferson famously called banking institutions "more dangerous to our liberties than standing armies.") The whole enterprise of finance led to a concentration of money and power, while Jefferson thought the nation's interests were best served when money and power were dispersed to the individual citizens.
Jefferson lost — and we're all vastly richer because of it. I've got a post up about how to have a rich country on my personal blog, but the basics — privately property, free markets, and the rule of law — are well known. It was Hamilton's pushing that insured that we had those things, and more: industrial production and a financial industry.
It's tough to get rich as a subsistence farmer. (The only scenario that comes to my mind involves giving up subsistence farming after oil is discovered on your land.) You're going to have a higher standard of living if you work for money, and then use the money to buy the stuff you want.
But you give up a lot when you do that. I've talked before about the many reasons besides frugality to do for yourself. But even more important than those is the freedom that comes from actual self-sufficiency. That freedom has benefits for others besides just yourself. It benefits your neighbors. Indeed, as Jefferson understood, it benefits the whole country.
So, there's an upside to the knocks that the financial system is taking. They're pushing people to learn how to be a little more self-sufficient (sometimes, it's that or starve). They're pushing people to live off the grid. They're making the standard-of-living comparison a little less stark.
Attainable Self-Sufficiency
Real self-sufficiency is tough. But limited, partial self-sufficiency is easily within the grasp of most people.
A little frugality is an important first step. If there's only one job in town that pays enough to cover your expenses, what will you do if you lose that job? If you can get your expenses down to where there are a dozen jobs that would pay the bills, you're vastly more secure — and vastly more free. (Plus, if you happen to have the high-paying job, you're in a position to do some serious saving and investing.)
There are a lot of possible second steps. Find ways to acquire some of what you need outside the money economy — produce it yourself, barter or trade, share with friends and neighbors.
Although the yeoman farmer was Jefferson's model, the point is not to work the land. The point is to be free enough — to be self-sufficient enough — to follow your own conscience.
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Interesting concept - the new American Yeoman - I can tell you from personal experience that this a real trend - Young professionals in their 20s and 30s, witnessing and being impacted by economic devastation of the past 4-5 years are making significantly different lifestyle choices.
It should be pointed out though that this doesn't mean we're in "survivalist" mode - what it does mean is that we're consciously choosing to live below our means - money in the bank or invested is sexier than a big house or new car. We work "normal" professional jobs, but if you looked at our paycheck and then at our homes and cars (Paid for in many cases) you might scratch your head and wonder why we don't live in fancier neighborhoods, and why we're driving that old ford when we could easily make the monthly payments on a new Lexus.
The answer is we know there is no such thing as job security. The axe could fall at any time and there is no guarantee anymore that your old salary will mean anything when looking for a new job. We've set up our lifestyles so that while the good times and high paying jobs are rolling, we're building wealth...and when the axe falls, we can quickly find something else that will keep us at our current lifestyle going while we plan our next steps and conduct a new job search over the much longer timeframe that has become reality for the unemployed.
The answer is we've learned to tune out the constant grind of marketing and advertising...telling us over and over and over again that to be happy and appear successful we must have the huge house, the new car, the glamorous lifestyle. The conventional wisdom used to be that if two guys drive up, one in a new Lexus and one in an eight year old ford, the Lexus guy is happier, wealthier, and more successful. These days we know the Lexus guy has probably got a 500-1000 monthly payment stretched out over as many as 84 months. Do you know how much I'll have to pay on my ford next month if I lose my job? $0.00.
No we are not better off or richer/wealthier for the Hamiltonian approach. Hamilton didn't actually win either. The 2cd Bank of the U.S.'s charter was ended by Jackson and the debt was paid off. And that we were better for, until 1913. And more free as a nation. Maybe even for what President Lincoln did a few decades later. If you don't know...he printed the Greenback debt free/interest free - with no bank help, and no borrowing, and this paid for troops thereby building the Union Army for the Civil War. This wouldn't have been done with a Central Bank in place. War with the south would have been a far distant dream most likely, and slavery would have been a practice perpetuated well into 20th century. That is for those who need to believe that the Civil War was even about slavery.
Look, you are free to bath yourself in these economic delusions if you like, but the proof is in the Finances of the country. Go to www.truthinaccounting.org
As an economic researcher and former economist, I tell you that this government aligning itself in such a narrow-minded fashion with one particular economic school of though is guiding our populous from cradle to grave as debt zombies.
This nation is in debt, from municipal to federal level, over 70 trillion dollars. Hmmmm. And that is excluding consumer debt my fellow citizens!!!! Let me ask all of you Hamiltonian - pro Central Bankers who is going to pay this debt? Who may I ask? Future generation am I to assume? Well, how moral of you to just have what you want now and have the nations grandchildren pay for it by making them pay your debts and enduring higher taxes, and a lower standard of living. How upright moral of you!
Go back to the farming and building your own homes America, and quit living beyond your means.
If you've read what I've written here on Wise Bread, you know that I'm no advocate of living beyond your means. But merely taking on debt is not the same thing.
If a community of farmers each invests his or her own surplus by buying another cow or building another barn, the community prospers to some extent. But if a community of farmers pools its surplus and uses that money to build a road or a bridge or a canal that lets them expand the market for their produce, they prosper to a much greater extent.
They could all save their surplus until they have enough cash on hand to build that bridge, but that could take a decade or more. If instead they pledge their surplus and use that promise to borrow the money to build the bridge, they can achieve that expansion of their market much sooner.
It was financialization at this level that Hamilton advocated—and, as I say, as a nation we are much richer for it.
And just to touch on your last point, the actual public debt is much lower than the figure you offer. I suspect your figure includes other promises to pay that are not debts, but rather obligations that we've chosen to create for ourselves. It is perhaps worth stating explicitly (although it should be obvious) that obligations that cannot be fulfilled will end up being reneged upon. This is just the way things always are.
Some debt undertaken in good faith cannot be repaid, and non-debt obligations are no different. There are systems in place to deal with this. Debts can be renegotiated, and if they cannot be, there is a system of bankruptcy. In a democracy, obligations undertaken by the public that turn out to be too onerous can be adjusted by the legislatures. These are not fatal flaws, these are just the normal workings of the system.
There is at least one "money economy" job where you can also be a Yeoman; a school teacher or other school employee in a district that follows the traditional school year, as most rural areas still do (9 months on plus Thanksgiving, Christmas, and spring break, then summer vacation). My grandparents grew up on farms and continued self-sufficiency level farming their whole lives while also having 30 year teaching careers. It was hard work but they've never wanted for anything (since the Depression anyway) and have zero debt. Plus, at just the same time that their age made the farm work more difficult, teacher pensions and social security kicked in. They are also very healthy to boot, from all the organic food and physical exercise. Its hard to be a yeoman and have a "regular" job, but if your Summer planting months are free, plus a little break in Fall and Spring to accomplish other tasks, its very possible.