I had a very good friend reply to yesterday's post. He happens to be a professional economist, and he took umbrage at my statement that the dollar is a poor way to value things. He didn't exactly say it wasn't a poor way to value things. But he did say that he couldn't imagine what the alternative would be. I can hardly begin to imagine how amateurish my musings must sound to somebody who is immersed in the intricacies of the economy nine-to-five every single weekday. But since basic human thriving (which is my basic area of concern in these posts) and economic theory have intersected, I've decided that it would behoove me -- at possible loss to my credibility -- to creep a little further out on the limb of economic theory.
To be clear, I didn't say that money was an inherently poor way to value things. I noted that money has no value in itself. Whether it's tied to a standard of gold or silver, or whether it's plain old fiat currency, the dollar cannot be eaten or worn. Money is merely a facilitator of our exchange of labor for things that really do have value because we need them. I'm a big fan of bartering for things. But I've fully aware of how inconvenient it'd be to barter for all of our necessities. If we move beyond the barter economy, we need to associate value with the dollar. I grant that.
My argument was not against the dollar itself, but instead that a global economy serves to distort the value of the dollar by putting it at a vast distance from the things that have value. My example yesterday was the Brussel Sprouts that I sold last fall, earning myself an income of about $1 per pound. The Brussels were part of what turned out to be a living wage for me. All told, I produced enough food beyond my own needs that I was able to support myself and my family and put away a little in savings. The value of a man's labor should be associated with it takes to support himself and his family. In my mind the value of a dollar is a handful of Brussels, or a decently sized spaghetti squash.
The squash and Brussels are things that you and I can eat; they are necessary things. Therefore, they have real value, and that value is pegged at about one dollar. Their value is pegged at a dollar because, if I were paid any less for them, I wouldn't be able to feed my family by growing them, and I'd close up shop and try something else, and there wouldn't be squash or Brussels to be had. If they're worth having, people will pay a living wage for them. If you like food, you pay the one who grows your food a living wage.
At least, that's the way it'd work in the small economy for which I advocated last time. Yet in the big-city store, those very same Brussels were selling for $6 per pound. To be sure, there are truckers earning a living wage after their fuel and insurance costs to deliver them to the city and grocery store folks earning their own living wage and paying their store's rent, electric bills, etc. Those increases in cost are to be expected; people living in the big city can expect to pay more because of the extra costs brought on by living in such a place. I also critiqued the whole idea of the city last time, calling it an artificial construct brought about by the globalized economy. But let's leave off on that part of the argument for today.
The point is, the price of Brussels in the city isn't intimately related to any of these living wages, or even to their sum total. Let me illustrate: on my end last season, I actually received $21 per ten pound box on a good week, but as little as $17 on a bad week. In the end I had a hundred pounds of Brussels that my wholesaler couldn't even take off my hands at any price because apparently a whole glut of Brussels had suddenly arrived from south of the border. Who would have known that farmers grow Brussels Sprouts in Mexico, or that the USDA would trust that Mexican Brussels were grown in a manner equivalent to their own stringent organic standards?
Our globalized economy doesn't care that I got left with a hundred pounds of Brussels and had my living wage endangered. Ultimately I sold the extra hundred pounds locally for far more than the wholesale price, but the point remains that the global market is cold and calculating. If a farmer in the Midwest folds because he can't make a living wage growing Brussels, it isn't because people aren't willing to pay him a living wage for them, but because there was cheaper product to be had elsewhere. Oh, they'll come back to the Midwestern farmer next season for more if the cheaper product doesn't present itself. But there is no human connection at all, just market forces and greed-driven speculation.
I didn't write yesterday's post just to complain, however. My goal was to present the beginnings of a solution in a return to a smaller, more localized economy. The whole edifice of middlemen and speculators comes crashing down when the distance between an object of value and the person spending dollars on it is eliminated.
While I've written about Brussels, how about ending with an example of lumber? Anybody who's been to Home Depot recently, as I was to buy some 2x4s for our bedroom renovation last month (home renovation is what a produce farmer does in the winter!), knows that lumber has increased in price by something like 50% since this time last year. The Internet tells me that it's partly due to due to COVID-related work stoppages, and partly due to speculation in the lumber market.
So who exactly is making the extra 50% that I paid for my 2x4s? Are the hardworking folks in the lumber industry retained by their industry at their former living wages, even as they are produce less lumber? Is that the reason that I'm paying more for each board? While I wish that were the case, I'd be willing to bet that it's not. Those folks more likely weathered the work stoppages by drawing on unemployment benefits funded by the Federal government.
No, the lumber cost more because the "market could bear it." Lumber was scarce, building projects had to continue, and some few folks became a whole lot wealthier through speculative greed and other folks folded the increased cost of their new houses into their home loans. They'll be paying for this speculative profit over the whole life of their 30-year mortgages.
At the same time, small Amish-run lumber mills in my neck of the woods have kept churning out a steady supply of rough-cut boards at a fairly steady price. There are still plenty of trees in the woods, and the saws are running fine. Perhaps there may be a work stoppage at one small mill. But the local supply doesn't become paralyzed, because there are five or six other small mills still running in the local vicinity during the one mill's stoppage. And the one mill doesn't suddenly raise its prices speculatively because the neighboring mills may not follow suite. That one mill would lose out on customers in the short term, and it'd earn a bad name for itself in the long term as an opportunist and a cheater of its neighbors.
The small economy is an interwoven set of relationships between actual persons who know each other and depend on each other. The small economy is not cold and heartless, drawing its supply from distant places and from people who may as well not even have names and whose demise would make no difference to us. My argument isn't against the dollar. It's against the globalized economy.
I have a feeling that the response to my admittedly crude caricature is that I have no idea the comforts and benefits that we'd be abandoning if the whole globalized edifice came crashing down. I'd miss the MacBook Air on which I'm typing this post and the diesel fuel that makes my tractor run. But thinking again of my Amish neighbors, who live very happily without many of the things that we take as sine qua non for human thriving, I'm haunted by another few sentences from Reginald Jebb's essay. They give me pause and make me wonder if most of our modern lifestyle and all the gains especially of the last century are but a game of smoke-and-mirrors that has left us worse off than we'd otherwise be. In that vein, I'll give Jebb the last word:
"One might perhaps compare the outlook of the average man under decaying capitalistic conditions, to a drug addict. He is not willing to give up his drug -- indeed, the idea appalls him -- though he can point to no natural or real advantages that it brings him. The notion of supporting life on food, drink, work, rest, and amusement -- the natural, indeed, the necessary, concomitants of life -- fills him with ennui, if not disgust. He craves for his drug because he has grown used to it, and he cannot picture existence without its stimulant. And though he knows that it is slowly killing him; he prefers such degeneration and death to a life of reality and vigor. For he has forgotten the taste of these things."
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