Nearly a century ago, in 1929, agrarian economist Ralph Borsodi published a book that challenged our industrial, market-driven society. “This Ugly Civilization” attacked the industrial era. It also advocated economic independence and personal freedom.
His observations were rooted in how little farmers were paid for their hard and risky work. Borsodi pointed out that the farmer received less than one-tenth of the food dollar. Everything else went to the companies that processed, distributed and marketed the crops. Borsodi advocated that farmers develop as many skills as possible so they wouldn’t be victimized. He didn’t want them to be on the wrong side of a multitude of consumer transactions.
But he was no Marxist. Instead, he focused on what I like to call the Un-Money Economy. That’s everything that we do, and everything we could do, that can be done with personal effort and little or no actual cash in the economy of human relationships.
Today we face the same situation, but worse.
Today it extends far beyond agriculture and farmers. Corporations control more income. Government, whether federal, state or local, takes more of our work dollar. And highly skilled workers with advanced educations enjoy rising incomes, while lower skilled workers with less education struggle to keep up with inflation. Or to be employed at all. We are in what some have called an age of Neo-Feudalism, an age of arthritic but powerful institutions that serve their own ends while preventing useful change.
The only defense for most of us is to turn away from the siren call of money and market transactions. We need to maximize our opportunities for creating value without participating in the money economy. Please note, this doesn’t mean destroying the money economy, it just means using our personal talents and skills in an independent, directly productive way.
Here is my list of some ways to grow our participation in the Un-Money Economy:
Get Married, Stay Married.
Our pursuit of maximum personal freedom has reached such absurd levels that millions of Americans willingly forgo an intimate, lifelong companion. Others despair of ever having that kind of relationship because they won’t question the habits of thinking and acting that make long-term intimate relationships impossible.
But in addition to adding joy, happiness and years to our lives, marriage (broadly defined) also brings what economists call the “economies of shared living.” While two can’t “live as cheaply as one,” we benefit immensely from sharing. And that’s worth money.
Here’s a concrete example. Last year, I wrote about the amount of money you’d need to live at a “living wage” level in cities throughout Texas. But the figures show that two people on Social Security will find it a lot easier if they live together.
Why? Because two people living together will have the same living standard as two people living apart… but they will need 20 percent less cash income.
Shrink Your Shelter.
The biggest single expense most people have is the cost of shelter. Whether they rent or own, it is always the largest part of their monthly budget. Those lost dollars make it more difficult to save for retirement. They also make it more difficult to pay off home mortgage debt. So if you can find a way to reduce your shelter spending, you will reduce your lifetime need for money.
Yes, you read that right. Your lifetime need for money.
Here again, the economy of wants, self-reward and money is our enemy, not our friend. A home with less space needs less lifetime earning to own and less lifetime saving to support in retirement.
Today, a modest singlewide manufactured home will be the least expensive shelter you can buy. But it will have about 1,200 square feet of living space, three bedrooms and two full bathrooms. That’s far larger than the first 750-square-feet homes in Levittown after World War II and larger than most two-bedroom apartments today. But it’s smaller than the typical developer’s house that few can afford.
With Park Models (manufactured homes the size of an RV), RVs, tiny homes and other shelter innovations splashed over YouTube, even the image of “home, sweet home” is changing.
Spend Carefully (It’s a Skill, not a Deprivation).
Every dollar you don’t spend is a dollar you don’t have to earn. That, in turn, represents a sum you don’t need to save. The math here is stunning. Follow my numbers.
Price of something you want but decide you don’t need: $100.
Price of something you want including sales tax in many Texas locations $108.
The amount a 12% tax bracket worker needs to earn to pay $108 after taxes, $187.17. (This assumes a worker paying income taxes at 12 percent, the full employment tax at 15.3 percent, and 15 percent to cover the loss of subsidy for Affordable Care Act health insurance to earn that additional money, a total of 42.3 percent.)
When the overhead cost for buying something through money economy earnings is so high, you benefit by doing without or finding another way.
Related columns:
Scott Burns, “Living on Social Security in Texas,” 3/13/2023: https://scottburns.com/living-on-social-security-in-texas/
Sources and References:
Scott Burns, “Home, Inc.: The Hidden Wealth and Power of the American Household,” Doubleday, 1975
This information is distributed for education purposes, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, product, or service.
Photo: Scott Burns, Waterway sign taken in Chesapeake Bay, 2021
(c) Scott Burns, 2024
This and the previous column “Seven Laws …” are so good to read. There is so much bad information out there. Personal finance is much simpler than people think and the actions required are relatively simple. Some of my favorite article of your are still those regarding your refurbishment of a trailer home … and your actions to reduce property taxes so you can continue to live in Texas. Thank you for continuing to write, post, entertain, and educate us.