My Considered Opinion

Think about it.  We live our lives completely immersed in a market economy, and that economy shapes our behavior.

Markets reward the most effective sellers, so those guys get really good at making stuff that we want, and making us want it.  The result?  We end up spending money on stuff that we really want, but actually don’t need.  In fact a good percentage of the time we barely use the stuff we buy, so it ends up filling up our houses, which makes us want bigger houses to store all that stuff we wanted so bad but never use.  You do it too, don’t deny it.

Of course to buy all that stuff we need money, and markets have an answer for that too.  More than one in fact.

First, labor markets will trade us money for work – we can always work for a living.  But to buy all the stuff we want we’ll need a good job that pays decently, so unless daddy is going to set us up we’ll have to go to school to acquire some marketable skills.  Then we need to climb the ladder from our entry level position to one that actually pays decently, but when we get a few rungs from the bottom we realize that what seemed like a decent salary before is totally inadequate to fund the lifestyle that we crave.  The result?  We become workaholics.

While we’re waiting to become workaholic middle managers we’re still craving that lifestyle, so debt markets will loan us money now, as long as we promise to pay them back later, with interest.  That need to pay our debts only adds to our salary requirements.

And while we’re becoming workaholics, we need to sell all the stuff we produce to fund our salaries.  Meaning that other workaholics have to buy it from us with their salaries.

And let’s not forget that some markets are food markets, and they get really good at producing food that we want and making us want it.  We’re genetically programmed from thousands of years of actually being hungry to want calorically dense foods, sugar, salt, and fat.  Make it marginally interesting and we’re hooked.  The result?  The highest rates of obesity in human history.

Markets live their lives completely immersed in us – they are us – so markets are very good at producing the things we tell them we want.  Unfortunately, what we seem to want is to be fat, in debt, and workaholics.  Which makes us the perfect customers.  What good little citizens we are!

I wonder if we’ll ever want something else?  If we did, what would it be?

Deacon Blue

They come from the land of ice and snow, from the midnight sun where the hot springs blow.  Or something like that.

The first humans came to America looking for opportunity; probably in the form of new places to hunt, fish, and live.  The first Europeans came to America for similar reasons, and in some cases with the hope for a bit more freedom to practice their religion than they were used to.  Many sold everything to pay for the journey, on the gamble that they would have a better life and probably earn more money than they were in their old homes.  They’re still coming, for basically the same reasons, but from different places for the most part (although people still immigrate to America from Ireland, Poland, France, etc.)

Most Americans look on the 1800′s as sort of the quintessential period for the immigrant story.  In the 1800′s they were emigrating from an old, long established culture and economy to a new frontier culture and economy.  Spaces were big, land and jobs were plentiful, and opportunity was supposedly everywhere.  My in-laws tell the story of my wife’s grandfather, who made several trips back and forth from Alsace to Minnesota, each time “earning a fortune” in Minnesota and spending it in Alsace.

The frontier was a key to the immigrant story.  Frontier meant opportunity to acquire land much cheaper than in an old established economy like Europe, and land meant wealth to a farmer.  Merchants saw opportunity in frontiers to move into new markets where there was little competition and they could capture a large market share.  Untapped natural resources like California gold were also keys to providing opportunity for immigrants who were willing to assume the risk of uprooting themselves to pursue them.

But those days are gone forever, over a long time ago.  America is no longer a frontier.  In many ways, today’s America resembles Europe in the 1800′s.  Highly developed, globally adventurous, and relatively stratified.  Social and economic mobility are not what they were, although as in 19th century Europe there is still a fair amount of them.  Probably more, since our system of aristocracy is less formalized.

So what’s a 21st Century American to do?  Should we stay behind in the old world and accept our lot, or is there a frontier where we might find greater opportunity?

Until we get serious about space travel, today’s frontiers are in any old, established cultures and economies that are experiencing a renaissance.  A few years ago that was Japan and the Asian Tigers, now it’s probably India and China and places like Vietnam.  These aren’t really frontiers – they’re well established markets and cultures, and the land is not available for homestead.  I’d call them “refrontiers”, since they’re really only frontiers by virtue of their renaissances.  Still, any comparison of GDP growth rates will attest to the levels of opportunity in these economies.

So it seems to me that for the fairly average American, the opportunity is to try to move your net worth to a refrontier and practice good old Yankee Capitalism.  Consider that seriously and it gets pretty scary, but that’s the kind of risk that immigrants have always taken on.  “Honey, I’m going to sell our house, my car, my 401k, cash out and move to Hyderabad.  I’ll send for you and the kids when I get established.  Six months tops.”

I don’t know about you, but I might have a little trouble selling that to my wife.  Still, neither one of us would be living here now if our ancestors hadn’t done it.

Just a thought.

Deacon Blue