Economic Efficiency Suppresses Independence
Category : Uncategorized
In our economic system, people typically trade 40+ hours out of every week in order to obtain currency. The currency that each person holds represents a portion of their time. $100 might represent 1 hour of work for person A, but 10 hours of work for person B. In order to be economically efficient, purchases should be measured versus how much time is being traded (opportunity cost). If Company X can provide socks for $10 per pair and it would take person A or person B 2 hours to hand-craft these socks, then both of these people should purchase socks in order to maximize economic efficiency. Person A could have worked 6 minutes to pay for them, and person B could have worked 30 minutes. Economics and more specifically micro-economics seek to use resources to maximize the production of goods and services. While this is great for the system, it creates complete dependence for the people living within it.
We live our lives constantly trading currency for things we can do ourselves: eating pre-cooked meals, automotive-maintenance, transportation, plumbing, landscaping, etc. We don’t need to make any of these trades, but after working 40+ hours, it feels much easier to trade $300 for rear struts rather than change them yourself. Plus, when you are dependent on your car to bring you to work, you can’t afford for a repair to take longer than expected. Depending on the person’s skill set, there is a threshold where DIY becomes a very poor trade. For example, if I were to try to build my own refrigerator, I’d surely spend more than $500 and have an inferior product with no warranty.
Lets back up to our discussion of person A and B. Say person B needs $12,000 annually to live. This includes necessities like housing, health-care, food, transportation, and insurance. If B is making $10 an hour, assuming B pays no taxes, he would only need to work 24 hours a week in order to support himself. Now, with extra free-time, he could make his own socks, and be less reliant on his job. He could also use the extra time to cook/grow his own food and bike to work instead of driving. If this reduced the amount of money he needs to live to $10,000 per year. Now he only needs to work 20 hours a week.
If B were to take this route, he would surely have less money to spend on inessentials like TVs and video games. He would also have spent much more time on transportation, food, and clothing than before, but he would be more independent. He would also be more protected against the possibility of losing his $10/hour job and scrambling to find a new one. With lower expenses, he could take a job that paid less in the short term in order to make ends meet. Or in his free-time from work he could develop skills to earn supplemental income.
Becoming more self-reliant is counter-efficient, but it creates independence.
Given how much Americans spout how much they love their freedom, I’m surprised they aren’t more independent.