Saturday, July 20, 2019

A Simple Life

     Do you regard your life as “simple?” Before you answer, think about this: what qualifies a life as “simple?” Doesn’t the answer depend on the meaning you assign to that word?

     Some great, genuinely accomplished men have been vocal advocates of the “simple life.” You know about some of them: Thoreau. Tolkien. Steinbeck. They didn’t all agree on what such a life might be, but they all liked the phrase.

     I’m something of an advocate for simplicity myself. Complex things are daunting. They mystify. Some of them terrify. It’s part of why I went into physics in my youth: a sound grasp of physics takes the mystery and terror out of many complex things by making them comprehensible. Even simple, in a certain sense.

     But all the physics in the world won’t repair your flatscreen television if it should stop working. Neither will it rewire your kitchen or pump out your cesspool. Those chores require carefully nurtured skills and – often – a lot of special equipment.

     The contemporary middle-class American is surrounded by complexities. He can’t cope with most of them from his own knowledge and tool resources. What makes coping possible is that mysterious phenomenon called specialization, a.k.a. the division of labor.

     The availability of specialists who can cope with your particular complexities on your behalf, plus the wherewithal to pay their fees, can transform a life utterly buried in complexities into one that’s simple, yet no less comfortable or convenient.

     J. R. R. Tolkien had some unusual views. His idea of the “simple life” might be called anarcho-pastoralism. He disliked government of any kind to the point of nausea, and modern technology almost as much. He occasionally expressed those opinions to an effect that would shock most of the admirers of his fiction. And to be fair, he lived as simple a life as one could contrive in the Twentieth Century, while serving as a college professor.

     But Tolkien, for all his brilliance, did not have a real appreciation for the sacrifices a genuinely pastoral, technology-free life would require: the endless backbreaking labor; the few physical comforts; the uncertainty about tomorrow. Pre-technological simplicity was a hard way to live. It killed most infants in the crib. Unending labor and hardship brutalized those who survived to adulthood, nor were their lives as long as ours, on average.

     The price of that kind of simplicity is one that few would willingly pay. Contemporary advocates for such a life usually have no idea whatsoever what they’re advocating.

     Present-day simplicity, in which each of us strives to master one skill with which he will earn his living, and pays part of his earnings for the skills of others at need, deserves to be better appreciated, and much better thought of.

     All that having been said, there is merit in reducing one’s dependence on complexities – if that can be done “at a profit.” To become omnicompetent, such that one never needs the services of others regardless of what problem one confronts, is a dream that fails to envision the consequences of such absolute self-reliance. Economics will have its say, and what it says in this instance is known as the principle of comparative advantage:

     David Ricardo made one of the enduring contributions to the analysis of international trade with the publication in 1817 of his On the Principles of Political Economy and Taxation. In addition to putting forward what was to become known as the Principle of Comparative Advantage, in this treatise Ricardo analysed the effects of import tariffs and subsidies (“bounties”, as he called them) on resource allocation, trade, and the level of profit; the impact of shocks to international trade; and the terms upon which the UK traded with its colonies....

     Ricardo put forward a simple and compelling example that showed why two nations would trade cloth for wine and why both would benefit from that trade, even if one nation maintained a productivity edge over the other in the production of both goods. Some object to the simplicity as being unrealistic but, as Richard Baldwin argues in his chapter of this eBook, Ricardo simplified to clarify. And with it the implication that it is comparative cost advantages – rather than absolute cost advantages – that matter.

     The above refers to international trade, but it applies with equal validity to relations among individuals. For example, if a lawyer were to hire a secretary, and then to discover that he types more rapidly than does she, it would still make more sense for him to leave the typing to her. Time the lawyer spends typing is time not spent lawyering, a far more remunerative undertaking. Similarly, for Smith to hire specialist Jones to solve a complex problem will usually make more sense than for Smith to undertake the task himself. In the usual case, the cost of learning (and equipping himself) to do Jones’s work at least as well as Jones would do it is, if not prohibitive, at least a net detriment to Smith’s overall happiness and well-being. (Besides, where would he keep the spools of wire, the large inventory of electrical components, or the cesspool-pumping truck?)

     Happiness is the goal, isn’t it? For a considerable range of problems, Smith will be better off in “happiness units” for having “rented” Jones’s skills and equipment than if he were to tackle those problems himself.

     It’s natural to admire others for skills one does not possess. I do, certainly. But let’s not kid ourselves: locating reliable specialists, paying their fees, and enduring their occasional surly remarks about the foolishness and carelessness of homeowners are a reasonable price to pay for contemporary simplicity. There’s great comfort in knowing that one’s own skill and equipment are sufficiently valued by others to allow the employment of such specialists at need. It’s the route to simplicity I prefer, though your mileage may vary.


sykes.1 said...

The problem with Ricardo's analysis is that free trade and the necessary open borders force all incomes toward the global mean. There is no other possible result, and it is the actual intent of our policy makers. In the case of the US, it put working class Americans into direct competition with low-paid foreigners, both those in foreign countries and legal and illegal immigrants. The result was and is the Rust Belt, which is still rusting away, viz. Lordstown.

American professionals have also been put into direct competition with lower paid foreign professionals by H-1B visas and by off-shoring. Silicon valley programmers are nowadays largely foreign born, and then there is the Boeing 737 MAX (and NG) and 787. Boeings foreign programmers made $9 per hour.

Francis W. Porretto said...

Your comment is essentially off-topic, Sykes, but allow me to quarrel with you about it even so.

In Ricardo's context, your objection fails. Absolutely free trade, unaffected by governmental intrusions of any sort, is best for all those involved. In the contemporary context, in which governments subsidize selected businesses, we don’t have free trade but a variety of mercantilism. Note that China doesn't subsidize low-tech, low-skill businesses such as T-shirt makers but high-tech, high-skill businesses that do compete directly with those of the U.S., which is the problem the Trump tariffs address.

Moreover, free trade does not require that the borders be open in the all-inclusive sense. It merely requires that imports and exports be allowed to pass over national borders, perhaps with a modest excise to support national "customs" policies. So your objection fails there as well.

Virtually no one bothers to take subsidies and fiat-currency manipulation into account in these matters. I make a point of always doing so. It clarifies many a conundrum that only seems to throw free-market economics into the shade.

pc-not said...

Fascinating subject today! My response to just a couple of your points could easily exceed the space you've taken up with today's blog, but I will try to limit it.

Although I didn't appreciate it at the time, my macro/micro economics classes have proven valuable in my life. My vocational endeavors have taken me in several directions, I'm thankful for the basic framework to view many of life's challenges. Here are two corollaries to your "lawyer illustration". Not necessarily earth shattering, but tidbits to chew on.

My wife worked 29 years for a commercial developer/lawyer. She became very proficient at number of related skills from paralegal, accounting, and setting up HOAs for subdivisions. At one time she headed up an office with over 25 employees, but after 20 years and building out most of the major project, it was down to just the two of them. It was a classic "girl Friday" set up. She probably knew the machinations of that particular operation better than he did, and was the perfect compliment to his legal expertise.

Then, after a disabling car accident, she was no longer available to continue. He tried training a couple of replacements, but to no avail. The job was just too daunting. He made a decision to go it alone. He downsized his client base, and became more proficient at his hunt & peck typing skills. At 74 he still enjoys the work and has no doubt acquired a greater appreciation for what my wife did. He can't type 70 wpm like she could, but the economic decision works for him.

Most of my life has revolved around residential construction. Charting a very unusual track, I went from learning several trade skills in my youth, to management, and then after a few years hiatus in other fields, returned to building in my late 30's to spend the rest of my working life.

Part of that hiatus included eight years as owner/operator of a commercial fishing vessel. Prior to that I was in the logging business for a 4 year stint. The part that makes my experience unique, however, is that all of these endeavors were preceded by a formal four year education at a major state university.

When I obtained my state contracting license several decades ago, I did not jump on the bandwagon to compete in the new new construction or spec sector. That's where all of the money is, but my calling was to the remodel/repair and custom addition field. I have not regretted one minute of it. In my case, volume is not a priority. I pick and choose jobs where I can use my skills and have an unusual working relationship with my clients. For the last ten years, I have worked solo, mainly because I have no patience with the current labor pool. The biggest problem I see with specialization is that people tend to burn out at a younger age. In my case, using a variety of skills on each job keeps me fresher both mentally and physically. I'm 72 and still work every day. I do take time off when I want to and have a flexible schedule. I compare my situation to the old craftsman/benefactor model as opposed to the modern one. One thing that has reinforced my unique situation is that due to the recent state of the building industry subs are hard to get on my small jobs. Most guys want McMansion type jobs. I do not build McMansions.