Scarcity is merely
contempt for that which is easily obtained.
~ Seneca (attributed)[1]
While
I am aware that many of the NOL writers do not agree with Jordan
Peterson, I think he is correct when he says that many of the contemporary
problems faced by society are the product of prosperity. The essence of his
argument is that in an evolutionary sense mankind has two sets of priorities: 1)
necessities of life and 2) social standing attached to life meaning. For the
first time in history, we are living at a point where the necessities of
physically staying alive, e.g. housing, food, medical care, etc. are obtainable
and now people are free to fixate on the second set of priorities. The point
where I personally diverge from Peterson and those of a traditional
“conservative” inclination is that I do not think it is incumbent upon broader
society to provide a sense of meaning or status for others.
In an interview
with Christina Hoff Sommers and Danielle Crittenden of AEI for their
Femsplainers podcast, Peterson illustrated his argument with an anecdote from his
childhood on the Canadian plains. He described how, despite college being free
in Canada at the time, he was the only one from his high school class to go
onto tertiary education. Some but not all of the cause, he said, was ignorance.
He observed that much of the reasoning related to an inability to delay
gratification. At the time, his hometown was an oil center and was flush with
money from the boom of the 1980s. Consequently, going to work immediately and
making a lot of money was more attractive for high school seniors than was
attending university. For the next decade this strategy worked. But, as
Peterson recounted, when he was in the final year of his PhD, two things
happened: 1) the wells supporting the town ran dry and 2) the oil bubble burst.
Unsurprisingly,
what were a blip on the radar and a minor hiccup in the global and historical
scope were disastrous for Peterson’s hometown. What became apparent in the
fallout was a softening of character and mind. Counterintuitively, men who had
no problem rising at 4:00 AM and working in subzero temperatures for sixteen
hours were shown to be fragile in the face of greater adversity. Having
manufactured an identity that emphasized the pointlessness of skill acquisition
but also placed great importance upon high income, these beneficiaries of the
oil bubble were devastated when their incomes disappeared and their lack of relevant
skills left them unemployable and consequently without status. In the following
decades, the town became one of many others of the rustbelt variety, plagued by
unemployment, substance abuse, and apathy. It was this sequence that Peterson said
caused him to start thinking in terms of the evolutionary stages of development.
For us, the most relevant takeaway is the limitations of money on conferring
status.
As
Alvin Saunders Johnson (1874 – 1971) wrote in his article “Influences affecting
the development of thrift (1907)” in which he lamented the loss of capitalist
mentality among the American people,
It is obvious that the more closely society is knit together, the greater the influence of social standards upon economic conduct. The solitary frontiersman shapes his economic conduct with very little regard for the opinion of other frontiersmen with whom he may occasionally associate. The one rich man in a community of poor men is scarcely at all under the dominance of social economic standards.
Saunders ultimately concluded that
increased status anxiety or social dissatisfaction was, however
counterintuitively, a sign of progress. After all, the real life of a
frontiersman was quite different from that romanticized in Zane Grey books. Therefore,
assuming that no one really wants to live a subsistence existence, a world in
which people are materially comfortable, even if subjected to social pressures,
is inherently better.
The concerns induced by social pressure are
external to material wellbeing since a positive environment for the latter
ensures that people can live above subsistence without difficulty. Social
pressure is hardly objective, and because of its variable nature, symbolized in
Johnson’s essay by a “suburbanite touring car,” which was both unproductive and
quickly superseded by newer vehicles, sweeping claims about feelings of social
pressure must be denied validity. Johnson presented the thirst, which he
observed in 1907, for status symbols as both positive and negative. Positive
because it indicated greater prosperity; Negative because it created a different
set of societal problems. As society became increasingly removed from a
subsistence existence, the human cycle of craving and acquisition – which in a
hunter-gatherer environment meant survival of winter – developed into an
obstacle, rather than a necessary tool. The contemporary extension to Johnson’s
line of reasoning correlates to Peterson’s assertion that the fixation of
broader society on status is a natural sequitur to achieving a level of prosperity
sufficient for the basic needs of all to be addressed.
While the topic of interest to Johnson
was thrift and capitalist mentality, or rather the lack of it, on the part of
the American people, his essay contained an interesting and pertinent
observation regarding land practices. Remembering that he wrote this particular
essay in 1907, he remarked on an agricultural real estate bubble existing in
the Midwest, his native region. The reason he thought it was important was that
he maintained it demonstrated two points in the spending-thrift, status-
(genuine) capitalist paradigm. Property prices and valuations had risen, he
argued, past the productive potential and therefore market value of the real
estate in question. This rise was driven, he said, by the farmers themselves
who spent lavishly on land because of an association of ownership with status,
even if they were then unable to use the land effectively and therefore unable
to recoup the investment. He predicted that land purchased under these
circumstances was not a good investment. Further he added that when the bubble
collapsed, not only would there be monetary loses, there would also be ego and
identity crises as those farmers who saw the value of their holdings diminish
would feel as though they had lost social standing, even if they didn’t lose a
single acre. However since, Johnson observed that many of the farmers he knew,
and upon whom he based his hypotheses, had repeatedly mortgaged their current
holdings in order to buy additional pieces, the economist predicted property
forfeiture as well.
A prototype Austrian economist, though
born and raised on the Nebraska plains, Johnson made no moral judgements about
the acquisitive instinct or the needless purchase of property. The pettiness
exemplified by Thorstein Veblen (1857 – 1929) and his claim that curved
driveways was a pointless display of wealth and status because they used space
that might be put to better use (The Theory of the Leisure Class, 1899)
was simply not a factor in Johnson’s works. Johnson’s conclusion on improper
land acquisition and use was based purely on dollars and cents: for a farmer,
unprofitable land was not an investment, and no amount of wishful thinking
would make it into one. Johnson’s predictions about an impending time of property
price collapse and hurt egos came to pass in the 1920s with the agricultural
depression, which was in full swing by 1924. The bubble burst was possibly
delayed by World War I. The Dust Bowl and Great Depression of John Steinbeck’s The
Grapes of Wrath was an epilogue to a situation that had begun many decades
before.
In 1922, shortly before the agricultural
bubble burst spectacularly, Johnson wrote another article, “The Promotion of
Thrift in America,” in which he warned, again, that the American land-owning
farmer was overleveraged. He also identified the existence of a tenant farmer
class whose status was due to lending policies which encouraged current owners
to become overleveraged through easy mortgages, thereby inflating property
prices, but prevented first-time buyers from entering the market. The dispute
between NIMBY and YIMBY is hardly new. To further exacerbate the situation, the
agricultural sector had begun to receive federal subsidies as part of the war
effort. While Johnson didn’t mention this in his article, the subsidies further
distorted the connected real estate market as they made farming appear more
profitable than it was. In response to criticism for his decision to refuse to subsidize
agriculture in any way, Calvin Coolidge, who was desperately trying to salvage
the American economy and took a firm anti-subsidy, anti-price control approach,
said, “well, farmers never have made much money.” Johnson’s predictions from 1907 came true, but Coolidge’s 1926
decision on subsidies received the blame.
What relevance, one might reasonably ask,
has a set of observations from 1907 on the investment attitudes of, primarily
Midwestern, American farmers have today? Why should these observations be
combined with comments on status, work, and society made by a controversial
academic? The reason is best exemplified by Sen. Marco Rubio’s article in the National
Review titled “The case for common good capitalism.” It was
an apology of soft socialism swaddled in pseudo-religious sanctimony culled
piecemeal from various Catholic encyclicals. Since Kevin Williamson already dissected the article and its flaws, there is no need to rebut Rubio at this juncture. The overarching thesis
to Rubio’s piece is that society has robbed the working man of dignity. The
logic is tangled, to say the least, and it crescendos to the conclusion that a
shadowy, disembodied society has mugged the working man and taken his dignity
(or sense of status). The basic equations appear to be as follows:
- burst property
bubble = conspiracy to deny ownership, at least dignified ownership, to average
Joe
- loss of jobs for
unskilled labor = denial of right to work;
- lack of
workforce-owned corporations = some vague travesty that is tied to denial of
ownership.
For this last, Johnson in “The Promotion
of Thrift in America” specifically mentioned such corporate arrangements as
complete failures because they created hostility between employers and
employees, and in fact reduced employee-loyalty, since the latter
believed that such arrangements were intended to defraud them of their wages.
In his two articles, Johnson frankly
argued that only the middle-classes and up practiced thrift and engaged in
capital acquisition and investment. He dedicated most of “The Promotion of
Thrift in America” to expounding upon the ways that the “wage earners (polite
speak for working class back in the 1920s),” farmers, and the lower-middle
class not refused to pursue capitalist behavior but would respond with active
hostility when thrift campaigners (yes, there was an save-and-be-a-capitalist
campaign in the aftermath of World War I, right up there with the temperance
movement![2]) suggested that they should. The crux of the issue, one which Rubio’s
article refuses to recognize, is that, like in the 1920s, the roots of broader
societal complaints lie decades in the past. The efforts to create a quick fix
are therefore both futile and infantile. Every couple of decades a specific
subgroup, be it the overleveraged farmers of the early twentieth century or the
unskilled oil workers of Peterson’s youth, discovers that its values are defective
and that the signs its members believed to be markers of status are
liabilities. Eventually the price of the decisions built on these misplaced
values and symbols must be paid. In order for the payment to occur in a way
that does not unjustly burden the rest of society, we must recognize that the
scarcity experienced by the indebted subgroup lies more in their contempt for
the genuine capitalist way of life than in any wrong society has inflicted upon
them.
[1]
Despite attribution to Seneca, I have been unable to find this aphorism among
his works currently in my library, and I would be very appreciative if someone
could tell me in which work he wrote this phrase (if indeed he did).
[2]
Interesting which of the two movements gained enough political clout to have its
agenda inscribed in the Constitution.
Notes On Liberty 