How the Middle Class Used To Be Affordable

The open market is vastly overrated.

In a previous era, we spent much if not most of our time in safe refuges, coves, and harbors.
We ventured into the open market as we felt it necessary, as a fisherman periodically ventures out from a placid bay into the rough and open sea.

In our own era we have never seen land. We live our lives adrift in the open market. We’ve never known safety from the merciless storms of vast aggregate demand.

So ubiquitous is our system of liquidity that we have forgotten that for most of the human experience, the open market has supplemented our livelihood. Only for a few merchants and nobles was it ever a mainstay.

We forget that any alternative exists.

And because of this we are blinded to the inherent disadvantages of our current system.

We fail to understand why it was that mere decades ago the people easily enjoyed a much higher standard of living, a now increasingly elusive “middle” class standard of living with less income.

We will easily find the answer if we understand an important principle:
Many basic human needs are satisfied much more efficiently outside the open market.

Money is an efficient means of doing business with strangers.

But doing business with strangers is very different than collaborating with those we know.

A stranger knows nothing of our reputation, has no pre-existing obligation or relationship to us, has no incentive to help us without a cash incentive. Enlisting their help is not easy.

Let’s consider the price of some very basic life needs on the open market.

A roof over one’s head = at least $700 per month if we factor in utilities or about $50 per night at a hotel. About $8400 a year for the most modest of accommodations!

Sex = $50 minimum-hundreds or even thousands of dollars a pop depending on the service provider.
Or 5-10 dollars a pop to pay cover charges to get into clubs. 5-10 dollars a pop for overpriced drinks once inside the clubs. Hundreds of dollars for fashionable clothes to wear to the club.

Basic childcare = Hundreds of dollars per month, thousands of dollars a year.

Home-cooked meals = Private chefs cost a small fortune. They are accessories of the wealthy.

When one is totally exposed to the open market one requires a bare minimum of about $20,000 just to live a subsistence lifestyle one minor accident away from strife and privation.

On the open market, all these basic necessities are incredibly expensive.
Just staying alive costs nearly as much as a high end college tuition.

And it is taken for granted in our culture that every year, we must pay our tuition in order to eat and avoid sleeping on the streets.

Our view of life is distorted.
These necessities are all services that friends, family, significant other can easily provide to one another for a fraction of the price or even for free!

It is by its very nature cost ineffective to rely on strangers for these needs!

A stranger who provides a roof or a meal is exposed to the caprices of a thousand customers. The price of their service is determined not by the courteous and upright, but by the most troublesome and dishonest among us.

Purchasing a bed to crash in for 8 hours at a motel in no small thing.

-Because we are unknowns, we are paying for the risk we represent to the owner.
-Thus we pay for any damage, wear or tear we inflict in advance regardless of whether we inflict it or not.
-The price includes the damage caused by the most disruptive and destructive customers.

Most of the money we pay isn’t for the room or the bed we sleep in!

The major expense of purchasing these services from a stranger is compensation for the inconvenience inflicted on the stranger.

If one refrains from approaching a stranger in the first place. Most of the trouble and expense vanishes.

Furthermore, a pre-existing relationship allows multiple means of remuneration for services provided without relying on liquid capital at all! It is in the interests of someone we know to help us. They know we will help them in turn!

The pre-existing relationship provides a haven from the savage free-for-all that is the open market!

How did people several decades ago enjoy lives of luxury by present standards with less liquid capital and fewer wage earners?

The typical answers in most mainstream political and economic columns:
-Strong economic growth
-Better job market
-Traditional values etc. bla bla bla.

All of these were relevant factors, but none of them was the decisive factor.

In the now nostalgic 1950s-1960s, Western society happened upon a certain balance between the personal market and the open market that worked particularly well.

All the processes that led to our present dystopian age were already in progress, but at that point:

-Services most efficiently handled by the personal market remained mostly personal.

-Meanwhile, a whole slough of services that had been stagnant at the personal level was being transferred to the open market.
As a result, the economy was rapidly becoming more efficient. New liquid capital was constantly being created and it was flowing like water.
The result was an exciting era of growth and progress.

Sadly, the result of this trend was the eventual transfer of nearly every human need to the open market whether or not it belonged there.

The result has been the social strife, economic stagnation, systemic decay, and widespread social distrust that now defines our precarious lives.

We have learned the hard way that mere subsistence in the tumultuous open market is more expensive than prosperity in the personal realm.


6 responses to “How the Middle Class Used To Be Affordable

  1. Well the world population hitting 7 billion has an impact as well. When I read what “poverty level” is in the US I’m always shocked, because I live on SO much less, but you have to make sacrifices to live cheaply. No bars, no travel, no restaurants, no kids, no frills, a less than desirable neighborhood, taking on whatever work is available. My parents lived through the depression and their philosophy, instead of whining and protesting like so many people do now, was more ‘what does not kill me makes me stronger.’ It is my legacy from them, and one that I am only now beginning to truly appreciate.

  2. I don’t know if the human population is having a decisive impact.
    After all, if you have more people, you have more people available to produce more food and necessities.

    Now, the rise of huge populations around the world to white collar status…that is having a huge impact on the world. We feel this impact every time we’re at the gas pump or in the coffee aisle. The issue has not been that there’s more people, but that there’s now more people consuming more.

    Being thrifty has a huge impact on one’s livelihood, but no matter how cheaply one lives, rent, utilities, mortgage, car, car insurance, health or health insurance…
    In an open market situation, these are the proverbial silverback gorillas in the room when it comes to our finances no matter how diligently we save up pocket change.
    A few generations ago, people were buying less stuff they didn’t need but they also had fewer hungry silverbacks to feed.

    The protesters have inspired mixed reactions, but my next post will address why I believe their activities are only going to escalate.

  3. These necessities are all services that friends, family, significant other can easily provide to one another for a fraction of the price or even for free!

    To a heretic?

    • Even heretics have friends and family.

      Furthermore, I limit most of my heterodox musings to the internet.

      I know better than to challenge someone’s entire reality when face to face.
      Such activity is pointless and only begets defensive reactions or even outright attack.

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