Americans generally have more spending power now than 50 years ago, across almost all income levels. But the perception is that lower income families are losing ground. Of course, some are, but generally, pretty much all of us can buy more and better stuff than we ever could in the past. In 1909, many things we consider absolute necessities didn’t even exist. So why the perception of slipping back? The answer is that income distribution is indeed diverging. The extremely rich are getting much more of the expanding pie than anybody else, and those at the bottom get the least:

Chart from the Afferent Input blog.

A rich class of people are becoming much more wealthy, and most other people are becoming somewhat more wealthy. So what? The problem is that our happiness is based on how we perceive we’re doing compared to those around us, and not on any absolute measure of our well being. This leads to three observations:

1. A shepherd living in a hut in one of the poorest countries in the world is generally just as happy as someone living in a house in America, one of the richest.
2. Displays of wealth are much easier for us to see than a measure of actual happiness – it is hard to fake driving around in a Lexus, but easy to hide psychologist visits for our depression.
3. As soon as a remote shepherd acquires a television, his happiness will likely decline since suddenly he isn’t comparing his success with his shepherd neighbors, but instead to the wealthiest people on the entire planet.

Recognizing this human frailty – that our built-in happiness meter is relative rather than absolute, and therefore set more by how much stuff we see our neighbors have rather than by how much we have, is the only way to counter its effect. Moving yourself to an absolute rather than a constantly receding relative goal allows you to be happy with what you have even if others accumulate more. This is the crux of keeping up with the Joneses; the only way to win is to not play the game.

This also explains the discomfort I feel about credit card debt in the US. If it really did add to happiness, then all for the better. And indeed, some people use credit card debt for absolutes – food, basic shelter, etc that increase their happiness since they don’t starve to death. But the majority use it to try and exceed those just ahead of them on the consumption curve. Credit card debt therefore creates a self-fulfilling prophesy – you see your (current) peers pulling away with fancier homes, cars, clothes and stainless steel appliances, and you feel worse about yourself. So you also whip out your credit card to catch up, and the cycle continues. But nobody actually gets any happier, since the top keeps pulling away.

Have doubts? Let’s look further afield than the United States, where I suppose it can seem like I’m splitting hairs. Below is an IMF figure for world income distribution, albeit from 1989, although I doubt it has changed dramatically in the meantime. The people at the top of this diagram (United States and friends) are basing their happiness against their neighbors rather than the vast majority of the world.

Politics | 8 Comments »

The Just In Time business concept is like minimalism for manufacturing, but Martha Beck’s recent article has echoes of minimizing it forward and brings it to a more personal level. I have a hoarding instinct, and I’ll stand by the idea of keeping a week’s supply of food and water on hand along with basic medical and emergency supplies. But especially with the worrying press reports on the economy producing fear, this can become an obsession. The fact is that stuff is cheap and easy to get – we’re drowning in stuff. I agree that:

switching to a just-in-time mind-set (“Everything good is readily available”) restores health and balance to our lives

even though it is really tough to do.

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Interesting poll on what people consider necessity vs. luxury (via WorldChanging). Perceived necessities are shrinking in the recession, but:

Finally, there’s the automobile — the ultimate survivor. It’s been around for nearly a century, but in good times or bad, it retains its pride of place at the top of America’s list of everyday necessities.

I hope this means “I need a car in my current situation” rather than “I need a car no matter what.” There are many places in North America where a car is a necessity – I grew up in a rural area with zero public transit, and the closest grocery store was over eight miles away. If I lived there now, I’d also tell the pollster a car is a necessity. Food is a baseline need, and if you need a car to get food, then yes, a car is a requirement.

However, such needs are a matter of circumstance. Realizing that your current situation is often a choice and can be changed means that you can largely define, and therefore limit, your needs. When making major decisions such as where to live, what size and type of home to buy, what type of work to do, or whether you have children, you are pushing some things from luxury to necessity. Make these choices carefully, and be mindful of the needs they will trigger.

Uncategorized | 1 Comment »

A while back Paul Graham realized that stuff is no longer valuable. Just as food used to be very expensive, and thus malnutrition and starvation were real issues, now overeating is by far the bigger danger for most people in America. The same thing has happened with stuff – it is now so easy to produce (or import) and acquire, the greater danger is having too much rather than going without.

Of course, you can’t talk about “Stuff” without a nod to George Carlin’s famous skit (NSFW: some swearing).

Random | 3 Comments »

Last weekend, I read When Consumers Cut Back: A Lesson From Japan in the New York Times. I was hoping it would be about the benefits of thrift, but the article starts off a little differently:

As recession-wary Americans adapt to a new frugality, Japan offers a peek at how thrift can take lasting hold of a consumer society, to disastrous effect. The economic malaise that plagued Japan from the 1990s until the early 2000s brought stunted wages and depressed stock prices, turning free-spending consumers into misers and making them dead weight on Japan’s economy.

Wow – “dead weight on the economy?” Too often we forget that the economy is meant to serve us, and not the other way around. How do we reconcile a society that demands ever-increasing consumption, yet is running into environmental and human limits? Less interest in cars is a good thing, not a bad thing, yet the article disapprovingly states:

… only 25 percent of Japanese men in their 20s wanted a car, down from 48 percent in 2000, contributing to the slump in sales.

There is no easy answer, and the economic pain is real. That said, there are plenty of jobs that need doing – they just aren’t the jobs that we’re currently set up to do. Let’s think about services, not stuff; more teachers, less cars; designers who make thoughtful products that last; repair, not obsolescence. Trying to prop up the failing status quo of an out of control consumer society is harmful, foolish, and destined for failure.

To help us keep the economy our servant and not our master, we need to measure more useful things: GNP is supremely flawed as a measure of success. Measuring contentment is more difficult than measuring dollars, but isn’t it much more important?

Politics | 5 Comments »

“I might need it someday” is really a curse for getting rid of stuff. Treehugger has a typically fiddly Lifehacker points to a fiddly way of overcoming the urge to hoard stuff “just in case,” but I think their this method would likely result in keeping a mental inventory of what you’ve sold vs. what you’re replacing with the funds. That’s a link to the stuff that should be severed right away – out of sight is not out of mind, and snipping the mental link is probably even more important than physically removing the item from your life.

Here’s an easier way that helps me. When I legitimately think I might need something in the future, but don’t need it now, I pitch it to myself as a “minimize it forward” event. I give it away, usually via freecycle, or sell it, free and clear of any special accounting. Someone else uses it and extracts value from it. If I need it again, there is a decent chance I can find it within a few days on freecycle, craigslist, or a garage sale. If not, I get creative, do without, or buy a replacement. The key thing is to try and keep everything in play – ideally someone should be getting value out of every item at all times. If I’m sitting on something “just in case,” I’m basically preventing it from being used, and probably causing another one to be created for someone who needs it.

Minimizing is good for the world, not just the individual, so keep what you really use, and put the rest in play.

Uncategorized | 9 Comments »

Every time I’ve moved, I have taken a huge amount of stuff along – instead of culling before the move, I’ve always done it on the other end. I think this is inevitable. Wouldn’t a move be the perfect time to reduce the stuff in our home? Reasons why it doesn’t work that way:

1. An employer is paying for the move. Why get rid of it when it moves for free? When we moved to our current city, in fact, insurance was by the pound, so we moved a bunch of cinder blocks (supporting a door desk) even though we didn’t think we would use them. That was crazy, but it is easier to let things linger in the move pile when you aren’t paying for the hauling.
2. There is fear and uncertainty in a move – it is very easy to fall into the “we might need this in the new place” trap since we’re nervous about owning our first place, and we honestly don’t know what we will really need. In fact, we’ve been buying more stuff because we’ll be setting up the place from scratch. The new place is much larger (we have a 21 month old in our one bedroom apartment now, which is mighty cramped), so it is easy to expand outwards.
3. Even stuff we really dislike, such as our amazingly ugly sofa from my wife’s graduate school days, is going to be moved because we have visitors coming to help us after we move in, so we’ll need a sofa right away in Canada for them to sleep on, etc. We have no idea where to buy a sofa in Montreal, and since we believe in investigating purchases thoroughly, we’ll end up moving this one to buy us time to make a good decision on a new sofa later. The realistic alternative would be to give this one away while in the US, then buy a temporary sofa (probably equally ugly and more poorly made) in our new city, and then research and buy the one we really want later. Yes, we could have replaced it here in the US and shipped the new one, but we don’t even have good measurements for the place we purchased.
4. It is surprisingly difficult to find stuff you like at a good price. We comparison shop and wait for a good deal. If we needed everything all at once right after moving (how long can you really wait to get a kitchen table?), we’d end up buying a compromise at an inflated price due to haste.

I wish it were otherwise – I still cling to the fantasy of the fresh start, including the thought that maybe the truck will start on fire and we’ll get a hefty insurance payment to start fresh. But beyond the environmental damage of all that stuff being destroyed, I know that replacing it all would be a nightmare, and we’d end up with so many compromises we would likely be worse off from a minimalist perspective. We have given away stacks of stuff and sold some things we don’t need, but we’re still moving a substantial amount of excess. Hopefully we’ll have enough discipline to really do the cull on the other end.

Home | 6 Comments »

$25 – $50 million = beer and pretzels

Money | 1 Comment »

Lots of headlines are popping up predicting a US or global recession. I don’t claim to understand economic theory at more than a basic level – I took a few economics classes in college and manage our family investments, but that’s about it. We might go into a recession this year (my guess) or we might not. Either way, it is a fine time to re-examine how it would impact you.

Don’t count on the media to help you figure out what to do. On the one hand, there are lots of articles about stimulating spending in order to avoid recession, including giving people money in the hope that they spend it quickly and NOT use it to pay down debt. Yet personal advice columns are exhorting individuals to examine their spending carefully and reduce their debt, warning of job losses in a recession. So what should you do? Don’t be fooled by any rhetoric that you should feel good about spending because it “helps the economy” even if it puts you into debt that you might not be able to manage if things go south. The economy exists to serve you, and not the other way around – it isn’t some separate thing that we need to feed at our own expense. Spend money only if it is good for you. Decouple your spending from your earnings as much as you can so that the volatility and uncertainty in the world, which you can’t control, will not yank you back and forth as it rises and falls. I wouldn’t be foolish enough to say that a recession won’t hurt many people even if they have stripped their consumption to the bone, but hopefully living below one’s means whenever possible will limit the pain.

There is no better time to be a minimalist than right now – and that is always true, whether a recession is looming or not. If you’re personally at risk in a recession, learning what is essential to your happiness will help you through any bad times to come, whether they happen this year or a decade from now.

So, TGIAM – Thank Goodness I’m (attempting to be) A Minimalist.

Politics | 1 Comment »

I don’t know what store this is, but I can’t stand egregious waste. Basically, rather than dilute their high-end brand, they destroy old merchandise in full view of customers if it doesn’t sell. I suppose the intended message is that their stuff is so exclusive that it should be destroyed rather than be seen in the dirty hands of the un-cool. Or that you may as well pay full price, since they certainly won’t be doing any discounting. Dunno. Heck – I don’t even go into stores that keep their air conditioning on with their doors wide open in the summer, so this is way over my line.

Environment | 3 Comments »