CH Smith gets it
Still thinking about the 'gig economy' vs solid corporate jobs. Remembering families I knew in various places. Corporate jobs were definitely superior in Manhattan in the '50s. All the fathers had W2 jobs, all were able to support a family without working viciously hard. Work was 9 to 5 Mon through Sat. Fathers could drive kids to school and eat dinner at 6. I didn't know anyone who worked from home.

Later, in Enid and Ohio in the '60s and '70s, I knew several people who worked at home or informally. One lady had a giant folding and collating machine in her house and ran contract work for various printshops. Another lady sold tropical birds from her house. One father bought and sold antiques, especially guns. These entrepreneurs got along fine without constant intense slaving. They had time for kids and enjoyment.

Why do modern entrepreneurs have to work 27 hours a day to get by for a year or two until they collapse or go bankrupt? Why was at-home work relatively easy in Enid but not in Manhattan?

Why was at-home work easier 40 years ago? Simple answer. Less regulation, less litigation, less inflation in health care and other REQUIRED expenses.

Why was Enid a better place for at-home work than Manhattan? Subtle answer. Enid was cheap and isolated, a self-sufficient universe. You could establish a comparative monopoly for your skill. Manhattan was close to Topeka and KC, which made monopolies harder to create; and a college town is always more expensive.

Charles Hugh Smith states the modern problem completely and concisely:

If we seek a coherent context for the new year, we would do well to start with the foundations of widespread prosperity. While the economy is a vast, complex machine, the sources of widespread prosperity are not that complicated: abundant work and a low cost of living.

When work is abundant, there are opportunities for many skill levels, and employers must bid for the most productive, reliable workers. This supports wages and widespread employment.

When the cost of living is low, even low-wage households can not only get by but put a little aside if they are prudent and thrifty.

This may seem obvious, but the conditions required for work to be abundant and the cost of living to be low are not so obvious. For work to be abundant, it must be easy to start a business, easy to operate the new business, easy to make a profit so the business can survive the first few years and easy to hire employees.

Smith doesn't discuss the comparative monopoly factor. Globalism OBLITERATES local monopoly. Nearly all businesses can be undercut or undermined or outlawed by Amazon's infinite bully power, leaving only a few menial skills like cutting grass. For the moment. Until Amazon MowDrone comes out next month.

Graybill.

Labels: Old Economy Steve, skill-estate

  ¶ 9:55 AM