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Resiliency vs Interdependence

Long ago, most Americans lived as Laura Ingalls Wilder chronicled in the “Little House” series.  Pa Ingalls and family were out in the wilderness, living with the rhythm of the land and putting away what they could to survive long winters and perhaps beyond.  The family’s net worth was what they had around them.

That life has been replaced with interdependence based on a dollar value assigned to absolutely everything.  We all get by with any extra scratch, should there be some, not stored up to get through the winter but properly invested in convertible assets.  This means everyone is subject to  the “free market”, which determines the value of all assets including experience, talent, and work.

That interdependence has changed our world to one with much less hard work or struggles against nature, and yet to many it has become as hostile as any winter on the Great Plains.

Pa Ingalls, hard at work

Pa Ingalls, hard at work

Out on the late 19th Century frontier what it took to survive was something a bit more than hard work and a diverse collection of skills.  It was essential to build up resiliency, a store of food and fuel and just enough gunpowder to hunt for fresh meat.  The exact amounts were determined by the seasons and the nature of the land itself, and reading the signs given by the land was a critical skill.

Life in cities at that time was essentially not that different, though it depended on the vagaries of social interaction more than the cycle of seasons. Big companies kept a few months’ payroll on hand in cash and tried to be self-insuring, taking a very long view of their development, image, and relationships with customers and suppliers.  Shocks might come through the market but big industrial firms were reliable, steady institutions. This concept became the way most people lived by the end of the 19th Century, and remained more or less intact as long as the USofA was a manufacturing nation.

This all changed around 1980 as cheap capital made stores of supplies or money salted away to get through the rhythms of life look very expensive.  It seems contradictory, but the concept is critical.  And that brings us to modern investment banking.

Look at all this idle capital, er, safe cusion for market fluctuations

Look at all this idle capital, er, safe cushion against market fluctuations

When capital becomes cheap through a concerted policy you’d think that it would also be cheaper to keep a lot on hand.  But decades of this approach starting in the 1980s increased the role of investing and banking in the economy, tying nearly all capital to the whims of the market.   Thus companies that have a lot of cash on hand look “troubled”, at least in the sense that they are not leveraging their assets to the maximum possible return.

This is how resiliency, or the ability to survive ups and downs independent of the vagaries of capital markets, becomes the ultimate casualty of “Supply Side” policies and an increased role for financial markets – paradoxically in eras of cheap money.

The situation is greatly exacerbated by big improvements in transportation and communications infrastructure.  The “Long Depression” of the 1880s came to pass largely because of the development of railroads and the telegraph.  These technologies linked up otherwise isolated “markets” in towns across the US, combining them into one market.  The stores of capital, supplies, and so on that were necessary for any market to make it through hard times were now shared.

The great gains in efficiency brought by one shared market was a boon for investors, but the process of realizing those gains meant that what was once “resiliency” became “excess”.  The real gains of technology improvements would not be realized until that capital was put to use and the workers put to new jobs – in larger, more efficient factories.  That took time in the 1880s, setting up a terrible depression that ended with good times in the “Gay 90s”.

One world, one people - one market.  Yikes!

One world, one people – one market. Yikes!

In the 1990s through the 2000s we had the internet and containerized cargo creating one big global market out of many national markets.  The effect is the same.

Like any social agreement, the economy we have is subject to beliefs, fashion, and political philosophy.  The current system we all operate under is fueled by cheap debt and a general belief that idle assets are wasted assets.  But these are not the same values that made the nation we live in.  These are not the values of people like Pa Ingalls, who valued independence and resiliency.

What we are ruled by are values that make us dependent on each other, all around the world, far more than we could ever imagine.  The storms that cross the oceans to challenge our survival are not biting cold or sweltering drought, but man-made disasters created by people with values that we often understand less than the rhythms of nature herself.  With economic integration there is a natural need for political integration, since we all rely on each other.

Pa Ingalls had no need for this.  His life was defined by what he could harvest from the land around him.  Very few of us live his life, subject instead to the whims of global politics and the values placed on things by investment bankers – none of which we can control or usually even understand.  It is a very different and much more vulnerable world, at least from the perspective of an individual who values freedom and independence.

And that is the real political divide that we face today.

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17 thoughts on “Resiliency vs Interdependence

  1. Pa Ingalls needed capital and equipment and both these things came from cities. People who farmed wanted manufactured things in their homes. That’s how the Sears catalog came about. They wanted the use of railroads. The view of farming as a holy, pure life is typical of St. Paul liberals.

    • Very little of what he owned came from cities. And “holy” is your word – I’m not from here and I know perfectly well I’d never survive in his world. I’m quite thankful to be in this one. But this is not about me and I’d prefer you not try to make it that way.

  2. this is why capitalism is bullshit, we dont live in a fantasy world of coonskin hats & always going west to screw the native americans anymore

    • That is one conclusion, yes, and I won’t say it is invalid. But to say “capitalism is dead” is to say we have to re-invent nearly everything, and I don’t think very many people are ready for that – nor do I think we’ll come close to getting things right, especially given the history of trying.
      Interdependence does mean we’ll all have to be playing by at least similar rules, and we’re nowhere near that right now. Forcing those rules from above doesn’t seem to work very well, for what I think are obvious reasons, so we’ll have to work it out.
      And to defend Pa Ingalls a bit, he did try to be understanding of the natives, at least as his daughter wrote about him. I think it was probably genuine, too. People had enough to worry about just surviving so why go causing trouble? Life was pretty miserable, getting along would have been rather important. Granted a lot of people made a living screwing over the natives, but I think the average Indian Agent kept moving and never had to deal with the consequences of their actions.

  3. “The romantic view of agriculture is deeply ingrained in the American psyche. It was given its classical literary expression in the writings of James Fenimore Cooper who was deeply influenced by the agrarian teachings of President Thomas Jefferson and the Marquis de Lafayette. In this view the strength of the country lay in its independent farmers, the “yeomen.” Democracy could only flourish when based on the holding of independent land and the production of food. Industry was perceived as the enemy of democracy because it concentrated wealth in the hands of a few affluent merchants and bankers.”

    from Encyclopedia of American Studies

    The whole trajectory of populist politics (including Andrew Jackson) and the Populist movement and party was a resentment against big banks, big business, and big government. To their credit they created cooperative institutions, but the rise of industrial america always went hand in hand with the industrialization of agriculture.

    People were also living in cities that thrived on industry and finance. Those with populist thoughts in their head have tended to think that industry and finance are dirty and dishonest because it didn’t involve handcrafting something or working the land. Making steel was a nasty business but a worker could get in 1 day what they would earn in 1 week in Eastern Europe. That’s why they came here.

  4. I don’t want to argue too much but it seems like a stretch to say that this is the real political divide today. No one lives like Laura Ingalls Wilder did and I don’t think anyone can. I think everyone agrees that the world is a lot closer together and we all rely on China to make things for us and that’s OK. So if you just leave off the last line I think this is OK as a history review and maybe philosophy but no it’s not that relevant to politics today.

  5. I´m kinda sure there is another trend now when people build their homes completely off the grid. Seeking harder yet meaningful life, when one can be more with his family and where social interactions are not based on earning money, can be very helpful. Or do you know any other reason why would people do this? I mean, not even the most beautiful city with great infrastructure can´t replace that feeling when you wake up and feel surrounded by nature.

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