The Daily Reckoning PRESENTS: Since the advent of the industrial revolution, the contrast between the mass man of consumer society and man as he should be – creator and artisan – has upset people who sweat such things. Today, Bill Bonner laments the effect of modern commerce on the soul of man. Read on…
“Men have become the tools of their tools.”
– Henry David Thoreau
(Fair warning: we take up today’s reflection with no particular destination in mind. It is summer, after all. We can permit ourselves an idle perambulation.)
We wandered over to the workshop late in the evening to check on the progress of our summer project. A friend is helping us build a gypsy wagon.
The design and construction are fairly simple. On the top of an old hay wagon, we are putting up oak studs…to which we have screwed tongue-in-groove pine siding. The sides slope outward gently as they go up, making the wagon wider at the top than at the bottom and protecting the sills from water. And the roofline is rounded, made from curved ribs attached to the tops of the sidewalls. To the ribs are screwed in more of the tongue-in-groove pine boards. We plan to cover the whole roof with thin lead or some sort of fiberglass; we haven’t gotten far enough to decide.
When it is completed, it will be painted in pastel shade on the outside. On the inside, the wood siding will be varnished…and painted, here and there, with flower designs. At the far end will be a built-in bed, framed with wood and curtains. Two windows, one on each side, another over the bed, and a door with a pane of glass in the upper part, will provide light. On the right hand side, there will be a small, built-in table with three chairs. Opposite, a cabinet and a tiny counter for the kitchen.
Our wagon is a summer project, both in spirit and time of execution.
Why a gypsy wagon?
Unless you are a gypsy, gypsy wagons have almost no practical benefit. They burn no fossil fuel. They take you nowhere. Yes, you can use them like a spare bedroom to lodge weekend guests, but a motor home would be more useful. Gypsy wagons cannot really be taken on the road, except perhaps at low speeds. They are made of wood and prone to the rot, warp and weathering that a modern motor home would better resist. They require a lot of maintenance…frequent coats of paint and varnish, for one thing. Nor are they particularly practical from any other point of view. Even the gypsies themselves have given up on them, in favor of Winnebagos and Airstreams.
Henry would like to see us do the same.
“Yes, Dad, why are we going to all this trouble?” he piped up the other evening.
This summer, Henry has been put to work as a carpenter’s helper. He is passing tools, holding ends, fetching wood, screws and glue. It is easier than stone masonry, he concedes, but not as easy as playing video games.
We decided to begin our explanation with a paradox that might hold the attention of 16-year-old. “We are doing it because it is completely impractical,” we began. “In this world of constant getting and spending, never-ending search for greater efficiency and better ways of doing things, a gypsy wagon is like poetry…or a quill pen or a pair of spats. It is a refuge for the spirit…a cool and quiet park in a hot, busy city; a place…”
“But, Dad, what are you going to do with this thing?” asked the boy, cutting off our romantic effusions.
“Well, it’s a lawn decoration. Just like a folly. In the summertime, we’re going to park it down by the pond, where it will be a piece of sculpture. And when we walk down there, sometimes we will go sit in the wagon and have tea. Or, maybe we will take out a bottle of Damien’s homemade aperitif and enjoy it al fresco. Perhaps we will have guests who would like to spend the night in it.”
Henry looked dubious.
“Well, then you’d better put screens over the windows. There are a lot of mosquitoes down there.”
“But that’s just the point, don’t you see? A gypsy wagon doesn’t have to be sensible or practical. It’s meant to be completely whimsical…and wistful. It’s a relic of a time gone by. And part of the pleasure is building it ourselves. Look, this thing is only costing about as much as a few dinners out at restaurants in London, yet it’s going to take us weeks of work to build it. But then, of course, we’ll have it for the rest of our lives, probably.”
“Compare that to buying an iPod or some other piece of junk assembled by minimum wage-workers in some Asian factory. What we’re doing is so much more satisfying. We’re using almost no energy and spending very little money. And we’re learning useful lessons about how not to cut our fingers off. Now you know the difference between a wood chisel and a cold chisel…and between a screw and a bolt.”
Henry didn’t seem convinced.
“Well, I’m not going to stay in it if it doesn’t have screens. And neither will anyone else,” he declared.
Henry is as caught up in the modern world as anyone else. He is homo-consumeris-teenagerum. We are hoping to turn him into homo-faber-juvenilis.
Since the advent of the industrial revolution, the contrast between the mass man of consumer society and man as he should be – creator and artisan – has upset people who sweat such things. They lamented the effect of modern commerce on the soul of man. Man, they said, had ceased to be homofaber – fashioning the world around him with his own hands and wits. He had become just another factory hand, a clerk in a counting house…anonymous and nameless.
Radicals and conservatives both mourned the change. Man is alienated from himself and nature, said Marx and Wordsworth.
Jules, given a chance to work in his father’s business this summer, showed signs of alienation.
“I don’t know how people do it,” he had commented. “This is brain numbing and soul destroying…sitting all day in front of a computer terminal, working on things you don’t really care about. I work on stuff. I don’t know what happens to it. I don’t know why I’m doing it. I don’t understand the point of it. And I don’t really care. If I had to do this for the rest of my life, I’d slash my wrists.”
And yet, most people pick up their tools day after day and get to work. The suicide rate has not noticeably soared with advances in living standards and the division of labor. As long as they feel they are making progress toward a better life, their wrists are safe.
Nevertheless, there is a difference. In earlier times, a man drew his sense of worth and his place in the community from his trade. The baker baked. The blacksmith hammered. The cartwright shaved his spokes. And there, for all the world to see, was what he did and what he was. But in modern industrial society, things were no longer valued for their use, but rather for the amount of cash for which they could be exchanged. Marx called this “commodity fetishism.”
Marx was more than a trifle unhinged on a number of things, but on this, we think he has a point.
We can remember how, as late as the 1970s, we still felt master of our tools and the world around us. We had no idea how a particle accelerator worked, but we could still take apart a carburetor and tinker with it. Now, we can barely find it.
And in the consumer society of today, a man works himself to death to maximize his income and then, he throws it all away on gadgets he plugs into the wall. He saves nothing. Instead, he wastes his substance.
All institutions, we’ve argued, tend to get hollowed out over time. It’s already happened to the dollar. The buck is so depleted now, there is almost nothing left of it. But, so too are the things it buys. They are all hollowed out, as well, by mass production, by mass marketing, and by the bad taste of the masses themselves.
We are not the first to say so. There were Victorian artists who were bothered no end by the bad taste of mass production. In fact, one of them, William Morris, who began the arts and crafts movement, had this to say about work in the modern world:
“Nor is that all the evil, nor the worst of it; for the cause of this famine of Art is that whilst people work throughout the civilized world as laboriously as ever they did, they have lost – in losing an Art which was done by and for the people – the natural solace of that labour; a solace which they once had, and always should have, the opportunity of expressing their own thoughts to their fellows by means of that very labour, by means of that daily work which nature or long custom, a second nature, does indeed require of them, but without meaning that it should be an unrewarded and repulsive burden.”
What practical value has a gypsy wagon? Almost none. It is purely ornamental…
But things do not have value a priori. Things are given value by the people who bid. And their views of what has value are shaped by the winds of fashion that blow over them. An iPod may use technology more complex than that of a nose flute, but give an iPod to a stone-age man from Papua New Guinea and he will find it completely worthless. Likewise, you could lay the Papuan’s most precious possessions down on the front seat of a car in Harlem and no one would bother to steal them; they would have no meaning in the ghetto.
It’s true…our gypsy wagon may have little value in cash. We can plug it in nowhere. It comes with no ARM. But, there is real work that goes into it. We planed down the oak studs, and then drilled through the base of the hay wagon so we could put a long screw into the base of the oak. Then, after standing the oak pieces up at the right angle, we took a wide fir plank and struck an arc to make a model for the roof rib.
The saw got hung up on the round cuts, but we learned how to raise the blade so as to give it more room to maneuver. After lunch, we’ll now go sand down the ribs and get them ready to place onto the frame.
The world may go to hell, if it wishes. This summer, at least, we will work on our own folly…a gypsy wagon.
The Daily Reckoning
August 4, 2006
Editor’s Note: Bill Bonner is the founder and editor of The Daily Reckoning. He is also the author, with Addison Wiggin, of The Wall Street Journal best seller Financial Reckoning Day: Surviving the Soft Depression of the 21st Century (John Wiley & Sons).
In Bonner and Wiggin’s follow-up book, Empire of Debt: The Rise of an Epic Financial Crisis, they wield their sardonic brand of humor to expose the nation for what it really is – an empire built on delusions. Daily Reckoning readers can buy their copy of Empire of Debt at a discount – just click on the link below:
Yesterday brought news that Toyota sells more automobiles in America than Ford does. But nothing to worry about, say economists, soothingly.
Of course, we agree; it is nothing to worry about. Like approaching death. You are far better off maintaining a serene outlook. Besides, it is summertime. We do not worry about things in the summer. There is plenty of time to fret in the autumn, winter and spring. Summer is a time for insouciance.
Still, we find that Ford has lost even more than expected in the last quarter – $254 million. And no chance of making it up on volume; those SUVs aren’t selling, despite all the discounts and incentives.
We don’t know how Toyota does it, but it looks to us as though U.S. consumers are slowly running out of money – just as we guessed they would.
“Mortgage default notices soar 67%,” says the LA Times.
Starbucks stock has fallen 23% in the last 30 days. “Service sector activity cools in July,” adds CBS Marketwatch. “Gas costs eat into restaurant sales,” runs another headline.
A new friend, Dennis Gartman, tells us that the economy is definitely headed into a recession that will take stocks down 15% to 20%. He sees a kind of “stagflation light” infecting U.S. markets.
We also see stagflation, but light or heavy…we refuse to worry about it until September.
Meanwhile, the central banks are playing a dangerous game. They’re trying to exterminate the “flation” part without letting the stag part get out of hand. The Bank of England made another move to the upside this week – raising rates to 4.75%. England, like America, has an economy that depends on a lot on marginal consumers, who depend on a marginal property market that depends on low borrowing rates…that are set by the banks. At some point, adding straws to our groaning camel’s back, 25 basis points at a time, they are going to find the one that brings the critter to the ground. But only after they’ve laid it on. Then, they’ll have the stag to worry about; the “flation” will have disappeared.
“But how is it possible,” a man asked us in Vancouver, “to have deflation, when the Feds are all pushing money into the system as if they were shoving commuters onto the Tokyo subway.”
We offer him our standard explanation: “What happens is that the means of pushing money and credit into the financial system break down,” we say. “This is what happened in Japan in the 1990s. The Japanese cut rates to zero. The government borrowed money. The government spent money (it undertook so many public works projects that at one point, the small island nation poured more concrete than all of the United States). But the magic had vanished. As consumers saw the economy collapsing, they became very frugal. They wouldn’t spend and they wouldn’t borrow. Eventually, the authorities couldn’t get any money into the system and prices went down. And then, as prices went down, consumers held back even more, because they knew that if they waited, they could get an even better deal.”
Not that we’re worried about any of this. We’re as tranquil and content as a frog by a mill pond. But we still have our eyes open. And what we see is an economy stalling like a jet out of fuel. Will it be a light landing? Or a hard one? We don’t know, but the risk is that it will come down with a smack.
Next week, the Fed meets again to fix the price of short-term credit. After a long series of “baby step” increases, the Fed has walked into the specter of stagflation. It can raise rates again to fight inflation. But it risks breaking the economy’s feeble credit-stiffened backbone.
Ben Bernanke reads the headlines, too. He’s made a career of watching the Japanese struggle to get out of deflation. He knows how hard it is to resurrect the camel of a consumer economy after it has buckled at the knees. When the time comes to speak up at the next rate-fixing meeting – next week – our guess is that Mr. Bernanke will have lost his voice…and maybe his nerve.
More news from our currency pundit…
Chuck Butler reporting from EverBank in St. Louis:
“The Bank of England (BOE) and the European Central Bank (ECB) both did as I thought they would yesterday, and raised rates 25 BPS respectively. As I was signing off yesterday, the BOE had wet their powder, and the pound sterling was soaring.”
Read today’s issue of Chuck’s Daily Pfennig.
And back at Ouzilly…
*** OK, the United States may no longer be able to make it in the car business, but we’re still number one at finance, right? When it comes to shuffling money, nobody does it better.
But what’s this?
“Wall Street and Washington are fretting that many of the world’s biggest initial public offerings are taking place on exchanges in London, Hong Kong, and Shanghai – and not in New York,” says a Slate news item.
“There is no single reason why IPOs are heading overseas…But as Alan Murray suggests in the Wall Street Journal…Americans are also losing our IPO advantage because we’re not as good at them anymore. A report by Oxera Consulting, which the London Stock Exchange and the City of London commissioned, found that the United States – for reasons that have little to do with Sarbanes-Oxley – is more expensive and not particularly efficient at IPOs.”
U.S. investment banks are too expensive; there’s too much red tape and too many lawyers. Companies no longer need to list their shares in the United States in order to get U.S. investors.
Yes, now even the money shufflers are being outsourced.
*** As you may know, dear reader, we’ve just completed our Sixth Annual Agora Wealth Symposium. Because we knew not everyone could make it to Vancouver, we opted to break out our newfangled high-tech recording devices to document the symposium in an effort to offer our readers a piece of the action.
*** What’s the latest from Zimbabwe? We ask because we always feel that Zimbabwe gives us a hint of what is in store. At 1,200%, inflation in the pitiable African country is the highest in the world. But this week, the central bank of Zimbabwe took steps “to help commerce and everyday life.” What it did was to take three zeros off the currency. The U.S. dollar, formerly quoted at 250,000 Zimbabwean dollars, is now quoted at only 250. You can see what a great convenience this is to consumers. Instead of paying a million dollars for a loaf of bread, henceforth they will pay only 1,000. At least this week. Next week they may be back to paying more.
Gideon Gono, governor of the Reserve Bank of Zimbabwe, went on TV on Monday to address the nation:
“Our currency is in trouble,” he announced gravely. “Our people are experiencing incredible hardships and inconveniences associated with too many zeros.”
Yes, that’s it…hit the nail squarely on the head, Mr. Gono. Give it a whack. But whence cometh all these troublesome zeros? Robert Mugabe, the democratically elected chief of state, lays the blame on “enemies” – both domestic and external.
So, off with the damned zeros! Nothing could be simpler.
How’s that for summer entertainment, dear reader?