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Economic Lessons from the Amish

June 21, 2007

Tags Free MarketsPhilosophy and MethodologyPrivate Property

The Amish are interesting people. Having lived much of my life in a rural area with a significant Amish population, I have had the opportunity to interact with them, and have some level of understanding of the culture. It is a fascinating study.

The Amish make a conscious choice to live without most of the modern conveniences that Americans take for granted. They have strong religious beliefs and a commitment to principles. Different communities have varying perspectives on what is allowable and what is not, but they all have a common belief that they must maintain a separation from the world and worldly things. They provide lessons to us that they may not intend, but are valuable nonetheless.

Their life is centered around the local Amish community, and they live separate lives from non-Amish people around them. They generally don't use insurance, but they share risk in a different way. They have a strong sense of internal community, and in time of disaster, they are drawn together to help their neighbors. When someone's barn burns down, there is a barn raising, where the whole community gathers to build a new one. It is an amazing display of cooperation.

Many people view full employment as the primary purpose of society. It is a concept that animates much of the discussion in economics and politics. If full employment truly is the primary goal of our society, then we should follow the lead of the Amish. They have developed a social structure that provides full employment for every member. In fact, the problem is not too little employment, but too much employment. They have to have large families with many helping hands to absorb all of the employment that the lack of modern equipment affords them.

Because they do not use tractors, they need many hands to plow, cultivate, and harvest the fields. Milking cows by hand is time-consuming manual labor. Shoveling manure by hand provides employment for some of the less fortunate members of the family. Cutting, transporting, and stacking wood for heat and cooking provides more work that can keep someone busy and sweaty for a considerable period of time.

By being fairly self reliant, rather than maximizing the benefits of national and international divisions of labor, they choose to be less efficient and to perform activities that subtract from the time they can devote to what they do best. By shunning modern labor-saving devices and technologies — such as electricity, hay bailers, power equipment, and modern milking facilities — they choose to live with less of everything. Many fall within the modern definition of poverty. Nearly all use child labor. They would starve without it.

Living with less is not necessarily a bad thing. I believe that most Amish people are very satisfied with their chosen lifestyle. Most do not regret the choices they made and find their lives quite rewarding. They are generally people of character who stand up for what they believe in, for the whole world to see.

Should full employment really be the primary goal of modern society? The Amish live in an agrarian economy. It thrives in the midst of modern society, not because of inherent advantages, but rather because it borrows much more from that society than meets the eye.

Most third-world countries are also agrarian societies, mired in a state of misery, reflecting the primitiveness of their economies. What they don't have, that the Amish in America do, is economic freedom, secure property rights, a well-developed system of trade, legal protections, fairly reliable money and access to the fruits of capitalist society. Yes, Amish do go to the store to purchase some things that make their lives simpler and more pleasant. They rely on cars and busses to transport them long distances. They use telephones when necessary. Trucks bring their milk to market.

Modern society is highly dependent on the division of labor, on vast networks of traders, on information and communications. The goal of modern society is not full employment, but rather the increasing prosperity that comes from continuing innovation and increasing specialization, trade and capital accumulation, where even the poor are better off than most people in the world. Economic freedom in fact reduces unemployment to levels significantly below those in less free countries. The Amish may hold the secret to full employment, but rejection of modern capitalism is full employment in poverty and hardship, not the rich fruits of progress.

 


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