Mises Daily Articles
The Case for Frugality
The Sydney Morning Herald declares, "Greed Is Bad in a New Era of Frugality."
The Philadelphia Inquirer explains, "How We Bucked the Urge to Consume."
The Calgary Herald advises readers on "Learning to Love Life with Less."
Frugality: It is spreading as a new ethos through the Western world. It is a natural and healthy reaction to a politically created economic downturn that has devastated the stability of so many families. As political elites demand ever more in taxes and entitlements, and as white-hot printing presses increase both currency and prices, the average person is grasping for whatever control is possible of his own economic future.
In times past, one of the main mechanisms of a family's economic control was to work harder and earn more. Today, hard work is discouraged and punished. It is discouraged by regulations such as those policing home businesses and enforcing minimum wages. It is punished by increased taxation and disappearing retirement and pension funds. Meanwhile, the politically connected have become an economic elite; they include Wall Street, public-sector employees, big banks, and bailed-out corporations. These elites, and not the families of average workers, are the ones who benefit from the sweat of hard labor.
Given the circumstances, it is easy for frugality to be viewed as a necessary but bitter pill that you are forced to swallow and would much rather spit out. I have come believe the contrary; I view frugality as a mechanism that has both freed and enriched my life. I view it as one aspect of a far larger lifestyle philosophy.
Several years ago, my lifestyle changed dramatically due to a single realization: material possessions cost money; money is time; time is, in a literal sense, life. The foregoing sounds ludicrously obvious, but I had never before looked at my possessions as representing units of time taken from my life. If X cost $100 and I made $25 an hour, then X cost me four hours of life. Or, rather, it cost four hours plus whatever time was consumed by the transaction costs of making money, such as the time, unpleasantness, and expense of a commute. When I made that paradigm shift, I realized the cost of my possessions was not merely an amount of money but also and more importantly the amount of my life it took to earn them.
I looked at a pair of expensive shoes that I had worn only once because they were uncomfortable. The money to buy those shoes had cost three hours of my life, which cannot be replaced or reclaimed. Without a hint of morbidity, I wondered, When I confront death, how much would I give to gain back the hours I squandered on useless shoes? In a sense, I applied marginal utility to the time allotted to my life. Right now, the hours can still seem boundless, and it is tempting to value each unit as if it were part of an infinite supply. Of course, it is not. Again, without morbidity, I know that I have only so many hours left to live.
I want the hours of my life to be filled with reading and writing, laughing with friends, and watching movies with my husband. I look forward to being in my garden in spring and to cooking complicated ethnic meals that bring the tastes of the world onto the table of my farmhouse kitchen. I want to see the expression on my husband's face when he bites into the meal that is currently simmering to tender perfection on the stove. I long to travel the world and to viscerally experience the places that fired my imagination as a child; someday I will know how stars in the night sky of Africa look and what a jungle smells like.
Pitted against these goals are the many, many extraneous possessions for which I have traded both money and units of my life; these possessions are the "useless shoes" of my life. (I call a possession "extraneous" or "a useless shoe" when it is neither necessary nor worth what I traded to acquire it.) Some of the items I bought on a whim, others I bought because they were expected of me (e.g., to wear a certain style of clothing to work). Still others I purchased because spending money provided a temporary boost out of a mood I wanted to change, like boredom or the blues. Much like eating when I am not hungry, buying something I didn't need or truly want filled an emptiness — at least, it did so for a brief moment. Arguably, that flicker of pleasure or fulfillment was itself a negative, because it substituted for directly dealing with whatever was wrong.
And then there are the purchases I will never regret: books, DVDs, my sporty little econocar, our farm, the ingredients for a superb meal. Those items provide a utility that is well worth the cost — and, yes, I count pleasure as "utility"; pleasure is a most "useful" thing. I do not stint on purchasing the pleasures that make life both comfortable and delicious. And I happily buy anything that increases the comfort and satisfaction of my husband, who, fortunately, shares my frugal views.
People respond to an understanding of the fact that possessions represent time taken from life in different ways. First and foremost, the realization is likely to make them more judicious in the acquisition of "things." But, quite apart from exercising more judgment, there are two main responses.
Again, some people will redouble their efforts to earn more and, so, to reduce the amount of time that any purchase represents. It is a version of the American dream: work hard and prosper. I have no criticism of those who choose to redouble their efforts to make more money by working harder or smarter or taking a second job. For reasons mentioned earlier, I believe political circumstances make this an increasingly less productive path.
Thus, working harder for money is simply not my choice. I want to invest less of my life, not more, into what feels half like a rat race and half like a holdup.
Rather than diverting weeks and months into making a few thousand more to spend on "useless shoes," I choose to own my time by paring the cost of life down to what gives me value. This is not a statement of asceticism. I honestly do not feel the want of any material possession. Part of the reason is how cheaply I can obtain most of the goods I truly value. Books, DVDs, good used furniture, kitchen equipment — all these are readily available at yard sales or other bargain outlets.
But that is the how of frugality, which deserves a column (or book) in itself. This column addresses the why of it and argues for frugality as a source of enrichment, not deprivation.