Manifesto of Thrift

Chapter 9: MANIFESTO  (here is chapter 9 of my book)

Contents:
Introduction

9.1 Manifesto of Thrift
     1. Thesis
     2. The Situation
     3.  Potentials

9.2 Economics of Thrift

     1.Economic myths and realities

     2. Costs, real costs, avoided costs

     3. The theory of avoided costs

     4. Application of the Theory

Introduction:

In this chapter I present a “manifesto” of thrift. In the dictionary a manifesto is described as a public declaration of intentions, motives, and views and that’s what I’ll do here. Many people might agree that the most famous (and notorious) manifesto ever written was The Communist Manifesto of Karl Marx. Here, I don’t expect to inspire lofty ideals, murders, social upheaval, revolutions, and endless debates about the meanings of words and phrases. However, I do hope to inspire you to be frugal, and as we’ll see, that can have sweeping consequences

The observations and statements in this chapter could be expanded to another book or shelf of books, each with arcane statements, arguments, equations, mathematical formulas and pages of nit-picking footnotes to support them as others have done. But in this book I wanted to emphasize solutions, and thereby avoid getting caught in webs of intellectual pontification. Therefore, this chapter is short, and is the last chapter of the book.

In this chapter, I will begin with a short summary of the manifesto, and then discuss in more detail certain aspects of the manifesto.

You may be more interested in these solutions, in methods for achieving ZCL presented earlier in this book. If the topic of this chapter doesn’t interest you, don’t read it.

You’re going to read it? Well then, here is my ponderous, pontificating, pulchritudinous manifesto of thrift.

　

9.1   MANIFESTO OF THRIFT:

1. Thesis:

A specter is haunting the world, the specter of thrift. All the powers of modern society have entered into an unholy alliance to exorcise the specter. Economists and bankers, CEO’s and stockholders, congresses and presidents, Chinese industrialists and Saudi Kings all fear the nightmare that folks might NOT BUY.

Not buying means masses of imported junk foisted upon people remain unbought on the shelves. Oil prices plunge. Credit cards remain in wallets and bank accounts of common folks grow, giving them greater freedom to be discerning in their purchases instead of living paycheck-to-paycheck and buying day to day. Folks gain a measure of economic independence. And if folks do not buy they need not earn, and therefore need not work as employees. Certain obnoxious low paying jobs have no takers. Sales decline, profits decline, stock prices plunge, recession and depression loom. Patches of the environment that are still pristine remain undisturbed by bulldozers.

Heretofore NOT BUYING was involuntary. Loss of jobs, assets, income and credit forced people to NOT BUY. In the future looms the specter of people NOT BUYING by conscious choice by relearning and practicing old and new methods of thrift; methods detailed earlier in the this book.

2. The Situation:

Change:

The economic world is in flux. Past centuries of no change or slow change have morphed into a perfect storm of change today. These changes are all too familiar, broadcast in news headlines everyday in stories describing outsourcing and off-shoring of jobs, factory closings, floods of imports, hordes of illegal immigrants, relentless technological innovations, inflation, unprecedented personal and national debt, declines in the value of assets including homes and investments, recession, depression, and economic chaos. The proclaimed positive effects of economic change: economic growth, greater wealth for everyone, better jobs, lower prices, have been drowned out it a sea of negative effects. Though some folks have benefited from recent economic change, sadly, American working folks have been at the receiving end of the negative effects.

The fact is no one can count on economic stability anymore. There is only turmoil. Stability in the economy is continually undermined. Industries underpinning the economies of entire regions are swept away. Cycles of boom and bust suffered by the economy in the past are intensified and deepened and made more universal. In the economic realm nothing can be counted on.

Folks work in jobs that are more specialized than ever and more unstable than ever. It may be useless to invest in more education, in training and retraining for jobs that are so unstable. Upon finishing their education students may find the jobs they trained for have been outsourced.

You may contemplate starting a business. But there is no certainty, no stability in business either. Markets have become too volatile, prices too unstable. Your business may be wiped out by waves of new imports, technological innovation, a competing business hiring illegal immigrants, or a competing business outsourcing work to places where workers get paid a pittance and environmental and safety laws are weak.

Why all this change? If you want to know why this is happening as the old gumshoe saying goes, “just follow the money”.

The Global Corporate Capitalist Economy:

The cause of all of this change is the global corporate capitalist economy, (the GCCE). Like a computer or aliens taking over the world in some science fiction movie the GCCE strives to take over the world today. Indeed it is far along in the process.

What motivates the GCCE? In a word: profit. Though they may give lip service to other goals, for the GCCE making profits is all that really matters. Profit is power. Greed is king. To make profits, bigger profits every day they continually strive to make products cheaper and sell them for more. They strive to pay working folks less and charge consumers more. They seek to get consumers into a position where they have no other choice but to buy their products. And they seek to put workers into a position where they have no other choice but to work for corporations at the lowest possible wage.

In the GCCE economy the consequence of and validation of profit is economic growth. The measure of economic growth is the Gross National Product or GNP. Though other measures of economic and social progress exist in the GCCE, GNP, like profits is the only measurement that matters. All other measures of progress - health, safety, leisure, freedom, the environment or social stability - are suspect. Thus the GCCE can invest in the most heinous regimes without any moral concern. And under the GCCE anything or anyone that stands in the way of economic growth and profit is in the way of the GCCE and therefore to be swept aside peacefully (and cheaply) if possible, by force (and regardless of expense) if necessary.

The GCCE is a giant bestriding the world today. The whole intent of the GCCE is to achieve unchallenged global domination, to have power over every aspect of people’s lives. To achieve this they make folks dependent, helpless, and subservient to their products, services, jobs, and wealth.

The Old American Economy strove for the opposite goal, to help folks become independent and self-sufficient, giving away free land, relying on a modest and simple government, keeping the military small and weak, keeping taxes low, avoiding foreign entanglements, whether treaties or wars, and keeping a lid on the wealth and power of big business. But the old economy was undermined and destroyed by the GCCE long ago.

Today, the GCCE moves American jobs offshore, thanks to free trade, cheap labor, low shipping costs and secure sea-lanes. Prices fall for many products and services in consequence and cheaper products and services would seem to make the consumer better off.  But, as jobs are lost, wages fall, so that relative to prices the consumer is no better off than before. And these prices are temporary. Once America is stripped of manufacturing capacity and capability, including the skills and knowledge needed, the GCCE can raise prices without concern about American competition. Enter inflation. Inflation formerly held in check by falling prices returns with a vengeance. Prices rise for everything, and the value of the American dollar declines. The end result: American working folks will find themselves working for unprecedented low wages in the near future. Sure, the minimum wage will be up a little at $9 or $10 an hour, but these dollars will be sadly depleted in their purchasing power. Thus the wages and incomes of most Americans will fall to the levels of the rest of the world, levels seen in China and India.

Chinese labor will see little of the money drained from the American consumer. They have no rights, no unions, an abundance of labor. China has a bottomless pool of available workers, keeping wages there low for the indefinite future. Chinese wages will rise a little, maybe, in consequence of the rise in value of the Chinese dollar relative to the American dollar. The GCCE, as the middlemen in the transactions between America and China will take the money drained from Americans in the form of increasing profits, and these increasing profits will be a larger percentage of the cost of everything.

The GCCE should be thought of as a mining operation continually stripping wealth out of the hands of consumers/working folks.

To assure their continuing ability to strip mine working people the GCCE practices an unrelenting assault on the freedom, security, health, and wealth of working folk. The GCCE assault their standard of living by outsourcing jobs, cheap imports, inflation, and illegal immigrants. The GCCE moves economic activities offshore, outsource jobs to places where labor is forced and paid incredibly low wages: to communist countries, poor countries, overpopulated countries, countries without effective environmental or safety laws or social safety nets. Then they flood America with cheap imports wiping out local business and local production. Businesses that survive in America increasingly rely on low paid illegal immigrants without the rights of citizens to do the jobs that remain.

For American working folks and working people the world over, there is no place to hide, no economic stability anymore, and no relief from this incessant and pitiless attack on their standard of living.

And, we see again ancient evils long thought expunged from the world raise their ugly heads: child labor, sweat shops, slavery in all but name, industrial ‘accidents’, and new evils never before imagined: climate change, global warming, ozone holes, chemical pollution from the arctic seas to the Antarctic snowfields, and new diseases as our bodies are assaulted by new chemical concoctions, and microbes adapt to the new global chemical soup.

Because the economy is global, supply disruptions are possible from myriad causes: terrorism, rogue states, war, natural disasters. Globalization requires the United States to be the world’s policeman to try to assure stability for the GCCE. Just staying home is made impossible. We dare not let our guard down anywhere in the world or supply disruptions, price spikes and shortages might result. Thus we are stuck with the unenviable task of trying to impose order upon the lawless nations of Africa, on the remote valleys of Afghanistan, on the trackless jungles of South East Asia, on every kasbah and mosque in the Middle East, on every place that shows signs of social disorder. No place is exempt. We are stuck with a dangerous, bloody and thankless job.

With cruel and cynical irony corporations that rely for their security on the American military and derive their income from contracts with the government of the United States move their headquarters and operations offshore where they can avoid taxes and regulations. Halliburton moves to Dubai. Company profits go up. Company costs go down. America foots the bill.

Dynamic of GCCE domination:

The global corporate capitalist economy imposes an inevitable pattern, repeated over and over upon the socioeconomic history of the modern world. The GCCE uses Britain, the United States or whatever nation best suits its purpose as the military platform or base, to impose its own version of social order on the world, whereupon it can move technology, economic growth and development to nations where working folks are impoverished, where they have no rights, where wage are low, and a desperate, servile population eagerly executes their will. Economic growth in the base nation; America, stagnates except in military occupations and the design of ever more deadly weapons; until the GCCE finds another nation to serve as its new military base. Then, no longer useful to the GCCE, the husk of the old base nation is abandoned to rot. Any jobs that can be outsourced offshore will be outsourced. The people left behind; remembering affluence; well educated and proud; now embittered become unsuitable human raw materials for the requirements of the GCCE.

With sources of taxes dried up, the American economy will no longer be able to afford the American military. But the GCCE is already finding other methods to maintain their security. Corporations such as Blackwater get into the security business, creating private armies for hire. These corporations pay their ‘help’ extremely well, while national governments pay very badly. Military personnel will increasingly become mercenaries for corporations and no longer be loyal to the United States or to any other nation. Private armies will arise not tied to any nation but to the corporations that can pay the highest price. Then the GCCE will not need to depend on any particular nation as a base of operation. Nations will become irrelevant and obsolete.

Probably the greatest modern improvement over the technology of the 19^th century is in medicine. Today medical knowledge and abilities to keep folks well - and to care for and cure the sick are vastly improved. Sadly, today our economy works hard to undermine the health gains we have made. The economy promulgates pollution, pesticides, obesity, bad food, unsafe vehicles, and stress from economic instability. Medical advances are undermined by globalization and the free market: by new diseases that are mutations of old diseases, and new kinds of pollution.

With the advent of globalized production prices go up and wages drop. Prices for globally produced imports may be cheap at first, undermining and destroying domestic competitors. Eventually though, when the GCCE gets a stranglehold on the market, they raise prices. They can get away with raising prices when working folks and local businesses no longer have the skill or tools or will to restore local production or to go back to earlier methods of production, which could provide alternatives to the products of the GCCE, and thus competition and lower prices again.

Society is no longer organized to make it easily possible to go back to earlier and in many ways more efficient ways of life: extended families do not live together anymore, formerly compact cities are spread out over the landscape making it too far to walk anywhere. Interurban commuter railroads went bankrupt long ago. Extensive suburban areas have become too spread out to be effectively served by mass transit.

Working folks have become incapable of taking care of themselves and so must rely on the GCCE for their sustenance and livelihoods. The GCC economy relentlessly strives to undermine their independence and self-sufficiency. Technology is continually invented that increases their dependence.

The GCCE embraces specialization. Each worker has only one skill, a simple skill, an easily replaceable skill; like a machine (and s/he is frequently replaced by a machine). Their jobs require skills that need little or no training, knowledge or education. Their jobs are designed so that they learn nothing from them that could increase their value and thus their wages. They are stripped of the opportunity to use their minds in their jobs and thus improve their economic situation.

But the GCCE is vulnerable. In the changes it engenders it undermines itself. The GCCE can assure no stability for itself either. Victims of the GCCE become conscious of the cause of their circumstance, and foment political and social opposition to the GCCE. Folks newly enriched because of the GCCE such as the Chinese; seeing expanding industries and new jobs are of course its most ardent supporters, at least at first.

And, sometimes the GCCE goes too far, becomes too greedy in their eagerness to strip-mine the incomes of consumers/working folks. Then, consumer/workers buying falters, threatening recession, possibly depression. And, the impoverishment of folks if allowed to go too far threatens the foundations of the global corporate capitalist economic system.

The GCCE is a giant, but a vulnerable giant. Vulnerable to a stone to the forehead, a stone called thrift; thrift applied consciously

Thrift is a monkey wrench in the global economic system. Hence economists are anxious that the Chinese cease their thriftiness and become consumers like Americans thus increasing demand for GCCE products (with Americans desperately hoping the Chinese will buy something, anything made in America). So Chinese frugality, like American frugality of the past; must be undermined and folks made into spendthrift consumers.

The whole impetus of the economic life of working folks must be to get out of this turmoil, to escape the economic trap set by the GCCE, to build bastions of economic security that insulate them from the GCC economy.

Economic security is difficult to attain for working folks, but easy for the wealthy. The wealthy have a moat of money, a cushion of assets and resources and knowledge (such as high priced and competent investment advisers). And, the wealthy everywhere welcome the GCCE and economic instability it promulgates. In times of turmoil they can make new investments, drawing from their cushions of assets. Instability may open up opportunities for them to make profits or increase profits. Indeed the intelligent rich welcome recession as an opportunity to buy assets; real estate, stocks, and commodities at sale prices. Recession may cause them to suffer a temporary loss of part of their wealth, but with economic recovery they stand to gain greater wealth in the future.

Of course working folks have no cushion and bear the brunt of a recession. Job loss, income cut, no savings, no options, thrifty ways forgotten or never learned. But thrift practiced as Zero Cost Living can become the cushion of working folks.

Why thrift?

Thrift is the antidote to the global corporate capitalist economy.

Through thrift (practiced as ZCL) working folks can have power as consumers.

Consumer power has always existed but has almost never been consciously used.

3. Potentials:

The benefits of spending have been set down ad-nausium by economists. Here are the advantages of NOT BUYING. Here is what thrift can do.

     Thrift can cushion the negative effects of the world economy. The not-so-simple practice of thrift mitigates all of the bad effect of the GCCE. How? By Reducing the need for $ or $ flow; by reducing the need to buy necessities.

     Thrift means folks can save $, and can build facilities and enterprises that can produce the stuff they need, and then they might not have to work for others.

     Thrift can make it possible for working people to refuse to work for others, and yet not be faced with poverty and destitution.

     Thrift can establish economic stability and price stability. Thrift can slay the dragon of inflation.

     Thrift makes it possible for folks to reduce, eliminate and stay out of debt.

     Thrift makes it possible for folks to stand on their own two feet, to live with freedom and independence.
     Thrift can mean armies of illegal immigrant labor will no longer replace you because you do not require the services they perform, do not need to buy the products they make or pick. They are no longer hired to do the dirty work of society because you can do that for yourself.

If thrift is such a good thing why is it not widely practiced today. It is in small ways: looking for the station with the cheapest gas, holding off buying stuff until it is on sale, surfing E-Bay for the best deal. But, to gain the full positive benefits of thrift it must be practiced at a new level of intensity.

And, practiced at the level of intensity that I call ZCL thrift can be hard, requiring time and knowledge and investment. Practiced as ZCL thrift is not simple at all. It is complicated. It is a struggle, a battle, but a battle that can be won. I believe that given modern knowledge and technology such as the Internet thrift can be made, must be made much easier.

Corporations and government, pundits and leader talk about thrift. Sometimes they even tell people they should save money. But really, they do next to nothing to encourage it among working folks. The fact is they don’t want it. If working folks became thrifty, buying less junk, profits would fall. Working folks might become more independent; refuse to take crappy jobs at low wages. Who would do the dirty work of society? And do it for less money. The GCCE wants you to be maxed out on credit buying their junk, thereby ensuring their profits, and work the longest hours possible at the lowest wage possible.

How to be thrifty, to live almost ZC was presented in chapters 2 thru 7 of this book.

Folks NOT BUYING occurred in the past by necessity, not by choice. Not buying causes or is caused by recession, when the economy contracts, GNP declines and folks cannot buy because of lost or declining income and because of a loss of credit.

By building up a thrifty economy folks can buy or not buy as they choose.

Through thrift (practiced as ZCL) working folks can have power as consumers.

Consumer power has always existed but has almost never been consciously used.

Folks can become conscious consumers.

Conscious Consumers are folks who are aware and able to control spending because they have built up knowledge and systems that make it possible for them to control spending.

It becomes possible for consumers to have conscious economic power. It becomes possible to have a consumer strike. A consumer’s strike is the most powerful manifestation of thrift. What is a consumer strike? It is a conscious choice by many, many folks to NOT BUY. . It is like the old Boston Tea party reinvented as a new American Tea Party. It is not buying a specific product or possibly all of the products of an economy thereby bringing on an intentional recession. Why bring about an intentional recession if it only hurts working folks (as said earlier). Because with thrift established they have a cushion.

For example, to curb oil prices everyone (or at least a large enough minority to significantly reduce demand) might refuse to buy gasoline, or alternatively might refuse to buy all products; thus reducing demand for oil by bringing on an intentional recession.
The refusal to buy by the practitioners of a consumer strike is conscious and deliberate; rather than forced and involuntary.

And so make a “consumer strike” or not, buy or not at will rather than having to buy out of necessity. Thrift gives power and freedom. Thrift is the key weapon for consumer power.

Therefore: Markets can be forced to bend to the consumer will.
Along with the establishment of thrift, a New Middle Class must come into existence that can buy or not buy as it chooses. Then this New Middle Class (NMC) would have the power to influence prices, wages, living standard and quality of life

The Old Middle Class was and is dependent on the GCCE and its wealthy supporters for jobs, products and services. It serves as the middleman between the wealthy/GCCE, and working folks. The .NMC will sever dependence on the GCCE. They will be in a position to defy the wealthy/GCCE and not have to worry that they’ll lose their jobs or not get the products they need. This new class must create or recreate a new locally based economy not dependent on the GCCE and its imports.

A new economy:

The New Economy must build up tools, organizations, facilities and services that can provide locally made and homemade products. An economy ready to go into production whenever global prices rise, or GCCE jobs leave your area, or supply disruptions occur.
(Even domestic production is made more expensive as transportation and processing costs rise; for California and Florida produce for example. Thus local production becomes more competitive even verses other domestic production).

A problem exists in the creation of the New Economy. Local productive resources: knowledge, tools, machines, have been wiped out. Folks may require retraining, new skills, or rediscovering of old skills. They may have to go back to earlier methods of production, methods that have become competitive again. For examples: wooden toys and furniture might replace imported plastic junk.

The New Economy might aim to create a complete set of local economic enterprises producing all the basic things folks need: food, health care, energy, shelter, mobility, recreations etc. The New Economy might be oriented towards local production for local use. Production for export, requiring specialization of labor (and the compromises it requires) might be attempted as side enterprises relying primarily on surpluses of products and services intended for local consumption.

Reduced to poverty and dependence and specialized beyond all concern for human aptitudes to robot-like jobs; working and middle class folks must become conscious, learn to take care of themselves as they never learned or could learn under the regime of the GCCE. And under the Communist regime of China, now a partner of the GCCE, Chinese folks will not learn independence either. These economic regimes are dedicated to keeping and creating consumer/workers who are specialized in their jobs, and buy everything else. But job losses and changes, and economic instability make specialization dangerous to your economic security and therefore you must escape that trap.

9.2 ECONOMICS OF THRIFT:

contents:
1 . Economic Myths and Realities:
2.  Costs: real costs, situation, avoided costs.
3.  Theory of Avoided Costs: (TOAC)
4.  Application of the Theory: avoided cost analysis

1. ECONOMIC MYTHS and REALITIES:

People today are hobbled by economic myths.

We live today encapsulated in myths as potent as the religious myths that made the ancient Egyptians build immense pyramids so the souls of their kings could join the gods. Our myths are economic, and are as insubstantial as Egyptian religious myths, and the structures we build in consequence of our modern myths are vastly more massive than the pyramids; and as useless.

Modern economic myths:

The myth of wealth:

We all need money, the more the better, to be happy, right? Wealth is good and great wealth is better. It lets you buy more stuff and more stuff is good. Poverty is evil and not to be tolerated. Poverty is failure, want, need. Supposedly we are all trying to be wealthier.

The value and advantages of wealth are foisted upon us ad-nauseum by our society with every advertisement in our media and needn’t be repeated ad-nauseum here. Sitting Bull said it best, perhaps: “The love of possessions…. is a disease with them”.

The reality of wealth:
Wealth can be an excuse to waste resources. Wealth can mean scarce natural resources are wasted in the production of superfluous luxury goods while basic human needs are not met. Wealthy folks use huge amounts of energy, materials, machines: huge houses, frequent flying, multiple cars, big yachts (that sit unused most of the time). But we all have a cost and burden on the resources of the planets. Shouldn’t you minimize that burden even if you are rich. It is possible to imagine a wealthy person practicing a lifestyle that does not waste. And a few do, regarded as cranks and eccentrics by most people. The world will not long be able to afford the excesses of the wealthy.

Genteel poverty has a lot to recommend it: especially for health. It can be stress free. And allow time to concentrate on healthy eating and living.

Wealth means you can live with profligate waste as most (and probably all) of the wealthy do. If you’ve got it, use it Right? Or why have it? So why not have enormous houses, gas wasting cars, frequent flights around the world, exotic and expensive entertainments and amusements no matter how destructive, wasteful or cruel.

Wealth means you can live without care, in fact without giving a damn, which is what most folks with excess money do.

But too little money can also result in waste when folks lacking enough food and other basics consume without regard for the future. For example eating the seed corn, cutting down the last forest, hunting species to extinction. Too often, folks who are by no means poor do these things: wiping out the buffalo, or burning rainforests for pasture, or exporting food from Ireland, while the people starve.

Wealth means you can cocoon yourself from life, the world and reality.

Wealth lets you build walls literally and mentally between you and others.

Wealth lets you waste time in dissipation and indulge in destructive vices: sports, games, drugs, and makes it unnecessary for you to do anything practical or useful.

Wealth can make you distrust others and suspect their motives keep you from ever really knowing people.

Wealth can encourages you to dominate others, to lord it over them, to surround yourself with servants ands supplicants and flatterers, and give you false friends who only want your money. And make you suspect the motives of any of your friends who are not as wealthy as you.

Misspent wealth can undermine the freedom of others, destroy the environment, and encourage envy hate murder and war.

Wealth can twist and corrupt everyone and everything it touches, make everything for show and status, turn folks into selfish misers.

And wealth can divide people from each other in tedious and absurd graduations of social status according to their wealth, the cost of their possessions, and the size of their bank accounts, making their lives mean small and destructive.

　
The myth of economic growth

The greatest myth of economics in the modern world, the mother of all economic myths, holy writ to every modern society is the myth of “economic growth”. Stated simply economic growth is the idea that societies, nations, the whole world should, indeed need and must to become wealthier over time. The measure of growth by economists is the “gross national product” or GNP. Rising GNP is always good, and falling or even static GNP is always bad.

Depression, recession in which economic contraction, or loss of wealth occurs are the great bogymen of this economic myth. And anyone or anything that might be construed as causing recession and/or depression are also bad, wrong, evil bogymen. Anyone and anything that dare stand in the way of the myth of economic growth can expect to have all the forces of modern society arrayed against them.

Why is economic growth a myth? Isn’t it reality, a fact, like atoms, or electricity?

Here I will expose economic growth or GNP for the myth that it is:

Economic growth, growth in GNP really means continually undermining peoples ability to take care of themselves: it means people becoming dependent and subservient. to the larger economy.

The things people do for themselves are not counted in GNP measures. The GNP relies on the flow of money as a measuring device so anything not increasing the flow results in a drop in GNP. So saving $ and getting or doing free stuff can cause GNP to decline.

Examples:

Buying bread at the store raises GNP. Making bread at home lowers GNP.

Buying junk food raises GNP. Making your own healthy food lowers GNP.

Eating more and becoming obese can raise GNP. Eating less, being thin can lower GNP.

Buying food at the store raises GNP. Growing a garden lowers GNP.

Buying a car raises GNP. Having no car and walking lowers GNP.

Buying a new house with a mortgage raises GNP. Building your own house and having no mortgage lowers GNP.

Buying new furniture raises GNP. Foraging and repairing old furniture lowers GNP.

Getting a better paying job raises GNP. Quitting a job to live self-sufficient lowers GNP.

Wife (or husband) staying at home lowers GNP. Wife and husband at work (and paying for day care) raises GNP.

In the south before air conditioning people sat on their porches and talked to their neighbors. No help for GNP there. Now, inside with the air conditioning running and watching TV, GNP is raised.

All money flow means is you get somebody else’s money, then turn around and pay somebody else. In the supposedly efficient modern economy you do almost nothing for yourself and buy everything while everyone must pay you for your one activity, work that may be tedious time wasting, and unhealthy.

GNP is a crude measurement of “good’ that is accepted as gospel by economists, governments and society. It is useful only because numbers are generated, as if GNP is measuring something real (like the velocity of light). Then economics can pretend to be a science, and like a doctor, economists can make a diagnosis of the patient’s (economy’s) health and then write prescriptions for economic ills.

In place of GNP, measurements that reveal the real economic (and social) condition of society are needed. Needed are measurements of the quality of life, of the value of leisure, of the value of health, of the value of services and products made in the home. By these new measurements, a family with a lower income may be better off than a family with a higher income. And a poor society may be wealthier than a rich one. For example, the Hunza of Northern Pakistan and the Tribes of Vilcamba in Peru have no electricity, cars, roads, or money, but live in robust health to an old age. Their per capita incomes are low, extremely low by American standards, but their cost of living is also extremely low; and if their incomes exceed their cost of living, they need not be considered poor by ZCL standards.

The nation of Bhutan between Tibet, China, and India relies on a standard called the GNH or Gross National Happiness as its measure of progress. Begun in 1972 the GNH is a less materialistic measurement of national progress based on sustainable development, environmental protection, cultural preservation, and good government. The nation has made great progress in health, education, and “happiness” as measured by the GNH. Bhutan has only 635,000 people in an area the size of Switzerland that is ¾ forest and as of 2006 is governed by a constitutional monarchy. (Source: National Geographic March 2008).

The reality of economic growth: The myth that is ‘economic growth’, the belief that economic growth is needed, and a ‘good thing’; because no measure is made of the real value of anything; is in the process of ruining life in the world through profligate waste of natural resources and human resources, pollution, environmental destruction and climate change.
Great Lakes commerical fishing example: Insisting on no government interference, no restrictions, no quotas commercial fisherman overfished and destroyed the fish stocks of the Great Lakes.  Wasteful, shortsighted, maximize profit now and no long term concern are the result of unrestrained, unregulated capitalism. Which brings me to:

The myth of capitalism:

ADAM SMITH and ZCL:
Here is the reality of the capitalist economy with its supposed efficiency as described by Adam Smith in his book The Wealth of Nations. Let us revisit Smith’s needle factory. All these men and children now must work long hours and do nothing else and therefore buy everything else they need. Other talents, skills or abilities they may have must languish. So when laid off they are helpless and unemployed. This is the unconsidered consequence of specialized labor created by Smith’s capitalist economy.

Smith wrote; “I have seen several boys under twenty years of age who had never exercised any other trade but that of making nails, and who, when the exerted themselves, could make, each of them, upwards of two thousand three hundred nails in a day.” Wealth of Nations page 14.

They make lots of needles, or nails, and nothing else, and so develop no other skills, and when a needle or nail making machine comes along they become worthless and useless.

In 1840 Edwin Chadwick, a famous British social reformer and colleagues were investigating the slums of Glasgow, Scotland to find the causes of a deadly fever. He …”ducked through a low doorway. …. “

“The passageway opened onto a courtyard…. In its center rose a vast dunghill, the product of the destitute who crowded into the rooms around it. Relying on a strong stomach and an unrelenting will, Chadwick made his way along a narrow path that skirted the courtyard and passed through a second corridor on its far side. He walked through it and found to his horror, a second courtyard, identical to the first with a second immense pile of human feces. …the denizens of this grim world, clothed in rags and tatters, crowded together for warmth, looked out at the intruders through hungry eyes.”

There were “…. vast piles of human excrement in every courtyard.”

“.… The desperate conditions inside the buildings matched the horrifying state of their courtyards. In one room, they found a group of women, huddling naked beneath a blanket. Their clothes, …were in use by their roommates. Without enough clothes for all the occupants of the room, the women took turns using what they had to venture out in the cold. …” from The Blue Death by Dr. Robert Morris chapter 3 ‘All Smell is Disease’:

This is the reality of Adam Smith’s economics. It is only an excuse to concentrate, impoverish and exploit labor. It saves money for the manufacturer/owner, but avoids the real cost of a product which is the cost to provide a living wage and compensate the worker for the skills he must forgo to endlessly do the single task set before him. The skills, abilities, and knowledge of an assembly line worker may never be used with his working life spent on minute narrow tasks. Everything else, he must buy. If he is laid off in this unstable competitive economic system he has no employment options except other equally tedious single task jobs that are useless for any other purpose. He ought to be compensated so if he is laid off he can still live in comfort, but he is not.

The myth of Profits:  Profit is good, very good, right? If you own stock maybe, but in the real world high profit means fewer dollars go to the working folks who actually do the work of making the stuff. And, low profits means less investment and business expansion and recession and thus increased unemployment for working folks. A heads I win tails you loose circumstance for working people. High profits strip-mines money out of working people.  Low profits and business won't invest.
The myth of free trade:

Then there is the theory of comparative advantage as described in the economics textbooks. According to conventional economics, free trade and comparative advantage merely achieves the most efficient geographical distribution of production. The reality is that the theory, and the practice of it is cynically used to destroy wage rates in a high wage country by shifting jobs to the low wage country.

The myth of the job:
Everyone needs a job, right?

Taking a job means you sell your time, your most valuable asset in life so another might profit. Most, almost all people sell this asset too cheaply.

Reality:

Taking a job means you are reduced to a servile and subordinate position to others. You may be required to do stupid and unhealthy things for money, useless things, dangerous and destructive things, boring, tedious, repetitious.

The world of jobs is a scheme in which almost everyone in the world enters into an involuntary conspiracy to make each other mutually miserable.

　

2. COSTS:
Real costs:

All of us carry around a burden of cost. The cost to keep us alive and comfortable and healthy. For some it is enormous, for others very, very low. Look at a person and determine the burden they impose on others, on the world. One person may cost under one grand a year and another 20 grand and some sick or wasteful 200 grand a year. Prisoners cost 30 grand a year to keep, a sum a person living ZC could live on in comfortable ease while saving a lot of it.

A persons’ worth could to be measured not by his wealth but by how small his cost burden is on the world verses his contribution. Not how much his net worth is in dollars, or his annual income, or the dollars he adds to the bottom line of a corporation, or pays in taxes, or contributes to economic growth, but how much he really adds to the real enrichment of the world relative to his living cost Such a measurement of worth would result in a calculation of the value of an individual completely different from the calculations of ordinary accounting.

Consider Jesus. What work did he do? Teaching and healing. What did it cost for him to live and what payment did he receive. His cost of living was low by any standard, and his income negligible or nonexistent. He was homeless, frequently sleeping out in the open. Sometimes he was invited to a “set down” supper (to use Jack London’s hobo terminology). He had no house, no car, or beast of burden, the simplest clothes and food. He was always among working folk; fishermen, farmers, shepherds. It is impossible to apply the tired measurements of wealth used by conventional accounting to his life. But by the standards of Gross National Happiness or Zero Cost Living he was wealthy beyond measurement.

Your Costs: and Economic Life:

Set before you is an economic agenda that may rule your whole life.

Before leaving home you get the car and credit card. Upon leaving home or dormitory you get the apartment. Later maybe a mobile home hardly better from a ZCL perspective than an apartment; the owner of the site spared the expense of keeping up a building. Later you get the house and mortgage. But you may have to pay for these using money earned at low and inflation undermined wages. And then add all the junk you might buy with your credit card, entertainment system, appliances, fast food. You have become another American consumer: in debt, overweight, and working for a company anxious to outsource your job.

This economic agenda is a complete and total drain on your income, sucking you dry. You are boxed in, the American dream the Real American Dream is out of reach.

“Time is money” states an ancient expression. If you live by this expression then expect to live as a slave to money making. Living ZCL may give you time, vast amounts of it to use as you please instead of at the beck and call of others. Free of the need for money, time is your own.

Questionable even, is the value of college if you don’t have a scholarship or supportive relatives. You may have to spend years earning the money at pathetic wages to keep going there and you may end your college education in debt with limited prospects thanks to outsourcing.

These expenses eat your money your time, and your life. They make you a servant to business as their employee and dependent as their customer. In too many businesses, especially in the service industry where most recent job growth has been, you may learn nothing that will make you more valuable as an employee so you can increase your wages. The jobs are constituted to be that way.  Businesses may not even give you a reference when you try to leave for a better job – company policy.

After several miserable and tedious jobs you’ll be anxious to avoid doing another and thus inspired to achieve ZCL.

Try another way.

You may believe you need a fortune to pursue your dreams. You do not!

Difficulties and obstacles to ZCL:

You may experience social pressure to buy new stuff to look good.  And you me feelsocial pressure to do things that people think you must do to 'have a good time'. Drugs for example, or an expensive amusement park.
There can be a social stigma to reusing stuff, clothes for example. How did I feel wearing others discarded clothes? Funny at first, but washed and repaired, clothes are clothes.

Social pressures may originate in media, in advertising, and be expressed in the remarks of others, sometimes as casual remarks; and in the general attitudes and behaviors of others towards you.

Under these pressures, keep in mind the flipside, you are free of needing to buy and thus free of demeaning and degrading jobs. Service jobs are a special incentive to live ZC, to reuse stuff. And consider, you are doing society and the environment a favor by reusing. Natural ecosystems have means for reusing everything.

Your reuse, and not buying is not reflected in economic statistics. You didn’t buy stuff, you didn’t have to work to get the money to buy it; revealing what nonsense economics is.

Situation:

The fact is many millions of folks in this service economy will spend their lives earning little more than $7 per hour, 2000 hours a year, $14,000 per year. They need to be helped to set up ZCL lifestyles; not exploited and plundered. Ongoing costs they may pay include cars, heating and electric, bills rent, junk food, alcohol. If they have a congenital illness, that will be a constant ongoing drain on their income.

ZCL Theorem:

Inflation has the effect of continually eroding the value of a dollar. The U.S. dollar is now worth less than one cent in 1846 dollars, the year Henry David Thoreau lived at Walden. So the cost of the candy bar is increasing each year.
A good way,( from the perspective of a person interested in achieving zero cost living), to calculate the cost of anything is to estimate the amount of money that must be saved to pay for the item out of money earned from growth in savings. So a $1 item like a candy bar with a savings account earning 5 percent a year will cost you twenty dollars. At 1 percent interest, (a common rate today), the candy requires $100 in savings.
The purchasing power of the $20 saved to cover the cost of the candy bar is continually eroding, so an additional amount must be saved each year and added to the $20 to cover the increased cost of the candy bar. The average rate of inflation in recent years has been 2 or 3%, so using an average of 2.5% the cost of a $1 candy bar increases by about 2.5 cents each year after inflation is figured in. To cover this 2.5 cent annual increase more money must be put into savings each year: at 5% return, 50 cents more each year. But where is that 50 cents coming from? To add 50 cents to savings each year, even more money must be added to saving in the first year. At 5% return, $10 more must be added to savings so the full cost of a candy bar becomes over $30.

Consider an annual living cost of $10,000. Using the method of cost adjusted for inflation that was used for the candy bar, $300,000 must be saved to cover an annual cost of $10,000.

You can quickly see that any step you take that reduces your annual living cost can have a great impact on the amount you must have in savings. Using the same methodology again, a million dollars in savings earning a 5% interest rate with inflation at 2.5% yields an income of only $33,000 a year. Thus, you may have only $33,000 a year to live on if you are a millionaire. So, even a millionaire may need to consider some ZCL methods.

Maybe you believe you can get more than a 5% return on your money. Then you must put your money somewhere else other than a bank, and your risks go up. The stock market, commodity trading, starting a business, even real estate in recent years have considerable risk

From experience, stocks are volatile, too often pure gambling. Much time for research is needed and still, too many unknowns exist, along with unexpected events and irrational valuations. Investors too often really don’t have a clue as to the worth of a stock. A herd mentality prevails, you try to be first in some herd trend, or stampede is a good analogy, and first to get out of the herd before it runs over a cliff.

Rather than invest in the stock market or inflation eaten savings, it may be far safer to invest in tools, equipment, facilities, and learning skills that lower your living costs.

For example, building your own house. You use your money to buy tools and materials, and your time practicing skills. That can be a far better use of your time and money than investing it. You might take 1 or 2 years to build a house and save $100,000, of the cost. Not a bad annual income. Skills you learn you can use to get a job or start a business. And when you are done (if you didn’t borrow $ to build) you have house you can live in mortgage free forever.

Like house building, you can use your money to buy raw materials and turn them into more useful items, things you can use yourself and thus avoid buying, or things you can use to further reduce living costs such as homemade solar panels, perhaps.

　
Don’t buy consumer junk:

The real cost of Chinese imports is far higher than the number put on the price tag. The real cost of any particular imported product does not include the cost of lost jobs and lost or lowered incomes of the people in America who used to make that product. The real cost is much higher. If the prices of imports reflected their real cost then they would not be so cheap and fewer Americans would buy them.

AVOIDED COSTS:

“A penny saved is a penny earned,” wrote Ben Franklin in Poor Richards Almanac. But in modern economic thought, avoided costs are not even counted in the economy. Instead, money not spent is NOT counted and is a loss to GNP.

Consider a mind experiment. Over a year, assume everything else in the economy is stable and stays the same except energy conservation cuts 10% from costs. Then, the Gross National Product would be lower, less stuff will have been bought or sold, and the economy will appear to have contracted because of the avoided costs, or savings resulting from energy conservation. Perhaps Ben Franklin’s saying should be modified, in the modern world to “a penny saved is a contracting economy”. Repeat of GNP above?

Of course in reality, having saved dollars by conserving energy, folks have bigger bank accounts, or spend more on consumer goods, or take more days off from work, or take longer or more expensive vacations. Of course the bank accounts, consumer spending, etcetera of folks in the energy industry go down.

ECONOMICS OF AVOIDED COSTS:

The Hunza of Pakistan have a healthy bracing climate and a stable and sustainable organic agricultural system. They live on farms and own their land and houses. They have good health into their 90s, no tooth decay , perfect vision; (from the book Healthy at 100 by John Robbins)

Other societies in odd corners of the world have similar circumstances. :Writes Robbins, “Certainly part of the secret to the exceptionally healthy aging found in Aabkhasia, Vilcabamba, Hunza, and Okinawa is the extraordinary amount of regular exercise built into the routines of daily life.”

Consider all the costs theses societies have avoided: medical costs, rents. mortgages, real estate, store bought food, automobiles, etcetera.

Until 1965 the Hunza did not use money, had no roads, electricity or modern conveniences. Since the introduction of all of these their health has deteriorated.

　

Real Wealth:

Many a primitive, backward or stagnant economy may be wealthier than they seem when looked at from American eyes. The Hunza of Pakistan have no cars and no need for them. They live well without them, and avoid the cost. They stay healthy, and have very low health care costs. By the criteria of conventional economics the Hunza would be considered among the poorest people on Earth. But in reality, they may be among the wealthiest people in the world They have an attitude of ease, well-being and happiness according to Robbins. Recently they have had to endure the introduction of a money economy, western food, roads, cars, and dependency on imports. These harbingers of progress are in the process of impoverishing them.

In the poor villages of India the income per person per day may average spending only $1. They live low cost by necessity. But, like the Hunza, their real standard of living could be higher than conventional economics would calculate if avoided cost are added in.

There are no cars but they are able to get everywhere on foot

They have no heating cost, living in a warm climate, and no air conditioning cost. Their buildings, with mud brick walls, stay cool naturally.

Many residents may have no rent or mortgage costs: They own their own land free and clear. Their houses are built out sun dried mud bricks, material obtained free from their property and naturally fireproof and not insured thus avoiding insurance cost. Homes may be owner built and easily repairable by the owner.

They have compost toilets, no piped plumbing system, no plumbers and no need for them.

We may not be not much richer than prehistoric or aboriginal folks if the value of avoided costs are added back in. Is a man richer who works in a factory all day rather than hunts? Who will be healthier? Who will live a more interesting life?

Does sitting at a computer all day make you richer than a subsistence farmer? Who will be healthier?

3.  THEORY OF AVOIDED COSTS: (TOAC)

TOAC is the theory that in counting up the real wealth and income of people the costs and expenditures that are avoided must be added in.

Dollars that you do not have to spend because of the way you live equals income. If you own your house free and clear and pay no mortgage or rent the dollars you save are not recorded or reflected in the economy or in your income, under ordinary GNP and income accounting. If you pay rent or mortgage you must earn the dollars to pay these costs and these dollars are included in your income. In fact, owning your home saves you $10,000 or more a year in interest payments. Your real income is higher by that amount according to the theory of avoided costs.

Similarly, if you can walk everywhere or bike and own no car you can save the $2,000 a year a used car you fix yourself might cost you, or the $5,000 cost of a new car per year. Again the economy and your income reflect no evidence of this under ordinary economics. But under TOAC accounting your income would reflect this savings.

To the typical service economy wage that is a lot of hours of labor: car and house savings together = $12,000 or about 12 months work after taxes. Therefore, if your service economy job pays you $12,000 a year, and you own your house without a mortgage and need no car then your income really is $12,000 plus $12,000 = $24,000 a year or effectively doubled.

Other expenditures, most expenditures in fact can be cut, or even eliminated by various methods to be discussed later in detail in this book.

Effects and Consequences of TOAC:

By TOAC accounting prehistoric men may be seen as fabulously wealthy by modern standards, avoiding every cost (and living in vast pristine wilderness). Avoided costs are not even considered in modern economic theory, and that fact reveals the nonsense that is modern economics.

Consider modern men living a primitive prehistoric-man-like existence: The Kalahari bushman: By ordinary economic accounting Bushmen are distressingly poor. But by TOAC accounting they are reasonably well off: Consider the costs they avoid: no houses, mortgages, cars, food costs health care. Under conventional economics the per capita income of a bushman vs. an American cannot easily be compared. But using avoided cost analysis the income of a bushman can be estimated at around $30,000 per year.

The bushmen may suffer from lack of a secure food supply and from lack of modern medical care. But they have compensations: They hunt. Hunting with primitive weapons is a recreation in American society. The way they gets his food is a healthy challenging pleasure. Compare this to workers stuck in a factory.

Can a bushman really be considered poor? Not by TOAC accounting. He can be made poor by taking him out of his environment, or by destruction of the environment he lives in. (A bushman or Native American living in a environment he cannot defend is a man about to loose his fortune though very little value would be placed upon it by conventional economic accounting).

A bushman moved to a city is made instantly poor. His skills are useless; he cannot hunt but must buy food. He is vulnerable to a host of new diseases and must have modern health care. He may need a car to get around. He has no property and cannot legally sleep in a public place in many cities.

A teenager leaving home is like a bushman leaving his environment going from an environment where he has no expenses to one where they are likely to be larger than his income; from well off to instantly poor. Unless he can live with low or no expenses (ZCL). In our society he must somehow then work his way back to well off.

Real Poverty

And poor in the extreme is a man suddenly unemployed with high expenses and no ways to cut down his expenses. (But there are always ways to save).

　

Avoided costs are not counted as part of the equation of the GNP of an economy under conventional economic accounting. These costs can add a considerable boost to the GNP of a nation. They may even be much larger than the dollar amounts reflected in ordinary GNP accounting. Like the dark matter in the universe that affects gravity, they might hugely skew the real circumstance of an economy, the real GNP, the real wealth. For example, consider a society where everyone owns their home free and clear and pay no mortgage vs. a society where everyone is fully mortgaged. By conventional economics the GNP of fully mortgaged society will be higher. But by the TOAC the society where everyone owns their home will be higher. Most real societies fall somewhere between these hypothetical extremes. Where some homes are mortgaged and some are not, the avoided expenditure must be added to the GNP.

4.  APPLICTION OF THE THEORY:

Avoided cost analysis:

　

Applying the theory of avoided costs to economic and social situations I call avoided cost analysis.:

Using avoided cost analysis we may calculate the full cost of an economic change to the individual, family, society and the environment. As a result of economic growth, new factories and other businesses costs that were previously avoided now might have to be paid.

Applying TOAC to a real case: Adam Smith’s pin factory again.

According to conventional economic accounting the pin factory mass produces pins making cheaper pins than ever before, society can buy cheaper pins, the company undersells the competition, sells many and makes a profit. Everybody benefits

But what costs that were previously avoided now must be paid:

Small scale locally made pin makers are wiped out. These pin workers are now unemployed. Their lost income is a cost of the pin factory that must be determined.

Factory pin workers are unskilled and low paid; they require little training and anyone can do it. Unskilled work means children may be employed with cost to their health and psychological well-being, and the social costs may result because they have an incomplete education. Also, mothers may be employed so childcare must be paid.

All the pin workers do is make pins. They have no time or skills to do anything else. Plus workers must live near the factories in cities where they have small homes with small yards and therefore no space or facilities to make or grow anything themselves. Therefore, they must buy everything and their living costs go up.

One or a few centralized pin factories increase transportation costs because distances to raw material and markets are greater. More roads, railroads, ships may be needed along with associated costs.

Pollution and trash from the pin factory formerly dispersed in home workshops or small factories and perhaps once recycled and reused may now be concentrated and not used. So there are increased costs to dispose of and clean up (or as industry usually does leave toxic messes that have health costs).

A cost should be assigned to the loss of freedom and independence workers suffer when they become a small cog in a large-scale army-like industrial organization.

A cost should be assigned to the loss of economic security workers suffer when placed in a situation of constant intense competition against fellow workers, against other factories and against factories in other countries. Living with increased stress, the health of these workers may decline.

And, because large numbers of workers are employed in close proximity for long hours, diseases may be more easily spread, exacting another cost to workers which should be determined.

So the supposed savings of the pin factory are much less than imagined by conventional economics, and could in fact be negative.

The problem of more accurately determining the wealth of a society (other than the Bhutan style GNH) might be solved by applying the TOAC and therefore by adding avoided costs into the total. The median family income in the United States was about $48,000 in 2007.

Consider the Hunza, by conventional economics they are distressingly poor. Because they rarely use money in transactions and money flow cannot be counted, conventional economics might calculate their per capita income at a few hundred dollars a year by assigning a value to the crops they grow, farm animals raised, firewood gathered, etcetera.

Applying the TOAC and adding up avoided costs per year and assigning a cost for each category that an American family of 4 might expect to pay.

Category:

Avoided cost:

Staying healthy into their 90s: avoided medical costs = $10,000

Perfect teeth and vision = $2,000

Growing almost all of their own organic food = $5,000

No social security tax and no need for it = $2,000

Almost no other taxes = $5,000

Remaining productive all their lives = value of their work: $1,000

Owning their own farms no mortgage costs = $10,000

Building their own house = $5,000

Owning no cars; going everywhere on foot = $5,000
No utility bills: compost toilets, hand pumped wells $2,000
No electric bills: natural light, oil lamps, firelight $1,000
Homemade clothes using wool from their own sheep = $1,000
Free recreations: family and community games and sports $1,000

Vacations visiting relatives (rather than Disneyland) = $3,000

So I estimate their family income at over $50,000 per year. They don’t have all of the junk owned by a typical American family. But some of what they have is priceless: peace and quiet, low stress, close families, a pristine environment, pesticide free organic food. Using the accounting of the TOAC the Hunza may be considered well off, not poor.

The thrifty society will thrive. The wasteful society will decline. Once America was thrifty, perhaps the thriftiest society on Earth, and they thrived. Once, in America, there were no wealthy folks wasting resources, no masses of poor living day to day without thought of thrift. Today, the Chinese are probably the world masters at thrift. They produce much, buy little, save 43% of income. American savings is negative. But the Chinese will change as more and more workers become dependent on their single task all day jobs, have no time to practice thrift, and must buy for convenience, must buy everything and make nothing on their own except the one tedious job set before them.

　

So is it all so simple? Just be thrifty and we’re home free (funny expression). Unfortunately practicing thrift is not so easy to do. Many practices that on the surface may seem thrifty are not. They turn out to be expensive, in time or money or both or require great skill, and years of training, education or experience. “Expensive thrift”, now there’s an oxymoron, so in this book I’ll just use the term “false thrift”.

After an interlude on history and philosophy in chapter 2, I will return to the problem of practicing thrifty thrift, practices which I call “almost Zero Cost Living”.

　

The poorest man is the one who must work long hours at the most miserable job in society - a job he hates that requires no skills and has no future prospects - to cover his expenses regardless of his wealth in dollar terms. Another words: Adams Smith’s pin factory workers. A poor man is one who lives in the suburbs and must have a car house and mortgage and has to buy everything - and has a low paying job and therefore must work long hours or go into debt to pay for constantly consumed kinds of expenses such as food, gasoline, electricity, medical costs, taxes, etc. This is the situation of many working Americans.

　

The Chinese don’t. They save a lot, buy a little, and only buy stuff that can make other stuff, or be sold to bring in income. China has a 43% savings rate. Americans have a negative savings rate. The real cost of any consumer item from the point of view of ZCL is equal to the cost of the money that must be saved to pay for the item out of the interest earned from that money, continually adjusted for inflation.

A new economy  will be needed to support the new middle class. Simultaneous with the growth of the NMC, the NMC must consciously build this new economy. And they must not build a haphazard volatile vulnerable free market economy. Though independent businesses might be imbedded within the New Economy, the Core must be networks of private non profit co-operatives.