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Why we do what we do ....

Discussion in 'General Discussion' started by tacmotusn, Jun 22, 2013.

  1. tacmotusn

    tacmotusn Mosquito Sailor

    I found this interesting article in a financial newsletter. It references a book or three that may further interest some of us here.
    . This Ugly Civilization, by Ralph Borsodi, publ. 1929
    . Flight From the City, by Ralph Borsodi, publ. 1933
    . The Homebrew Industrial Revolution : a low overhead manifesto, by Kevin Carson
    In this piece – excerpted from the June issue of his letter – Chris writes about the simple and subversive insight the great libertarian writer Ralph Borsodi discovered while watching his wife work in their kitchen. And Chris explains why it's an important idea for investors to keep in mind today…


    Mrs. Borsodi's Tomatoes – Useful Wisdom
    By Chris Mayer, editor, Capital & Crisis

    In the summer of 1920, Ralph Borsodi stumbled on a life-changing insight – and one that we can apply today. It all began when his wife canned tomatoes for winter use. Ralph, having "an incurable bent for economics," wondered if it paid – or if they were better off just buying canned tomatoes from the store. He sought to find out.

    The Borsodis spent many evenings carefully factoring in all the costs of canning tomatoes. It was more difficult than it sounded, as Borsodi relates in his book Flight From the City (1933). Eventually, they had an answer. "When we finally made the comparison," he wrote, "the cost of the homemade product was between 20% and 30% lower than the price of the factory-made merchandise. The result astonished me."

    How could little Mrs. Borsodi, working alone, produce canned goods at a price lower than the great Campbell Soup Co.? The latter had labor-saving machines. It had massive economies of scale. It had smart management. After much study, Ralph began to put the pieces together. "Slowly, I evolved an explanation of the paradox," as he puts it:

    Transportation, warehousing, advertising, salesmanship, wholesaling, retailing – all these aspects of distribution cost more than the whole cost of fabricating the goods themselves. Less than one-third of what the consumer pays when actually buying goods at retail is paid for the raw materials and costs of manufacturing finished commodities.

    From that simple insight, a whole new way of life opened up for Ralph. And it is something to think about today.

    To back up for a minute, I should tell you a bit about Ralph Borsodi (1888-1977). He was a great libertarian in the American tradition of Thomas Jefferson. He was an economic theorist and important figure in the back-to-the-land movement. Borsodi believed – and set out to prove – that the household could be a productive and creative institution.

    In Flight From the City, Borsodi writes about how his wife and two young sons were renters in New York City. They bought their food and other goods from retail stores. Borsodi had a white-collar job in the advertising industry.

    But the insecurity of it all gnawed at him. Borsodi knew he was dependent on that income from his job. Then in 1920, his fears became reality. There was a housing shortage in NYC. The landlord sold the house the Borsodis rented. Finding another place to rent was expensive. As later gubernatorial candidate Jimmy McMillan would put it, the rent was too damn high.

    So they moved out in the country, about three hours from the city. They bought a place with a small frame house, an old barn, and a chicken coop. It also had seven acres of land – hence, they named it "Sevenacres."

    Ralph wanted a degree of economic freedom he didn't have before. He would still work for a "modest salary." But if it went away, he wanted the freedom to continue almost indefinitely without it.

    To do this, Borsodi aimed to make more at home. Much of the rest of the book is an account of the Borsodis' efforts at raising chickens and goats and growing vegetables and keeping bees. The Borsodi homestead produced its own eggs, milk, butter, and honey. They also would weave blankets, carpets, and draperies; make some of their own clothing; and grind flour, corn meal, and breakfast cereals.

    Borsodi shares detailed records of the expenses to show how cheap it was for his family to do these things for themselves compared with buying them from the Campbell Soups of the world. His goal was not autarky. He wanted not to have to rely so heavily on an uncertain salary or the whim of a landlord or the great machinery of modern industry. Nor did he want to rely on the government.

    In This Ugly Civilization (1929), Borsodi makes his views on this point clear: "History, which is one long record of the imbecilities and the injustices of governments, furnishes us good grounds for seeking some alternative solution for them."

    Borsodi's do-it-yourself manifesto came out when the country was "most deliriously celebrating the great boom of which Henry Ford was the prophet and mass production the gospel. Virtually no one wanted to be told that the whole industrialized world was mistaken; that there was another way and a better way of making a living and of providing ourselves with our hearts' desires than through organized, integrated, centralized labor." When the Great Depression hit, though, it was a whole other story.

    And this, really, is the nut of the investment insight I wanted to share with you. No, I'm not recommending you head off to create your own homestead to prepare for a depression. However, I do have a soft spot for the Jeffersonian ideals Borsodi personified.

    I recently picked up a copy of Kevin Carson's The Homebrew Industrial Revolution: A Low-Overhead Manifesto. There is a lot of good stuff in this book. It focuses on how the modern statist world raises the cost of living. And it shows an emerging alternative economy that reduces the need for a continuing (and high) income stream to live well.

    Reading Carson, who quotes Borsodi extensively, made me want to read Borsodi in the original. (You can find Flight From the City and This Ugly Civilization free online. Both are easy reads.) Anyway, Carson's distilled wisdom from Borsodi is worth sharing:

    Contra conventional finance gurus like Suze Orman, who recommend investments like lifetime cost averaging of stock purchases, contributing to a 401(k) up to the employer's maximum matching contribution, etc., the most sensible genuine investment for the average person is capital investment in reducing his need for outside income.

    Among these investments is the purchase of a home – and paying it off as quickly as possible. I know that with low interest rates, this may seem foolish. But interest costs are interest costs. Use a mortgage to buy a rental (or two). The rental also provides an alternative income stream. You own your own place free and clear.

    I think Borsodi's story also touches on something timeless. It destroys the notion that bigness leads to efficiency. People often assume giant corporations are efficient and hard to beat. They often are not. Borsodi exposes the hidden costs of large-scale production. He shows the wisdom in locally sourced goods.

    As Borsodi found out, his wife could can tomatoes cheaper than Campbell Soup – a counterintuitive but handy insight. It also speaks to our commitment to small, owner-operated firms against the absentee owners of the giants of industry. Our smaller, agile, and more resilient firms are the egg-snatchers in the dinosaurs' nests.

    I know Borsodi's story may be one of the stranger ones I've written about to you. But I think the message is important. (Besides, the Borsodi tale struck me as immensely fascinating in its own right.)


    Chris Mayer
  2. Kingfish

    Kingfish Self Reliant

    I really enjoyed this post. One line that I have to repeat from it is this one :

    quote" the most sensible genuine investment for the average person is capital investment in reducing his need for outside income."

    No words could ring more true to me and my wife. We can and freeze our garden, we fish from our little local lakes, we hunt game and raise chickens and Rabbits. All of those things reduce our need for outside income. W e were making over 80,000 per year and never seemed to have enough money. Now my wife is disabled and we live on her disability check and my small fishing lure company. We take in less than 25,000 a year. Our freezer is still full and the pantry as well. The garden is growing and rabbits keep multiplying. I have more eggs then we can eat. Another huge savings we made was opting out of the heating fuel costs by returning to wood for our heating needs. This cut over 3,200.00 per year from our budget in propane costs alone not to mention furnace upkeep etc. My wood cutting costs average 200.00 per year in permits to cut on federal lands and upkeep of my Stihl chainsaws and gas for them. That was a net gain of 3 grand in one swoop.

    The real cost saver that we need to finish is to become energy self reliant and remove ourselves from the grid. Not only is this freedom in this day and age of smart meters and other infringements but a huge savings in the long run. This accomplished in three steps. First you need to reduce the amount of electricity you need so you can cut the cord. Then use the same monies for building solar, wind and other long term alternative power sources. It is hard to do on a limited income. W e have a propane powered generator so far and all the right poower distribution panels in place but lack the funds to build the inverter and solar /battery system to move off grid. Every step we take is towards self reliance and another string we cut from the beast. KF.
  3. TXKajun

    TXKajun Monkey++

    tacmo, you and I subscribe to the same newsletter! Good taste, eh?

    KingFish, my hat's off to you and the missus.

    tacmotusn likes this.
  4. kellory

    kellory An unemployed Jester, is nobody's fool. Banned

    @Kingfish, have you considered that Monkeys fish? I buy lures from time to time, (though there is a saying that a man with a boat, need never buy lures), and depending on type and use, I'd just as soon support a fellow monkey, as give my cash to Mepps, or wallmart. You might see what would be involved in posting a list of what you have to sell.
    tulianr, NotSoSneaky and tacmotusn like this.
  5. tacmotusn

    tacmotusn Mosquito Sailor

    Fishing lures? Did someone say fishing lures? I only have 5 big plano tackle boxes full of fishing stuff. Need more, need more, need more of my precious fish enticers!
    [worthless] ..... show us what you got for the fishes.
    oldawg, tulianr and chelloveck like this.
  6. NotSoSneaky

    NotSoSneaky former supporter

    I'd buy fishing lures from a fellow monkey in a heart beat.
  7. Kingfish

    Kingfish Self Reliant

    I did not want to post any links to our website or anything that would be considered spam so I didn't mention it. I guess since you guys are asking:D Ill give you a little background. My wife and I are long standing members of Muskies Inc. We are members of chapter 47 the Michigan Muskie alliance . We have worked with our State D.N.R. to help stock muskies all over Michigan returning them to their rightful place at the top of the eco systems here. My Wife has two division Titles in women's Muskie fishing including 1st place women's division and 1st place women's Masters .

    We Started our company ( FISHALL LURES) building just musky lures but have since branched into Walleye , Pike, Bass and Salmon. We build high end hand made wooden crank baits , some spoons and Buck tail Spinners and spinner baits. Our Twitch baits are pretty popular in both the Muskie/Pike and bass worlds. We build baits from 4 inches long to huge 21 inch Cedar crank baits. Here is a link to our Website. fishall

    I started in 1991 painting salmon spoons for Infinity lures. I went to school for auto body but decided I didnt like painting cars so I got into airbrushing lures. Im not an artist or anything like that I just do lots of patterns that work. Check out our color chart. I have been doing custom lure paint jobs for 20 years. Our lure line is called TALONZ and include the Claw series, Slasher series, Rippin Shad and Deep Threat series and several other new ones we have coming up. Our baits range in price from 10.00 each to 225.00 for a Titanium lipped 12 inch Deep Diver. Check out our site and let us know. We are working about 2 weeks turn around on orders and take money orders or Pay Pal as payment. KF
    oldawg likes this.
  8. kellory

    kellory An unemployed Jester, is nobody's fool. Banned

    Since you are the expert, what would you recommend for bass in running water, and for ponds? If I buy your lures, that will be my focus.
  9. oldawg

    oldawg Monkey+++

    [ditto]I was wondering how to justify another tackle box! Must keep Plano in the black you know.
  10. tacmotusn

    tacmotusn Mosquito Sailor

    Buy one just like one of your other tackle boxes. That is why I have 5 identical Plano boxes. I used to keep them in a locked cabinet (out of sight and mind). Never take more than 2 out of the cabinet, and keep it locked. Who would know you had more than 2 tackle boxes. Just sayin'
    Oh, I have them identified with different colored twist ties on handle, and more inside. I use them for breakaway sinkers occasionally. No one notices different color twist ties as unusual.
    oldawg likes this.
  11. Kingfish

    Kingfish Self Reliant

    Which type of bass? Around here Smallmouth are the predominate river fish With Largemouth being more pond or lake oriented. I sell Crankbaits so I can only give you one slant. My Katz Claw and Little claw are twitch baits that work in different conditions well. Both rivers and lakes. The Katz Claw is 5 inches long and made of White Cedar. Its very light and works great in and around Lilly Pads and weeds While the Little Claw is 6.75 inches and though we built it for Musky Huge Bass have taken this lure so many times it can not be overlooked as a big fish lure. Every good Bass fisherman should have a good selection of soft plastics (worms, craws, creatures , etc.) Top water, Spinner baits and a selection of crank Baits. Here is picture of another one of our smaller cranks. This is a 4 inch Cherry Wood twitch bait that does tricks no other lure does. Two bass ate it at the same time. It is a shallow suspending twitch bait. This means it wont dive more then a foot and does not rise fast back to surface. So you twitch it and it does cool tricks and then hangs in the strike zone. Very cool lures. 3l5o.
    NotSoSneaky and Gator 45/70 like this.
  12. kellory

    kellory An unemployed Jester, is nobody's fool. Banned

    I like that 4" twitch suspended. Apparently , so did the bass. PM me prices foe a couple of them. I want to see how Ohio fish like 'em.;)
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