I've been sitting on the concept for this post for a long time. There used to be lots of minimalism discussion around these parts, which makes sense since we've all sold our chairs and shoes for bitcoin.
What if, beyond adding to our stacks and personal well-being, our minimalism was actually good for other people too?
The 30,000ft case is pretty straightforward: By maintaining your level of production and reducing your consumption, there are more resources available to others. (As @SimpleStacker often reminds us, think about quantities, not prices)
A Bit of Theory
What we're talking about is a reduction in demand, which results in lower prices which allow others to afford more. It won't be enough to fully make up for your reduction, but the quantity supplied won't drop by as much as you stopped consuming.
Let's say you reduce your consumption of Hodl Butter by 5 jars per month. That might just drop the price enough for me and two others to buy another jar per month, resulting in Oshi only selling 2 fewer jars.
That holds as long as supply curves are upward sloping.
Why are supply curves upward sloping?
For a given production technology, or set of production technologies, producers will make their products in the least expensive way possible. It stands to reason, then, that if they need to increase production, the best they could do is maintain their current unit input costs, which would be a locally flat supply curve.
At some point, though, they'll run into constraints: Additional labor either requires paying overtime or raising wages to attract new workers and additional material inputs will need to be sourced from more expensive providers. That pushes unit costs up.
Running that logic in reverse, reducing demand allows producers to abandon their least efficient practices. They can retain their best workers and suppliers, while ditching the marginal ones.
Just because you don't need things doesn't mean others don't
Americans wildly overconsume (yes, that's just a personal value judgement). Let's focus on overconsumption of food, which bids up prices all around the world. While farmers benefit from this, they aren't the only ones who need to eat. Lower prices make adequate nutrition more affordable.
That same overconsumption of food (and food-like substances) is causing the bulk of American health problems, which, again, drives up medical costs for people whose problems aren't self-inflicted.
Even the stuff no one else needs is made from scarce resources that could go into making things other people need. The land, workers, machinery, etc. could be put towards other purposes.
What about the producers?
This is the part where we have to address tradeoffs. It would be disingenuous to pretend it's all puppies and rainbows for everyone.
Some activities will have only been productive because of your demand and cease being productive when your demand decreases: i.e. those producers are no longer adding value to the economy and continuing to support them would be the same as a subsidy.
What we have to keep in mind is that their loss of business is at least partially offset by the other effects of minimalism: new customers, more efficient production, and less competition for their inputs. We also have to remember that as consumers these producers benefit from the lower prices too: i.e. they don't need to produce as much to maintain their standard of living. This implies that a higher standard of living can be achieved with the same amount of work, or even a little less.
The other major element that helps producers is the effect on interest rates. By reducing your consumption, without reducing your production, you will have more savings. You could simply save those funds, which puts downward pressure on interest rates, or you could invest it. Either way, you're making financial capital more available to businesses. This allows them to weather rough patches and pursue longer term projects which may be more efficient.
Miscellaneous (half baked) second order effects
- Conservation: Ultimately, reduced demand will impute its way back through the structure of production to land, resulting in the most marginal land being "abandoned". Things like grade, forestation, water, and remoteness make land more costly to develop and they also happen to be traits of nice places to recreate.
- Leisure: Speaking of recreation, demand for labor will also be reduced, as will supply (most likely), resulting in more leisure time.
- Creativity: A society with more leisure time might have more creative works, as people find the time to express their talents and passions. With the lower cost of living, there might even be greater ability to earn a living at these creative pursuits.
- Family formation: The top reason given for delaying family formation is cost. Food, doctors, fuel, vehicles, housing, clothes are all enormous expenses for families. They are also precisely the things minimalists tend to scale back on. By desiring less stuff, you're taking some pressure off of young families.
TL;DR
By reducing your consumption, you make life more affordable for others, possibly even allowing them to pursue more rewarding lifestyles.