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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.
105 sats \ 17 replies \ @Scoresby 12h
I like minimalism. It's a good way to live, but I don't think that's true in aggregate.
Isn't there a story where Hodl Butter is making their fine products in their garage, and if they get a deal with Amazon to sell at Whole Foods, they go out and buy/build themselves a little production shop in an industrial park somewhere and start producing much more Hodl Butter at a lower price point?
That deal only happens because more people want Hodl Butter, not fewer.
The story of last few centuries has been that increasing consumption is what makes life affordable for others. That's why poverty rates have decreased so dramatically. We have more people on Earth who want more things than ever before and that's the exact reason a the percentage of the world living above poverty levels has increased.
People wanting less means there will be less stuff and less activity and less goodness in the world. Perhaps I have failed to grasp something in your argument, though.
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Isn't there a story where Hodl Butter is making their fine products in their garage, and if they get a deal with Amazon to sell at Whole Foods, they go out and buy/build themselves a little production shop in an industrial park somewhere and start producing much more Hodl Butter at a lower price point?
There is, but I cleverly preempted it by holding supply fixed. What you're describing is a supply shift.
This is partially offset by the increased availability of financial capital that I described. Think of it like reducing the activation energy needed for a chemical reaction. There's a lower energy state that's not currently reachable, we can either reduce the hurdle or add energy.
The story of last few centuries has been that increasing consumption is what makes like affordable for others. That's why poverty rates have decreased so dramatically
I totally disagree with this. Increased production has made life more affordable. I think you have cause and effect completely backwards.
Human wants have always been unlimited. What's changed is our ability to meet them.
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47 sats \ 7 replies \ @Scoresby 12h
by holding supply fixed
what is the real world scenario where such a thing happens?
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It's a contrivance that economists call "the short-run". We bust it out when we want to think about the changes that will happen before the structure of production is able to adjust.
Still, it's not that crazy. Supply being fixed isn't the same as quantity supplied being fixed. If you think of a particular factory, with it's available labor force and suppliers, it has a fairly fixed supply. At different prices for its products, they'll scale production up or down, but the production technology is the same.
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42 sats \ 5 replies \ @Scoresby 12h
I guess I'm confused by this. How can you make a generalized statement based on a particularized observation?
The structure of production will adjust and when it does, the result may very well be more expensive Hodl Butter...or no Hodl Butter at all if enough people decide not to purchase it. However if you keep on buying it and more people ask Hold Butter if they can buy some, then Hodl Butter might figure out some ways to make it more available. This is something they have no reason to do if they see their sales declining and interest waning.
Your post is making a generalized statement about life, not a specific observation about some very constrained place or moment in time:
By reducing your consumption, you make life more affordable for others, possibly even allowing them to pursue more rewarding lifestyles.
In any scenario where one might make a decision based off this observation, supply won't be fixed. If I decide to not buy something it may or may not contribute to the expansion of a business (it might also contribute to the degradation of the environment or a even to the beginning of a war) -- the same might be said if I choose to buy something.
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Your Hodl Butter point is somewhat inconsistent. You say that the production structure will change and then proceed to ignore it when declaring that they would have no reason to continue producing at lower demand: Most likely their inputs have become cheaper and their cost of living is most likely cheaper, so they can afford to spend more time on it.
When we're thinking about our individual actions, it's not all that likely that we need to allow for supply shifts. Our production is marginal in many cases. Only if your demand is sufficient to change how goods are produced do you need to think about supply shifts. Maybe that's the case for Hodl Butter, but it's not the case for anything that's mass produced. No one's opening a new plant, or closing an existing one, because you cut back on your spending.
Now, when you suggest that the equilibrium changes could go either way. I don't disagree, which is why I had the "half baked" description on those thoughts. Take those more as my musings on what I would expect to happen.
42 sats \ 3 replies \ @Scoresby 12h
but why would production ever increase if not for demand?
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Technological advancement and specialization from trade.
More stuff being consumed isn't the same as more demand. Hold a demand curve fixed and slide the supply curve to the right.
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47 sats \ 1 reply \ @Scoresby 12h
but, there is no reason to advance or specialize unless one expects people to demand what you will produce.
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Profit maximization is the reason. If cheaper inputs can be obtained or a more efficient conversion into outputs is discovered, profits increase and production expands.
i only just got the chance to read and digest this, although i did zap it earlier because i could see the proof of work (thank you keynsian beauty contest rewards). it made a lot of sense to me, especially after reading scorsby's trial by fire. i'll have to think on this idea some more until i have something more meaningful to add--although i will say that i noticed you took and made some complex concepts accessible and succinct--and in the meantime, i'll be waiting for your book to come out.
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47 sats \ 1 reply \ @Scoresby 12h
Isn't this also how organic food got so much cheaper? In the 90s and early 2000s, nobody was too interested in organic food and the prices were significantly higher than "normal" foods. But as demand for organic foods increased, producers figured out how do organic more efficiently (either because of economies of scale and/or because of tech) and the result is that a jug of organic milk doesn't actually cost that much more than a jug of non-organic milk.
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Yes, it is
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Consumerism has brought everything except good things, an example of this is how all the technological waste in the world has ended up in the poorest countries in the world.
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Christian theology teaches that one should desire neither poverty nor riches, and that the rich have a responsibility to scale back their own consumption to leave some for the poor, so I think "minimalism is pro-social" is accurate from the standpoint of Christian ethics.
As to the negative effects on producers, one should remember that everyone is both a consumer and a producer, and that "producer surplus" so-to-speak isn't well defined apart from the consumption that this surplus buys for the producer. Thus, if the producer has adopted a minimalist lifestyle in their consumption patterns, it's not obvious to me that a minimalist society would make producers worse off.
Ultimately, though, this discussion highlights one of the weaknesses of traditional economic welfare analysis. Without a clear ethical foundation from which to make judgments of "good" or "bad", we're just lost at sea like a ship without a compass. We gravitate towards "more GDP", which essentially means "more stuff", not because that's morally right, but because we can't agree on a more comprehensive ethical measure.
(To be fair, it's also because economists are trying to be as "scientific" as possible and to import as few ethical assumptions as possible. "More stuff" is always "better" in a weak sense because you can always choose not to consume the stuff that's there. Still, given that producing "stuff" results in the usage of input resources and given that disposal is not actually free, maximizing "stuff" isn't really a great metric to work with.)
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I don't really mind the standard moral relativism of economic analysis. As long as we keep in mind that what's being asserted are claims about what people are willing and able to pay for, we can avoid grander claims about happiness/utility/better/etc.
We're just being descriptive.
I think the obsession with GDP is mostly about focusing on what's observable and ignoring what isn't.
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I actually think the obsession with GDP is mostly by absorption of social norms rather than the majority having a deep understanding of the ethical or practical foundations of GDP as a measurement. i.e. People see the talking heads focusing on GDP so they absorb the idea that GDP is the measurement of economic health.
I think GDP is a good enough measure for what it is; but I'd like to see more people understand what it actually measures and what it doesn't.
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Yes, agreed. I meant why economists continue focusing on it, when we all know the limitations.
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Americans wildly overconsume (yes, that's just a personal value judgement)
Fact.
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.
... is in contrast to that beautiful @SimpleStacker remark ("think about quantities, not prices)"; in real life, prices don't move that much whereas quantities do.

ALSO, hot take:
The top reason given for delaying family formation is cost. Food, doctors, fuel, vehicles, housing, clothes are all enormous expenses for families. This is mostly bullshit; peeps deluding themselves.
  • it's not more expensive than in the past;
  • decline in childrearing isn't so much in marriage/couples as it is in fewer people partnering up (so the cost impact downstream of this is immaterial)
  • various schemes, all across the world, to throw money (sometimes quite a lot) at new families having babies, produce effect sizes of ~0. So "cost" as a given reason is clearly bs.
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I largely agree with that latter part, but the important point is about perceptions since that's what people act on.
I do think people would have kids sooner (and subsequently have more of them), if they felt less stress about their costs. Again, the perception matters. The financial incentive programs feel like a drop in the bucket when weighed against all the costs of raising kids, while reducing costs of living removes it as a concern.
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no I'm saying efforts/arguments like that are fishing in the wrong pond.
It's not the reason peeps ain't having kids or forming families. There's a bigger culture/mindset idea around -- individualism, feminism, career/boss lady, self-actualization, IG blah-blahblah. Those don't get fixed by costs
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I know first and second hand that people do postpone having kids for financial reasons. It's also known that having kids earlier increases the number of total kids.
I agree with your bigger causes but I'm not convinced this isn't a factor on the margins.
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I did it but I was sure I gonna get a younger wife so as to at least have two babies before I'm 40 and possibly the third one, just in case, before 40 too. My decision was purely based on one thing and that was that I wanted to be sure that my kids wouldn't need to struggle financially that I went through as a kid.
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While not arguing about the theory of minimalism you described, I'd like to add that True minimalism is found nowhere except in India. So, I suggest Americans or any other populace to research on Indian people living in villages.
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It's more of a spectrum than an absolute.
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I'm sure you must have listened about Sanyasa and sages which is the zenith of minimalism, not suitable for everyone. But because these are so deep rooted in Indian culture, I don't see average Indian spending more than what's necessary. The joint family system helps a lot in maintaining this. I see many many families around me that don't have cars or credit cards not because they can't have but they believe they don't need them. Or in any case they need them, they buy things often in sharing. For instance one of my neighbours recently bought a car but the payment for the car is done by 3 brothers. The amazing part in their purchase is that they would only need the car occassionally so they are renting it for local commute.
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It's the first time I read this word and what it means. Well, if as a society we were to reduce consumption in the world (although I see it as difficult, when consumerism has destroyed half the world), do you say that this will bring us some benefit?
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Lots of people have written about the personal benefits of consuming less. I'm arguing that it's also better for others when we choose to consume less.
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21 sats \ 1 reply \ @Msd0457890 12h
Sounds good to me, will you have more content where I can look for more information?
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You could look at the related posts for this one. There are a few others on minimalism.
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People always commit this error because they don't need something think others doesn't want for example.
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By hoarding, you make resources less accessible to bad people, preventing them from using those resources to do bad things to good people. Minimalism is cowardly abdication.
(Anything can be spun into a virtue signal.)
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7 sats \ 1 reply \ @Daedalus 12h
Genius idea! You make a great case for how a conservative, minimalist people maximize the human elements of life for all, instead of just in their personal lives.
In these matters I always like to think about the power we have as individuals to affect this change. If all of us spontaneously decided to take steps to reduce consumption, the world would be fundamentally changed. Of course, this is not practical, but just one person's choice to avoid consumption has a knock-on social and financial affect that can very likely spread. This pursuit in all of us is far from fruitless.
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I totally agree with that. The world would be a better place if we stopped consuming so many things that we often don't need. Of course, it will have to be a change in the global mentality.
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