Sorry for the delay, but here's the second discussion post for the Depletion and Abundance book club.
Chapter 4: Meet the Real Economy. Sharon argues in this chapter that the real economy is not the one that we are used to hearing and reading about. The idea is that the "real", or informal, economy is the one that is uncounted for. Some examples of this includes all the work that is done at home by stay-at-home moms, wealth that is created through bartering, even under-the-table transactions (babysitting) and criminal activity. These are all part of the informal economy.
The wealth generated by some of these activities are easier to calculate (illicit drug sales, housecleaning) than others (tending to a sick elder). But all of this input is not represented in what is considered the formal "economy". Her argument is that this unrepresented labor, this informal economy, is what really runs things.
Furthermore, she points out that the idea that this informal, or subsistence, economy is subsidizing the formal economy is inaccurate. In fact, it is often the other way around. Her examples of this are generally related to third world countries and those in economic turmoil and this makes sense.
[The rest of these chapter comments are my own, just to be clear...]
I do take issue with the concept of Peasant Economics in that all one needs to do (and I'm assuming that the majority of the readers of this book are middle class Americans and not sub-Saharan Africans) is to slowly slide outside of the formal economy. The benefits of this I'm still somewhat unclear or dubious about, although she states at the end of the chapter that "we should reduce our participation in the formal economy because it is the right thing to do".
I know very few, in fact, pretty much nobody that participates in the informal economy. We all work for the "man", hire legitimate child care, educate our children through public schools, pay our taxes and buy most of our food from someone else. So, aside from cooking at home and the occasional toilet cleaning, there is little in the way of supporting the informal economy.
So, if we decide to take a few steps toward self-sufficiency, what exactly is that gaining us? Maybe I can trade a few pumpkins with a neighbor for apples or sell some rosemary to the guy down the street, but it's really not going to keep me from relying completely on the formal economy. For very few of us will the formal economy be a supplement to a subsistence economy, even if we find the time or interest to spend on making that transition.
The problem with this has to do more with the assumption that people actually want to do these things that lead us to be more self-sufficient (growing their own food, making things by hand, repairing items). The idea that families will gather around to pitch in and do these tasks with relish and wonder what they've been missing all this time is misconstrued.
The reason why people stopped doing all these things and why convenience appliances and services are the norm is because most of these tasks, for many people, are a huge pain in the ass and they don't like doing them. Some people prefer to work at their career than struggle with teaching their children at home. There's a reason why there's specialization - it's because it's not only more effective (higher productivity), it's also because some people just don't have the interest to learn how to do everything and do it well. Bartering for services just isn't a reasonable way to obtain them in modern society where goods and services are based on a monetary value.
She makes a huge value judgement in that staying home to work on the "home economy" has way more value to society. This "good and honorable work" for one person is drudgery in chains to another. The woman's movement into the workforce speaks a great deal to this and it's not all because of finances - it's a way to escape. Would I rather employ my time doing something challenging, using my intellect and doing work that I know serves a great deal of people in a positive way or stay home chained to household chores with its never ending litany of laundry, dishes, ironing and cooking?
Being a part of the formal economy affords me the time to do many of these self-sufficient things with pleasure only because I know that I have conveniences available to me if I don't have the time or energy to do them. In other words, these tasks have become pleasant hobbies, but if they were all I did all day long, they wouldn't give me the same sort of satisfaction.
[One other thing I wanted to point out in this chapter is that I believe Sharon's analysis of 11th century serfs is inaccurate in the amount of time they spent working. The estimate of labor is under-represented and her calculation on the number of days put in during harvest time is wrong. Unless harvest time lasted only one week.]
Chapter 5: Making Ends Meet. Rather than buying our way out of our problems (either though retail therapy or the misconception that buying things will make you a better, happier, sexier person), "the goal is to reduce our costs by extreme frugality." Additionally, all that purchasing produces climate changing and oil-depleting gasses, so we are better off limiting consumption.
Purchasing goods is the root problem, even if you are buying greener products. So, the end result is that we need to be buying a lot less items. Sharon advises using what you have rather than buying more of things you don't need.
The next item towards gaining self-sufficiency after reducing spending is to reduce your debt. Because of interest, debt makes you poorer so focus on reducing your spending and putting that saved money towards paying off your debt. The other adage is to use it up, wear it out, make it do or do without.
Finally, do what you can to stay in your home. If that is not feasible then cut your losses and move on before investing a ton more in paying down a mortgage you will end up forfeiting anyway. This makes the assumption that the housing market will never recover or, at the very least, it will take a longer time to recover than you have or can afford to wait. So, before taking this advice you should really weigh that one - I'd hate to see people sell their "underwater" homes at a huge loss when, if they had hung onto it for 5 or 10 years, they would have regained that loss.
In any case, paying down your mortgage is a good way to reduce your financial exposure. Sharon advocates doing whatever you can to reduce your other debt even if that means cancelling all your other services (like cable) and selling the financed car or items that you are no longer using or need. Basically, reduce your costs and consumption in other areas.
If you are truly cash strapped you may not have the funds to spend building the garden that Sharon recommends, but you'll have to do your own cost-benefit analysis on whether or not the monetary input is affordable enough to try growing your own food. I know from personal experience that just because you plant a fruit tree doesn't mean that you'll actually get anything edible off of that fruit tree and maybe that $35 would have been better spent on beans and rice this year.
Depletion & Abundance discussion post - Part One
Depletion & Abundance - the book club
Depletion and Abundance: Life on the New Home Front
The Transition Handbook: From Oil Dependency to Local Resilience
Plan C: Community Survival Strategies for Peak Oil and Climate Change