October 14, 2011

Contemplations on Value & Money

What gives a thing value? Is it how rare it is? How much it sells for? How much someone else says it's worth? For it's potential to make money? Or, is it's value based on how much others need or want it? I am thinking these would be commonly accepted ways to set value. I daresay most folks in Dan's and my shoes would look at our home improvements and ask themselves, how long before thus and such pays itself off? Or, how much of a return can we get when we sell the house?

I'm contemplating this because I'm thinking that as homesteaders, our view of value needs to be different. Dan's and my goal, which I think is a typical one for homesteaders, is to meet more and more of our own needs through our relationship with our land. That could be extended somewhat, to secondarily meeting them through our relationship with our local community. I'm going to suggest that our success will hinge in part, on how we perceive value.

I've blogged along these lines before, in "Mindset: Key to Successful Homesteading?" Applying this mindset to how we're trying to live, is something I'm constantly mulling over. It requires conscience effort because it is not the way we are socially indoctrinated. Indeed, it is quite foreign to most folks.

Chickens, for example. Every homesteader, rural or urban, thinks about getting chickens. One of the first things we typically do, is calculate the cost. This is compared with what we can buy eggs for at the grocery store. If we want chickens for meat, we can figure that in too. In my case, I included the manure for compost and the ability to reproduce more chickens. After all that, the question we inevitably focus on is, which is cheaper? We try to determine the value of this endeavor by what it will cost us, and what we can recover.

At some point in our chicken deliberations, we entertain the idea of selling our surplus eggs to offset our expenses. No problem with that, but it finally occurred to me that, for what I was claiming our goals were, I was asking the wrong questions.

The question I ought to focus on, is, do I want to have a self-sustaining source of eggs, meat, compost, and chickens? If the answer is yes, then the cost comparison becomes basically irrelevant. If I have the money I get the chickens, and work toward feeding them from my own land. Here, their value is based on my need and how well they help me attain my goal, not whether I can get my money's worth from them.

Another example. Let's say I have an old farm tractor "worth" $2000, and you have a freshened dairy cow "worth" $700. I need milk for cream, butter, cheese, etc., to feed my family. You need to plow your fields to plant grain for your cows. A consumer/profit based trade would assume, "you still owe me $1300". Whether or not the trade could take place would depend upon whether or not the cow's owner had an additional $1300 worth of goods or cash to complete the transaction. If not, neither party would have their needs met. A need based trade on the other hand, might make the trade as is, and call it even steven.

What I'm suggesting, is that money is not the only standard by which we can set value. We can also set it by how well a thing fulfills our needs or helps us meet our goals.

Now, most folks probably wouldn't want to do it that way. That's simply not the way things are done and money is, after all, an easy way of setting value. There is a problem with that though, because ultimately, a thing's value is only what someone else is willing to pay for it. If I have a rare book that I claim is worth $10,000 but nobody wants it, is it really worth $10,000? I could theoretically starve to death because I wouldn't part with it for less than $10,000. If someone was finally willing to pay $500 for it, is it still worth $10,000? The original owner might think so and assumed s/he'd been cheated, but I'd say it is only worth $10,000 if the new owner can sell if for that. If not, then it's only worth what the next buyer is willing to pay. In other words, value is arbitrary. A real life example is the 2008 mortgage crisis, where many folks suddenly found they could only sell their homes for considerably less than what they paid for them.

Another example of the mindset I'm talking about would be the movie, It's A Wonderful Life with James Stewart and Donna Reed. The Baileys were interested in helping folks own their own homes, more so than they were in large profits. They lived comfortably but modestly, and were willing to sacrifice to help meet peoples' needs. Mr. Potter on the other hand cared more about profit than people. Of course he was the bad guy, and we all cheered in the end when things worked out for George Bailey. We might think of this as nothing more than a Christmastime feel-good movie, but it illustrates the real life viewpoints I'm talking about.

Now, I'm not trying to minimize the reality of money, nor am I suggesting that it is possible to do away with it. What I am saying is that there is more than one way of looking at it. It can be viewed as security, power, or a tool. Unfortunately, economics is the religion of our times, and those in power are it's priests. They deem that it's the duty of the rest of us to get jobs, work, make money, and hand it over. More and more people are beginning to become aware of this and don't like being pressured into this mold. We commonly hear the problem described as "corporate greed," but anybody can be greedy: from the kindergarten bully who steals everybody's candy, to the politician who takes bribes under the table. Some suggest that the answer to capitalism is socialism, but a government can be just as greedy, power hungry, fraudulent, and uncaring as a big corporation. It's the human element that makes it so, and is something no law can govern.

I think it is important that those of us who desire a self-sufficient lifestyle understand the underlying basis upon which we make decisions. How we assign value to things will influence those decisions. The problem is that a standard of value other than money, is foreign thinking to us. It is not the mindset we are taught and it is difficult to think this way. Our challenge, is to begin to look at ourselves and the things around us in a different light. It is something I invite you to consider.

This post was the first in a series. It continues with:


Dani said...

Leigh - We have recently come to the conclusion that in order to "grow" in the years ahead, we need to focus on bartering, more than purchasing. As you say, money has value, but it's not the same value to all, given the example you gave of the chickens - supplying you with eggs, meat, compost they will provide, and the baby chicks you could potentially sell.

Reckon the world has become too dependent on money and what it can buy...

trump said...

I think Bartering will become much more popular as time goes on, so its a blast from the past that is making a big come back! Richard

DebbieB said...

Wonderful food for thought, Leigh!

Leigh said...

Dani, I think a lot of us are coming to similar conclusions and I agree about our dependency on money. It has been said that the love of money is the root of all evil, and I think we're beginning to see the social problems caused by that love. It is a very sad thing.

Richard, I agree. The stumbling block now, is that the government wants to tax us on bartered items, forcing us to remain in that money valuation mode.

Debbie, thanks!

Mama Pea said...

Am excellent post, Leigh. Very succinctly said and easily understood.

So much of what we as homesteaders strive for is not measurable by society's current standards and, therefore, doesn't fall under the umbrella of "what is its monetary worth."

For instance, we believe our very homesteading lifestyle (daily exercise, growing as much of our own food as we can, etc., etc.) will keep us from contracting cancer, diabetes, heart disease, an auto-immune disease, etc. But there is no way I can prove this or put a dollar value on it. So how can I say what my vegetables or fruits or meat is worth. A heckuva lot MORE to me than the market dollar value!

I realize I'm preaching to the choir here (and also making this the length of a blog post in itself) so I'll stop. It's my hope that more people will start being able to think about the whole "Value & Money" situation as you do. Thanks for the post.

Mr. H. said...

Like Mama Pea said, how can we even begin to put a price on the health that this lifestyle brings with it. I enjoyed this post and agree with your words...love the new header picture too.:)

Tonya Gunn said...

Our health is priceless.. and the fresh air, exercise, and nutrient rich food are all worth it.

We also barter with neighbors and wish to do more as well.

Thank you for a good read.
Warm wishes,

Renee Nefe said...

you see a version of what you talked about in garage sales. The seller looks at the item and sets the price based on what they paid for it and perhaps too what the item new would cost and the shape it is in.
The buyer on the other hand wants to buy the item for a cheap as they can get it with no thought at all as to what the item is worth.
For this reason I would rather donate all my garage sale items to charity and take the tax deduction. Of course since I'm too busy to gather up my old stuff I have a house full of items I no longer need waiting to go. :(

Leigh said...

Mama Pea, thank you! That is another excellent point about value. I suspect the current economy will force folks to rethink things, hopefully not to worry or become discouraged, but to begin to realize that there are other ways of looking at things.

Mr. H, thanks! I think I should add the joy of such a lifestyle as well. There's nothing more satisfying than sitting down to a meal one grew oneself!

Tonya, that is so true. Hopefully more folks will begin to make the connection between their lifestyle and their health. It is important stuff to consider.

Renee, garage sales are a fascinating study in how folks set value. I admit I'm guilty of looking for that rock bottom bargain. The two times I've held garage sales, I was moving, and so priced to sell so I wouldn't have to deal with the stuff later. If I had simply been clearing out a bit, I might have priced differently.

One thing I notice, is that with garage sales and thrift stores both, items are often priced by where the seller is used to shopping. A comparable item, say a cotton t-shirt, might sell at a department store for $20 and a big box store for $10. Because of how I shop, if that t-shirt is marked $15, I wouldn't touch it. If it's marked $5, I would consider it.

Florida Farm Girl said...

I'm not a homesteader in any shape or form, but I am a farm girl, having grown up on a small farm here in NW Florida. Most of the things you are talking about were just part of daily life for us. If we had a garden sufficient to supply our vegetable needs, hogs, chickens and cows to supply our meat and dairy needs, the amount of money needed from the actual crops grown was kept to a minimum. I still think that is the best way to live. If more time was spent on the actual process of providing for our own day to day needs, a lot of the issues rife in the country today would never have arisen or even been contemplated.

I'll climb down off my soapbox now, but know that I'm right there with you.

CaliforniaGrammy said...

Great post and offers so much to think about. We've retired from a busy city-life, and are now living in the country and consider raising our own chickens for eggs, growing what we can, enjoying our grandkids while they are raising dairy goats, chickens, rabbits for their own family as well as 4-H projects . . . all this is priceless! There is just no comparison with the quality of food raised at home knowing what is in the food eaten by the animal and chickens to the commercially raised critters sold at the supermarkets . . . no comparison!

Jane @ Hard Work Homestead said...

Every dollar spent on a homestead usually goes to a specific purpose for a greater good. We have invested quite a bit in the last few years, and now we have no electric bill, no gas bill, no water or sewage bill, and no food bills. Yet I am still surprised how people will gasp at the price of a tool we may purchase that has a true payoff for our lifestyle and built to last, yet they spend hundreds a month in things that can not be measured, like cable TV, dinners out, disposable goods, lottery tickets, etc. So I am always surprised on how many Americans will "perceive value" , as you stated.

BrokenRoadFarm said...

So true...for us, like you, raising our own chickens is for food, and to know where it comes from, not to save money. I get irked when I read message boards and everyone is saying "it costs so much money to feed the chickens"...I just want to respond "then why do you have them?" But not everyone thinks like me. And, oh, that is my 2nd FAVORITE movie!! Love, love, love it! Seen it a billion times and cry my eyes out each time LOL

Susan said...

Value, like beauty, is definately in the eye of the beholder. As a fiber artist I know that I can buy socks at the store for $1 a pair, but I hand-knit them. Not "economical" perhaps, but making them is my therapy, and lets the person gifted know that they are valued and loved by me, and that is priceless.

Michelle said...

Well said! Your post is very timely for issues we are dealing with on oue homestead. :-)

Sherri B. said...

Excellent post with so many good points. I didn't read all of the comments but will try to get back to them tomorrow. My husband and I talk a lot about the value of what we may have to offer if things change and money is no longer something we use. I was a tax preparer years ago and know that the IRS does tax bartering. I don't know if this rule is the same now, but it used to be, if you had a conversation with someone and said a $ amount on a barter, then the IRS expects the taxes on that amount. So if I had some seeds and you had some eggs and we just traded for them it would be fine, but if I said my eggs are $3.00 and you said your seeds are $3.00 then you can expect to see uncle sam's hand out. I will make a note to self and look that up and see if it is still that way, we all should probably know this. Thanks for this post. xo

Leigh said...

FFG, there's plenty of room on the soap box! Your comment shows us a real life example of the benefits of the process. I wholeheartedly agree that when people are removed from the process, they do not understand it, and misunderstand much. Plus too much leisure time for a populace in general rarely seems beneficial to the social health of a nation.

CaliforniaGrammy, agreed, priceless! Not only the quality of what we consume, but what you can offer to your family. A more excellent gift could not be found.

Jane, excellent points. "... has a true payoff for our lifestyle," is so well put. What you are describing, is true freedom and security. I daresay if the rest of us were at that level of self-sufficiency, we would view money and value differently.

BRF, okay, I have to ask, what is your 1st favorite movie! I know what you mean about the chickens, but the whole thing seems to be a process we all go through. My guess is that the ones who remain stuck in "what it costs," will never really make it as homesteaders.

Susan, good point! When I used to do spinning demos, I would always get a number of folks who would give me, "I can but that at WalMart for cheaper." I would think, no you can't. They rarely bought the white bread/homemade bread comparison, but they always understood me when I commented that folks spend their time and money on what's important to them. For me, a round of golf or a Harley Davidson would be a ridiculous waste of money, but my spinning wheel and loom were my treasures. That, they always "got."

Michelle, thanks! Good providence on resolving the things that need answers.

Sherri, thank you for that! I knew about taxing bartering, but not what the rules are. Would really be interested in to know; please let me know what you find out. The frustrating thing about it to me, is being forced to remain in the money standard mindset, especially when the whole thing doesn't mean anything any more!

Theresa said...

Interesting post Leigh. I do agree barter is a win win in so many ways and provides a wonderful way in which to gain and grow. However, we still use a monetary value even in barter. When you figure the average price of a cow, or chicken, most likely we use a standard measure . Money in this case, in other parts of the world it might be cows, or pigs or what have you. I'm sure that those in parts of Africa would consider cattle barons the priests and so on and so on. And the world needs a standard to base it's barter on. Money is much easier than livestock. ;) Which has left agricultural based systems well, in the dust along with the people who still use them. Now, I know and you know we can talk about quality of life etc. And in this country we have the luxury of doing just that, but in many many third world countries, that livestock system is an indicator of the poverty levels of most of it's people, who are just one natural event away from starvation and disaster with no $ stashed away, only starving livestock or ruined crops. Money, no matter how you view it is a lot more stable ( even in these times) than any other value except maybe precious metals. A self sufficient lifestyle here is just that, a lifestyle, we chose it or not and there are a lot of safety nets and lots of choices as to how "self sufficient" one wants to be.

Lisa said...

Leigh - I enjoyed reading your post and the other's comments. Your points are insightful and well-writen. Thank you for choosing this topic.

Leigh said...

Theresa, oh yes, money is a very convenient way to set value. Too bad it's own value isn't consistent, LOL.

I confess that I do give a lot of things away rather than sell them. As much as I wouldn't mind a few extra dollars, the golden rule always comes to mind, the "do unto others" thing. Then I think how grateful I always feel when someone passes something on to me. I've been given things I couldn't afford to buy, so I think that's why a need based trade makes sense to me, rather than trying to establish a number amount as value. I figure it's probably the only way some folks could afford to have things.

Your point about self-sufficiency is well taken too. Most of us who want to work in that direction, quickly discover how expensive an endeavor it is. Solar and wind systems for example, are out of sight. Equipment for even a small farm is very expensive as well. Add a mortgage on top of that and the goal is nearly unreachable. Still, to be like Jane and not have electric, water, gas, sewage, and food bills. An enticing idea, don't you think?

Lisa, thanks! It's an interesting topic and always elicits interesting comments.

Cathy said...

Very interesting discussion, as always.

Leaving the farm for town was a bit of a shock because of the values change.

I don't barter anymore because I have learned that it's not acceptable here. Or I have yet (in a dozen years) to meet people who comprehend. Or maybe in this boom economy money is easier to come by and people feel better with that concept. At the farm, we were all scraping by one way or the other.

Unknown said...

You have expressed the truth of the matter very clearly. Money, after all, is just a figment of some people’s imagination. It means nothing other than what a group of people have decided on. So why should there not be another group of people that agree on another way of exchanging what they produce for what they want or need.

Anne said...

Need/ demand does play a role in determining perceived value... but as well a network has a lot of value and yet no price tag. As well how well something is used makes an impact.

This summer the weather here took an awful toll on many farms and backyard gardens alike. The economy has taken a strong toll on this tiny town making jobs very scarce.

A crop swap kind of just came about between several of us here. My husband brought friends some tomatoes, they responded in kind. We traded this summer for everything from venison to mushrooms to cucumbers to wine to canning lessons!

That would have not been possible without the network of good people.

Chickens.. well.. we have Japanese beetles by the millions. They devour them and grasshoppers. They also clean the straw by picking out the seeds before I use it as a mulch. I could further use them to clear areas for the garden.. but raised beds and chicken tractors are further down the to do list. The do happily go nuts scratching for grubs. I see that all as saving me a lot of time. To us they also bring the value of entertainment.

In the case of your cow & tractor.. lol.. out here they'd hire you to plow and harvest with payment being the cow and/or value of part of the crop. My point just being there's more than one way to skin a cat.

Farming is and always has been at the mercy of the market.. and the weather. Most medium to large scale operate with huge overhead and debt constantly. Their value is often all in the land.

Small farms however are easier to ride out the bad times.

I suppose I see the value in small farms in their tendency to be more diversely utilized, and the stability of being able to survive several years of bad times that would wipe out a large farm.

Norma from Misty Haven Alpacas said...

Good post, Leigh. Thanks for the reminder...(sometimes I still find myself sucked into those common beliefs of value=money)
I bring my yarns to the farmer's market on Saturdays...up at 6:15 to get there and setup a tent, sometimes standing in chilling wind or getting damp and wet. Sometimes the sales are good, sometimes not so much.
When I wouldn't take a part-time job offered because it was weekend work, someone said..."But you are willing to do that outside market in freezing rain even though you aren't garaunteed a sale?"

YEP ;)

different values!

Leigh said...

Cathy, good points. And as you and Theresa mention, money, if readily available, is a convenient means to trade based on a system of value. It's when money is scarce, that bartering makes more sense to folks. And I daresay, it causes values to change.

Sgtempleton, thanks! Now that we have no true value standard for money, i.e. gold, it is quite amazing that our money system is nothing more than just numbers in a computer file, and that they only mean something because everybody agrees they mean something. I think folks are beginning to lose faith in this however, which is the beginning of the whole thing unraveling. Those trying to hold it together are those in positions of power who think they have a right to a cut, in taxes, fees, markups, or simply because they've set themselves up in a hierarchy of middle men. They're afraid of losing control.

Anne, thanks for taking the time to leave such a thoughtful comment. Yes, I'm writing in examples in this post, hopefully succinct enough to make my point. But you're right, the living out of these will depend on many factors. I agree the ideal is a community! Or network. I so envy your crop swap. I think some of us, depending upon where they live, will have a stronger network to rely on than others. So far, we've found few around us who "get" what we're doing. Mostly we're the community oddity. :)

Norma, thanks! You bring up another valuable point, that of what gives us a sense of purpose or joy. Some folks simply don't understand that it isn't always money.

Anne said...

They don't need to get all of what you are doing and why, only you need that. ;)

Sometimes getting a swap going is luck (good or bad.. depends on how you view the 16+ inches of rain overnight that triggered it all), usually it takes some work. Probably the best place to start is with a garden club.. and if you don't have a garden club by you, maybe start one!

Gardeners would be some of the first to appreciate a lot of what you have accomplished.

That's how ours came about, by luck of discovering fellow gardeners. The swap occurred after all of us suffered major weather damage... luck had it so everyone had something different to offer.

Jody said...

Hi Leigh, I didn't read all the comments. Someone may have said this already, but you mentioned, "land" and "community". Surely you're acquainted with author Wendel Berry. If not, you won't regret the way he enriches what you've shared in this post. Thanks for sharing. We're with you at every point.

Leigh said...

Anne, I reckon it does sometimes take unusual circumstances to get folks together for such a purpose. I know there are a few like minded folks around, based on library books I want that are checked out. Another thing that would be valuable besides garden swaps, would be work swaps.

Jody, Wendell Berry! Thank you for mentioning him, he's an author I truly admire. Folks do read the comments from time to time and I agree, he's an excellent resource for those pursuing an agrarian lifestyle. Thanks!

Anonymous said...

We entered the barter world about 6 months ago. I needed some work on the farm and had friends with teenage boys. I agreed to pay 2 dozen eggs per hour for each teenage boy. It gave them a chance to work and they rec'd something tangible to provide for their families. I fell in love with barter.

However, it is getting harder to barter as we go deeper. Primarily with friends. The production on my homestead is my work (versus a day job) and has value. At times I give things away b/c I want to, other times I want to barter instead of using money. When you start bartering, it is harder for each side to accept genuine gifts b/c you don't know if you should give something in return. What is barter and what is sharing with friends? Whereas at a merchant, give $ and you are done. I've tried to be clear about what is a gift and what is barter, but I feel I start sounding too business with friends. It is weird and I don't like it.

I prefer to be done when completing a transaction. When I barter with people we're not close to, then I feel the transaction is complete and much easier. When I barter with friends, I am so worried I've short-changed them or they have the same concerns about me. It is just not easy to be done.

This is an area in our society that needs to be developed. It is not widely accepted b/c small farm items are not seen as commodities by many unless they have a sticker from another country.

But our fruits do have value. After my friend comes home from outside work it would be considered rude of me to walk over and ask for $100 that he earned that day. It is really no different when someone asks me to share my farm production just b/c I have it, without offering anything in return.

This is a delicate dance and relationships can be strained when you get serious about bartering on a routine basis. I hope you blog more about this subject in the future. I want to learn.

Your Houston friend

Leigh said...

Kris, you bring up some excellent points. I admit that this is a new area for me, like many others. I'm not even sure yet who'd we'd barter with, though folks are often are willing to trade. Actually "trade" seems more like an as-is proposition. "Barter" to me is more negotiating for an agreed on price.

I agree this needs to be developed. If the economy gets as bad as some folks say, it will be put upon us and we'll have to figure it out. If a time comes when our money isn't worth anything anymore, it can't be a standard of value. That may be tough be folks.

Grace said...

That's funny, Leigh, I've just been thinking about this very thing. My conclusion is that it is not enough to prepare to be self-sufficient, we should also prepare to have more than we will need so that we are in a position to be able to trade or barter. If the bottom drops out, and everything changes, it seems to me that a few of us will have things that other, less prepared people will need to get along. The problem is getting those others to see that now so that they will have something worth trading. Don't come down my driveway with green paper in your hand in a world where that paper no longer has any value if you want something that I have. Come to me with something useful, something I will need or really want. Bring me coffee, tea, salt, sugar, fuel, an exotic fruit that I can't grow myself - forget the green paper stuff.

Leigh said...

Grace, your comment reminds me of how it was in the South after the Civil War. Confederate money wasn't even worth the paper it was printed on. If the US dollar is indeed dropped as the world standard, I imagine we can see it's value plunge.

Karen said...

Wonderful post, and much food for thought. I've run into the 'what's it really worth' argument with my vegetable garden. I've had some comments along the lines of "well, when you figure in the $$$ you spent on compost, seeds, etc., and your time, you're really not saving any money at all." I wholeheartedly disagree. The organic, non-GMO vegetables I'm growing, along with the valuable experience I'm gaining, are worth far more than any $$$ amount anyone could place on them.

Leigh said...

Karen, thank you. I think folks who think that way, have honestly not thought it all through. They usually compare them to what they buy them for in the grocery store rather than true organic produce, which is considerably more expensive. Then there's the toll on our health and those related costs. And you're right, no one can place a price tag on the joy of doing it and the knowledge gained through the experience.

BrokenRoadFarm said...

Top Gun :-)

Leigh said...