Easy Credit Makes People Foolish

Easy credit is pernicious. It actually drives "value" out of everything--it's a subtle, but powerful force. It's called "Gresham's Law" when applied to currency. The gist of "Gresham's Law" is bad money drives out good, e.g. people will spend paper money or use a credit card, but will hoard gold and silver, even copper and nickel. This principle applies across the board and it explains many aspects of "consumer" and "worker" behavior.

If you've got a corporate job, and the corporation is tied into the easy-credit financial markets, a task like gardening seems really stupid economically, because you can go throw some funny money at a grocery store clerk and obtain food without much work. That same situation arises over and over again in various ways. Instead of changing your own oil in a car, for example, it's easier to throw money at a professional to do it, etc..., etc....

When you act contrary to that system of incentives--the apparent "value" of the money drops drastically, and the value of your time increases drastically, similarly the potential value of productive assets like land and tools and vehicles goes up.

We have a strawberry patch in the garden that produces a lot of fruit each summer. This year it produced 44 pounds of fruit or 6,000 calories (give or take). It's very low maintenance and is self-propagating with a little human intervention. If the yields remain constant per unit area, an acre of strawberries on my property could be producing something like $20,000 of fruit per summer.

It's very difficult to unlock that value when working full time in a corporate job and under the sway of the easy credit markets.