Irrationally Exuberant

I recently read Alan Greenspan’s The Age of Turbulence: Adventures in a New World and am in the middle of a second read of E.F. Schumacher’s Small is Beautiful: Economics as if People Mattered, so this post will feature these two economic theories. Neither school of thought gets my vote of confidence (even if I stole this blog title from Greenspan), yet both have some valid arguments that connect at the focal point of my exuberance!

The Age of Turbulence offers some advice for politicians in the coming years. Greenspan highlights two ideas: rapid technological growth increases the disparity of wealth and education reform is essential to narrow vast income inequality. He also throws in a recommendation that we should allow immigration to flow in tandem with a better education system to create a stronger, more educated workforce. Greenspan’s politics for the masses makes some sense if you can get past the complete disregard of people as individuals. His rationale is to find a solution so that the quality of living may rise.

E.F. Schumacher finds faults with a “fix it and go” attitude. Concerning the relationship between technology and the environment, Schumacher observes that once one problem is solved through technology, ten more problems may arise. Schumacher supports his own theory of Buddhist economics by suggesting there is some balance between economic growth and traditional stagnation. He knocks cost-benefit analysis as single-minded and suggests modern economics, “… considers consumption to be the sole end and purpose of all economic activity, taking the factors of production- land, labour, and capital- as the means.”

Oh, can you feel the contempt!?!?!? Does Schumacher’s argument defeat capitalism or could we combine his ideas with Greenspan’s desire for laissez-faire capitalism? Can a free market, driven by modern economic theory and an attachment to wealth, remain balanced with care for the environment and people? Or are we all too irrationally exuberant about our money and easy access to goods?

No one has an answer, but we are slowly moving towards an economic system that recognizes Schumacher’s plea to care for people and their environments. I am excited about the world’s (or well, the rich world’s) recent interest in not using consumption as the sole purpose of all economic activity. The government may still reference GDP as a primary economic indicator, but individual consumers are beginning to recognize well-designed products that respect environments, societies and cultures (read Buddhist economics). For now this movement may be limited to hybrid cars, fair-trade chocolate, and canvas shopping bags, but we are moving towards a more thoughtful economy. Eventually we may realize biking is more fun, fair-trade pricing is not the solution, and that we should probably just grow our own food. While Alan Greenspan may advocate for constantly increasing the standard of living, perhaps the concept of “standard of living” could include some ideas of Buddist economics. Could there be a universal measure for standard of living?

This is where Greenspan and Schumacher collide. First, Schumacher’s stab at modern economics no longer applies. While we are driven by consumerism and cost-benefit analysis, new factors are compelling people to think about the implications of their purchases. More purchases are intended for a greater economic or social good, so Schumacher’s Buddhist economic theory is slowly emerging in modern economics. Greenspan bumps into this notion because of his suggestion for education reform. With a greater number of educated people, workers will have more control and independence in their jobs. Schumacher expresses this as part of Buddhist economics. If we revamp the education system properly, similar to what Greenspan suggests, we could move towards a society with workers who are more empowered and consumers who are more educated. A combination of Greenspan’s math-driven economic concepts and Schumacher’s people-focused theory presents a realistic possibility for economics that really matters. If you look hard you can see that change is already happening!

Five months in Vermont and I already feel like I’m a Vermont bread expert. While I typically do not focus on bread as much as I do vegetables, it took some time to find the right bread here in Vermont.

I tried all kinds of Vermont bread: deli bread, soon-to-be stale sandwich bread, excellent rustic loaves with a thick crust and perfect soft inside, but it was not until I tried Trukenbrod, an incredibly hearty whole-grain sourdough, that I decided I could live in Vermont for a while. Not only is their bread exhaustingly perfect with an impeccable sourdough flavor matched with delectable freshly grown and milled Vermont and Quebec-grown whole grains baked in a wood-fired brick oven, but their website correctly communicates this strenuously breathtaking process. From the unexplained picture of W.F. Trukenbrod on the homepage to the everlastingly bitter explanation of why their method of baking bread is better and healthier, I cannot get enough of this beast of a bread operation.

Typically, I could find myself annoyed with such a snooty company. I am all for using local foods and having a minimal environmental impact, but I get annoyed when operations that tout their use of local foods and environmentally-conscious missions have products that taste like crap. Luckily, Trukenbrod is freaking delicious. Not only is their mill hand-made in Austria by a famous mill maker, but Trukenbrod deserves to be snobbish about their wood-fired oven, the local grains they mill, and the environmental mission that their company entails. Trukenbrod’s commitment to old-time baking pays off with the most delicious and dense loaf I have ever eaten! If I trust anyone to handle whole spelt and rye flours with dignity, Trukenbrod is the one. Trukenbrod, the only Vermont bread company with the courage to make bread the right way and charge the righteous, hefty price!

I am irrationally exuberant about food, biking, farming, and economics. Bring up fresh sliced tomatoes and I’ll tell you how I like mine grown, sliced, and salted (in Virginia in early September, a perfectly sharp knife with air pockets, and with eleven sprinkled grains of coarse kosher salt). In cities, I check out bikes more often than women. Ask me about agriculture and I’ll tell you it’s my biggest fantasy. Let me talk about economics and I’ll explain how I plan my day around opportunity cost.

My economic mind formed at a very young age when I got frustrated by the idea of banks. People put money into an account and they can retrieve that same amount plus some interest. “Wait a minute,” I scoffed at the idea to my dad, “how do banks make money if you can get the same amount back?” After some explanation of loans, I slightly understood the banking system. Maybe it was merely my fascination with giant steel vaults, but I kept thinking about money and banking.

Whenever I’d pass a billboard or analyze a TV commercial, I’d wonder how each company makes money. If Pepsi pays $3,000 for a billboard, do they recover more than that in sales? If they take out a loan with an interest rate of 7%, what can they do with the money to get a return higher than that? Often, the analysis would be in a fake insular business world created by a ten year-old. I’d try to envision the cash flows of a business by using over-simplified made-up numbers in my head. If a pack of baseball cards costs $2, where does that money go? I’d try to make up numbers for the cost of the paper, printing, and packaging to determine the cost per unit. After a few minutes I’d regain focus and welcome myself back into the real world.

Now if I still have an inkling to analyze companies, I read annual reports but my interests have shifted from business to food. I found cooking enjoyable as it fit well with my practical thought pattern. Heat changes food; change it the right way and you have success! Of course, I could not settle for buying food in stores. I needed to learn how to make the vegetables, meat and grains that I eat. Naturally, I became an agriculture nerd and a local food/sustainable agriculture preacher.

Most recently, I’m combining my passion for food and sustainable agriculture with my practical economic/business mind. I like the never-ending drive to understand how to improve our food distribution system to include more local, fresh food in all communities in a realistic economically-sound manner. It will be less hefty once I actually stop explaining and start writing about the theory…

Welcome to Irrationally Exuberant, the blog of unclear excitement. The blog title comes from a famous phrase said by Alan Greenspan in an acceptance speech for some award at some institute for public policy in 1996. Greenspan’s famous line reads,

“How do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions…?”

While the famous phrase is “irrational exuberance” (not “irrationally exuberant”), that name is no longer available on WordPress and using the adverb “irrationally” only intensifies the meaning of Greenspan’s phrase. The meaning for the purpose of this blog, of course, is unclear. In the past, I wrote about all things food and sustainable agriculture at the soon to be defunct Post-Haste Taste. While the blog started with recipes and massive discoveries in food production, it turned into a channel to express my economic thoughts. Here is the full circle. Irrationally Exuberant is a place for me and my friends to express what we’re excited about in entertaining and hopefully thoughtful manners! My topic of choice will often be sustainable agricultural economics with some food at times and I promise to be excited while I explain my theories. Unlike Greenspan’s mention of irrational exuberance with the stock market and money matters, being irrationally exuberant about hobbies is entirely worthwhile and productive! We hope.

Look for posts from a group of people ranging in topics from the sociology of education to mainstream comedy to building a desk. Enjoy.