Ep 7: Horse By The Door

Grandpa Charles was born at the end of the Civil War in rural Utah, but he and Grandmother Georgina aspired to something beyond their immediate grasp, something unknown.  They migrated, first to the town of Morgan, where he was schoolmaster.  Ultimately, they lived out their days in quite untraditional roles, even further afield, in the somewhat cosmopolitan, transcontinental railroad hub of Ogden.

Along the way, Charles headed water user associations for two lifeblood rivers, served as mediator and water commissioner, and also served as Utah’s first director of Weights and Measures.  His charge then, at the gateway to the 20th Century on America’s Western frontier, was industrial standardization.  A gallon of gasoline sold in urban Salt Lake City, for instance, had to be exactly the same measure as one sold 300 miles away in the town of St. George.

More on Grandpa Charles, later in this podcast series.  But for now, his persona is useful in grasping a powerful economic metaphor from post-Civil War America.  I call it the horse by the door.  Its purpose is to visualize what it means to be economically productive, and what it means, on the contrary, to take a nonproductive free ride on others.

Suppose a prosperous farmer, hypothetically known to Charles and Georgina during their growing up years, owns a plow and two horses to pull the plow.  Passers-by may comment on how the farmer’s industriousness benefits others in the community.  With his growing wealth, the farmer-entrepreneur buys goods from local merchants and hires workers from the community.

Now, suppose he calculates his family has become secure, even economically bullet-proof, if you will.  He no longer fears lean times, nor even unfavorable opinions from townspeople, should he fall out of favor in his community.  Therefore, plowing with one horse, rather than two, he reasons, should be sufficient.  

Farm productivity is likely to suffer, even remarkably, however.  Instead of selling the second horse, he tethers it permanently but the door of his house—in a nonproductive use—solely for the pleasure of his children.    

The farmer’s actions, then, have economic implications—not just for him—but for the entire community.  Because of mutual interdependence, if the farmer produces less and buys less than before, from local merchants and laborers, then the quality of community economic life suffers.        

Perhaps townspeople chafe when reflecting earlier, they may have granted the new entrepreneur a break on property taxes to help get his venture rolling.

Here is the point.  

The farmer in this metaphorical tale began by connecting the pursuit of his self-interest, with attainment of the community’s common good.  Later, he jettisoned the common good link, in spite of benefits conferred upon him earlier, in anticipation he would continue to give back to the community.

If fraud is deception, then, we ask, has this farmer committed fraud, even though no laws have been broken?

More on this, later.  For now, check us out on Capitalism in Crisis.

From Boulder, Colorado, this is Jim Sawyer for Capitalism in Crisis. Org