« Update on the public plan | Main | *Wilco*, by Wilco »
Status games among the Amish
Some Amish bishops in Indiana weakened restrictions on the use of telephones. Fax machines became commonplace in Amish-owned businesses. Web sites marketing Amish furniture began to crop up. Although the sites were run by non-Amish third parties, they nevertheless intensified a feeling of competition, says Casper Hochstetler, a 70-year-old Amish bishop who lives in Shipshewana.
"People wanted bigger weddings, newer carriages," Mr. Lehman says. "They were buying things they didn't need." Mr. Lehman spent several hundred dollars on a model-train and truck hobby, and about $4,000 on annual family vacations, he says. This year, there will be no vacation.
It became common practice for families to leave their carriages home and take taxis on shopping trips and to dinners out.
Some Amish families had bought second homes on the west coast of Florida and expensive Dutch Harness Horses, with their distinctive, prancing gait. Others lined their carriages in dark velvet and illuminated them with battery-powered LED lighting.
Most of the article concerns a recent bank run in an Amish community:
Only Amish people can join. The trust's 2,100 depositors receive annual interest of 3.2%, while borrowers pay 3.5% interest on loans. There are no credit checks. Monthly mortgage payments can be no more than 33% of a borrower's gross income.
The trust's structure reflects the Amish philosophy of sharing. It isn't insured by the Federal Deposit Insurance Corp., but by its own bylaws it maintains at least $1 million in cash reserves. The trust has never exercised its authority to foreclose on a home.
A sustained run wiped out the bank's reserves and now it has ceased lending. Probably it is hard to gather the data, but I would love to read a book Economic Life Among the Amish.
Posted by Tyler Cowen on July 1, 2009 at 02:01 PM in Economics | Permalink
Comments
I just finished the new biography of David Ogilvie, The King of Madison Avenue. It has a too-short section about his stint as an Amish farmer. When he was asked why he was returning to New York, he apparently replied, "Lucre".
Posted by: andrew potter at Jul 1, 2009 2:16:33 PM
Note that the Amish are a very decentralized group of people. Thus, there are a patchwork of practices across regions of the country.
Posted by: liberalarts at Jul 1, 2009 2:27:03 PM
Yep, humans are wired to seek status. That's why the it's so exasperating when religious idealists and people like Will Wilkinson claim we can form a society in which people don't care about status. These are pipe dreams. The best we can do is try to manage and channel the status-seeking.
Posted by: Dirk at Jul 1, 2009 2:30:19 PM
Poor Amish, becoming proud. Next think you know they'll be wearing button. (One of my all-time favorite sights was seeing Amish boys play a volley-ball game against Hispanic farm workers in Lancaster County one summer.)
Posted by: Matt at Jul 1, 2009 3:12:54 PM
Donald Kraybill does Amish well. You know Amish bishops are chosen by lot? And some Amish travel to Mexico for cheaper health care. They make a great compare and contrast to mainstream American culture.
Posted by: Bill Harshaw at Jul 1, 2009 3:13:46 PM
I know some people who have worked in small-town hospitals in Indiana. They always liked to see Amish families coming in because (1) they never asked for charity care and (2) they always paid, cash, often in advance. I wonder if that's changing as well?
Posted by: Donald A. Coffin at Jul 1, 2009 3:23:02 PM
"The trust's 2,100 depositors receive annual interest of 3.2%, while borrowers pay 3.5% interest on loans."
Now at least we know what a reasonable spread should be.
Posted by: Td at Jul 1, 2009 3:29:36 PM
"Economic Life Among the Amish"...great title - if that were a chapter in your next book, I'd buy it....
Posted by: missmarketcrash at Jul 1, 2009 4:14:54 PM
So, I must have autism, but remind me, is the purpose of the government to further status competition, or to oppose it.
Posted by: Andrew at Jul 1, 2009 4:28:05 PM
I'm not sure you need much data to write a decent book on the economic life of the Amish... as I am trying to do. They do provide a fascinating contrast to mainstream American life. Yes, people do seem hard-wired to strive for status but seems to many a good thing to resist, rather than embrace, in most cases.
Posted by: martin kennedy at Jul 1, 2009 4:40:41 PM
That's why the it's so exasperating when religious idealists and people like Will Wilkinson claim we can form a society in which people don't care about status.
I think you may have misread Will Wilkinson -- he doesn't suggest forming a society where people don't care about status. Rather, what he argued was that there was no single-dimensional, 'Great Chain of Status':
http://www.willwilkinson.net/flybottle/2006/10/31/the-great-chain-of-status/
Money is an important source of status, obviously, but it's far from the only source.
Posted by: Slocum at Jul 1, 2009 4:49:19 PM
"So, I must have autism, but remind me, is the purpose of the government to further status competition, or to oppose it."
Whose purpose? Government has a purpose? I'm not sure vague statements about 'protecting the rights of man' are exactly purposes.
The purpose of the government is (or rather, are) the purposes of the people in it.
Posted by: Vichy at Jul 1, 2009 5:26:36 PM
Dirk:
Another avenue, away from defeatism, would be to tinker around with the wiring (i.e. cultural and genetic change). This seems obvious. There exist some people who do not seek status; we need to find out what makes them different, with the aim of creating more of those sorts of people. (This is all the prelude to real science, of course.) Upon learning the 'nature' of a thing, we can change it.
Posted by: Currence at Jul 1, 2009 7:35:40 PM
"Upon learning the 'nature' of a thing, we can change it." - Currence
That phrase, and the certainty with which some believe it, terrifies me.
Posted by: Gary at Jul 1, 2009 9:19:53 PM
Not unique to the Amish:
"Buddha found out that the causes of suffering are craving and desire, and ignorance. The power of these things to cause all suffering is what Buddhists call The Second Noble Truth."
Posted by: ZBicyclist at Jul 1, 2009 11:59:41 PM
I lived not far from the Amish in Lancaster,
Pennsylvania for many years in the 1970s and
1980s. The Mennonites, who may a related but
separate community, seemed
more willing to strike out on a different path.
In 1960 I met a young man who was training
to be a dentist in Philadelphia. In the later
1970s I occasionally met members (or so I
supposed)of the Amish community on trains in the
Harrisburg area, who I thought wished to advance
the idea that they were different without being
peculiar.
A people living an insulated existence, perhaps
going back to their 18th-century origins,in a
mainstream community makes various adjustments
as the decades pass. But the mainstream has
things to learn from them as well, such as
distinguishing between artificial or frivoluos
wants and real needs.
Posted by: Candadai Tirumalai at Jul 2, 2009 10:09:24 AM
Thanks for the post. Northern Indiana, it is true, has lived higher on the hog than most other communities, thanks to RV income. They have been hit hard, and were already experiencing a slowdown 3 years back in the summer of 2006, with shortened work weeks even then.
For Amish and economic life, you can't go wrong with Donald Kraybill and Steven Nolt's Amish Enterprise, which examines the Amish business phenomenon in Lancaster County but which also includes a chapter on other Amish communities around the nation.
I have written a follow-up to that which is more of a business-wisdom-according-to-the-Amish book, based on 60 interviews of Amish entrepreneurs in Ohio and Pennsylvania.
It's tentatively entitled Success Made Simple: How the Amish Do Business, and will be published by Jossey-Bass in March 2010. Donald Kraybill is slated to write the foreword.
Also, the Amish business section of my blog covers Amish businesses from puppy breeders (aka 'puppy mills') to homebuilders to urban market stands such as those operated by Amish in downtown Philadelphia:
http://amishamerica.typepad.com/amish_america/amish_business/
Sorry for the shameless plugs here, but I thought that the above may be of interest if anyone wishes to dig deeper into the topic.
Erik Wesner
Posted by: Erik Wesner at Jul 2, 2009 11:14:31 AM
Oh, wow... I was just about to post a link to Erik's website to tell you about his upcoming book, and then I scrolled to the bottom of the comments and saw that he beat me to it.
Posted by: Sarah at Jul 2, 2009 2:11:19 PM
Wow, this is some kind of discrimination
Posted by: Peter at Jul 8, 2009 6:44:40 PM
I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.
Patricia
http://lioneltrains.info
Posted by: Patricia at Aug 10, 2009 11:05:59 AM
