21 
44 | § ¶The Employee and The Serf
-- Times Change, Concepts Don't
In the old medieval times there where land-owning nobles and land-working serfs. Both had their responsibilities. The serf had to work the land and give the majority of its produce to the land-owning noble, keeping a minor portion of his produce for his family's sustenance and to barter it for goods in the local market. The noble in turn had to protect the serf from attacks from fellow warring nobles, and ensure that his serves lived in a safe community. The noble also had to provide tribute to higher nobles, and had to pay for the upkeep of fortifications, armies, and other government needs. In times of war the serf had to serve for up to 40 days in the noble's army. In times of famine the nobles often shared their stores of food, for fear of loosing the serfs (and loosing all of the hands that worked their lands). Serfs where not allowed to move from one noble's land to the other without prior permission of both nobles. People who didn't owed lands (nobles), nor worked the land (serfs) better had a trade (craftsmen: blacksmith, carpenter, cobbler, etc.) or found themselves out of society (literally).
Civil rights and liberties have changed the lives of the common man and of the owner. Modern society doesn't impose serfdoom on those who don't own land. Furthermore, owning land doesn't directly make someone special, as the mere quarter of an acre on which most suburban homes sit now would not feed too many people if it had to be put to farm use, nor the house structure would produce anything that could be bartered for food or goods.
What is still true is that the employee (serf) is expected to produce far more than what he/she will bring home in the way of money. The business owner(s) (nobles) make use of most of the production to cover the costs of running the business and paying taxes (tribute) to higher authorities. Increasingly, business owners are expected to provide for social needs of the employees (serfs) – like medical and life insurance, and even vacation and sick time. Business owners hope that through good management they will be allowed to keep a reasonable amount of the value produced by the employees.
Both models have a drawback for the employee/serf. This person is not really free to get out of the situation where he/she is. Both the employee and the serf need sustenance (food and shelter) and the modern employee has the perceived need of acquiring luxury goods. The only way these people acquire the things they need is by producing. However, neither has the means to produce – the serf doesn't own the land and the employee doesn't own the business. The serf needs to move from one noble to the other, and the employee from one employer to the other.
Fortunately modern society does provide for the ability to move from one segment of the population to the other. Better yet, the move can be gradual or at once – up to every individual. An employee (serf) can become a business owner (noble). For this he/she needs to invest into the starting of a business and if successful can have people work for him/her and may be able to enjoy the production of those employees. It is all possible because we have a very liquid currency that can be accumulated and invested until it is time to start a business. We also have credit institutions and even venture capitalists willing to help someone with the energy to move from being a serf into being a noble.
As you might expect, nobody said the path to become a business owner/noble would be easy. Business may fail, and then you are in a worse situation than you where before. Just think that the path to Knighthood used to be riskier: you could fall a casualty of war in an attempt to impress your noble enough to make you a landed Knight.
Modern society does allows for the same person to be the equivalent of a serf and a noble. A serf in the sense that person works for an employee – and can only keep a portion of his production to feed his/her family. However, that same person can invest a portion of his/her earnings into companies – essentially becoming one of the owners of a corporation. By becoming one of the owners of the corporation, now he/she enjoys the excess production from such endeavor. He/she also shares the risks of the corporation, just as the noble(s) shared the risk of defending their land (market).
There is another option in both societies. The craftsman, that expert in a trade who barters his services for food, shelter, and goods rather than his raw work in the land. In modern times this expert on his field is called the independent consultant. This is the electrician, the plumber, and the carpenter. This person is also the staffing consultant, the temporary worker, the IT consultant, and many other flavors of the same idea: someone who barters his/her services directly for a compensation. Fortunately you do not have to go through a 10 year apprenticeship / slavery to earn your trade now. You just have to get education and experience (potentially a lot more than 10 years). Traditionally life has been more comfortable for this kind of person – but this person is not protected by the business owner (noble) from any social maladies. This person is not entitled to keeping his sustenance as the serf does either. If a there is no war, fletcher may be out of work, and if there is no wine the cooper (barrel maker) may be out of luck.
If you had the choice, would you rather be:
- A Serf / Employee.
- A Noble / Business Owner.
- A Craftsman / Independent Consultant.
- A combination?
19 28 | § ¶Real Estate: Increases in Price, Not in Social Status
-- Long Timer Reality Check
Real Estate has the habit of increasing in value over time – I do believe in real estate as one of the greatest investments you can have. It has the ability of creating great amounts of wealth with very low initial investment when leveraged by a mortgage loan. In fact, for many people the primary residence is the biggest asset families have.
Real Estate, however, has the habit of staying fairly constant. Lot size, house size, number of rooms and dimensions, number of bathrooms tend to stay the same. As time goes on people from any particular Social Level expect more out of a house. Years ago people where happy with one or two bathrooms in their houses. Nowadays middle class people want two and a half. Rooms where 10 x 10 feet, while 12 x 12 feet is becoming the norm. Real Estate agents still list dishwasher and food disposal machines as features, while most people think is a necessity. In short, a middle class family from today may expect a lot more than what a middle class family expected out of their home 30 years ago.
To make things more complex, new neighborhoods are often the ones in more demand by those who can afford them, and some old neighborhoods start to become less desirable – not as pricey.
This issue becomes particularly evident when an old couple (or single person) has been living on a house for 20 or 30 years. The day they decide to move they face a hard reality: the sale proceeds from their home may not buy a home that reflects the particular social level that the person or couple identify themselves with. The old house will most probably fetch a lot more than they paid for it but, no matter how nicely cared for, it may not fetch enough money to buy the property that reflects the perceived social status.
I have seen this shock to happen to my grandmother, to my in-laws, and today to a relative of my in-laws. In these and many of the other cases I have seen, the individual have come up with extra cash to move to a property in the same city that is comparable in social level and comfort level to the one they bought 20 or 30 years ago. Other people choose to move to less costly places – places where there may not be enough jobs but that suits them very well because they no longer need one. Plain downsizing is another option – especially if the family size has dramatically decreased in the past few years.
I think this particular phenomenon affects people who hold the same property for 20 years or more, and a lot less for those people who hold the property for 10 years or less. I am not sure what the best way to address this is, assuming it should be addressed. But I would throw a few suggestions:
- Upgrade residence once every 10 years – easier to say than to do. Will always require a lot of cash that may be needed for education, fun, or retirement.
- Save a lot of money – again, easier said than done. It is better to be prepared than to face a reality check.
- Buy in a very nice area of town, with very nice schools that produce very successful kids. Great school systems usually tend to attract people, regardless of house conditions. House value, and social level may probably be closely related in these communities – more so than in others.