What is Subsistence?

Wikipedia <http://en.wikipedia.org/wiki/Subsistence_economy> says:

A subsistence economy is an economy which refers simply to the
gathering or amassment of objects of value; the increase in wealth; or
the creation of wealth. Capital can be generally defined as assets
invested with the expectation that their value will increase, usually
because there is the expectation of profit, rent, interest, royalties,
capital gain or some other kind of return. However, this type of
economy cannot usually become wealthy by virtue of the system, and
instead requires further investments to stimulate economic growth. In
other words, a subsistence economy only possesses enough goods to be
used by a particular nation to maintain its existence and provides
little to no surplus for other investments. Therefore, this type of
economy aims to create economic stability so that capital can be
accumulated and the inevitable economic surplus can be invested in
other potentially lucrative business ventures. A subsistence economy
also has no money of any sort.

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Wiki-Answers <http://wiki.answers.com/Q/What_is_the_definition_for_subsistence_economy> says:

A subsistence economy, is an economy in which the people barely meet
their everyday needs. It is often seen as a major factor for poverty in
developing nations. This is because the people of the society do not
trade with other groups, this may be for a vary of reasons but a major
one being their isolation. If the people of the society do not produce
enough food, or not a variety the people will become sick and contract
disease. This type of living is poverty.

The people also do not have everyday items that we take for granted,
such as ipods, TV's, computers, fashionable clothes and shopping malls.
This is because the people do not produce enough surplus to trade with,
sometimes not even producing a surplus at all.

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From <http://ankn.uaf.edu/Curriculum/Books/DoesOneWay/SUBSISTENCE%20AND%20ECONOMIC.html>

"Subsistence is not only a cultural activity, the foundation of
several of the Native groups in Alaska, without which their cultures
would die. It is also the necessary economic base for their very
existence."1 Owen Ivan, Bethel, 1973

Historical Perspective

When economic planners set about to tackle the problems of "poverty" in
rural Alaska they usually seem unaware of the role that subsistence
plays in the rural economy. With good intentions to relieve the poor of
their problems, they often lose track of the fact that poverty has only
recently been introduced to Native communities. Up until a hundred
years ago people were living in a finely balanced economic relationship
with the land.

For thousands of years people subsisted from the land and ocean along
the west coast of Alaska. In many ways it was a hard life, but it had
none of the frustrations and stigmas of poverty, for the people were
not poor. Living from the land sustained life and evolved the Yupik
culture, a culture in which wealth was the common wealth of the people
as provided by the earth. Whether food was plentiful or scarce, it was
shared among the people. This sharing created a bond between people
that helped insure survival.

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THE SIMPLER WAY: WORKING FOR TRANSITION FROM CONSUMER SOCIETY TO A
SIMPLER, MORE COOPERATIVE, JUST AND ECOLOGICALLY SUSTAINABLE SOCIETY.
Ted (F.E.)Trainer, Social Work, University of NSW, Kensington 2052.
<http://socialsciences.arts.unsw.edu.au/tsw/>

SUMMARY

SUBSISTENCE.
<http://socialsciences.arts.unsw.edu.au/tsw/Subsistence.html>
3.11

Ted Trainer

The use of the term “subsistence” is ambiguous and is used in confusing
ways. The following comment focuses on the meaning that is very
important in the discussion of the economy. The economy assumed in The
Simpler Way is a subsistence economy.

The term is commonly taken to indicate a situation in which very poor
tribal or peasant families barely survive by just producing enough to
feed themselves. “Modernisation” and “development’ are essentially
thought of as requiring the replacement of subsistence economies.

However if we consider what the economies of tribes and peasant
villages were like before being impacted by Western society we see
that these were typically complex, integrated at the village level (as
distinct from being about an isolated family), and satisfactory and
effective in meeting needs.

Following are the characteristics of a subsistence economy as the term
is used here.

    * The crucial themes is producing with the intention and
expectation that the product will be used by the individual or his
community to satisfy need, not with the intention of selling it to
receive money. The focus is not on the production of commodities,
items to be sold into the market in order to be able to buy products
from the market.

    * Subsistence is best thought of at the communal level, not that of
the individual. In the subsistence economies of tribes, monasteries,
peasant villages and communes the intention is to produce what members
of the community want and to distribute those things to them via
mutually beneficial procedures. These may involve selling but if so the
point is only to facilitate exchange and accounting. There can also be
trade between communities, and trade with an external
conventional/modern economy, but these are minor elements and are
engaged in to secure small quantities of locally unavailable items and
are not engaged in to accumulate monetary wealth.

    * The concern is to suffice, to produce just enough for a
satisfactory life. Production, work, sales and consumption are
minimised rather than maximised. Non-market and non-monetary processes
are maximised, such as production within households, mutual exchanges,
giving and assisting. Modern economies are obsessed with a fierce
determination to maximize, income, profits, sales, GDP, trade,
investment, wealth…

    * Non-market considerations such as tradition, rights and justice
take precedence in production, distribution and development decisions.
The distinction between this situation and the modern economy is
enormous. In a capitalist economy the only consideration is the
maximization of profit, income, and monetary wealth. This is the basic
cause of most of our problems. Many bad things happen because the
moral, social, ecological etc costs involved can be ignored because
the only factor that has to be taken into account by an investor,
seller or purchaser is what will maximize monetary benefit to him.
(Governments curtail the process and stop the market having effects
that are too destructive, but this is the extent to which “socialist”
principles restrain the operation of raw captalism.)

    * The overriding element is that production is not carried out in
order to make profits or accumulate wealth, or to invest a surplus in
order to increase wealth or capital stock. Accumulation is the
defining characteristic of capitalism, and shows its essential link
with growth. Subsistence economies are stable and their participants
are not seeking to accumulate.

    * In a subsistence economy capital is of little or no importance.
Development depends on whether the community has the labour, land,
stone, timber, seeds, knowledge etc. necessary for the project, not on
whether a sum of money can be obtained.

    * Subsistence therefore involves independence from the global
economy and its sources of capital, and the resulting debt and
entrapment.

    * A major characteristic of subsistence economies is security.
Communities are independent of the normal national or international
economies, being able to produce necessities for themselves, having
inter-dependence and mutuality, and focusing on effectiveness and
sufficiency rather than efficiency and maximising. These provide high
levels of safety in the face of adverse natural events or the
devastation that the fickle and predatory national and international
economies can inflict. What matters is being able to continue to
provide, to get by, no matter what happens and no matter if production
is “inefficient’.

The Simpler Way is based on an analysis of the global situation which
stresses the coming era of intense and irremediable scarcity. Growth
and affluence society is grossly unsustainable and unjust and there is
no possibility of maintaining the levels of resource use typical of
rich countries today must be replaced by mostly small, localized and
highly self-sufficient economies run by participatory processes, and
based on a culture of frugal, cooperative non-material values. The
argument is that we can live well in these societies. These economies
are well-described as subsistence economies according to the above list
of criteria.

Conventional economic principles are in italics, to left. Alternative principles are indented in bold.

Produce what makes most profit.

Produce what is most needed.

Let free markets determine what is to be produced and what industries
are to be developed.

Free markets will produce for and distribute to richer people,
because this is more profitable. Therefore the economy must be under
social control or regulation, to make sure that the important things
are done. This does not mean there can not be a place for free
markets.

The rich become richer; most world wealth is delivered to them.

Local people use local resources to produce for themselves the
things they need.

Trickle down will eventually enrich all; just generate more wealth and
in time everyone will benefit.

Not much ever trickles down. Even if it did, the process is a
grossly inefficient way to improve the conditions for the poor
majority; they would be far better served if allowd to apply existing
productive capacity to producing to meet their own needs, not producing
what will maximise profits for the few who own most of the capital.
Inequality increases.

Allow a very few to own most of the capital. (Half the world's capital,
shares, factories and mines is now owned by about 1% of world people.)

Make sure society as a whole owns or controls at least the major
productive capacities, such as the big steel works, railway networks,
and banks. Many things should be public property, run for the benefit
of all, not run to mazimise profits. This sets difficult problems of
efficiency and government, which should be tacked via very open and
participatory arrangements.

Only take money costs and benefits into account. Define efficiency
only in terms of maximising profits in relation to outlays. Efficiency
so defined is the sole concern. Economics is the overriding priority in
society.

Monetary costs and benefits are a minor concern. Therefore many
real costs, such as noise and stress, are ignored by corporations. In
a sensible society considerations of justice, morality, social and
ecological welfare would be the main considerations. Often it is right
to do what is not very efficient in monetary terms but what is good for
people etc. Conventional economics is appallingly inefficient in
meeting human needs. The economy is much less important in society
than the cultural, social, political and ecological systems.

The more business turnover, sales, production, exports, investment,
consumption and growth of GDP the better. The more GDP, the more
wealth is being created and the higher living standards are.

The more the GDP rises now the lower the quality of life is
becoming, and the more ecological damage is caused. To increase GDP is
not to increase "wealth"; it is just to increase business turnover,
resource depletion, social and ecological damage..

Growth is not just good; it is the supremely important goal.

Growth is an absurd goal. Economic growth is not solving problems
or raising the quality of life. Most importantly it is totally
incompatible with ecological survival. Current world output is grossly
unsustainable; it must be dramatically reduced, yet all governments
seek endless increases in output. This mindless commitment to growth
is of course what those who own capital want.

Globalisation is good.

Globalisation is mostly having devastating impacts on all but the
rich few whose coporations are getting greater access to the world's
wealth, while reducing jobs, security, and the access of Third World
people to the resources they could once use.

Conventional economic theory and practice are developing the Third
World,

Conventional economics is only developing the Third World into the
form that suits the rich countries, their corporations and the Third
World's elites; it is producing grossly inappropriate development for
most Third World people. Development is plunder; it has geared their
productive capacity to the benefit of distant others.

One big, centralised, unified global economy is good.

The ideal is many very small localised and highly self-sufficient
economies, under local control, with relatively little trade, capital
flows, foreign investment or debt.

This economy makes us work hard and compete hard; it has powerful
incentives for initiative and effort.

This economy mostly requires bad values, especially competition,
individualism, selfishness, indifference and predation towards others,
lack of concern with the public good...and above all greed. We don't
need to work and produce anywhere near as much as we do now. If we
lived more simply and cooperatively we could produce very satisfactory
lifestyles with far less work, stress and resource use.

<http://socialsciences.arts.unsw.edu.au/tsw/Economy1p.html>
and <http://socialsciences.arts.unsw.edu.au/tsw/THE.EC.SYSTEM.All.htm>
or <http://simplicitycollective.com/ted-trainer-and-the-simpler-way>