Posted on September 19, 2019 @ 08:20:00 AM by Paul Meagher
I have been reading a book on farming called "Ten Acres Enough: The Classic 1864 Guide to Independent Farming" by Edmond Morris. You
can read it online for free here.
The book reports on his first three years of farming after leaving the city and purchasing a farm. He had a family of 10 and appears to have acquired many firm ideas about farming before he ventured into owning and running a 10 acre farm.
Today there are many who will argue that you can make a good living by intensive cultivation of 1 acre. Back in 1864 I would imagine that saying you can make a good living by intensive cultivation of 10 acres seemed like an equally radical claim.
The book is interesting and well written but the main reason I wanted to mention it was because Edmond spends alot of time in the
book discussing how much he made by selling certain crops and what he paid out in expenses. He summarized his receipts and expenses
over three years with this report:
Edmond Morris wouldn't have written the book if he didn't think he performed quite well so I was curious to convert his profits in the last year ($1327.02) into what it might be in todays terms using measures of inflation to make the adjustment. When you do this using the CPI Inflation Calculator you get this result:
$1,327.02 in 1857 is equal to $39,133.06 in 2019
This result surprised me as I expected his profit (in todays terms) to be more. This surprise has caused me to reflect on the history of entrepreneurship and the nature and causes of inflation to try to figure out what is going on here.
Entrepreneurs have existed throughout history and "10 Acres Enough" is a book by an agricultural entrepreneur on what he did to make his farm successful. What "success" meant to an Entrepreneur in 1857 in terms of wages may be different from what it means to be an Entrepreneur today. Today we expect a successful entrepreneur to be making a high wage but back then a successful entrepreneur was perhaps happy to make enough money to live without alot of financial stress. Being able to produce all your own food (in addition to selling it) certainly helped to reduce/eliminate a major financial stress that a family of 10 would have to deal with and gave the author a hopeful and optimistic outlook on life.
Another way to think about these numbers is that the inflation calculator is not fully capturing the reality of inflation - its nature and its causes. This has lead me to reflect on some categories of expense that are not included in this financial report that we would expect to be listed in the financial report of an agri-business today: sales taxes, insurance, fuel, loan interest, new equipment, repairs, registrations/licensing/permits, etc... For entrepreneurs, new categories of expense are causes of inflation that increase our cost of living and simultaneously decrease the amount of time that can be allocated to earning income. Inflation is reflected in how time and money is allocated.
You can read about Inflation on Wikipedia for how economists talk about inflation or you can examine a financial report from long ago and reflect on that it might be telling us about the nature and causes of inflation.