Does Mustachianism Undervalue Collective Human Capital?

[mathlete]

I don't know whether the FIRE movement undervalues it or not (though I tend to lean on "not" except for a few extreme cases) but I think society as a whole definitely does.

I think the role in which extended family plays (or doesn't play) in raising kids is a big one. When I was a kid, I was watched by my grandparents all the time. Now, as a parent, my own parents have moved several states away. And (somehow!) its easier for my wife and I to travel with the kids to visit them than it is for them to come down here.

When I was a kid, seeing my grandparents was a fact of life since they lived so close. And it came with a side of free babysitting for my parents. For my kids, seeing their grandparents means a 10 hour drive, or hundreds of dollars in plane tickets. And no free babysitting. Based on what I've heard from my other millennial friends, this isn't uncommon.

Not trying to gripe or anything, it's just a fact of modern life. The concept of retirement has barely been around for a hundred years, and the concept of decamping several states away from your family has probably been around even less.

We're definitely losing something that doesn't typically get accounted for in household finances.

[mathlete]

Other recent examples:

- Attended a "gardening party" recently. A friend just needed some manual labor done in her flower beds to get the house ready to sell. A couple hours outside, chatting with friends, pizza at the end of it... the host saved some tangible money by not hiring it out, but I would say everyone left the party "richer".

- I host frequent board game nights. Nearly everything we've ever played was purchased by our board game enthusiast friend. The house is provided by me. Sometimes I'll cut up some fruit and cheese, too. Again, everyone leaves much richer than the cumulative cost of all those things.

- My wife is in a Facebook "moms" group. It's a great network to trade around kid stuff at low or no cost. Also good for handyman / contractor referrals. Honestly, a network like this beats the pants out of appified approaches like Angie's List or LawnStarter or anything like that. At least for now.

- The best investing ROI I've gotten have been on private equity deals with a group where a friend had to personally vouch for me (despite not yet being an accredited investor). I've of course, paid that forward with referrals as well. The equity group gets access to more capital. We all beat the S&P. Everyone is richer. This approach, by generally accepted rules of financial mathematics, is better than something like Yield Street.

So collectively, that's five examples. Help raising kids, using friends for manual labor, in home entertaining, a robust market for second hand items, and a referral network.

You can go out into the appified market and recreate all of that, but you'll often either spend more money, or get an inferior result. It's really really really good to have a network of people in your life. I'm more convinced of this as each year passes.

[GuitarStv]

Oh, I thought we were talking about moving away from (and losing) a social network.

If you have no social network to cling to, then I'd guess there's no real loss moving from place to place because you're not losing much.  If you're more normal in that area and do have a good network of people you'll probably be able to make a new one after you move.  So . . . other than a couple years of rebuilding (again, assuming no social retardation) you should be pretty safe to move either way.

Ah gotcha, yeah, the point of my comment was that not everyone grows social roots where they are, no matter how long they are there. It's not a given that people make connections over time.

We have a huge epidemic of loneliness.

Are you seeing this mostly among younger people, or does it impact many older people as well?  The stereotype of a group of teens sitting around a table and texting each other rather than talking is something that I've seen on many occasions now.  Enough of this eventually has to fuck up someone's ability to deal with people in a normal face to face manner.  Compounding it there's the isolating effect of using social media regularly, the significant breakdown of religious groups, a huge reduction in autonomy for children (leading to less exposure to difficult situations and probably contributing to fear), a change in family structure especially related to care for and family integration of the elderly  . . . it feels like there's a lot of stuff stacking that sets up younger (and to some extent very old) people to fail socially.

[NorthernIkigai]

From what I've understood loneliness is a problem across the age spectrum.

I remember reading something at the start of or just before Covid that small, daily interactions may be at least as important for humans as deep, close relationships. The staff at your regular supermarket or cafe who you nod at or exchange a few words with, the lady who attends the same weekly class with you but who you actually don't know that well, other people you come across regularly and who form part of your routine. It really, really rang true for me during the worst times of Covid: you can always video call close friends and family, but these people who are part of your regular social fabric but who are just there (until they maybe aren't) suddenly felt very important.

So it's really not about transactional usefulness such as babysitting or even just exchanging helpful information, even just the daily microinteractions are important. And this is as true in a city, where recognizing someone on the bus is not an everyday occasion, as it would be in a small town where everybody knows each other and sees each other much more frequently.

[Metalcat]

Oh, I thought we were talking about moving away from (and losing) a social network.

If you have no social network to cling to, then I'd guess there's no real loss moving from place to place because you're not losing much.  If you're more normal in that area and do have a good network of people you'll probably be able to make a new one after you move.  So . . . other than a couple years of rebuilding (again, assuming no social retardation) you should be pretty safe to move either way.

Ah gotcha, yeah, the point of my comment was that not everyone grows social roots where they are, no matter how long they are there. It's not a given that people make connections over time.

We have a huge epidemic of loneliness.

Are you seeing this mostly among younger people, or does it impact many older people as well?  The stereotype of a group of teens sitting around a table and texting each other rather than talking is something that I've seen on many occasions now.  Enough of this eventually has to fuck up someone's ability to deal with people in a normal face to face manner.  Compounding it there's the isolating effect of using social media regularly, the significant breakdown of religious groups, a huge reduction in autonomy for children (leading to less exposure to difficult situations and probably contributing to fear), a change in family structure especially related to care for and family integration of the elderly  . . . it feels like there's a lot of stuff stacking that sets up younger (and to some extent very old) people to fail socially.

It's not just young people, over 50% of Americans report feeling very lonely, but yes, it is worse for younger people, and yes, the problems are systemic.

[mathlete]

Jonathan Haidt’s new book, “The Anxious Generation” purportedly hits on a lot of the social isolation aspect, particularly for the youth.

I’m “anxious” to read it.

[sonofsven]

Oh, I thought we were talking about moving away from (and losing) a social network.

If you have no social network to cling to, then I'd guess there's no real loss moving from place to place because you're not losing much.  If you're more normal in that area and do have a good network of people you'll probably be able to make a new one after you move.  So . . . other than a couple years of rebuilding (again, assuming no social retardation) you should be pretty safe to move either way.

Ah gotcha, yeah, the point of my comment was that not everyone grows social roots where they are, no matter how long they are there. It's not a given that people make connections over time.

We have a huge epidemic of loneliness.

Are you seeing this mostly among younger people, or does it impact many older people as well?  The stereotype of a group of teens sitting around a table and texting each other rather than talking is something that I've seen on many occasions now.  Enough of this eventually has to fuck up someone's ability to deal with people in a normal face to face manner.  Compounding it there's the isolating effect of using social media regularly, the significant breakdown of religious groups, a huge reduction in autonomy for children (leading to less exposure to difficult situations and probably contributing to fear), a change in family structure especially related to care for and family integration of the elderly  . . . it feels like there's a lot of stuff stacking that sets up younger (and to some extent very old) people to fail socially.

Just an anecdote, but I have an elderly friend who just turned 80, who I have watched push away almost all of his friends for the last twenty years; it's like he can't help himself.
The reasons for this are ridiculous and trivial, but it's basically because if he feels wronged he acts out. When he acts out with me I literally tell him to fuck off. He storms off but I don't cut him off. He has anger issues but otherwise is witty and an excellent writer with a sharp mind- his specialty is writing cutting letters to the editor in our local paper, although recently he had a falling out with the editor, "who is an asshole", and canceled his subscription. I have been trying to get him to write his memoirs to no avail. He is a retired logger (with a pension!) who became "radicalized" (his words) in the woods as an anti capitalist socialist.
He is deeply lonely, and depressed. I speak with him often but rarely do things with him because of his tendency to act out. His daughter and grandson live in the same small town as him and he never sees them, his daughter wants nothing to do with him.
He's from a deeply disfunctional family. One example: one of his older brothers moved out when he was 18 and my friend was 10. He didn't move far away but they never saw each other again!
This level of disfunction is hard for most of us to imagine.

[Metalcat]

Oh, I thought we were talking about moving away from (and losing) a social network.

If you have no social network to cling to, then I'd guess there's no real loss moving from place to place because you're not losing much.  If you're more normal in that area and do have a good network of people you'll probably be able to make a new one after you move.  So . . . other than a couple years of rebuilding (again, assuming no social retardation) you should be pretty safe to move either way.

Ah gotcha, yeah, the point of my comment was that not everyone grows social roots where they are, no matter how long they are there. It's not a given that people make connections over time.

We have a huge epidemic of loneliness.

Are you seeing this mostly among younger people, or does it impact many older people as well?  The stereotype of a group of teens sitting around a table and texting each other rather than talking is something that I've seen on many occasions now.  Enough of this eventually has to fuck up someone's ability to deal with people in a normal face to face manner.  Compounding it there's the isolating effect of using social media regularly, the significant breakdown of religious groups, a huge reduction in autonomy for children (leading to less exposure to difficult situations and probably contributing to fear), a change in family structure especially related to care for and family integration of the elderly  . . . it feels like there's a lot of stuff stacking that sets up younger (and to some extent very old) people to fail socially.

Just an anecdote, but I have an elderly friend who just turned 80, who I have watched push away almost all of his friends for the last twenty years; it's like he can't help himself.
The reasons for this are ridiculous and trivial, but it's basically because if he feels wronged he acts out. When he acts out with me I literally tell him to fuck off. He storms off but I don't cut him off. He has anger issues but otherwise is witty and an excellent writer with a sharp mind- his specialty is writing cutting letters to the editor in our local paper, although recently he had a falling out with the editor, "who is an asshole", and canceled his subscription. I have been trying to get him to write his memoirs to no avail. He is a retired logger (with a pension!) who became "radicalized" (his words) in the woods as an anti capitalist socialist.
He is deeply lonely, and depressed. I speak with him often but rarely do things with him because of his tendency to act out. His daughter and grandson live in the same small town as him and he never sees them, his daughter wants nothing to do with him.
He's from a deeply disfunctional family. One example: one of his older brothers moved out when he was 18 and my friend was 10. He didn't move far away but they never saw each other again!
This level of disfunction is hard for most of us to imagine.

I've worked with seniors for years, this kind of thing is tremendously common among single older men.

Many boomer men never learned how to make friends and many only had connections through work. If they had a wife, they might be okay long term because their wives made friends and those friends had husbands for them to socialize with in retirement. But if they never had a day job or a wife, often they were totally fucked.

I've met many, many an isolated, cantankerous old bachelors in my years of treating older patients.

Older, independent men with robust social networks are incredibly rare unless they're gay, but there's a huge sampling bias there because it was such a norm to get married and settled down that even the vaguest of social skills and stability usually resulted in having a family. So the singletons in that generation tend to be more extreme in terms of their antisocial behaviours.

Also, that level of dysfunction is far more common than you might imagine. I've been peeling back people's polite layers for many years, talking to thousands of people about their histories, and I encounter very, very few families that don't have some level of profound dysfunction within them.

It's more the norm than the exception, IME, people are just very, very good at masking it.

[mathlete]

I've worked with seniors for years, this kind of thing is tremendously common among single older men.

Many boomer men never learned how to make friends and many only had connections through work. If they had a wife, they might be okay long term because their wives made friends and those friends had husbands for them to socialize with in retirement. But if they never had a day job or a wife, often they were totally fucked.

I've met many, many an isolated, cantankerous old bachelors in my years of treating older patients.

Older, independent men with robust social networks are incredibly rare unless they're gay, but there's a huge sampling bias there because it was such a norm to get married and settled down that even the vaguest of social skills and stability usually resulted in having a family. So the singletons in that generation tend to be more extreme in terms of their antisocial behaviours.

Also, that level of dysfunction is far more common than you might imagine. I've been peeling back people's polite layers for many years, talking to thousands of people about their histories, and I encounter very, very few families that don't have some level of profound dysfunction within them.

It's more the norm than the exception, IME, people are just very, very good at masking it.

I’ve heard this about older men before, in the context of it being one reason why women are more selective about partners; they simply function better alone and have more robust friend groups.

Really makes me think… I’m halfway decent at making friends but I also tend to run on inertia. I need to skill up at “bashing people over the head with insistent friendship”.

[Metalcat]

I’ve heard this about older men before, in the context of it being one reason why women are more selective about partners; they simply function better alone and have more robust friend groups.

Really makes me think… I’m halfway decent at making friends but I also tend to run on inertia. I need to skill up at “bashing people over the head with insistent friendship”.

Making friends is stupidly easy and doesn't even require being a particularly likeable person, it's just really counter intuitive for most people.

Most people socialize in ways that actually trap potential friends in an out-group state. They socialize by doing casual leisure activities outside of their normal life behaviours, they try to put their best foot forward to impress people, and they naturally navigate away from vulnerability.

That's a great recipe for developing extremely limited and casual connections that will never feel like those old friendships from your 20s where friends felt like family.

The recipe for friendship is painfully simple:

Do difficult things with people while engaging in active listening and using basic emotional validation skills when the other person engages in even the slightest of vulnerability.

Emotional validation skills are pretty much the crux of connection and dumb fucking dumbfuck easy to learn.

[FINate]

We moved early 2020 from a VHCOL to MCOL area. The VHCOL was where DW and I were born and raised, and we had a huge network of friends and family there. Our previous location didn't make sense for us financially and a bunch of other reasons, yet we stayed 10 years longer than we should have because we really value people and relationships. Not just what we can get out of it, but also the sense of community and belonging. Oh, and I'm an extreme introvert, so the though of forming entirely new connections was daunting.

In our experience, and I totally get this isn't universal (more on this later), we've found that we have a closer knit community in our MCOL area. People here have time and energy to form community instead of super-commuting and hustling all the time to make ends meet. We've made friends with most of our neighbors. Our sweet little neighborhood elementary school has been a regular source of connection and community. We make a point to invest our time and energy in a church near us, and many of the congregants are within a mile of us.

All this means we constantly have serendipitous encounters with people we know and care about: at the store, kids sporting events, local coffee shop, church, park, or just going on a walk. It's a rare day when I don't randomly run into someone I know and have a short conversation. And then on top of this we actively invest in these relationships by intentionally helping each other with projects, BBQs, grabbing coffee, block parties, and so on.

Ok, so why this isn't universal (i.e. take this with a big grain of salt) and factors that I believe worked in our favor.

1. We now live in a walkable/bikeable neighborhood. It's way easier to have a sense of community and belonging when everyone around you is also walking and biking places. There's also an element of self-selection, where people have moved here because they value these things. It's just very different from the car centric suburbs I've lived.

2. We have school age kids. Kids easily make friends whereas this is more difficult for adults. This becomes a natural path to friendship (or at least acquaintanceship) between the parents.

3. We're very involved in our church. I realize it's somewhat taboo to talk about religion these days, because we think of this as an exclusively private matter of the heart. And I think that's part of the problem. Historically, churches were primarily understood in a collective context. It's where people from various backgrounds and socioeconomic levels mix. For sure not Utopian -- there's conflict and misunderstandings and sometimes hurt. It's messy. And I suspect that's the point... we can't have deep connection with others without the discomfort and vulnerability and struggle.

All this to say, I think Human Capital is very important. I would perhaps say this is, in a sense, essentially how I understand the meaning and purpose of life. So it's worth investing in relationships, even though this is almost certainly going to result in pain and sorrow, but also joy and belonging. Moving to a lower COL area can help with this as a goal if it frees up time and money to invest in such connections. The same is true with FIRE in general, but this doesn't happen automatically, it requires intentionality. So in this sense, moving for lower COL and FIRE are just tools that can be used for different purposes.

[Laura33]

most forms of capital - density, social ties, personal assets, personal skills - can be partially substituted. Absent density, you need some combination of skills, a lot more money, or personal connections.

What the implicit wealth of dense urbanism creates is a choice about whether to enmesh personally or not because cities offer impersonalized “collective human capital.”

This exactly.  There are three ways we can get what we need:  (1) do it ourselves; (2) exchange with others via bartering/favors; or (3) pay for it.*  We all deploy some combination of those things, based on our circumstances. 

When you're poor, you don't have much financial capital, so DIY and social capital are priorities.  I've often wondered why many poor people don't move from economically-depressed areas to where the jobs are.  It's in part because when you don't have financial capital, social capital becomes critical.  You can't really uproot yourself to follow a job when you need your mom to watch your kids and your buddy down the street to keep your car going and your mom friend two streets over to provide hand-me-downs for the kid, you know?  Social capital becomes a core value, because that's what makes your life work.

OTOH, people who have money can choose to deploy their financial capital to fill those voids.  You don't have to put in the hard work to build social capital, or to learn to do something yourself, when you can solve your problem by throwing money at it. 

And of course where you live also drives your choices.  You need DIY skills and social capital if you live in a rural area where services aren't available and goods are nonexistent or very pricey.**  OTOH, if you're in a city or suburb, goods and services are readily available, which means through supply and demand they're often cheaper.  So even if you're not particularly wealthy, you can often choose to satisfy many of your needs buy paying for them.  Of course, cities/'burbs also offer far more opportunities of things to spend money on, and less space/opportunity to DIY things to save money (you're not going to get many vegetable gardens when you're living in an apartment), and real estate can be very pricey given those same laws of supply and demand.  So you also need more financial capital to live comfortably -- and salaries are often higher to compensate.  But that also means you can tend to focus your own time and energy on increasing your own financial capital rather than on social capital or DIY skills, because that's what makes your life go 'round.

To my mind, Mustachianism actually values social capital far more than most of society.  We are by and large a very wealthy nation by international standards.  The vast majority of us have money that allows us to deploy financial capital for many things -- and as a result, we have grown a commercial society that teaches us to value all the things that money can buy us.  Mustachianism reminds that we don't actually need to buy all that stuff, and that there is significant value in putting in the hard work to learn to DIY and to develop meaningful relationships that allow us to be useful to others and let them be useful to us in turn.  IOW, just because you can solve most problems by throwing money at them doesn't mean you should.

I think the OP's question actually demonstrates this.  A typical consumer, when faced with a move, is going to focus on amenities and what they will be able to afford to buy -- will I be able to afford a nice house, are there good schools or will we need to go private, are there shops and restaurants and movie theaters for entertainment, etc.  It is actually very mustachian to say, you know, I've built a life that allows me to rely on social capital and DIY skills, and while I'd like to live in an area with a lower COL, I don't want to lose my social capital by doing so. 


*There's also government programs that can provide things, but that's just a version of financial capital, just with the government paying via income from taxes, vs. you paying it directly yourself.

**We spend a fair bit of time in Taos, and the pricing is, umm, interesting -- you can get a $0.99 ice cube tray at Walmart, but if you need to replace a boiler, you'll get a quote for $25K (ask me how I know).  We call it the "Taos tax."

[mathlete]

As a person with the financial capital to solve most of my problems through the market for services... I still think the social capital is really valuable.

The economy is built on trust. The more people can trust each other, the better off everyone is.

Buying and selling things online has existed as far back as BBS systems. But eBay built a $27 billion company by taking that buying and selling off of message boards and on to a platform with a customer review system. PayPal built a $25B company on the basis of backstopping those transactions. Angi is currently trying to grow past it's $1B valuation by being the go-to place to find trusted contractors.

Visa and MasterCard are collectively worth about a trillion dollars. Add in AMEX, Citi, and CapitolOne and that's an additional trillion. They fetch those valuations because when you walk into a store, a merchant has zero idea if your word is good when you want to buy on credit. But they sure do trust the banks and the payment processors.

Now, I'm a big fan of all these companies. They add liquidity and security to all of our transactions and that's a good thing. But these companies make a lot of money by being the underwriters of trust for every person and every business. So if you've got a network of people that you already trust, you can save a lot of money by leveraging that trust.

---

Addendum: Needless to say, having a strong social group is a great thing for non monetary reasons as well. And if you are on the more financial-capital-rich side of the equation, then your role in these circles can be helping out others. Letting them borrow you stuff. Introducing them to people who can help them. Etc.

[Metalcat]

As a person with the financial capital to solve most of my problems through the market for services... I still think the social capital is really valuable.

The economy is built on trust. The more people can trust each other, the better off everyone is.

Buying and selling things online has existed as far back as BBS systems. But eBay built a $27 billion company by taking that buying and selling off of message boards and on to a platform with a customer review system. PayPal built a $25B company on the basis of backstopping those transactions. Angi is currently trying to grow past it's $1B valuation by being the go-to place to find trusted contractors.

Visa and MasterCard are collectively worth about a trillion dollars. Add in AMEX, Citi, and CapitolOne and that's an additional trillion. They fetch those valuations because when you walk into a store, a merchant has zero idea if your word is good when you want to buy on credit. But they sure do trust the banks and the payment processors.

Now, I'm a big fan of all these companies. They add liquidity and security to all of our transactions and that's a good thing. But these companies make a lot of money by being the underwriters of trust for every person and every business. So if you've got a network of people that you already trust, you can save a lot of money by leveraging that trust.

---

Addendum: Needless to say, having a strong social group is a great thing for non monetary reasons as well. And if you are on the more financial-capital-rich side of the equation, then your role in these circles can be helping out others. Letting them borrow you stuff. Introducing them to people who can help them. Etc.

Yeah, I find it kind of bleak to quantify social connection just in terms of what it can provide that money can also provide.

I mean, there's a hell of a lot of value in social connections beyond what someone can lend you or do for you that you might otherwise pay for. Those things do matter, childcare is a huge example of that for a lot of families, but there's so much value to connection well beyond the direct services and goods that friends/family can provide.

Connection is pretty fundamental to basic quality of life.