Status games among the Amish

by on July 1, 2009 at 2:01 pm in Economics | Permalink

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.

1 andrew potter July 1, 2009 at 2:16 pm

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”.

2 Dirk July 1, 2009 at 2:30 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.

3 Bill Harshaw July 1, 2009 at 3:13 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.

4 Td July 1, 2009 at 3:29 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.

5 Andrew July 1, 2009 at 4:28 pm

So, I must have autism, but remind me, is the purpose of the government to further status competition, or to oppose it.

6 Slocum July 1, 2009 at 4:49 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.

7 Currence July 1, 2009 at 7:35 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.

8 ZBicyclist July 1, 2009 at 11:59 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.”

9 Erik Wesner July 2, 2009 at 11:14 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

10 Peter July 8, 2009 at 6:44 pm

Wow, this is some kind of discrimination

11 gucci outlet October 1, 2010 at 10:02 am

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