Avoiding The Road to Serfdom
One reason to create multiple streams of income is to slow personal movement down the “road to serfdom.” When you diversify your streams of income, creating streams that aren’t dependent on traditional employment, you are taking a quiet step toward financial independence. Although being financially independent is often thought of as being wealthy, it can also be thought of as a state of positive balance between non-employment income and necessary outgo.
Charles Dickens’ famous quote defines the type of financial independence that is a reachable goal for most people. “Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.” Multiple streams of income can help you reach that desirable state of balance– not just by being careful with expenses, but by creating enough income to cover what you need to live the kind of life you desire.
Over the past few years the economy has given most of us the equivalent of a roller-coaster ride. Many of the hardest hit lost jobs, and if they had no other streams of income, they often lost their homes as well. Multiple streams of income provide a cushion against this sort of economic upheaval. More importantly, having independent (non-employment related) streams of income helps sustain individual liberty.
Nobel Prize winning economist F.A. Hayek’s prophetic classic, The Road to Serfdom, vividly illustrates why it’s important to maintain liberty. The more closely an individual is tied to a single stream of income, the more vulnerable he or she becomes to financial, social, and political pressure. It’s a surprisingly short road from loss of economic independence to loss of other freedoms.
The short video below is based on a 1940’s Life magazine cartoon summary of the book. If you prefer to simply read through the booklet, you can find it at Mises.org and other sites around the web.
Although many modernists find individual liberties unpalatable, entrepreneurs, homeschoolers, homesteaders and other off-the-grid people are still able to make choices that nurture a healthy independence and the corresponding ability to live true to their values. There’s no guarantee that any of these things will remain possible, but The Road to Serfdom serves as a reminder of the things that must be preserved. I recommend it.
“In the main it will be found that a power over a man’s support (income) is a power over his will.”