Book Review: The Trap

by Philip Brewer on 20 January 2010 9 comments

The Trap: Selling Out to Stay Afloat in Winner-Take-All America by Daniel Brook.

For more than two years now writing at Wise Bread, my whole thesis has been that frugality leads to freedom — if you can live cheaply enough, you can choose whatever work calls you, instead of whatever work pays the most. This book thoughtfully presents the case that my view is not just shortsighted but actually harmful.

I've always recognized that the lifestyle I advocate has its limits. All sorts of perfectly ordinary aspects of a normal life — whether positive, such as having kids, or negative, such as becoming seriously ill — make it a lot harder to live a very frugal life.

Brook talks a good bit about the limits of frugality as a way to do whatever work calls you. Many of the examples Brook uses are people whose work requires that they live in a big city:

  • Activists who need to live where there's a critical mass of others with the same vision.
  • Social workers or community organizers who need to live in the community that they serve.
  • Creative types of the sort who can't just do their work by themselves the way a writer can — filmmakers, dancers, actors.

It's possible to live frugally even in a big city, but living very frugally requires not only luck and flexibility but also a level of constant attention that makes it hard to focus on the work that was the whole point.

Sure, Brook says, it's possible to live frugally enough that you can do whatever you want — as long as what you want doesn't include expensive things like sending your kids to college or paying for your healthcare if you get sick or living in a big city.

But that's really Brook's secondary point. His central point is that the way we've organized society is harmful.

Low tax rates were supposed to be good and fair. Letting everybody keep what they earn seems only right, and in a growing economy it wasn't supposed to be harmful for some people to become extremely rich. After all, as long as the poor and middle-class are also making progress, does it matter if some people are super-rich? Brook's answer is that it does matter.

Perhaps it wouldn't matter if the super-rich were spending all their vast wealth on Old Master paintings and private islands — but they aren't. They're spending significant amounts on stuff like college for their kids and healthcare and apartments in the city. Stuff, in other words, that the rest of us need to buy too. And, since they have so much money, they end up bidding up the price of the ordinary necessities of middle-class life.

The result of that is that people are pressured into selling out. Even people who are strongly inclined toward service in government or a non-profit find that they just can't do it — not and pay off their student loans, get married, buy a house, and support a family.

The big reason I advocate frugality as the path to freedom is that it's entirely within your own grasp — it doesn't depend on the government nor on changes to the way society or the economy are structured. But that doesn't mean that society and the economy are structured perfectly. Whether you're with me on the advantages of frugality or disagree, The Trap provides a fascinating look at the issues.

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Guest's picture
bogart

For a related read, I'd recommend Elizabeth Warren's (of All Your Worth) Two-Income Trap.

Guest's picture

Thanks for the introduction to the book. Looking forward to the read. I just finished reading Simple Prosperity by David Wann. Sounds very similar. Highly recommended if you're looking for something similar.

Guest's picture
The Economist

Interesting review. I have heard of this phenomenon happening in real estate, but I think it may be too simplistic of an understanding of a free market economy.

In a free market, where competition is free to set prices based on the market, prices fall. Electronics are a good example. A flat screen TV, which would once cost $2,000, now costs about $700. In contrast, in the areas of society where government in involved, either through regulation or subsidies, prices have gone up. Real Estate is a good example. Previous administrations through HUD and other agencies, artificially stimulated the market by offering housing to people who couldn't afford it. In other words, when the government comes in an either gives free money to people through subsidies, or forces prices down through regulation, you short circuit the market.

I may be speculating, but it seems to me that this book points to more, not less, government involvement. We've seen societies try to make life more equal for everyone, but the means of doing so require being unfair to some in the process. Taxation is a form of taking, and then giving to others. Fairness, in contrast, is keeping what you make.

While this book may make for a case of distribution as a solution, I caution against this narrowed view of economics, that any macro or microeconomics course would easily dispel as flawed.

Guest's picture
Guest

Yes, I agree. Except govt. needs to be involved to ensure the free market does not go haywire or "wild west" on the consumer and do the same things (or worse) than govt. intervention. It needs to be a happy medium of sorts. Let's face it, Wall Street is "a Bull & a Bear" (if you know what I mean), and someone has to play "Cowboy" to keep 'em in check. (Uncle Sam)

Guest's picture
Morgna

The more I read blogs about frugality, the more I come across nay-sayers who think that frugality is bad. I agree that there's a limit to how much you can achieve with frugality, and you really have to have money coming in as well. Also, I haven't read this book (yet). But the premise that frugality stops you from doing what you want is wrong - if that's what the book is arguing. I live in a big city, and frugality has allowed me to enjoy more of what I like doing.
However, I welcome different points of view since that makes me think harder about what I'm doing, so I'll probably look up The Trap on Amazon. Thanks for an interesting review Philip :)

Guest's picture

Living requires personal choices. The person who sets out to be an activist, and then determines that he/she must live in the big city must then make a lifestyle choice. I see no reason why others should potentially bear the burden of ensuring that this person achieve his her goals and/or dreams in spite of the fact that his/her decision is beyond financial reach.

I am also a frugal person and believe that in many ways debt equals slavery. In order to get and stay out of debt we chose not to take lavish vacations and drive our cars for at least 10 years or so. We also live in a more moderately price part of the country, instead of our first choice, which would be in the sun belt.

However, we are happy and healthy and look forward to the near future when we can head out and avoid winters and jobs. In the meantime, I hope for government gridlock, where each side can balance the other side.

Once again, it is truly about personal choices.

Guest's picture

Needless to say, I haven't read the book. But only CERTAIN cities are super-expensive to live in. You can have a frugal city life in, say, Indianapolis or Cincinnati or even Philadelphia.

I live in a small town and I know plenty of dancers and actors and musicians! Oh, and I also know some organizers, activists, and social workers.

Philip Brewer's picture

In many affluent communities, it has (since the 1980s) become unaffordable for public employees to live there.

Brook, I think, wants people like police officers, firefighters, and school teachers to be able to afford to live within the district that they serve—even if they work in Manhattan or San Francisco.

Guest's picture

So, according to your argument, all that deregulation that happened in the financial industry in the 80s should have resulted in something other than the meltdown that occurred, yes? So, why didn't it?

The free market ideology is gorgeous on paper. Unfortunately, its adherents seem to forget that there is a human element involved and that the market is not a separate entity unaffected by human involvement (why did this notion ever develop in the first place? The odd fallacy that markets will always correct themselves?). Greed is real and dangerous, as we have all experienced and continue to endure.

Although I agree with you to some extent. The government shouldn't always step in. Sometimes, the sky just needs to fall.