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The Amish economy – 5 fascinating characteristics

The number of Amish has grown from 5,000 to 340,000 in the last one hundred years. Their growth is almost entirely internal – only 50 outsiders have joined since the 1950s. With the high birth rates and a small number of people leaving, the population has more than doubled every 20 years.

The Amish are known for their deep Christian faith, pacifism and radical rejection of large parts of modern technology. They are easily recognisable, as they move by horse and have a distinct, plain style of clothing. The way the community organises their economic activities is also distinct, and might provide some valuable insights to those seeking to learn from alternatives to our current system.

1. Do it yourself and barter

One set of economic principles the Amish have could be described as the following:

  1. When possible, make the item you need yourself. 
  2. If you can’t, barter with someone who has the item. 
  3. If that isn’t possible either, buy it with cash. 
  4. Only if none of that is possible, take out a loan. Pay the debt as quickly as possible. 
  5. If you have an item you no longer need or that doesn’t work, reuse or repair it.

The book “Money Secrets Of The Amish” describes a good example of this – when an Amish family had enough unwearable clothes, they tore them into strips and weaved them into color-drenched rugs. One time, the family traded fifty or sixty rugs for a heifer. 

2. Voluntary work

The Amish use the word “frolic” to refer to events where a community gathers to do volunteer work together to achieve a practical goal. The most iconic example is barn-raising – where hundreds of Amish men gather together to build a barn. While it is unpaid work, the Amish make it a social event that is often looked forward to. For women, a typical frolic event might be quilting bees.

Below is an example of barn-raising in action.

3. No insurance

Holmes county is predicted to be the first county in the US with more than half of the population being Amish. It is one of the healthiest counties in Ohio, but also the least insured. This is due to the Amish rejection of insurances, on religious grounds. The Amish are exempt from health insurance mandates and social security payments. The expenses of healthcare are paid with cash;  if needed, the entire community is ready to help, by organising fund-raising events, such as auctions.

The Amish focus on preventing medical problems before they occur instead of treating them once they do. They have a relatively healthy lifestyle – research shows that they take around 2.5-3 times more steps per day than the average American, and they rarely drink alcohol or smoke. As a result, the obesity rates are around 9 times lower and cancer rates around 40% lower than the general population. In 1900, when the average American life expectancy was 47, for the Amish it was already around 70. While the rest of America has caught up, the community still has a significant edge in late-life health. A crucial factor here is that almost all elderly people are cared for at home by relatives, which studies suggest can have health dividends as large as quitting smoking.

When they need medical treatment in a hospital, they typically bargain the price down or, alternatively, get their treatment in Mexico. There are numerous reasons healthcare providers are willing to cut down their payments compared to other uninsured patients – they pay their bills quickly, often with large payments in advance and their religious doctrines prohibit lawsuits, so the healthcare providers don’t have to worry about malpractice claims. This can have a substantial effect – for example, in Lancaster county, cesarean section costs around $13,480 for all uninsured patients, whereas the Amish paid only $5,000.

4. Learning happens through work and the Church, not schools

The Amish are exempt from many educational requirements and the children receive only 8 years of formal schooling. The local community run schools teach basic skills, but also teach values they believe are not instilled in young people in the wider American educational system. One of these values is cooperation, while competition and status seeking is frowned upon. In a world where everyone seems to be encouraged to compete for higher positions relative to others, a culture that instead instills the value of mutually beneficial cooperation might teach us some valuable lessons.

A lot of the learning happens through work, such as informal apprenticeships, and religious activities like church services and family bible reading. Another venue of learning is through local newspapers. Due to strong community ties and a lack of social media, it is  reasonable to suppose that the Amish local newspapers are a rare example of a booming niche within an industry that is otherwise in steep decline. 

5. Small and family owned businesses

For most of their history almost all the Amish were farmers, but this started to change in the 1960s. Depending on the estimate, around 20% – 40% make their livelihood through farming, but hobby farming is also popular. While the agricultural industries across the world have seen a development towards fewer, larger farms, the Amish still prefer small farms. Lancaster County, which has the largest cluster of Amish people in the US, also has the most small farms out of any county in the US. Approximately 12,000 of the 40,000 dairy farms in the US were Amish-owned in 2018!

Another industry where the Amish excel is carpentry. According to one estimate, around 10% of domestic home furniture shipped in the US is Amish made. The woodworking skills of the Amish are renowned, and their furniture has a reputation for being made to last, which fits with the Amish sentiment that discourages a throwaway culture.

Around two thirds of Amish businesses employ at least one family member of the owner. Typically, the workforce consists solely of the Amish, as the large family means that there are plenty of relatives to employ. It is, however, not uncommon for these businesses to have a non-Amish employee who can perform certain tasks that are prohibited among the Amish.

While this article is definitely sympathetic to the Amish, we shouldn’t seek to romanticise them. There are definitely things, such as strict gender roles, that many would find immoral. In many ways, the rejection of modernism is not as strict as many would believe. For example, the Amish are twice as likely to order home delivered pizza than the general population. However, they do demonstrate that a radically different economic system can exist and thrive within our modern society. 

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