Taking Care of Business: The Tribal Model of Income

Introduction

Why do many large families in the United States require public assistance handouts as they barely survive in abject poverty? It is because they bought into the Standard American Income Model.

The median income for a family of four is around $40,000 per year. Not bad, until you realize that this assumes both mom and dad work full-time and the public schools raise the two children. The family lives well above the poverty line, but there is a daily disconnect between all the family members. It is more like a club that meets each evening– that is, if the members don’t all scatter into their own rooms to zone out in front of their own television sets for the night. The family could choose instead to live on one income as mom raises the children. Now the family income is down to $20,000, right at the poverty line.

A larger and growing family faces the same choice, but with more significant consequences. Choice #1: Two-income family, $40,000 per year. After paying day-care costs for the youngest family members, this family may actually be below the poverty level. Choice #2: One-income family, $20,000 per year, but with no cost of child-care. On the whole, an even worse standard of living than the first choice.

In order for the larger family to overcome poverty using the standard model, either mom or dad or both must increase their earning ability, either by working more hours, or by earning more money per hour. Now this naturally happens much of the time. Having many mouths to feed can be very motivating. It makes people grow up and take on more financial responsibility. It makes people take on more responsibility in their jobs and pursue more raises.

Trying to achieve prosperity in the context of the Standard American Income Model is like swimming upstream for a tribe. And the income can be cut off instantly by two magic words: “You’re fired.” There is an easier way. It is the Tribal Model of Income.

Determine Your Strengths

This directive applies to the parents. Each parent should take steps to determine their talents, interests, and aptitudes. There are tests such as the Type Logic test, the Human Metrics test, the Keirsey Scale, and the morals test. There are many other tests out there. Take all of them, or take them until you feel confident that you understand your strengths and weaknesses. There are also different brain-storming and meditative activities which will reveal your deepest desires to you. Click Here for an exercise in determining your purpose. There are few lessons in life more important than knowing yourself. If you choose the wrong career path, you will hate your life, but just as importantly, you will be less motivated and less productive.

Match Your Strengths With a Marketable Skillset

It is not enough to have a passion and a talent. Your passion and talent must be marketable. In fact, anything is marketable. Don’t believe me? Click here. The problem is, there is no standard marketing class requirement in schools or colleges. Buy a marketing textbook and read it. Learn how your strengths interface with other people’s needs. Once you make that connection, the world will reward your contributions.

Learn Enough Skills to Provide Value at a Rate Higher than the Minimum Wage

Why have I set the minimum wage as a threshold? That will take some explaining and of course there will be exceptions to this rule.

First, to be comprehensive, this model assumes a starting wage of zero. If you are already earning six digits per year, then you are probably doing fine on the Standard American Income Model. The tribal income model can still benefit you, but obviously you’ll be starting the tribal model at a much higher wage than the minimum.

Second, for a family already living in abject poverty, showing the ability and willingness to earn an income equal to a full-time minimum-wage job is a prerequisite for getting in the door to public assistance programs. Applying the Tribal Model of Income will not happen overnight. It will take time. In the meanwhile, depending on circumstances, a cushion may be necessary to provide the necessities of life. Public assistance is meant to provide that cushion. I am using the term “public assistance” in the most general sense to include informal assistance and gleaning programs. State programs are not optimal, but may be necessary in a transitional sense. Ultimately, with multiple multi-generational tribes, the state will become less necessary, and indeed less helpful, as the tribes take on their own welfare functions.

Third, the minimum wage threshold means that using your passion, you are doing at least as well as you would getting a low-paid unskilled job working for someone else.

Learn the Steps of Starting a Business
Read a basic business startup manual. Follow the steps. The learning curve will be steep the first time. But after that, starting more businesses or adding branches or divisions to one business will be easier. Check out Dan Miller, About Entrepreneurs, Small Business Wiki Index for starters. Some things can be outsourced, for instance payroll. Ceridian Payroll Services.

Read the business tax brochures and labor laws for your state. Learn everything you can about the nuts and bolts of starting a business.

Why start a business instead of getting a job? Because you want to optimize your income. And because as the leader of a tribe, you want to become a grownup. People and companies pay contractors more than employees because the contractor is expected to be more of an adult. They do their work professionally and without complaining, and that creates value. An employee is legally and practically a servant. How do you pay a servant? As little as is necessary to make him work. My definition of an employee is someone who hasn’t completely grown up yet. That sounds harsh. But who in their right mind would go to work day after day, accepting less than the value of their work and letting their boss pocket the difference? Either someone who doesn’t honestly know the value of his work, or someone who is aware of the situation but likes the fact that the employer takes full responsibility for all the results and outcomes. The self-employed contractor takes on that responsibility, and gets paid accordingly. This responsibility is a high state of being “grown-up.” It requires much more thought and work than being an employee.

Also, there is less of a power struggle for the self-employed person. A tension always exists between an employers desire to get more productivity out of an employee for the money, and an employee’s desire to get more money for a given level of productivity. But a contractor understands that in an efficient market, his income can only be equal to the value he creates. The focus is on creating more value, not on doing less work.

While Running Your Business, Develop Your Technical Skills to Increase Your Rate of Value Creation
This will secure your place in the market. Do a better job than anyone else. Do a faster job than anyone else. Do it right and do it quick. This has the result of giving yourself a raise. Doing the job right and fast increases the desire of others to do business with you, and earning more money per hour increases your desire to do business with others. It is a win-win.

Continue to Learn Business Skills to Optimize Your Return for Your Value Creation
This is another way to give yourself a raise. Make sure you know what your product or service is worth and don’t accept less. Use marketing techniques to expand your clientele. Find every way you can to add value to your product or service. The more valuable you can make everything you do and create, the higher your standard of living will be.

Hire Your Children to Make Your Business More Productive
Here is where the model diverges sharply from the standard model. When a couple has a child, they create a human resource. Western society treats children as liabilities. That is why families are small. Tribalism treats children as assets. That is why tribes have many children.
During the early Industrial Revolution, child labor was heavily abused by unscrupulous employers who cared nothing for the future of the children they employed. See Karl Marx, Das Kapital for a particularly bleak look at the situation. The family business should operate on different principles. Children are not machine cogs. They are the very future of the tribe. Their interests must be protected. 18-hour workdays in a factory earning someone else money does not turn children into tomorrow’s leaders.
Check local labor laws. States should recognize that parents operating a family business will naturally protect their children’s long-term interests. If your state does not, then move.

A natural question is, why not just hire employees? Hiring experienced employees would be a shortcut to short-term wealth-building. However, by apprenticing your children in the skills of entrepreneurship, you enable them to eventually extend your business empire beyond what you could do yourself, even with the best employees. Plus, you will be building up your own household. In the agrarian model, children work the farm and by so doing, they increase the size of their inheritance. Parents could conceivably squander the wealth, but that would be like shooting themselves in the foot. The children are the future of the parents. They must not be short-changed, for they are the very reason for tribe-building.
Ideally, the apprenticeship should be a mentoring relationship. Make the learning process fun for children so they enjoy being productive. Teach them games that build leadership and teamwork skills. As children grow in maturity, they progress from working to be helpers, to working for rewards, to working as an expression of leadership. Each child should grow up to earn more money than his parents. This is building a tribal power structure as the children learn from their parents and eventually overtake them.

Have More Children, Raise Them, and Hire Them
Hire Your Extended Family Members
The essence of tribalism is an extended family working, playing, and living together. The tribe derives its strength from its numbers and the whole is greater than the sum of its parts. Working together will build solidarity and co-operation. A large tribe will have many small family businesses, and perhaps a few large businesses. Allowing free circulation between the businesses will build breadth of experience and a broad skillset among the next generation.
Hiring you extended family in the United States is referred to derisively as “nepotism.” In other cultures, it is a preferred and exalted practice. It shows that you care about taking responsibility and taking care of your family. Of course, family members must be competent in the positions where they are placed. That is the task of the human resources department.

Develop Your Family’s Skillsets and Increase Productivity and Value Creation
The business should be an apprenticeship and a mentor-ship for everyone working in it. If anyone isn’t progressing, figure out why. Static working situations make people bored. Then they quit. Always continue to improve and optimize the value creating productivity, and therefore the wage, of yourself and your family members. If you do this, your tribe will have plenty of income and plenty of leisure time to play together. Everyone will enjoy a competitive and increasing standard of living. This is utopia, the best of all worlds. As the tribe prospers, it can project its influence onto the world around, and onto other tribes. All benefit from the triumphs of each.