ECOnomics

Whenever I blog on economics or statistics, I know I make some folk uneasy with my comments.  But the joy of blogging is commenting on things I read or think about for which I don’t have to be right.  That appears to be the job of the rest of the world, who lets me know where my economic thinking goes astray.

Super Committee inaction

First a comment on the failure of the “Super Committee” to come up with a budget reduction plan which supposedly now will trigger mandatory cuts in government spending, including mandatory cuts for the military (this last phrase,  I think, is always thrown in to make conservatives nervous).

In our pluralistic society, the “consent of the governed” is going to mean that those who govern have to come up with compromises so that they can form majority coalitions to approve of legislation.  But in America this also has come under criticism as “business as usual” and Americans politically are perpetually in favor of change.    So the legislators can’t compromise and they can’t get anything done (which means they can’t govern reasonably either).  So  mandatory cuts in government spending are the only kind of cuts that are going to be agreed upon.  Americans are fed up with this political gridlock as well, at least based upon polls rating Congress (I heard one commentator note that communism gets a higher approval rating in America than Congress – 11% to 9%).

Cutting both the annual deficit and the national debt seem like proper goals to me.  The deficit can be cut/eliminated by cuts in spending, but to reduce the national debt, I believe, is going to require some tax increases (even if temporary).   Since I favor a balanced budget for the government and a reduction in the national debt, I believe we have to talk both spending cuts and tax increases.     I think that means talking about how to make Medicare and Social Security solvent as well.  Apparently none of these ideas is very popular with our national legislators and so they cannot come up with a reasoned planned and only seem to be able to acquiesce to a mandated reduction in spending (and even at that some are not comfortable with the mandatory reductions and seem to want to avoid them as well).    It seems obvious enough that continuing on the current path is not going to reduce the national debt, so the legislators decided to take those decisions out of their own hands and allow mandatory cuts to do their work for them.  But it is also true if we send our elected congressional leaders to Washington and tell them not to compromise to resolve the deficit and debt we are going to get what we got: an inability to govern reasonably.   In a democracy, compromise is not always a bad word as it means bi-partisan.   We might remember that ‘partisans’ from one point of view are ‘terrorists’ from another point of view.  Governments are said not to negotiate with terrorists.

What isn’t needed is more blame, but there always seems plenty of that around; a super  abundance of blame will not reduce the national debt or deficit one penny.  We waste our money when we send to congress people who have nothing to offer but blame.

My intent in this blog is not to belabor our government (“we the people”) and our inability to reasonably solve problems because of our ideological rigidities.

Instead, I want to comment on was a graph I saw in the 14 November issue of TIME with an article by Stephen Gandel titled “The Deregulation Myth.”   The gist of the graph is that despite a popular notion in the US that government regulations are hurting economic growth, worldwide the statistics show a different picture.  For the five years ending in 2010, the US is ranked 4th out of 183 countries as being the most business friendly (Singapore is 1st, Hong Kong 2nd, New Zealand 3rd).   In that time period the US had an increase in GDP of 15%.   But in that same time period China had a GDP increase of 160%, Russia of 94%, Brazil  135%, and Indonesia 147%.   These are countries in which businesses  are more regulated than US businesses.   Being more business friendly and government deregulation of business do not automatically create jobs or economic growth.  Capitalism moves money to where capitalism believes there is money to be made.   It is an oversimplification for politicians to promise Americans significant economic growth by further reducing government regulations.  America is already one of the most business friendly nations on earth.

The reality is America cannot control all of the economic factors in the world.   Politicians have limited powers as to what they are able to do to improve the economy.

If America cannot control world economics, what is our best strategy for living with, in and as part of the family of nations (which maybe we can influence even when we can’t control them)?   If politicians really have limited power to change the American economy, what are our best domestic strategies for creating sustainable economic growth?

Things to ponder.

For me there are also ethical questions regarding the relationship between profit and greed and the balance between sustainable economic growth and environmental stewardship.  We are after all not merely consumers on earth, but stewards of the earth.   God so loved the world, we believe, and we too are to love His creation, not just greedily use it for profit but for the benefit of all.   We Americans certainly believe that no tyrant anywhere on earth should control its resources.  So too, we have to abide on earth in peace with the rest of the world sharing the earth’s resources following that same principle as well.

See also my blog America and Capitalism: Dr. Frankenstein’s Demonic Lesson

13 thoughts on “ECOnomics

  1. “It is an oversimplification for politicians to promise Americans significant economic growth by further reducing government regulations. America is already one of the most business friendly nations on earth.”

    I suppose it depends on what we want to class as a regulation. Laws in America seem to be increasing without bound, and people don’t seem to recognize that laws cost us economic growth. For example, they’ve effectively outlawed incandescent light bulbs. There is a hidden cost in that because it narrows the choices people have. I’m required to wear a seatbelt whenever I’m driving. That costs something too. No money comes directly out of my wallet in order to get the seatbelt fastened, but its still a restriction of freedoms, and those invariably cost money.

    Think of it like electricity moving through a circuit. We can add resistors to the circuit, making it more difficult for the electricity to go through. But that’s only if resistors are added in series; when we add them in parallel, the overall resistance goes down. Why? Because we’ve created more routes through which the electricity can travel. Increase options, and you ease movement. Require that I must use only compact flourescent bulbs, or that I must wear my seatbelt, or that I must purchase health insurance, and you force me through just one resistor. That costs.

    There’s been an insane proliferation of petty laws lately, and while their impact on the economy is almost impossible to measure, I guarantee you it is there. Cut those down, and you will improve economic growth. Interestingly, this is no different from acknowledging that man has free will, and limiting society’s laws accordingly.

    “God so loved the world, we believe, and we too are to love His creation, not just greedily use it for profit but for the benefit of all. We Americans certainly believe that no tyrant anywhere on earth should control its resources. So too, we have to abide on earth in peace with the rest of the world sharing the earth’s resources following that same principle as well.”

    I built an economy. In order to get it to work, I found that it had to adhere to Christian notions of virtue. In doing so, it also adhered to ideals of free-market capitalism. The two go hand-in-hand, but technical definitions of ideas like justice and ownership need to be properly understood. You might be interested: http://alamanach.com/2011/11/25/aid-for-labor/

    1. Fr. Ted

      While I don’t disagree that America has an insame penchant for passing petty laws that deal with problems that affect the few, I’m not so convinced by your examples.

      Requiring seat belts creates manufacturing jobs and causes certain businesses to benefit significantly. So there is a business plus for some industries and no industry is hurt by requiring them. Seat belts may also be a plus to the economy is saving lives and preventing some injuries from accidents, which has a positive impact on the economy. Requiring seat belts does not put a restriction on business.

      The banning of the incandescent light bulb certainly affects those industries manufacturing them, but new industry is being created by the new technologies which are now required for lighting homes and buildings and cities. That to me is the free market. There is a social knowledge that we need to be more energy efficient, pushing us in that direction is socially intelligent and just. Your wanting to burn inefficient incandescent light bulbs increases the demand for energy and pushes the price of energy up, that hurts my freedoms.

      And I don’t totally buy the idea that banning incandescent bulbs somehow limits my freedom. Individual freedoms such as that are of limited value anyway. You are not being prevented from lighting your house. I don’t really equate freedom to whether I can choose 6 different types of bulbs or five. I still have plenty of choice. Freedom is not merely consumerism – having 33 flavors to choose from instead of 32.

      Additionally, there is the issue that we are not each separate individuals unrelated to all others dotted across the country. We are social creatures and exist in society. We have social responsibilities not just individual freedoms. When you promote absolute individualism in this way it creates social problems. For example if my neighbor burns his leaves day and night smoking out the whole suburban neighborhood while I want clean smoke-free air to breathe, is this simply a fight of individuals, or is this a social issue? I would say it is a social issue. Individual freedoms on every issue are not absolute because they have social and environmental consequences. There is a need for social decisions as to what we do to enable people to live together. If I want to create a toxic dump in my backyard, why should you be allowed as my neighbor to stop me? That is why freedom cannot be equated with individualism and consumerism.

    2. Fr. Ted

      By the way, I did visit your web page and found your story to be very impressive. I also liked your definition of economics. It is about people and relationships which is what your work proved.

  2. “Your wanting to burn inefficient incandescent light bulbs increases the demand for energy and pushes the price of energy up, that hurts my freedoms.”

    The more I think about this argument, the more it worries me. I also want to eat food, which in turn creates demand and drives up prices. Hypothetically, if we were to exterminate the least-productive 10% of the population, society would see more productivity per calorie of food consumed, thereby lowering the cost of food. Obviously, that’s not a measure any of us would be willing to take, but I can’t find a qualitative difference between that and telling me which light bulb I have to use. Somewhere in between restricting the freedom to purchase light bulbs and restricting the freedom to live there is a line beyond which we should not go. Where is that line?

    And since when is your energy bill my responsibility? Did I make some demand that you wire up your house? Did I require of you that you be able to power a computer? Have you made any such demands on me? Or did we– as we should– allow each other to follow our individual pursuits as best we see fit? That we both, in the event, want electricity is hardly surprising; the stuff is really useful. Of course we’re going to have to pay for it, but that doesn’t give either one of us the power to dictate lifestyle to the other. If you can claim that my incandescents impinge your freedom, what’s to stop some atheist from claiming that your preaching impinges his freedom? After all, the hours you spend writing sermons are hours that could be spent in a factory, making parts.

    Are men free or not?

    1. Fr. Ted

      Men are free, but free actions have social consequences. We are not free from responsibility and consequences. We are not free from our social nature. We are not free from being in communion with God, neighbor and creation. We each aren’t planted at our own Walden Pond (Or Paradise) with no one else around so we can trash or pollute our pond without regard for neighbor.

      Theologically speaking extreme individualism is exactly what has created the world’s problems. In Genesis 3:6 we read: “So when the woman saw that the tree was good for food, and that it was a delight to the eyes, and that the tree was to be desired to make one wise, she took of its fruit and ate; and she also gave some to her husband, and he ate.”

      From Eve’s point of view (individualism) there was nothing wrong or bad about taking the fruit and eating it. What she ignored was how her action would affect her relationship to Adam, to God, to nature, to all of creation. The effects were brokenness and disruption on all levels. Eve acted in self love rather than in love. (and the opposite of love is not really anger, but self love. Self love is always self directed while love is directed toward the other: God or neighbor. Christ tells us to love as He loved us. Christ tells us to love God and love neighbor.

      This love involves concern for the good of the other and self denial. That is the nature of Christian love and Christian freedom. We are able to free ourselves from self centeredness, self preservation, selfishness and ego=centrism of every kind. Freedom is not freedom from others but freedom from the limits of self to love others.

      That certainly is what St. Paul emphasized in his letters where he writes about eating food – the issue is not what I have a right to do, but how do I express my love for others.

      To me your concerns take the argument to strange conclusions, not logical ones. Humans are not totally isolated and autonomous beings, but social ones, created to love one another.

      I wonder if you really believe what you wrote in your blog about economics: “An economy is not sheep and irrigation structures and cars and houses and things. Those are merely the material goods that move through an economy. An economy is a complex set of relationships between people. The better the organization of those relationships, the better the people will be able to exploit the material resources that are around them. The material stuff is not what’s important; material stuff is all around us, and is free for the taking. It is the networks of people that are important, and some networks– some economies– are much stronger than others.”

      I think you are correct that economy is about relationships more than about stuff, but then from your comments it seems actually you personally value stuff more than relationships. And in the midst of that quote on relationships you perhaps give clue to your real beliefs: “the better the people will be able to exploit the material sources that are around them” and “material stuff is all around us, and is free for the taking.”

      Sounds to me like total materialism and even totalitarian materialism. Exploit. Materials stuff is free for the taking. The strong gets the most. “In the name of the Father, Son and Holy Ghost, he who eats the fastest gets the most.” or Whoever has the most stuff at the end of his life wins.

      Doesn’t sound like relationships ultimately matter. When they do, we don’t exploit. Humans too readily see other humans, especially strangers, as mere commodity and as material resource. Thus exploiting them is no problem according to what you wrote.

      So theologically, I see serious problems in what you wrote, despite seeing something positive in what you accomplished.

  3. Love requires knowledge of the beloved. Without that knowledge, there is no love. I didn’t love the laborers in my aid program because I didn’t know any of them– never met a single one. They were all statistics to me, as are most of the fellow citizens with whom I share the output of the local power plant. Love and relationships (the kind of relationships you are talking about) are ad hoc, personal, and particular. The exchanges between two people under those circumstances are unique, and are specific to the situation. When that exists, loving sacrifices can follow.

    But that can only happen when there’s knowledge of the beloved. Lacking that, the ‘sacrifices’ are actually injustices. Injustice destroys, and it hurts both parties. If two people don’t know each other– and all of us do not know most of our fellow citizens– then justice must govern their actions. Jesus tells us to love our enemies and to love our neighbor. These are people we know. He tells the story of the good Samaritan who helps a stranger he met on the road. A stranger, yes, but one that he’s met. He could see the wounds and evaluate the needs, and give to this particular man accordingly. Nowhere does Jesus tell us to love those whom we’ve never seen and know nothing about. I don’t know of anything in the Bible anywhere that teaches us to do that.

    Love is stronger than justice, but love only covers those whom we know. It is impossible to love that which we don’t know. Try to love the unknown anyway, and we do not love, but instead commit injustice.

    1. Fr. Ted

      You wrote: “Nowhere does Jesus tell us to love those whom we’ve never seen and know nothing about. I don’t know of anything in the Bible anywhere that teaches us to do that.”

      If you mean by that as St. John says in his epistle that the one who cannot love the person he sees, cannot love God whom he cannot see, then I agree. As the doctor in one Dostoyevsky novel says, “I love humanity, it is people I can’t stand.”

      I would say in as much as Jesus teaches us to love he certainly does not forbid us to love people we’ve never seen or know nothing about. In fact I would say the Good Samaritan parable goes a long way in that direction of telling us to love everyone.

      Your comment seems to put some limit on love – I’m only required to love those I know and have seen. Where does Jesus ever teach that?

      The God so loved the world statements, I think, are supposed to teach us that we should as well. We are to love as Jesus loves us. It is unconditional. No limits are put on it.

      Several people tried to quantify love in their encounters with Christ and He rejected their thinking. One asked about forgiveness, How many times do I have to forgive me brother, 7 times? That was a pretty generous offer, but Jesus rejects that quantification and tells him no but 70 times 70 (or 77 times, depending on translation). The idea here is to quit counting. Don’t quantify love.

      And the lawyer says he is willing to keep the law, even the law that says to love one’s neighbor, but then he asks Jesus, who is my neighbor? He is trying to quantify love. I’m willing to love my neighbor as long as the definition of neighbor is acceptable to me. But Jesus turns that thinking on its head, and tells the Good Samaritan story, and then asks, “which man proved himself to be a neighbor?” The question in love is not “who is my neighbor?” but to whom can I be neighborly? Jesus’ Good Samaritan parable says you are to be neighborly to anyone in need, even your enemies. There is no limit to love. That is the very way in which loves triumphs justice.

      Obviously we are to love people we know and those we come in contact with, but Jesus does not put any limits on love.

      Love is not an feeling emotional noun in the New Testament. It is an active verb. It is something we will, not feel. It is an action towards others not a reaction to them.

      I would agree with you on a certain practical level that loving the unknown can risk injustice since we don’t understand the situation and the needs. So there is a need for wisdom guiding us in what we do.

      But I would say I don’t see anything in the teaching of Christ that puts any limit on love. Dying for the other is the great love that says there are no limits to love.

  4. There’s something perverse in what you are trying to put forward. You are seeking a “love” that goes beyond what Christ has commanded of us. Yours is a self-sacrificing “love”, (I put it in quotes because what you describe is not love. The problem is not whether or not you should love those whom you do not know. The problem is you can’t. More on this below.) and you seek to make it into something boundless and unlimited. Boundless and self-sacrificing can be a very dangerous combination. When asceticism ceases to be about God and becomes an exercise in self-aggrandizement of the ascetic, it is drained of its spiritual benefit. Yes, there are limits, because you are good and worthwhile. God loves you, and wants you to prosper. If you boundlessly self-sacrifice yourself for the sake of everything except yourself– including people who, to you, exist only in your imagination– then you deny that you have any worth. You deny the existence of that in you which God loves, and has deemed worth of preservation and protection. You’ve aimed for magnanimity, but you’ve shot right past it.

    I want to be careful with definitions here. Magnanimity does not mean ‘generosity’. Magnanimity is striving for greatness. Its opposite is sloth. Sloth is not laziness, it is a spiritual sadness and a perverted humility; it is the soul believing it is not worthy of God’s supernatural gifts; it is a shrinking back from greatness. Love, obviously, has many shades of meaning, from ‘I love you’ to ‘I love this coffee’. Josef Pieper observed that all these forms which love takes have one thing in common: approval. Whether an emotion or an action, love amounts to the statement “It is good that you are in the world! It is good that you exist!” This is why knowledge of the beloved is a necessary precondition.

    If your “love” is such that you will boundlessly self-sacrifice even for people whose conditions you only imagine, then you deny your own worth, and you spit in the face of God’s love for you. You’ve shot past magnanimity, right into sloth. Sloth leads to despair, the deadliest of sins. Despair is interesting; it is the perverse anticipation of the non-fulfillment of hope, while it opposite, presumption, is the perverse anticipation of hope. Hope itself, lying right in between them, is a special trust we place in our own actions that they will be of some good. Hope, like magnanimity and justice, is a virtue– it is incapable of being twisted toward a evil end. But hope is a virtue only so long as the future upon which it is fixed is Christ’s kingdom. (The other virtues lack this specifically Christian requirement.) Everyone from the ancient Greeks to Nietszche has sneered at hope, recognizing its power to undesirably sustain a lost cause. But because of faith (another virtue, one based in reason and amounting to a special trust we place in God that He will keep His word), we know about the coming of Christ’s kingdom, and have a reliable promise with which we can fruitfully bring our hope into accord.

    The virtues are a system, and they work. My own aid program in Afghanistan is evidence. But in this system, love is preceded by knowledge, and has approval at its core. There’s no loving the unknown, and an attempt to love the unknown amounts to an injustice perpetrated on yourself. You can try to dress it up as something magnanimous, but it isn’t; you’re flirting with sloth.

    1. Fr. Ted

      You have many assumptions and unique definitions of words which create a strange logic. Of course if some of your “ifs” are true it might be as you say, but many of these are your assumptions, not fact, not reality. It sounds like you do not much care for Christ’s own offering of love – His self sacrifice for the life of the world. He did teach us there is no greater love than to lay down your life for your friend. This is total self sacrifice. Or He tells the rich man who comes to Him, give all you own to the poor and then come follow me.

      Yes when asceticism ceases to be about God, there is a problem, but asceticism – self sacrificing love – can be about God. St. John the Baptist said of Christ – He must increase, I must decrease. This is not to deny self worth, but to prevent self interest from getting in the way of loving God and neighbor.

      You define self denial in a negative way and then come to your conclusions. Jesus said, deny yourself, take up your cross, and follow me.

      He taught us to love as He loved us. And according to the scriptures His was a self-emptying love (kenosis).

      Denying the self is learning to love as Christ who though He was God denied Himself and became a servant. That is not spitting in the face of God! What strange definitions you have.

      In the Kingdom of God, says Christ, the greatest are those who serve. He humbled himself and washed the feet of His disciples as a servant. We are to imitate this behavior, He said. Greatness in the Kingdom comes with humility, self denial, self sacrificial love, martyrdom.

  5. “You have many assumptions and unique definitions of words which create a strange logic.”

    The definitions of the virtues and sins that I have presented come (mostly) from Thomas Aquinas. Christians have been living their lives by them for hundreds of years.

    You, personally, are special, precious, and deserving of care and protection. God thinks so and, frankly, so do I. You are also free. The logical consequences of those facts would seem strange indeed to one who was tending towards sloth.

  6. Thank you for the suggestion, I am happy to read further. One of John Cassian’s books was ‘Institutes,’ in which he wrote about monastic life and the various sins that can threaten it. I haven’t read the whole thing; I am going through it looking for passages on love and sacrifice. Here’s one. Institutes, Book X, Chapter 22:

    “And so taught by these examples the Fathers in Egypt never allow monks, and especially the younger ones, to be idle, estimating the purpose of their hearts and their growth in patience and humility by their diligence in work; and they not only do not allow them to receive anything from another to supply their own wants, but further, they not merely refresh pilgrims and brethren who come to visit them by means of their labours, but actually collect an enormous store of provisions and food, and distribute it in the parts of Libya which suffer from famine and barrenness, and also in the cities, to those who are pining away in the squalor of prison; as they believe that by such an offering of the fruit of their hands they offer a reasonable and true sacrifice to the Lord.”

    They never receive anything from another. Furthermore, those for whom they sacrifice are described as suffering “from famine and barrenness” or as “pining away in the squalor of prison.” These are people in Libya and in the cities. A glance at a map reveals that it’s a bit of a hike from the populated parts of Egypt to the centers of Libya. I suppose they could ship food by boat, but however the monks managed it, this business of moving food from their Egyptian monastery to the famished in Libya was an enterprise of some complexity. Doing so even today would be a serious job, and we live in an age of unparalleled transportation capability. Those monks put real effort into this.

    So there’s you’re self-sacrificing love. But what we must not overlook is that the monks knew exactly what they were doing. They knew who they were helping, where those people were, and why the particular help they were sending would do the job. And they didn’t just think there might be starving people in Libya, they knew. Somehow, they knew. Otherwise, they’d have sent food to Libya, and Ethiopia, and the Holy Land, and Greece, and wherever else– completely dissipating all their energies, and accomplishing little actual good. Also, they sent food, rather than something else, again, because they knew. When the monks learned about prisoners pining away in squalor, did they respond by paying money to an innkeeper? Of course not; they gathered up and sent food. When the good Samaritan came across an injured traveler on the road, did he respond by sending shipments of food to Libya? No, that would have been ridiculous. Love requires knowledge of the beloved.

    I will continue reading John Cassian, and I thank you again for telling me about him. If you have particular words of his in mind that you want me to read, please direct me to them.

    As for the scriptures, you’ve introduced much already. Read through them, and I believe all of them make the case for loving people we know. They say nothing about loving people we don’t know. It’s not the absoluteness of your proposed self-sacrifice I object to, it is the fixing of your self-sacrifice (whether boundless or limited– although the boundless comes with disturbing consequences) on the unknown. That’s not love. When you bar me from incandescent light bulbs for the sake of some unknowable person at the other end of your power grid then you serve not the people who are really in the world, you serve the people of your imagination.

  7. Pingback: The Versatile Blogger Award « I AM THE ALAMANACH

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