Paying for the Free Market

I read in the Winter 2016 issue of THE WHEEL (a new journal of Orthodox literature and thought) the article by Anthony Artuso, “On Dominion and Progress: Sacramental Action in a Secular World.”     Artuso makes a few interesting claims that I piqued my interests.  He says that …

“The original political idea of the  Enlightenment was to create a religiously neutral public sphere where governments supported by the will of the people, would make decisions to enhance  overall welfare.”

The proponents of the 18th Century European Enlightenment and their successors felt some oppression from the existing religious structures in Europe and the wars between Christians which were frequent at that time.   The movement toward separating church and state was an effort to disentangle society, government and religion in the hope that people might behave more rationally and less passionately in disagreements.  By pushing religion to a more private sphere, some thought people would behave more rationally.  The reality is that people don’t need religion to become passionately driven on issues as a number of communist atheist tyrants have shown.  Religion does not automatically lead to irrationality, nor does the absence of religion guarantee humans will be reasonable.

But relying purely on human reason, allowed them to imagine that commerce/ the market/ capitalism would serve the people by keeping individual greed in check.  The market had an interest in a moral order and in spreading the benefits it brought about to a wide range of people (or so they believed).   Artuso says the market was to be

“always under the guidance and management of the state, which alone was entrusted with safeguarding the interests of all.”

reaganThe state was in their idealist view the preserver of reason.  This may have been the ideal, but this ideal  in the 18th and 19th Centuries for Enligtenment advocates, but it must not have been working which led President Reagan to identify the government as the problem, not the solution to the problem.  But then, even under Reagan, the government grew and the national debt doubled.  The government may have been the problem, but his policies enlarged the problem.

Artuso says the drive for deregulation of the market was a response to a feeling that the government wasn’t in fact a benevolent guide for the free market but could be turned into a monstrous tool of political interest groups.  So the new idea came to be to free the market from government oversight.  Artuso puts it this way:

“We have entrusted ourselves to the invisible hand of the market which we vaguely conceive as being wielded for our benefit by the god of progress.”

Therein is a dilemma.  Adam Smith, the patron of the free market, apparently thought the government was to manage the market for the public good.  But in modern America, the government came to be viewed as part of the problem because the government proved not to be a neutral force in the free enterprise system.  It was a huge force that could be manipulated by interest groups to carry out agendas other than the general welfare.

But, the market freed to move as it wishes without government oversight becomes a large and largely undirected force.   What or who guides the market and for what purpose?   Perhaps we are to think that the unguided force of commerce is always benevolent, but what would make us believe that is not clear.  The market can be manipulated by organized forces with particular agendas.  Is it too big to allow it to go where it will?  Or in fact  will some clever folks be able to guide it to their own benefit without regard to the general welfare?

money

The market is driven by greed if by anything, and certainly does not want to keep greed in check.  The market imagines unbounded growth which, at least in recent years, certainly has benefited the wealthiest people.  Unbridled growth in the market (as well as in the government!) seems to fit the American attitude that wealth is a god which we should always serve.

Our money says on it, “In God we Trust“, but perhaps the god we trust in is money itself.   St. Paul warned that “the love of money is a root of all kinds of evil” (1 Timothy 6:10).  We tend to think on the other hand that money is THE solution to every problem.  [Think also about how much money gets invested in our elections – some do think money can influence the direction of governement].   Wealth and more wealth are assumed to be always a good, the more the better.   The notion of any kind of self-control by individuals, commerce or the government is out of favor these days, or perhaps in America always is.

Wealth of course is not a god, is not infinitely wise and can, as we have experienced throughout history, suddenly disappear throwing the world into depressions and recessions.    Wealth is not a neutral force unaffected by the greed and powerlust of people.   It certainly is a major force in human life and history, but it never claims to be benevolent towards humans.   It is always being pushed and pulled in various directions.  And to imagine that ever increasing wealth can only produce more good, we might ask: Would an infinitely rich Hitler have created a better world?  To imagine that wealth or the market are simply neutral, and unmanipulable is to ignore history where people were always striving to use the market for their own goals.

Besides all of this, studies have continuously shown that increasing wealth does not automatically equate with people being  happier.   Certainly it doesn’t guarantee people being wiser, kinder, more generous, more humane, more civic minded.  Money can be a good servant, but it is a bad master.

People are attracted to power, and the free market represents a huge power in the world.  People have and will continue to attempt to use government, wealth, the market, for their own ends  This is the fact that we have to be aware of and prepare for.

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

Light Which Shines out of Darkness: Faith and Economic Crisis

Sermon Notes for 28 September 2008

 

Still thinking about the traumatic financial crisis which is gripping this country and affecting the world. 

 

The good news is really in the first line of today’s epistle:

(2 Corinthians 4:6)   It is the God who commanded light to shine out of darkness, who has shone in our hearts to give the light of the knowledge of the glory of God in the face of Jesus Christ.   

Though St. Paul refers to the Genesis 1 story of creation, it is a message of hope in every generation.   There are many kinds of darkness which can take over our lives – the darkness of sin, of natural disasters, of war/invasion, of plague/pandemic, of economic disaster, of manmade disaster, of depression.  

God still commands light to shine out of darkness.  Darkness does not overcome God’s light, though we might experience the darkness as real, and the light as vague hope or even distant delusion.

Darkness does not overcome the light, though darkness can oppressively last for years as witnessed by the Jews, and many others through the centuries. 

This is why it is important that we not contribute to the darkness by our political decisions!

 

[that God commands light to shine out of the darkness tells me that the basis for light is spiritual not material.  The basis for existence is spiritual not material.  In fact the basis for the material world is spiritual as well.   The Big Bang (used by science as a description of the beginning of the known/empirical universe) is from what we can know light emerging out of the nothing.   The basis of the empirical universe is not found in matter but in the nothing which precedes matter, from our point of view, from the spiritual, from God!] 

(Luke 5:1-11)    Jesus [2]  saw two boats there at the shore of the lake; the fishermen had gone out of them and were washing their nets.      [5] Simon answered, “Master, we have worked all night long but have caught nothing. Yet if you say so, I will let down the nets.”

Economic downturns and disasters have been known to humanity as long as human social systems existed –  famine, flood, draught, invasion, insect plagues, disease, warfare have all taken their toll on human fortune and fortunes.   And in a time when there were no hourly employees, as the apostles knew, you could work long hours, but if you produced nothing, you earned nothing.    The fisherman are washing their nets – they have to continue working and cleaning up and repairing even when they earn nothing!   Economic demands are pitiless. 

 

The Gospels are full of stories about bad financial decisions, unscrupulous financiers (the publicans!  Zacchaeus!), money lenders, people who got rich off the miseries of others.  There is no Parable of the Good Merchant.  The Gospels say a lot about debt, debtors, the rich, the prosperous.   People were very familiar with poverty, taxes, financial disaster and economic oppressors.    Christ’s followers knew very well what it was to work hard and long and to have nothing to show for it.  He who won’t work, doesn’t eat – but even those who work hard might not have anything to eat in this system! 

[6] When they had done this, they caught so many fish that their nets were beginning to break. [7] So they signaled their partners in the other boat to come and help them. And they came and filled both boats, so that they began to sink. … Then Jesus said to Simon, “Do not be afraid; from now on you will be catching people.” [11] When they had brought their boats to shore, they left everything and followed him.

Note in the story, Jesus doesn’t ask the disciples to abandon their business when things had failed – when they worked hard and had nothing to show for it.  He asks them to follow Him after the hugely successful catch of fish.   He asks them to abandon prosperity to follow Him, not to abandon poverty and failure!  The disciples don’t leave behind their empty nets, but rather their enriching catch to follow Jesus.  

 

While we may all feel the need to turn to God during times of economic downturn seeking His merciful intervention, it is in times of prosperity that we are most tempted to forget not only to thank God, but that God exists.

 

In Washington politicians may work out a bailout plan for the troubled financial market and their agencies of wealth (gained and lost), but whatever ideas they implement are themselves fraught with risks and offer no guarantee of success and might in fact exacerbate the problem.

 

Prayer in bad economic times offers no risk, except that it might go unanswered.   On the other hand, it might turn God to attend to us, but at the minimum will make us attend to God.

“In God We Trust”: Especially When Money is Our God

I wonder if it is irony that America places the words “In God We Trust” on our dollar bills but not on congressional or senate bills?  The world’s greatest capitalistic nation, trusts money and economic growth as if these things were an all good God.  At times we don’t seem to distinguish between wealth and God – they are an equal good in our experience, and we will trample on a lot of ethics, and look away from a lot of morality, in order to pursue the ominpotent dollar and the divine prosperity we believe it gives us.   For example greed, one of the seven deadly sins, is seldom railed against in prosperous America and sometimes is euphemized as “profit”.

Marketplace commentator Robert Reich in his 6 August 2008 “A Contest Between Two Capitalisms” offers us something to think about as he compares and contrasts the phenomenal and unprecedented growth of the Chinese economy and its “authoritarian capitalism” with the faltering U.S. economy’s democratic capitalism, using the Olympics as a metaphor:  the Chinese Olympic games versus the American Olympics: our upcoming presidential election.

For years, American policy toward China assumed that trade and economic growth would generate a large Chinese middle class, and this middle class would demand democratic reforms. … We thought capitalism and democracy went hand in glove. They don’t.  … But when it comes to civil and political rights, China today is where it was almost two decades ago at the time of Tiananmen Square.

Authoritarian capitalism works wonders if all you care about is getting ahead economically and being able to afford more stuff. … Democratic capitalism should win in the end because it responds far better to what people want — not only as consumers but also as citizens. Yet right now it’s not so clear. The Chinese economy is booming while we’re in deep trouble. Eighty percent of Chinese are optimistic about the future but only 20 percent of Americans say this nation is on the right track.

In terms of this big contest, you might think of our upcoming presidential election as our own Olympic games. It will showcase to the world how well democratic capitalism still works.

Maybe a question Reich should ask is whether Americans themselves are not so addicted to getting ahead and getting more stuff that they will be willing to trade the freedoms democratic capitalism affords for the wonders authoritarian capitalism delivers?   Will Americans sacrifice their ethics and religious beliefs to embrace philosophies that can deliver greater economic prosperity?   Have profit and wealth in fact become our gods?  Maybe atheists do not have to fear “In God We Trust” on money, for maybe the money itself is our God.

An American Success Story and the Unexpected Pain

There has been a lot of doom and gloom news lately – the U.S. economy is bad, unemployment is way up as are rocketing gas prices.  Worldwide there is a food shortage while food prices are soaring.   We all are feeling the pain at the pump and at the grocery store.

 There is a population explosion which is driving the world’s fuel and food shortage and inflation.  But it is not just an increase in numbers; it is the kinds of people who are growing rapidly throughout the world which are causing the strain on food and fuel supply and demand:  a rising middle class throughout the world.  On the radio this morning commentator Robert Reich offered this explanation:

“You see, hundreds of millions of people in China and India and the former Soviet republics are ascending into the middle class at a rate never before seen in history. And the two items this huge, rapidly-growing middle class want most are cars and meat.

That’s the problem. Cars use enormous amounts of fuel. And meat uses up enormous amounts of agricultural land, because animals that provide it require lots of feed grains. And supplies of both are limited.

This means global prices for fuel and food will continue to increase in the foreseeable future. And these increases are likely to generate the biggest threats to global peace.”

America whose leaders so aggressively wanted to bring an end to communism and propagate free enterprise throughout the world, have in fact succeeded.   But this success of spreading “American” capitalism throughout the world came with a unanticpated cost.   Population growth among the world’s poorest does not put the strain on the global fuel and food supply that growth in the middle class does.  For the middle class has money and they want more goods and consume far more food and fuel than the poor.  So the American success in spreading free enterprise through the world has exceeded the world’s capacity for sustaining middle class consumptive life styles.   It is going to put even further stress on the demands for the world’s limited resources and is going to put much more stress on the world’s poor who cannot afford the basic necessities of life. 

The gloom and doom of the news was met this morning in my daily reading of the Bible with this passage:

Though the fig tree do not blossom,

nor fruit be on the vines,

the produce of the olive fail

and the fields yield no food,

the flock be cut off from the fold

and there be no herd in the stalls,

yet I will rejoice in the LORD,

I will joy in the God of my salvation. 

(Habakkuk 3:17-18)

The Prophet Habakkuk says even if food crops fail, and animal production disappears, he will still rejoice in the Lord.   In the doom and gloom of the news it is hard to feel so piously trusting in God as to be joyful.  As America deals with its worldwide success in exporting free enterprise, will we feel so joyful in God as prices soar through the roof?   We have convinced the world to embrace capitalism, and it has brought an unbelievable boom to the world’s population and economy.   Now will we be able to practice what every household family with kids has to teach and learn –  how to share?