Posts Tagged ‘Economics’

The (very) long view of history.

April 24th, 2017

Many moons ago, my son was presented with an essay title for his History GCSE, which was on the causes of the First World War. He decided to talk to me about it.

The immediate cause was, of course, the network of alliances which had grown up between European powers which was intended to create a sort of detente, a situation where no-one could afford to be aggressive because of the likely invocation of alliances bringing in the then “big players”. History records, of course, that an agression by one of the more minor players, Serbia, via a terrorist act, resulted in the whole structure being mobilised – as were troops all over Europe. This is beautifully lampooned in a joke comparing the whole thing to a bar fight. Current commentators worry, not without reason, about minor players like the Baltics and Ukraine drawing Nato into a world conflict in the same way.

Looking to expand his appreciation of the broad sweep of history, I encouraged him to think about why there were competing ethnicities and religions in the area, and we traced that back by stages. His eventual essay (which got him an A*) stopped at Trajan’s Dacian wars – he was probably sensible in not going all the way to where our discussion ended, something like four hours after we started.

However, we didn’t stop there in conversation. The Dacian wars were at least in part caused by population pressure from the east. It was thus one of a series of waves of pressure on Europe from that direction, as tribes moved west over the whole area from Mongolia to the borders of Europe, each pressed by those to the east of them. Sometimes, the more eastern tribes actually managed to conquer and form alliances well enough for their members to arrive in Europe itself; the Huns were the first, followed by the Mongols; the Turks were another. In Trajan’s time, however, the Dacian movement was a knock-on effect. The Dacians were pressed by those east of them, such as the Scythians.

Why, we asked, did this set of waves of migration actually occur, and why hadn’t they happened earlier in the history of the Roman Empire? My best guess at this rested on climate change. Where there was a relatively wet, cool period, the homelands of the more eastern tribes and their natural raiding areas (largely China) became more fertile, producing an increasing ability to support population. The period in question was marked by a set of cycles of cool wet weather followed by warm dry weather, though, and when it turned warmer and dryer, the population in the east couldn’t be supported there any more. At the same time, warmer, dryer weather dried out the immense areas of marshland along the Dnepr river (including the well known Pripyat marshes) and lesser ones along the Don and Vistula rivers. What was, in wet weather, a hostile landscape for horse-warriors became plains which were ideal for large mounted operations, and effectively created a highway all the way through to the Balkans in the south and Germany in the north. It wasn’t just Europe which suffered this way; the Middle East had its own waves, for example that under Timur Leng which ended the golden age of Islam, that under Ghengis and Kublai Khan which replaced the native Chinese empire with a Mongol one for centuries, and that under Babur which founded the Mughal Empire in North India.

The ultimate cause was, therefore, changes in climate, which interacted with the predominantly horse-oriented nomadic culture of the eastern part of north Asia to produce very massive population movements.

I’ve been reminded of this by reading a New York Times article on how climate change produces migration. We focus a great deal when talking about Syria or Yemen on political issues, but the map at the beginning of that article makes clear the unacknowledged fact that from Syria down into the Arabian Peninsula, climate change is affecting the ability of the land to support population, and that is going to produce increased competition for the increasingly scare resources, wars and both economic migrants and those fleeing war and civil disorder. The same goes for a swathe of land through Sudan to the horn of Africa, and for areas in central West Africa as well, those being the source of much of the migration trying to cross the Mediterranean from the more Western points such as Libya. Americans should notice the intensity of red dots in the north of South America and in Central America.

Rome, of course, eventually collapsed in the fact of these waves of migrants, unable to stem the tide; the Goths, Vandals and Franks were pushed (largely by the Huns) westward, and took down the civilisation in the Western Empire; in the Eastern Empire it was the Turks in a later wave who dealt the coup de grace, though there had been an earlier Arab expansion (which I can’t connect to climate change, but which may well be another instance) which had done immeasurable damage first.

We’re a lot stronger than Rome was in Europe and America, of course. But we should perhaps wonder whether we can actually get away with merely building a wall along the Mexican border and fences along the long European border to the east. The Chinese had a frontier-long wall as well…

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I want to see the world burn…

December 17th, 2016

About the only entirely logical, fact based and thought-through reason I was given by any friend for voting for Brexit earlier this year was that phrase “I want to see the world burn”. I was not living in a liberal-left bubble, at least not entirely so, so I did have quite a few friends and acquaintances who voted for Brexit, some with considerable enthusiasm (about which I spent a lot of time biting my tongue…). Almost everyone else who explained to me their reasons for voting that way was either relying on what I considered groundless faith that the UK economy could “go it’s own way” more successfully than with privileged access to the largest economic single market in the world (at least until China overtakes it), the belief that immigration was damaging job prospects (which I think is contrary to the facts, though it could have an effect on stifling wage growth) and would be reduced (which I strongly doubt is going to be practicable) or the nebulous idea that we were “restoring sovereignty” by ridding ourselves of a raft of EU rules (which we will have to adhere to anyhow if we want to sell to Europe in the future and will need to replace in order to have any reasonable level of consumer and environmental protection) – there, the facts are probably that we will by “going it alone” be more subject to outside forces, particularly those associated with globalisation, and less able to make our own economic and social policy. OK, there were a few who wanted us to get rid of human rights legislation, which ranks as another logical, fact-based and thought-through reason, but is one which I earnestly hope very few Britons adhere to.

Some had visions of us returning to a past seen through rose-tinted spectacles when we had thriving manufacturing industry, jobs for everyone and (therefore) rising wages and standard of living. Those days are irretrievably gone. Some were justifiably angry at the way the banks had been bailed out, and thought we would become less dependent on them – in fact, we would be more dependent, as finance of some form is, regrettably, our biggest export earner, and we would be less able to consider capping the exorbitant salaries taken by financial middlemen who, in the ultimate analysis, produce nothing, as we would so much more need their ability to cook the books between us and our competitors by the construction of complex and risky financial transactions.

It has seemed to me that the same factors, more or less, were at work in the election of Donald Trump, and I read with interest an article in “The Nation” comparing the Trump campaign with the 1960s Hells Angels. I think this is probably spot on. Underlying all of the complaints of my Brexit friends is, I think, the feeling that things were better in the past for the vast majority of the middle and working classes – and they were. I grew up in a country in which education to a bachelor’s degree level was effectively free (assuming you could get accepted onto a degree course), and where the primary reason for deciding not to get a degree was that employment was extremely readily available at good wages, often better than you’d be likely to see after spending three years getting an university degree. A sizeable number of people from historically working class backgrounds were being educated and getting very good jobs. Contrast how things are now, where any education beyond 18 costs you, and lands round your neck a substantial millstone of debt which produces effective debt peonage. Those getting “good” degrees from leading universities are increasingly those whose parents could pay for their education, and so those entering higher-paid jobs are equally more children of privilege than the “best and brightest”. Where, when I grew up, it was normal for children to leave home at 18 or 21 and buy their own home immediately, now there are increasing numbers of 30 and 40 year olds still living with their parents as they can’t afford to buy or, frequently, even rent. There may be a lot of jobs (in point of fact, there are more jobs now in the country than at any time in the past – unemployment has recently fallen somewhat, despite a continuing vigorous increase in population due to migration), but they are not jobs paying the kind of amounts on which you can base setting up home and raising a family, hence the cartoon featuring the server at a burger bar asking whether the customer wants his burger flipped by a PhD in English, History or Philosophy (OK, there is a dig at the humanities there as well…).

There is no longer the level of opportunity to “get on in the world” for the vast bulk of people which we used to have, and vast numbers of people have given up thinking that any of the old political solutions will work (I could blame the fact that, both sides of the Atlantic, there is no political game in town other than neoliberal economics, save perhaps Sanders and Corbyn, but that remains the perception). In those circumstances, we are looking at populations who are in despair, and despair makes for desperate solutions. “Let’s wreck the whole thing and see what happens (because it can hardly be worse)” starts looking very attractive. As the Nation article says, it’s an emotional rather than a rational motivator, and thus immune to reason, and experts, and even common sense.

But at least, so far, it’s only democratically taken decisions. My worry is that soon it will be decisions which ignore democracy. Perhaps the “end times” are really upon us (which could explain some of the evangelical enthusiasm for Trump). But if, as I might fervently hope, there is a messiah coming, I do hope that it looks more like Jesus than like Trump.

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Biblical politics and economics

August 9th, 2016

I think Brad Artson may be my favorite Rabbi (he’s certainly been asked to be “their Rabbi” by more than one non-Jew). Under the guise of biblical advice on which to choose political candidates, he has outlined a biblically based political programme – which is pretty much exactly as I’ve been arguing for some time (although Rabbi Artson doesn’t go so far as to call free market capitalism as we see it operate “the System of Satan”…)

He does have one caveat in the article – he states that he is no expert on the Christian scriptures, but that from everything he’s heard about Jesus, Jesus would not disagree with any of what he’s written. Now my arguments have largely been based on the sayings of Jesus – and they end up in the same place.

This may demonstrate that Jesus was solidly in the Jewish tradition (I think it does), or that our dominant neoliberal social and economic policy is contrary to God’s will for the world (I think it is). Or, of course, both…

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Towards a Christian economics?

July 31st, 2016

Elgin Hushbeck has responded to my recent post in the comments to his original article; this is my reply.

Elgin,

Sorry it wasn’t still fresh in your mind – I confess it took me nearly a month from first putting down some reaction to actually posting it; various other things kept intervening and it nearly didn’t get posted at all – but I didn’t want to waste the work…

Let me start with where we agree. As you note at the end, we agree that there is a problem when organisations get too big, and this goes for both companies and governments. It also goes for Labour Unions, which I think are a good thing unless they become too large and powerful (i.e. significantly more powerful than the organisations they are negotiating with). We definitely agree that a government in the pocket of large companies is an extremely bad thing, and that we have moved towards that over the last 50 years.

We also agree that a bargain between individuals is an extremely good way of establishing an equitable result, as long as the parties have a fair level playing field, i.e. neither has any duress applied to it to close the deal, neither is unable to walk away if a deal cannot be struck, and both parties are in full possession of all the facts (there may be more caveats on further reflection).

We also agree, I think, that when purely financial considerations drive an organisation, that organisation becomes toxic. I have had quite a bit of experience of organisations driven by cost accountants and MBA’s of the Harvard school (happily mostly from the outside), and they are every bit as nasty as I’ve described.

However, I don’t see the problems of short-termism and intolerable pressure to keep on producing more for less as flowing purely from the payment of performance bonuses, as you do; I think the root problem lies with a stock market which can respond within milliseconds to any perceived opportunity or risk, and where you have a market which works to a timescale of milliseconds, you are likely to be forced to think short term.  Performance-based incentives for CEO’s just makes things that bit worse. The system itself forces the actions of individuals; even if managers wish to be long-sighted, the demands of finance make them short-sighted.

That is, however, just an intensification of a tendency already inherent in the idea of a market in shares in large limited companies. Ambrose Bierce (one of your better American sceptics) said that the limited liability company was the greatest instrument of fraud ever invented by humanity; I would add that it is the second greatest instrument for dissociating an organisation from its ownership (the greatest being a representative democracy with a strong party system).

We also agree that attempts to create pure socialist societies have been, to a large extent, failures; we agree that they come up against the problem that people are not all paragons of civic virtue, and some of them will game the system, some of them will grab and hold power. However, you do not concede that moving closer to the idyllic concept of socialism would produce a society far better than the ones we live in, while you do maintain that moving closer to your idyllic concept of capitalism would do this.

This is where we completely part company. I don’t think that moving too far in either direction would be a good thing, and in particular I am absolutely convinced that removal of all restraints on capitalism would make things far worse.

The thing is, we have seen societies which have been substantially less regulated by government than either of ours now is, and indeed have seen some where there was absolutely minimal regulation. What results is the development of larger and larger organisations, the concentration of wealth (and power) in fewer and fewer hands (both of which Karl Marx observed would occur), the cartels and price-fixing which Adam Smith warned were a feature, as I quoted:  “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” , and the increase of influence of corporations over government, which both of us have observed and deprecate. It is the system itself which tends to monopoly and cartel, and not any particular failing of individuals beyond normal human nature.

Incidentally, the replacement of small shopkeepers by chains here has nothing to do with government regulation (which is far lighter on small businesses) and everything to do with economies of scale and cartels involving the chains and suppliers, i.e. the negative effects of an imbalance of power.

Yes, such societies can indeed “produce wealth” – indeed, it is the whole objective of their economic systems (and frequently of their governments as well). Without redistributive taxation and strong curbs on the power of corporations, however, in the absence of a labour shortage this wealth largely stays in the hands of a very few people and is of no benefit to the wider population. Both of our societies were far less regulated in the days of our respective industrial revolutions, and both saw the absolute degradation of labour and the rise of super-rich individuals until governments started to limit the power of the industrial concerns and provide for the mass of the population both by providing a safety net, by restricting the ability of the employers to make use of their disproportionate bargaining power and by legislating as to the conditions in which they were asked to work. Both produced appalling living and labour conditions for the workers, frequently worse than those they had had before moving to work in cities. I for one do not want us to go back to the systems of the early 19th century.

We definitely agree that monopolies are in principle a bad thing; where we disagree is that I see the likelihood of monopolies growing as regulation decreases, and you see competition as being a sufficient mechanism to stop that happening and even think that deregulation assists competition. While we agree that government-sponsored and protected private monopolies are a bad thing, we are not agreed, I suspect,  that there are no areas in which a government monopoly is beneficial.

I have in mind there that there are going to be natural monopolies in some areas – it is, for instance, inconceivable that it would be sensible for me to have two entirely different sets of wires connecting my house to two different electricity producers – and in those cases, if private companies are supplying my electricity, they need to be extremely strongly regulated. In fact, we now have here a rather artificial “market” in which a number of middlemen companies contract with individuals on the one hand and with electricity generators on the other, and “compete” with each other (which would never have happened without government intervention – without that, there would have been local monopolies and possibly a national one). I am unconvinced that this system actually delivers any benefits over and above the previous government-owned and run electricity monopoly. Rail transport is another area in which I am not convinced the current privatised system works as well as the former British Rail, which had to be formed when the previous private railway companies became insolvent and incapable of providing a reasonable service. The theory behind both these moves was hugely convincing, but the outcome has been fairly bad.

And, of course, I have not come across any advocates of privatising the defence of the country – though it could be argued that the USA has experimented with this with several private military contractors. I do not envy you that piece of privatisation!

This is a position I could well have reached (and in fact did) without years of reading the scriptures, and in particular the synoptic gospels, and within them the injunctions of Jesus to his followers. It is not too dissimilar from your own – that market forces are the basic way in which human commerce is best organised, and government should intervene primarily to ensure that competition is fair, though I think far more needs to be done by government than you do to ensure that fairness.

However, I see a different set of injunctions from Jesus. In particular I see a clear identification of the pursuit of wealth as evil; “you cannot serve God and money” (Matt. 6:24), which is underlined by Paul “the love of money is the root of all evil” (1 Tim. 6:10). Jesus enjoins those who would follow him to sell all they have and give it to the poor (Matt. 19:21) or at least half of it (Luke 19:8-9) and asks followers to abandon their small businesses in order to follow him (Matt. 4:18-22).

Now you think that socialism taken to its extreme doesn’t work, I think that capitalism taken to its extreme doesn’t work (and largely agree with you as to socialism); I think both of us would have substantial problems thinking that following Jesus’ economic injunctions would work. If we did follow them, we would probably end up as itinerant beggars – but that is, I am wholly clear, what following Jesus demands when taken to its extreme. I can’t do it myself, and setting aside all arguments that it isn’t practical, that I have responsibilities I’d be abandoning and the like as self-serving excuses, at the root I am too scared to do it and lack the faith to trust that God would see that I was all right if I did.

So Jesus is suggesting that money is an alternative to God, i.e. a demon, and Paul is reinforcing that; Jesus then suggests that we renounce Satan in renouncing wealth and its pursuit (to paraphrase him).

Pope Francis put it this way in a recent address:- “Friends: the devil is a con artist. He makes promises after promise, but he never delivers. He’ll never really do anything he says. He doesn’t make good on his promises. He makes you want things which he can’t give, whether you get them or not. He makes you put your hopes in things which will never make you happy. … He is a con artist because he tells us that we have to abandon our friends, and never to stand by anyone. Everything is based on appearances. He makes you think that your worth depends on how much you possess.”

This all leads me to the position that free market capitalism, at least in the form it’s developed to, is an inherently satanic system. However, it’s the one we’re stuck with; the alternatives are perhaps theoretically attractive but can actually be worse in practice – it’s much like the Churchilian comment about democracy, which he said was a bad system, but better than all the others which had been tried.

I could, however, also point to a set of injunctions of Jesus which militate against putting faith in governments (or nation states); these too are at least potentially satanic. What I advocate is not to let either have free rein, but to balance the one with the other and in the process always have in mind that both are flawed, both are man-made, both are fallen.

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A free market exchange of views…

July 17th, 2016

Elgin Hushbeck has written an impassioned piece in favour of capitalism. I quote him at length:-

“One of the common criticisms of those on the left, particular the religious left, is that capitalism is an evil system because it treats individuals as commodities of momentary worth, rather than as people made in the image of God.  This is really just a self-serving definition that tells us more about the person making the claim than about capitalism itself.

One reason for this is that at its core capitalism is based on a mutual giving among individuals that is, at least ideally, freely chosen.  There is nothing in this that demands greed or exploitation.  Granted we live in a fallen world where people are not always driven by the highest motives, but this is a problem with all systems, from sports to science, movies to teaching, the private sector, government, and yes, even socialism. It is hardly limited to capitalism.  People are people, regardless of where they are.

and

There is nothing inherent in capitalism that makes men greedy or teaches them to exploit others, in fact if anything it is the opposite for capitalism simply seeks an exchange that is best for both sides, where what is best is determined by each individual.  Since it is based on mutual consent, it encourages people to be concerned with the needs of others, which I believe is one of the reasons those supporting capitalism are on average more charitable than those supporting socialism.”

Now, as Elgin is my opposite number from the Global Christian Perspectives webcasts (currently in hiatus pending new technology and a new format), and by “opposite” I mean in politics, theological stance and country (the UK and the USA being opposites at least from the point of view of the Atlantic), and he is therefore well aware of my take on capitalism; I still recall the expression on his face when I called free market capitalism “the System of Satan” (which I later elaborated on in a post of the same name). I have written other posts in a similar vein – “Depression, the System of Satan and the Devil’s Evangelism”, “Freedom with or without Property” and “What price Free Trade”.

Do I feel just a teeny bit targeted by that This is really just a self-serving definition that tells us more about the person making the claim than about capitalism itself.” ? Well, even if Elgin hasn’t read all those four posts of mine (and I’m not going to recapitulate them here – you can click through and read or reread them to see that I do have some very good reasons for thinking the way I do), I think it isn’t unreasonable to think I am, if not THE target, then part of the target. Mind you, it does seem possible that this is just turnaround, and he felt himself targeted as one of the “Devil’s Evangelists”. That would be fair enough, I suppose.

What, then, does it “tell you about me”? It seems to me that in writing it, Elgin meant to imply that my view of capitalists is an overly negative one (after all, he goes on to paint a picture of capitalists as benefactors of all…). What it should tell you is, I think, expanded upon in the four blog posts I link to, but Elgin hasn’t dealt with the contents of those, so I suspect he hasn’t read them. They would also tell him that I’ve reached my position largely due to reading and rereading the synoptic gospels.

But yes, it does tell you that I don’t regard capitalists as generally beneficial to humanity as a whole. For that I have good reason.

It tells you, perhaps,  that I read a bit of economics occasionally, in which people are either units of consumption, units of production or “wealth creators” (i.e. profit takers). Elgin himself is fond of saying that taxation is bad, because it holds back “wealth creation”.

It tells you that I’ve encountered (and advised) large companies governed by cost accountants, balance sheets and share prices, I’ve encountered (and advised) individuals ground down to unsustainable wages and then continually pressured to make more and work harder and faster for no extra benefit to them than that they keep their jobs while the capitalists they work for grow rich, and others thrown on the scrapheap of society as unemployable and therefore worthless, and somehow also morally reprehensible.

It tells you that I’ve seen societies in which the size of your bank balance is the main indication of your worth as a human being (and on both sides of the Atlantic that is increasingly true). It also, perhaps tells you that I spent a significant part of my life enslaved by the fear of loss of financial security and the need to make more (as I deal with in the second post above) and have only with substantial pain learned that that is a way to exist, but not a way to live.

But actually, if you read on in the piece I’ve quoted, it tells you not about me in myself, but about me not being a writer who confuses capitalism with a market economy – perhaps particularly a “free market economy”. Capitalism is about the ownership of the means of production by individuals, which in and of itself seems innocuous enough; you can have a capitalist economy with very restricted trade, as indeed we used to in the UK when mercantilism was the dominant economic model (and, for what it’s worth, I think the free market version of capitalism is significantly superior to the mercantilist version).

As with the rest of Elgin’s piece, however, he describes (in descibing a free market rather than a capitalist economy) an idyllic world in which everyone bargains freely for everything they want or need with others who merely wish to make a reasonable return for their labour, and if he actually lives in a world which generally operates like that, he is incredibly lucky and privileged.

Actually, in order for the bulk of his transactions to resemble the picture he paints, he must be truly privileged and have a significant disposable income as well. Those who are “scraping by” or who are dependent on low-paid employment in order to exist will not recognise that picture, wherever they live.

No society I have encountered actually operates that way. In small towns in the UK, some businesses certainly used to operate like that when I was growing up (though by and large not in cities), but not any more – that type of business owner has mostly been driven out of business by large companies, and those who survive, survive on the margins. Most typically this change is seen in the case of small retailers who have almost all fallen to the supermarkets and chain stores, which, of course, operate purely for profit; these may try to make their customers happy, but this is at the expense of their producers and their workers (and in the celebrated cases of Wall-Mart and others like them, the expense of the taxpayer who subsidises the workers’ poverty wages). Both their producers and their employees scrape along without any of the supposed benefits of a “free market”, the first because there is now nowhere else to sell to, the second because if they raise any objection they can be fired and instantly replaced by one of the millions of jobless.

His idyllic scene, of course, only works if we ignore the fact that (as he concedes)  “we live in a fallen world where people are not always driven by the highest motives”Better, I think, that we assume that people are not driven that way and be agreeably surprised if things turn out otherwise – but please, let us not make a virtue out of greed and exploitation. Elgin writes of an idealised (I’m tempted to say “fantasy”) capitalism, suggesting that greed and exploitation are not at the root of a free market capitalist economy, but this is not what conventional economic theory says; he claims “capitalism simply seeks an exchange that is best for both sides, where what is best is determined by each individual”. However. the form capitalism has actually developed to (which is probably properly described as “financialised capitalism”), does not remotely “seek an exchange that is best for both sides”, it attempts to extract the maximum price for the least possible overheads (and the wages of employees and the quality of raw materials are both overheads). Anything else hurts the bottom line, and impedes “wealth creation”.

This is traditional economic theory, which holds that the market is at its most efficient when individuals act rationally to maximize their own self-interest without regard to the effects on anyone else. In other words, it demands exactly “greed and exploitation”, and rewards both with bonuses for CEO’s and managers. This capitalism indeed does not “care what motivates a transaction” (as Elgin says later), but it also does not “care whether it is freely entered into by both sides” contrary to what he suggests – indeed, it prefers monopolies, particularly in goods which are necessities, and in labour relations it prefers that the option is “take what we offer or starve”. For example, our young people are increasingly forced to take “zero hours contracts” where they are at the beck and call of the employer, but the employer has no obligations to them.

It is unfortunately the case that in a free market businesses grow inexorably towards monopolies (or at least cartels) and as Adam Smith wrote “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” The result is that the ideal of the free market is distorted by the players in the market, until it stops being free, and until it takes at least partial control of government, as this article shows. The “wealth” (i.e. ownership) becomes concentrated in fewer and fewer hands until a very few people hold almost all the ownership and power – and money, and therefore worth as human beings.

It is also resolutely short term, because it is forced to be that way by the financial system which sees only the last balance sheet and profit and loss statement, and will take profits where it can, as there are always other bigger short term profits to be made than building for long term stability of a company. Whatever type of motivation people may have personally, finance-driven capitalism substitutes the law of the bottom line.

Elgin is, of course, right that at the root of much of this is the insurance companies, pension schemes and banks on which we normal human beings rely – and so very few of us are not in the end complicit in this system. Short term means that you do not want your employees to be loyal, just to work harder (they can always be replaced), you do not care about the environment (far too long term!), you do not care about quality as long as you can get people to buy (what, after all, are marketing and advertising for?). The fact that we are complicit, however, does not mean that the system is good…

Finally, he contrasts capitalism with socialism, which he states needs a strong central government, and suggests that as government restricts autonomy, this is axiomatically a bad thing.

Now, bearing in mind that markets (as we have seen) tend to produce monopolies, and monopolies are bad even from the point of view of the most ardent free-marketeer, and that capitalism tends to produce a smaller and smaller percentage of individuals with a larger and larger percentage of wealth/ownership, which itself distorts the market (a free bargain for something requires that you have disposable income sufficient to buy, which is increasingly not the case for a large proportion of society, and mere disparity in power to purchase negates any sense of free bargain), there is clearly a need for something to mitigate these effects (and the other negative effects I’ve mentioned above, including perhaps most strongly the short term perspective of everything), and as businesses and the markets are not going to deliver that, government must; that is to say the people acting as a whole by their representatives and employees must take a stand to prevent the domination of everything by a few corporations. Many of those corporations are now multi-national and have  wealth and power well in excess of that of some countries, so government must be at least that strong.

However, Elgin has a point with which I do agree. Just as corporations tend to get bigger, so does government, and the larger something is, the more remote it is from its ultimate owners even in a system of representative democracy. Just as by the time I have followed through the investment of my pension through multiple companies, my voice cannot be heard, so by the time my democratic vote has been filtered through a party system, a lobbying system and the necessary apparatus of civil servants my voice also cannot be heard (though it is there somewhat easier, as I can at least find where to meet my immediate representatives in person).

In addition, the financial power of big business, big finance and the very wealthy allows them to influence government in a way the ordinary individual cannot match, even in combination, just as it creates automatic distortion in markets. Elgin and myself are agreed that this is a bad thing, but he appears to consider that capitalism, left to itself, will produce a beneficial effect and that anything else is transferring power to government and is therefore axiomatically a bad thing. I consider that capitalism and government both are at least somewhat broken; capitalism needs restraining, but so does government – and we have, in theory at least, the means to restrain government via the ballot box.

I am thus very slighly hopeful, seeing the collapse of both our UK main political parties in infighting, that we may see a political restructuring here which may, just possibly, restore a small amount of control to the individual voter. Maybe in the course of that, the messages that bigger is not always better and that local issues should be dealt with by the people who live there may strike home. Perhaps, just perhaps, we could see the possibility that all of big business, big finance and big government might have their wings clipped.

It’s a small hope, but I need to nurture it.

 

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They toil not, neither do they spin…

May 14th, 2016

I see that FiveThirtyEight has caught on to the fact that manufacturing jobs will never return. Sadly, they seem to think that the solution is to create jobs in service industries, and that’s a problem.

The thing is, manufacturing jobs are the easiest to automate; as the article notes, manufacturing is actually returning to the USA, but it’s largely automated and doesn’t provide the number of jobs it used to. Low level clerical jobs are the next easiest; very many of those have similarly disappeared with the advent of computerised workplaces. Customer service is in the process of going the same way; my bank (for instance) has successfully persuaded customers to do most of their banking online, where computer systems handle the work which a load of clerks and counter staff would once have done, and I hear that even burger flipping is in danger, as automated short-order cooks are being trialed at the moment. In the office, vending machines have largely replaced the tea lady.

When I retired from the law, the need for secretaries had diminished somewhat, but also I noted that expert systems were starting to take over some of the work which qualified lawyers had previously done. There are now surgical robots – admittedly these are currently remotely operated by real surgeons, but it is only a matter of time… Professional jobs are by no means safe either.

How about the entertainment industry? There is still going to be a huge demand for people singing, acting, doing variety turns, surely? Well, to an extent that’s true, though the popularity a few years ago of Max Headroom and the ubiquity of CGI makes me wonder how long it is going to be before we have the first completely computer-generated “live action” film or television. However, whereas 100 years ago, there were performers in every town (and often every pub or bar) churning out music and drama, now the use of TV and film means that only relatively few performers actually get to make a decent living. Everyone wants to listen, say, to David Bowie or Prince, not to their local Joe Bloggs or Fred Smith. The market for actual performers is much more limited than it once was, and is likely to shrink further, and even the very popular are now having difficulty with the internet getting round copyright so that significant parts of their output ends up free.

Of course, these last two categories require substantial natural ability as well as training, and even if they were boom areas, most of the population would be unlikely to be able to do the jobs as one would wish them done. I pause for a moment for a sideswipe at government policy for some time – it is pointless expanding education willy-nilly in the apparent belief that you can train anyone to be a brain surgeon if you take enough time and they are dedicated enough, and that is just not true. At the moment we are merely piling on courses for the sake of courses to “qualify” people for jobs which they could learn by doing them in a couple of weeks.

We are progressively making the majority of humanity redundant.

Or, at least, we are making them redundant as workers. Our capitalist system is predicated on there being a vast class of consumers, as otherwise there is no market for all the goods and services. The redundant, of course, do no work and therefore do not get paid – and therefore can’t consume. Eventually, the whole system will break down – and I think there are significant signs that it is doing that already.

It has to be time for us to break the linkage between money and work. Efficiency and automation mean that we can produce enough to supply even the vast population we now have, but not to keep them in work. Time, I think, to look very closely at the concept of a national guaranteed income, or an “universal income”.

There will be a few collateral effects of this. One is that, provided with enough income for the basic necessities of life, no-one need take a job who does not want it. Without the need for labour unions, suddenly workers will have a negotiating strength which they have always historically lacked. The conditions (including pay) of work will have to be sufficient to entice people to do the work. Granted, there need be no minimum  wage – people may find out that a job well done is satisfaction in and of itself, or that even a very small additional discretionary income is worth the effort. Those who wish to turn their minds to art or literature will no longer need to starve in a garret; the inventor or innovator will be free to put in the long hours working out their idea into something practical without the fear of destitution.

Another is that companies will be forced to consider that having people able to buy their products is a good in and of itself; this might just persuade them that in order to gain access to a market, they would need to pay tax. Governments, on the other hand, would no longer need to beg, plead, cajole and bribe companies into employing workers in their countries. Instead, they need only point out that “we have a market of 60 million people” (or whatever is the current figure for your population) to induce a company to come and trade – and pay taxes. They may well, of course, also want to site their manufacturing in the country where they trade; after all, there will be no minimum wage, and lower transport costs!

I will continue looking with huge interest at Switzerland and Holland, which seem to the the countries most likely to be the first to implement such a scheme.

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Satan, yeast and seeds

May 13th, 2016

Professor Kathryn Tanner has, at the point I write this, just finished her series of Gifford Lectures at Edinburgh University. They are well worth a listen; I don’t think I have heard a better skewering of market capitalism as it functions in the 21st century, under the neo-liberal philosophy which seems to have captured the thinking of politicians throughout the West (and a fair proportion of the East).

She does, of course, come to the conclusion that market capitalism (particularly finance-led market capitalism) is profoundly contrary to Christian principles. It encourages greed where Jesus commands care for the disadvantaged. It encourages competition where Jesus commands care for community. It grinds down workers where Paul counsels that labourers are worthy of their hire and should not be short-changed. It considers people as units of production and units of consumption where Jesus sees each as being unique creations of our Heavenly Father, with supreme worth (more valuable than a sparrow or a lily, indeed).

It also focuses on short term financial gain to the exclusion of building a lasting community, and there there might be a temptation to remember Jesus counselling that we give no thought for tomorrow and think that he approved a short term viewpoint. However, he also placed this in terms of dependence on God for our basic sustenance (daily bread) and, in looking forward to the Kingdom of God on earth, assumes, in my view, that that Kingdom will be structured to give everyone their basic sustenance, not to look for a “fast buck”. A fast buck is, of course, an idol, and we cannot serve God and Mammon, as I expanded upon recently (see link below).

Prof. Tanner does not, it seems to me, take quite the same view I do of the requirements of the Christian life; she works within the paradigm of the “salvation history” which I do not really subscribe to. However, I have recently finished Richard Beck’s new book “Reviving Old Scratch; Demons and the Devil for Doubters and the Disenchanted” which among other things works from the framework set up by William Stringfellow and Walter Wink which has made the real existence of forces of evil make sense to me again.

This has enabled me to identify the finance-led market capitalism of today as “the System of Satan”. Merely calling it idolatry is not sufficient for me, given the all-encompassing and subtle power of this system and the fact that most of us see no real alternative, in particular our politicians.

I think Prof. Tanner could do with an element of this more powerful way of condemning the system; while at the point of writing I have not yet heard her final (and summing up) lecture, so far she has merely set out in a factual and resigned way the undesirable features of the system, and commented that there is no longer any competing structure available for us to prefer, communism being widely considered to have failed (and inasmuch as it requires a command economy directed by a few people in power, this is true). Marx, it seems, was a brilliant diagnostician of the weaknesses of capitalism, but his prescription was a failure…

She has not so far considered any of the anarchist thinking which might (as long as it is not anarcho-capitalism) provide another way; her solution seems to be to work within the system but not to subscribe to it’s encompassing ethos, not to be drawn into belief in it, accepting that we live in a fallen world.

I do not think this is enough, though it is a start. We should certainly adopt small measures of protest against the way the system works, but we should also at least hope for a future in which the Kingdom, and it’s non-capitalist economics, grows out of that – as Jesus suggested, like a leaven or a mustard seed. Anything we can do to hasten the leavening or the growth of the seed should be tried.

And maybe, just maybe, we will see the start of the Kingdom coming in glory…

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What price free trade?

March 23rd, 2016

A friend has recently posted an approving link to an article criticising both Trump and Sanders for opposing the TPP (Trans Pacific Partnership) treaty; the basis on which the criticism is levied is that free trade and more of it is good for the US economy; the article then goes on to suggest that the failure of non-competitive industries is a price worth paying for the benefits of increased productivity and innovation.

In doing that, it completely misses the point of Sanders’ criticism of the treaty, which is not on the basis that the lowering of trade barriers is bad for employment, but on the basis that the treaty hamstrings the ability of governments on both sides to enact legislation which might hamper trade. Sanders’ position is not (as the article suggests) protectionism, it’s simple care for the population and the environment which is being prejudiced.

This is the same criticism which I have been levelling at the proposed TTIP treaty between the US and the EU; in essence, the treaty would remove sovereignty from the individual nations in favour of unregulated big business, limiting or removing the powers of governments to legislate on (for instance) food safety, environmental protection and banking control. These kinds of treaties give corporations the power to sue governments for losses (generally being the inability to make future profits) which they anticipate if the governments restrict the ability of those corporations to (for instance) strip mine large tracts of land, deforest wide areas, sell dangerous drugs or foods or, of course, carry out the same kind of financial manoeuverings which led to the 2008 crash.

My view is that governments’ abilities to control large multi-national corporations are already far too limited, particularly in the US with it’s system requiring huge money in order to get elected, thus putting politicians in the pockets of big business. (Our home-grown politicians at present seem willing to do much the same things without actually directly receiving vast sums of money, which in my eyes makes them fools rather than crooks; I might prefer crooks, as at least their crookedness is predictable).

It is a huge shame that the treaties of this type in existence (and the drafts of TTIP) actually operate in this way. It makes sense to have a mechanism by which restrictive rules made by governments can be challenged; historically many of these have been back door means of instituting protection of native industries rather than regulations designed to safeguard the environment (a Christian duty in my view, as we are called to be good stewards of the remainder of creation) or keep consumers safe from shoddy or dangerous products (another Christian duty, as protecting the weaker against the stronger and limiting fraud). My personal instinct is in favour of free trade, as this has been historically the position of the Liberal Party (and then the Liberal Democrat Party) in the UK. However, this has to be tempered by considering the actual effects on people and environment.

What the article does in the main is attack some of Trump’s criticism. I don’t propose to talk about that directly, as Trump expresses his ideas on the subject fairly incoherently, but instead note an article by Chris Hedges recently. To quote from that article:-

“To allow the market mechanism to be sole director of the fate of human beings and their natural environment, indeed, even of the amount and use of purchasing power, would result in the demolition of society,” Polanyi warned in “The Great Transformation.”

“In disposing of a man’s labor power the system would, incidentally, dispose of the physical, psychological, and moral entity ‘man’ attached to the tag,” he went on. “Robbed of the protective covering of cultural institutions, human beings would perish from the effects of social exposure; they would die as the victims of acute social dislocation through vice, perversion, crime, and starvation. Nature would be reduced to its elements, neighborhoods and landscapes defiled, rivers polluted, military safety jeopardized, the power to produce food and raw materials destroyed.”

Hedges is, of course, a significantly left-leaning commentator (as, it might be argued, is Robert Reich), but I think his observation that the existing treaty is impoverishing the population of the weaker partners (Mexico in this case) as well as contributing to the forces lowering the living standards of US workers is well founded. The benefit of free trade in enabling workers in poorer countries to lift themselves out of poverty by producing things cheaper than can be done in richer countries is a good; it contributes to the alleviation of poverty, which is a major Christian duty. However, in this case the existing free trade agreement seems not to be having that effect. Partly that will be due to the fact that the pool of labour is not organised and is far larger than the demands of production could ever need, of course.

I am also inclined to question whether it makes sense to ship low value goods vast distances, particularly to places which can readily produce their own; none of the mechanisms envisaged take account of the vast carbon footprint of long distance travel, which in my opinion ought to render some trade uneconomic. I might, for instance, like the fact that under TTIP British farmers could potentially strike down US regulations forbidding British beef and lamb from US markets – but the USA are perfectly capable of producing their own, and the transport costs (if they included pollution) should render this uneconomic.

It might be that under a properly constituted free trade agreement, the poor farmers of other countries would be able to sue the US government for subsidising agriculture to their considerable disadvantage. However, the mechanisms which are in place, even were this a practical possibility, are effectively open only to rich companies and not to poor individuals.

It may well be that protectionism is indeed something which is now impossible to resurrect – the article suggests it’s a thing of the 50’s, though I would argue that it is still alive and well and being practiced in many countries, perhaps all in some measure. We would not in any event, I think, wish to go back to the days of major tariffs on imported goods, as we like our cheap consumer goods, clothing and food too much. Is protection, though, a completely bad thing when just designed to protect our native industries and workers?

Hedges’ quotation accurately pinpoints one of the problems; a larger pool of labour (worldwide rather than local) reduces the bargaining power of labour, and thus reduces the income of workers. As Trump might say were he not speaking in a wholly populist manner, this is likely to prejudice the workers ability to meet the needs of the bottom two levels of Maslow’s hierarchy of needs (basic sustenance and security) and in fact is doing so. I have in mind here the repeated suggestions of Alan Greenspan (former president of the Federal Reserve) that immigration of skilled workers should be encouraged in the US in order to drive down the wages of the skilled.

So what I’m left concluding is that while free trade between parties with rough parity of bargaining power (the kind of situation advanced by most proponents as paradigmatic) is in principle a good thing provided due consideration is given to (for instance) the environment, the kind of agreement which TPP and TTIP represent doesn’t achieve this in a sensible way, and indeed may act against true freedom of trade by increasing the relative power of large corporations against the consumer and labour (and, of course, the environment) without really achieving the improvement of the situation of the workers in poor countries which is a major aim.

But it’ll keep things cheap, at the expense of sweated labour (or even outright slavery) somewhere.

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Freedom with or without property?

March 13th, 2016

“Property is freedom” (Proudhon)
“Property is theft” (Proudhon)
“Property is impossible” (Proudhon)
“Consistency is the hobgoblin of small minds” (Thoreau) (the four quotations assembled by Robert Shea and Robert Anton Wilson as a chapter heading in “Illuminatus”).

Proudhon, sometimes called the father of anarchism, was not actually being quite so inconsistent as those quotations suggest. However, his “Theory of Property “ makes for extremely tedious reading, so tends to get forgotten apart from those highlights!

I started thinking about this post on reading a meme shared by a friend, attacking the ability of government to tax people. In essence, it says that people cannot delegate to government a right they do not have themselves, and they have no right to rob their neighbour. That led me to wonder quite how well the idea of private property aligns with Biblical and Christian principles; it was not immediately apparent to me that there is, for instance, a right not to be “robbed” by ones neighbour, nor that in the natural state of things there is no right to “rob” ones neighbour, if that be interpreted as taking and using yourself something your neighbour is not using themselves. There isn’t even truly a right not to have something you’re using yourself taken away unless either you have the force to prevent it or there is a system of government and law to give you redress for someone else taking it.  Rights are non-existent in the absence of such a system (and, I remark, such systems have to be paid for). It is perhaps in this sense that “property is impossible”.

It seems to me that in the world as we now find it, private property is increasingly seen as a “right” (at least for those who have it). Margaret Thatcher praised the “property owning Democracy”, and although private property is not one of the fundamental rights enshrined in the Declaration of Independence, it seems to me that it might as well have been. It is absolutely foundational to the modern capitalist system. Thatcher had a point; if you own property, you are at least somewhat more secure (level 2 on Maslow’s hierarchy); you are at least to some extent free to say “no” to demands that you do something for someone else; you are not forced to work in order to eat (which destroys any semblance of an equal bargaining position with those looking for workers); you have some degree of power inasmuch as there is an exchange value of your property. This is Proudhon’s target in saying “property is freedom”.

I wrote recently about the deeply anti-Biblical nature of money, the ultimate form of property which is nothing but exchange value, so I will not go much further into property which is money. There are, however, two major other divisions of property, moveable and immovable – the second category is land, together with what is built on it.

To have land may mean you have a house (and therefore shelter, part of level 1 for Maslow). If you have enough land, you may be able to farm it to provide yourself with food, answering both a level 1 and a level 2 need (I remark that very few people in the UK have that much land; that is probably the case in most developed countries, but in the States seems to be a dream which is very much alive, even if not actually given to most to realise). The ancient Israelites were clearly aware of this when they allotted land to each tribe by lot according to their size (Num. 26:55-6) though clearly from the Jubilee provisions they anticipated that individuals (patriarchs of families) within those tribes would have their own allotment, and instituted provisions to return land at a Jubilee so as to prevent people losing this freedom; the Jubilee also freed slaves and cancelled debts, thus removing debt-slavery as another means of denying basic needs. It should be noted, however, that the basic allotment was to the tribe, not to individuals, so land was at the most basic level a common asset.

There is a common theme through the Hebrew Scriptures that water (much prized in the generally arid landscape of the Middle East) was in particular provided by God – Isa. 55:1, Psalm 107:33-36, Psalm 23:1-3, as merely a few or many instances, thus strongly suggesting that basic utilities should be common to everyone (and that water resources in particular should not be in private ownership). Of course we also should not forget Psalm 24:1 “The earth is the Lord’s, and everything in it”.

Land is thus a particularly difficult thing to categorise as naturally being “private property”, as it clearly belongs to God, and not in general to man. One factor in this is that by and large, you cannot “use up” land (though you can certainly make it very unattractive for others by, for instance, polluting it or strip mining it). It’s still going to be there when you’re dead and gone, and a lot of farmers, owners of stately homes and even those of us fortunate or unfortunate enough to live in an old and interesting building will testify that to a great extent you don’t own the property, the property owns you.

In addition, of course, land is habitat for a lot of species apart from humans. If we have a “right” to land, do not other species also have rights to it? Are owners of land not responsible for their alteration of its characteristics such that, for instance, what was forest fixing large amounts of CO2 becomes arable land (or worse, desert) which fixes none, often in the process burning the trees to produce more of the CO2 which needs to be fixed?

The ancient Israelites were maybe getting at something like this in not permitting land to be sold off on a permanent basis; the only way you could alienate it was for, at most, 49 years until the next Jubilee. You could in the meantime use it, and I’m inclined to think that “use value” rather than “exchange value” is a better measure of land.

So, how should we use it? A common argument for long term ownership of land is that the land has been “improved”, for instance by reducing it to arable land from wood or scrub, or irrigating or draining it. I have to question whether these can truly be regarded as improvements. I’ve mentioned the problems of deforestation already, but should underline that any intensive human use is massively damaging to land as habitat for other species, and when we farm it we are tending to introduce monocultures which severely damage biodiversity. One man’s improvement is, therefore, another man’s damage or destruction.

“The Earth is the Lord’s, and everything in it” (Ps. 24:1). The Biblical witness in Genesis 1 is that God made it, and saw that it was good as he made it. While yes, God is seen here as giving mankind rule over it, a ruler does not destroy that which he rules, he tends and protects it – and the vegetation is clearly given to both mankind and the rest of the fauna on earth to eat.  We should, I think, not see ourselves as owning land, but being stewards of it – and, perhaps, being owned by the land. Does the fact that God “gave man dominion over” created things (Gen. 1:26) mean that man should be less solicitous of the welfare of the rest of creation than is God, who “saw that it was good”, or rather “in the image of God” every bit as caring as God, for whom even sparrows are important?

Although the writers of the Pentateuch envisaged that land would in fact not be held communally, they did make provision for (for instance) the poor to be able to glean from the fields ; margins were to be left so they could do this. Genesis 1:30 clearly states that God gave vegetation to animals to eat; should we therefore not prevent them from eating, and do they not therefore have rights in “our” land?

The other form of property, and that which is beloved of those making simplistic arguments for property rights and thus capitalism, is things which we make (or buy).  Or find and collect, or extract from the earth, or grow in the earth, or (in the case of livestock) collect, allow to breed and then utilise in some way.

It tends to seem obvious that when I do something which places an object in my possession, unless I have stolen it, it is mine (and remains so). This is particularly the case when I have done something in order to make it – in the case of a miner, dug it out of the ground, a farmer prepared ground, planted seed, weeded, fertilised and irrigated it and finally reaped it, in the case of a hunter chased down an animal and killed it, in the case of a craftsman taken materials and formed and/or assembled them into something new. This is the case, for instance, for Marx, for whom the human labour which goes in to something is the sole form of value which it should have (neglecting the use of land or equipment which may not belong to the labourer); it is doubly the case for capitalist economists, who would value the land and equipment first and the labour only second (if at all – the pure capitalist regards labour as an irritating cost to be reduced by all means possible). For both of them, value has been added, and their dissent is merely as to how that value should be apportioned.

I question this view. It seems to me that what I most truly own is actually just those things which I am currently using – as Heidegger put it “zuhanden”, i.e. “ready to hand”. The skilled workman acts as if the tool he is using is an extension of himself, and to a great extent, it is; he can reasonably be said to own it while using it in this way. Something which I am not using is at best, in Heideggerian terminology, “vorhanden”, i.e. present to hand – and much of what I tend to think of as “mine” is not even actually present to hand – it isn’t even immediately available for use. This is a form of valuation  purely by use-value (which both Marx and the capitalist economists both acknowledge), but one which is more restricted by suggesting that potential use-value isn’t yet really value at all. As an aside, if potential use-value is considered a value, use for one purpose should surely be regarded as destroying (or at least reducing) the value of all other potential uses.

After I started writing this, my wife bought bones for our two dogs. The older of the two persistently tried to corner both the bones, and when he managed it would growl fiercely at the puppy to warn him off “his” bone. Of course, he could not eat two bones at the same time, and he was depriving the puppy of “his” bone (we had to keep intervening to take one of the bones off the old dog and give it to the puppy). Before saying that this was just clearly theft, consider whether, to the dogs, we are not in effect in the position of God, giving abundant food (or at least the opportunity and circumstances to cultivate it) and then seeing one person cornering it and denying it to others. I was reminded of seeing a homeless man begging outside a plush restaurant; he was hungy, and those inside had more than enough. Was that not also a form of theft (Proudhon’s second meaning)? Of course, Jesus preached against this attitude in Luke 12:13-21 (the parable of the rich fool), in which a man with abundant grain builds more storehouses, but does not live to enjoy their contents.

I could argue that unless I am in the process of using something, if someone else would benefit by using it, this might be equivalent to a form of theft. Before dismissing this argument too quickly, recall that a major argument for settlers having a claim to land over and above migratory people who only occasionally used the land is just that; that they settled on it and actually used it. Another is, of course, that they improved the land, for instance by making it cultivable, but as examples such as the deforestation of the Amazon and the creation of the mid-west dustbowl indicate, the term “improvement” is very debatable.

In a similar way to the “improvement” of the mid-west, I might also argue that when someone takes, say, wood from a forest (thus destroying living trees), works it and produces, say, a chair, this should really be viewed merely as adjusting the form of something, and not as creating something (and if, for instance, there is a glut of chairs around, the chair produced has frankly near-zero value for either use or exchange value, whereas the tree it came from has value merely by existing as part of the ecosystem, and indeed the chair might have negative value as waste needing to be disposed of). The intuition in Genesis and the Psalms that God alone is the Creator is valid here; man does not create, he merely rearranges.

I suspect that by this point many reading this will think “this goes massively too far”, and I would agree. It’s an extreme. For there to be no real private property (Proudhon’s third suggestion) is also the position someone is in when society has broken down and there is no trust or fellow feeling between individuals; what you “own” is, if it goes beyond what you are actually currently using, what you can by force or intimidation prevent others from taking. “But we don’t live in a society like that”, I hear. Well, conditions like that occur regularly in places like childrens’ playgrounds and prisons, where individuals either haven’t yet learned to respect the conventions of society or have wilfully rejected them. I suggest that this is a more natural state than is the society of property owners, in fact. A friend recently alerted me to the fact that the Founding Fathers contemplated in the Declaration of Independence expressing a God-given right to property ownership (in fact, they substituted “the pursuit of happiness”); I think that they were entirely correct to reject this as a natural right. It has to be said, however, that having some property does contribute to Maslow’s second level, security (although there too, Jesus would comment “do not worry about tomorrow”).

However, if you add to a society an ethos of compassion, “loving your neighbour as yourself” as a general value,a mix of private and communal property becomes the most natural way to organise things, always in the consciousness that everything originates from God, and that we are mere stewards of it (or, in the case of food or drink, recipients of a gift).

There is one final thing. As I mentioned earlier, very many people I talk to who own a large house or a large area of land (perhaps a farm) say that they do not really feel that they own it, they feel that it owns them. They may well also say they are merely custodians, evidencing just that attitude of stewardship which I commend. Some people with (for instance) vintage cars will gladly confess that they are slaves to keeping it in pristine condition and good running order. Fewer people with large bank balances and multiple investments will say that they are owned by their possessions – but it seems to me that they are. They are defined by being a millionaire or a billionaire, and their primary energy goes to retaining that status and increasing it.

When Jesus told the rich young man to sell everything he had and give it to the poor, he was not asking him to damage himself, he was suggesting that he free himself. Just as an addict or an alcoholic is enslaved to their addicting substance or activity, so possessions can enslave us. Let’s be free!

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The System of Satan?

January 30th, 2016

On Friday 22nd January, one of the topics covered in the Global Christian Perspectives webcast, at its new regular time of 10pm UK time (4pm Central Time), was one which the Energion Discussion Network had asked Elgin Hushbeck (my usual sparring partner on GCP) and myself to write contrary blog posts. Elgin’s appeared on the 18th, and mine on the 19th. What follows is an expanded version of my blogpost of the 19th, expanded in the light of the fact that neither Elgin nor myself had seen the other’s post when we wrote our own.

The question asked is “Does Capitalism best express Christian economic values?” which I interpret as meaning free market capitalism, rather than (for instance) the nascent Chinese authoritarian-capitalist model.

So, what passages in scripture best enable us to see what Christian economic values might be? One might start with the account of the early Jerusalem church in Acts 2:44-45 “And all who believed were together and had all things in common, and they sold their possessions and goods and distributed them to all, as any had need”.

Having all things in common would be an expression of the second part of the Great Commandment from Mat. 22:36-40 “You shall love your neighbour as yourself. Selling their possessions and distributing them to all would seem to flow from the parable of the rich young man in (inter alia) Mark 10:17-31 “And Jesus, looking at him, loved him, and said to him, “You lack one thing: go, sell all that you have and give to the poor, and you will have treasure in heaven; and come, follow me””. He went on to say “Children, how difficult it is to enter the kingdom of God!  It is easier for a camel to go through the eye of a needle than for a rich person to enter the kingdom of God.” Also, of course, according to Luke’s version of the Beatitudes (Luke 6:20-26) “Blessed are you who are poor, for yours is the kingdom of God.”

Many reading this will immediately think that this had to be a short term situation, perhaps having regard to the expectation of Jesus’ imminent return and the institution of the Kingdom of God on earth, and some will think of Paul’s collection for the Jerusalem church referred to in 1 Cor. 16, 2 Cor. 8 and Rom. 15 and suspect that the Jerusalem church had effectively beggared themselves. I am, however, mindful that Jesus also said (Matt 6:25-34) “Therefore take no thought, saying, What shall we eat? or, What shall we drink? or, Wherewithal shall we be clothed?” and “Take therefore no thought for the morrow: for the morrow shall take thought for the things of itself. Sufficient unto the day is the evil thereof.”

If there is a major fault I can see in the Jerusalem church attitude, it is that the evidence is that it shared equally only between its own members. Implementing the principle of “love your neighbour as yourself” however has guidance as to who your neighbour is in the parable of the Good Samaritan (Luke 10:25-37), in which it is clear that your neighbour includes those of another religion and race, and traditional enemies. These days, it should probably be the parable of the Good ISIS insurgent. Help should have been for the whole community, and not just the group of followers of Christ.

But, I hear said, this is just totally impractical, it cannot work. G.K. Chesterton however said “The Christian ideal has not been tried and found wanting. It has been found difficult; and left untried.” There have been some decent attempts (generally shorn of explicitly Christian content, for instance the anarchist communal enterprises during the Spanish Civil War), but never a widespread trial. I should underline that a statist controlled economy (which is often seen as the only alternative to unbridled free market capitalism) is not what I think is the nearest to a system Jesus might have approved of. However, something like the Jerusalem church might well be a halfway house to a truly Christian economics.

Let’s turn to free market capitalism. At first sight, a free market looks a wonderful idea. You produce something which someone wants, and you agree a price with them. If someone else sells cheaper than you do, you have to lower your price to compete with them, and without any conscious decision making other than everyone getting the “best buy” and, on the other hand, selling at the “best price”, prices are kept low and competitive.

This is very much the basis on which Elgin suggests that a free market is a magnificent system for ensuring things such as efficiency and cost-effectiveness. To a significant extent, he is right in that. He opposes the free market to a centralised system fixing prices, a “command economy”, and rightly remarks that all experiments with command economies (chiefly in communist states) have been unmitigated failures. However, command economies are not the only alternative to an unregulated free market, as witness the fact that in a recent poll of the ten best countries for doing business, all of them were social democracies rather than fully free market states (and neither the UK nor the USA were on that list).

There are two major problems with free markets from a Christian perspective. The first is in the motivation it assumes on the part of both buyer and seller – the buyer is looking to pay as little as possible for as much as possible, the seller to sell as little as possible for as much as possible. Both are assumed to be working entirely out of self-interest. Self-interest is not a Christian value; it ignores the command to love your neighbour as yourself. It can be argued that it is realistic to assume the worst of humanity, and even Christian (given that most Christian denominations hold that mankind is in a fallen condition), but it is not something we can hold up as an ideal situation, as it rests, fundamentally, on greed. However, adopting more Christian principles of exchange might not completely destroy the ability of free markets to regulate prices (and supply) without central control.

The second is that it fails to work in practice except in very limited circumstances. What we actually see in unregulated economies (and in a lot of somewhat regulated ones) is developing monopolies (even on a very small scale you get those – there just is not room for two competing providers of some goods or services in my town, for instance) and, where there isn’t quite a monopoly, a cartel, agreeing not to compete on price. As time goes by without a cartel, one supplier becomes dominant because they can sell a little cheaper (or with a cartel the cartel becomes dominant), and then economies of scale kick in and they become cheaper yet, and you have another monopoly (which is then protected from someone else entering the market by selling at a loss until the new entrant fails, at which point the losses are recouped by raising the price).

On the back of monopolies comes an ever greater concentration of wealth in fewer and fewer hands (on the basis of a recent study, looking purely at moveable wealth, half the world’s wealth is currently in the hands of 62 people). As Adam Smith (hardly a poster-boy for liberals and socialists) pointed out (and I link to an article by David Brin discussing this at length), great disparities in wealth destroy the freedom of markets, via the huge disparities of purchasing power they produce.

As a secondary effect, the freedom of the market is compromised severely when less and less people actually have the money (or power) to enter into it, resulting in the removal of the mass decision making which makes the free market work, concentrating the power to make decisions in a very few hands. The result is close to a command economy, with all the abysmal track record that brings. As Brin remarks, in exchange for price setting by 10,000 civil servants, we get price setting by 5,000 golf buddies – and I add to what Brin says, that the man in the street has at least in theory the ability to elect politicians who will do something about the 10,000 civil servants, whereas the golf buddies are not removable except by people with immense wealth to buy controlling interests in the companies they operate.

Free markets are thus demonstrated to be fundamentally unstable; they will eventually cease to be free unless they (or their effects) are regulated.

Another problem kicks in when talking about markets in, for instance, stocks and shares. What governs those prices is more what people think is going to happen to the price in the future than a dispassionate view of how well the underlying company is doing, so they are prone to boom and bust cycles, particularly since automated trading systems started to react to changes in the market more rapidly than human traders ever could.

Turning from markets to capitalism proper, except on a very small scale (without economies of scale), it is not a matter of a single person producing something. Elgin is correct to say that capitalism has produced a higher standard of living for masses of people, and the mechanism is mass production, which demands major investment of equipment to work; this has been provided by mechanisms such as the joint stock company and by the banking system, which together give you capitalism.

I need to pause here to say that I have misgivings about both the joint stock company and the banking system as being in accordance with Christian principles.

The joint stock company allows people to risk only their initial investment through the principle of limited liability; the worst they can fear is the loss of their share value. What that actually does, however, is enable companies to fail to meet their obligations to others, either debts owed or liabilities for damage caused, by just declaring the company insolvent and winding it up. This enables people to support companies which will defraud or cause damage to people without fearing the full consequences.

The banking system lends money at interest, fundamentally. That is something which, for very many years, Christians believed was forbidden by scripture, basing this on Deuteronomy 23:19 “Thou shalt not lend upon interest to thy brother: interest of money, interest of victuals, interest of any thing that is lent upon interest”, first prohibiting it at the First Council of Nicea (325). This was the sin of usury (for over a millennium Christians left that practice to Jews, who used the parallel provision permitting interest to be charged to foreigners in Deut. 23:20). I am not convinced that our move away from condemning usury is warranted.

Beyond that, capitalism is a matter of an employer (usually a company) with multiple employees, it is a matter of needing capital from somewhere in order to set up the business; both separate the work of production from the sale of the product. But, I hear, workers contract freely to work for the capitalist, and there is again a free market. The fact that the employer or the provider of capital makes most of the money, and not those who actually produce, is fair because it is a free market.

This is just not the case. A free market demands that both seller and buyer are free from overwhelming need to contract at whatever price the other demands. Except in circumstances of labour shortages (which rarely arise except in the case of people with specialist skills and which the mass production through automation on which the modern capitalist economy depends constantly strives to reduce or eliminate), the employer can employ anyone while the worker typically fears starvation and the gutter and is compelled to accept what the employer is willing to give. This is good free market capitalist economics; it reduces the cost of production for the employer and increases the profit margin.

It is not, however, remotely Christian. The employer is not only failing to love the employee as himself, but is taking advantage of rather than benefiting the poor (for instance by giving them all his money…). In a truly Christian economy, the fear of starvation and the gutter would not be there, because the rich would be queuing up to give the poor money.

Indeed, free market capitalist economics value people only as units of production or units of consumption. The less you pay in wages the better, the more they pay for what they buy (and the more they buy) the better. A Christian economics would value them as people and, I suggest, value them the more if they are poor (hungy,  thirsty or unclothed), a stranger, sick or imprisoned (Matt. 25:31-46). Capitalist economics, in other words, values only money. If you work for a capitalist enterprise, you are likely to be sacked for giving anything away or for selling it at a lower price than the employers demand; you are forever going to be pushed to produce more at a lower cost and sell more at a higher price. To make more money.  As Gordon Gecko says in “Wall Street”, “Greed is good”.

There lies the problem. Paul said “The love of money is the root of all evil” (1 Tim. 6:10) and Jesus said “You cannot serve God and money” (Luke 16:13). The word used for money there is “Mammon”, which Christian theology has traditionally seen as a false god or prince of hell (Gregory of Nyssa, Cyprian and Jerome certainly thought this way; Gregory equated Mammon with Beelzebub).

All this for something which you cannot eat or drink, which you cannot wear, and which has only the value we permit ourselves to be deceived into giving it unless and until it is converted into something real. If you consider that money has real value, think of inflation, and particularly hyper-inflation which has affected some economies in the past. The pound (or dollar) in your pocket is really only worth to you what someone is prepared to give you in exchange for it, and that can vary wildly (if, for instance, someone just doesn’t want to sell you something, or work for what you offer, or just isn’t interested in having more money) or, in hyperinflation, collapse completely. Money, and therefore wealth, is a fiction, given value only by the belief of those who have faith in it. That’ to my mind, sounds very much like a minimalist definition of a god… or, at least, a false god.

In addition, if you consider Maslow’s hierarchy of needs, while the lowest level (physiological) can be attended to fairly readily with money in normal circumstances, safety requires more than just money, and having more money does not correlate well (some would argue “at all”) with attaining any of  the higher needs of humanity (“Money can’t buy you love”), though we are deceived into thinking that money gives us security and others are deceived into esteeming us more for “having” more of it.

Indeed, while with most commodities we can readily see that, at best, “enough is as good as a feast”, and consumption of many things in excess can actually be bad for you, having reduced everything to money, i.e. wealth, we have produced a system in which you can never clearly see that you have too much.  In the quest to sell more (and produce more) we have developed marketing and advertising, the chief effects of which have gone beyond the initial aim of letting the buyer know what was available to inducing people to buy what they don’t need, and to pay more for it not because it is intrinsically better, but because it is seen as trendy, or high status.

It is also the case that in every free market capitalist system (and the more so the more nearly that approaches the ideal), the principle of “trickle down economics” (otherwise expressed as “a rising tide lifts all boats”) which benefits the poor because it benefits everyone, does not work unless there is a labour shortage. Marx got a lot of things wrong, in my eyes, but the one thing he got right was that free market capitalism concentrates wealth (and so power and the ability to choose what one does with life) in fewer and fewer hands. “Thus says the LORD:  For three transgressions of Israel, and for four, I will not revoke the punishment; because they sell the righteous for silver and the needy for a pair of sandals – they who trample the head of the poor into the dust of the earth and push the afflicted out of the way. “ (Amos 2:6-7)

So, capitalism gives us a system which results in us valuing each other by the amount of this Satanic fiction we consider each of us to have and concentrating that in fewer and fewer hands. We live in fear of not having it (which is a primary reason why we do not try a truly Christian economics) and are compelled into getting more of it, and letting others have as little of it as possible.

I therefore think that I was entirely justified in a recent Global Christian Perspectives webcast in calling Market Capitalism the “system of Satan”. It is the opposite of a Christian economic system.

The trouble is, just as Jesus observed when he said “render unto Caesar that which is Caesar’s” (Mark 12:17), we are stuck with this system. I am myself too consumed with the fear of destitution to go as far as I think I should towards a truly Christian view of economics, and can only chip away at the edges (by, for instance, not buying from companies which I know oppress workers particularly badly, and by paying more than I need to where a seller is plainly poor, as well as the normal charitable imperatives for which there is no justification in Market Capitalism, as well as by seeking to elect politicians who will curb the excesses of the system). The fact that we are stuck with it, absent a level of popular faith I can’t muster in myself, however, should not blind us to its “Satanic” character and the fact that we should aim at something better, or at least at using government (the people acting as a whole) to regulate and moderate its influence.

Free Market Capitalism is not a matter of “best expressing Christian values”, it’s a matter of turning the opposite of Christian values into a belief system which becomes the whole basis for society.

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