Praying and Paying

The Forgotten Man: A New History of the Great Depression by Amity Shlaes
My rating: 4 of 5 stars

Shlaes uses William Graham Sumner's "forgotten man" to expose the problems with FDR's New Deal. To paraphrase Sumner, A sees the plight of X and says to B, "Let's pass some legislation to help X," and C gets the bill. Sumner wrote about C: "He works, he votes, generally he prays - but he always pays - yes, above all, he pays." The identity of A is the progressives and B is Congress. It is laudable that A wants to help X but tinkering with the economy at the expense of C only exacerbates the problem. Shlaes is not a shrill conservative on the rampage but a classic liberal.

Shlaes argues that FDR's intervention in the private sphere made the Depression worse, encouraged the government to bully and harass its citizens (see the Schecter case!), and introduced special interest politics. This messianic view of government is still with us and has come home to roost with Obama.

Ancient peoples established governments to stop people from taking too much land and gobbling up resources at the expense of others. Regulation is one thing, intervention is another, and the private sphere has got to be put into the hands of as many private citizens as possible, if we are going to be great again.


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Economics to the Glory of God Pt. 2

Proverbs 28:8

Whoever multiples his wealth by

interest and profit

gathers it for him who is 

generous to the poor.

According to God's economy tithes, offerings, and giving to the poor is simply the best investment. Savings is second and Wall Street is much further down the list. This shows just how screwed up we've become.

Proverbs 28: 19-22, 26-27

Whoever works his land will have plenty of bread,

but he who follows worthless pursuits will have plenty of poverty.

A faithful man will abound with blessings,

but whoever hastens to be rich will not go unpunished.

To show partiality is not good, 

but for a piece of bread a man will do wrong.

A stingy man hastens after wealth

and does not know that poverty will come upon him....

Whoever trusts in his own mind is a fool,

but he who walks in wisdom will be delivered.

Whoever gives to the poor will not want, 

but he who hides his eyes will get many a curse.

Are we working our land and giving to the poor? That is a perennial question in Scripture. Whether we are diversified is also important, but doesn't receive the same emphasis.

Economics to the Glory of God

Proverbs 22:16

Whoever oppresses the poor to 

increase his own wealth,

or gives to the rich, will only

come to poverty.

We have had our share of economic woes lately in America. Could they be related to the truth of that verse? The rich have been getting richer and the poor poorer for a long time. In the 1970's a CEO was paid twenty times more than the lowest paid worker. Today he's paid over 300 times more (Goodzward, Hope in Troubled Times)!

The Mondragon Corporation in Spain is based on Distributist principles so that the highest paid is remunerated at only six times more than the lowest paid worker. It is a billion dollar company (William Cavanaugh, Being Consumed).

When will we learn to love our neighbor as ourselves?

Luxury Folly

I just re-listened to a Mars Hill Audio interview with Robert Frank about his 1999 book Luxury Fever: Money and Happiness in an Era Excess. It has been republished in 2010 by Princeton Univ. Press, because it is probably more relevant than ever.

Frank argues that we buy possessions that don't make us happy, because the incentives are wrong. Our consumer culture sends us the message that to be successful we must look the part. This means conspicuous consumption like the Lexus, the sprawling estate, and the flashy wardrobe with all the accessories. Inconspicuous consumption like vacation, family time, and relaxation, which we know are more fulfilling, are not incentivized by our consumer economy.

Thus Frank proposes a economic model that sounds more like what my grandparents knew. I've always wondered why during WWII the war effort at home was always about sacrifice and doing without. Today we're told that if we want to help, we need to get out and spend. We chart consumer confidence as a mark of a healthy economy. It's spending not savings, stupid!

Frank says not so fast. If we know what's good for us we need to change the game. Why not incentivize savings. Do away with income tax and set up a progressive consumption tax. Say a family pulls in $1,000,000, and they save $300,000. This means that they spent $700,000 on consumables, and this is their taxable income. The tax is graduated so that low and middle income families aren't made any poorer, and also have an incentive to save. This sounds like a distributism of savings.

Despite the poor economy, we've seen another decade of little to no savings among the majority of Americans. When you think about it, we must be out of our minds.

Many reviewers complain that Frank's vision doesn't take cultural realities into account. Just because we know that intangibles are better for us doesn't mean that we can quite worshipping the invisible hand of Adam Smith. Smith told us that the sum of individuals seeking their own interest adds up to the common good for all. This is the invisible hand of the self-regulating market, but it has infected us with luxury fever. Didn't Jesus say, "Do not store up treasures on earth where moth and rust destroy and thieves break in and steal, but store up treasures in heaven where moth and rust do not destroy and thieves do not break in and steal. For where your treasure is there your heart will be also." More intangibles please!

A former student of mine described our consumer economy as a once flowing river that has all but dried up. In order to keep it flowing the government has gone into debt buying two parts hydrogen for every one part oxygen and flooding the basin of consumerism. This is an artificial stimulant that gets us spending again. But it leaves us with the hangover of buyer's regret, and a government that's going to take us down the drain with it.  I pray that this doesn't have to happen in order for us learn wisdom and change our incentives. "Righteousness exalts a nation, but sin is a reproach to any people" (Proverbs 14:34).

Economics as the Possession Not the Pursuit of Happiness

Being Consumed by William T. Cavanaugh
My rating: 4 of 5 stars

Cavanaugh argues that globalism is a counterfeit of the church. Consumerism is the worldview that drives the structures of globalism and it is a direct challenge to the Christian faith. Cavanaugh writes:

Consumer culture is one of the most powerful systems of formation in the contemporary world, arguably more powerful than Christianity. While a Christian may spend an hour per week in church, she may spend twenty-five hours per week watching television, to say nothing of the hours spent on the Internet, listening to the radio, shopping, looking at junk mail and other advertisements. Nearly everywhere we lay our eyes -- gas-pump handles, T-shirts, public restroom walls, bank receipts, church bulletins, sports uniforms, and so on -- we are confronted by advertising.

Such a powerful formative system is not morally neutral; it trains us to see the world in certain ways. As all the great faiths of the world have attested, how we relate to the material world is a spiritual discipline. As one corporate manager frankly put it, 'Corporate branding is really about worldwide beliefs management' (47-48).

Consumerism seeks to exploit our restlessness, while Christianity seeks to cure our restlessness. St. Augustine, Cavanaugh's primary discussion partner and guide, once "confessed," "Thou hast made us for thyself, and our hearts are restless until they find their rest in Thee."


Thus the worldview of consumerism and its quasi church of globalism with its sacraments of technology are  idols meant to replace Christ, his universal church, and the sacraments of bread and wine. Cavanaugh shows that as we consume we become more "detached" from the things we consume. Because consumerism is based on desire for desire instead of the object that is desired, we constantly throw away what we consume as we move on to our next purchase.


But in the Eucharist (the Lord's Supper/communion) we become consumed by what we consume. Instead of detachment, we experience greater attachment to Christ and thus satisfaction in Him. Cavanaugh points out that in consumerism possession kills desire, but in the Eucharist possession transforms and satisfies desire. This is because God made us for himself. We were created to know God and enjoy him forever (Westminster Confession of Fatih), but we worship and serve the creation instead of the Creator (Romans 1).


Cavanaugh expertly diagnoses the problem but he also gives solutions, at least on the individual and local level. Cavanaugh is not as ascetic who is trying us feel guilty about consuming materials. He wants to reform our view of what we consume. Every created object contains traces of the Creator. When we use created things we should be enjoying the Creator. Created objects don't satisfy us when they are treated as an end in themselves. The satisfy us when we use them to point us to their source in God. Thus, the things of earth don't go strangely dim, as the misguided hymn says, but they grow, as one of my friends likes to say, "strangely alive."


Cavanaugh brings in Hans Urs von Balthasar for a philosophical discussion of how we see the universal and the particular united in Christ. In globalization we see only particulars unrelated to anything universal or as mere interchangeable stand-ins for the universal (as in the liberal idea that all religions lead to God so it doesn't matter which one). Thus particulars are dispensable. But in the incarnation of Christ, we see the universal Son united with the finite Jesus. By becoming man, God makes room for every particular. Every material object, just like Christ's humanity, can be set apart for God's purpose.


God created us to create under him. Thus we should consume what we produce and produce what we consume. Cavanaugh realizes that we can't produce everything we consume, so he says we should consume locally and get to know our producers in order to make God-glorifying choices.


We don't realize that our clothes, coffee and other consumables are produced by poor people in third world countries who are being exploited by businesses feeding our consumption. Do we know how our God-given cows are being treated? Cavanaugh does. He buys his beef from a local farmer who feeds his herds healthy, naturally produced food instead of drugs meant only to bulk them up. The cows are clean and not penned up in their own muck. Does the meat cost more? Definitely, but a little less beef goes much farther in terms of satisfaction. Adam Smith could not have been more wrong when he said that the market provides all the knowledge necessary for the consumer to make rational choices for the common good.


Cavanaugh argues that Adam Smith's and Milton Friedman's definition of freedom as the absence of coercion, actually leads to a coercive capitalism. He argues for a return to Augustine's definition of freedom as the ability not just to choose but to choose the Good. We must choose the Good as defined by God who created human nature. Without the Christian understanding of the chief end of man, nothing remains but lust for power through profits.


Cavanaugh compares the Mandarin Co. who outsources jobs to El Salvador with the Mondragon Cooperative Corp. in Spain who hires locally. The Mandarin Co. widens the gap between employer and employee by forcing workers to put up with substandard pay and working conditions. If the workers protest, as they have, the company simply threatens to leave El Salvador for cheaper labor elsewhere. The workers aren't coerced. They have a choice, but few options, and they can't afford the consumables they are producing.


A priest founded the Mondragon Co. on Distributist principles, which means that the employees are owners and the highest paid in the co. only makes six times more than the lowest paid. Compare that to the average CEO who makes 300 times more than the lowest paid worker in a modern corporation. Mondragon is a multi-billion dollar company who has created a healthy, educated local community with low crime rates. "Which has promoted human freedom?" asks Cavanaugh. Neither group is coercing its employees to work there, but one of them as enabled human flourishing and the other is oppressive.


What Cavanaugh doesn't address, and this is probably the major weakness of the book, is how to restructure the state, national, and global economy along the lines of Augustine's definition of human freedom and the principles of Distributism. Distributism seeks not to redistribute wealth through taxation but to distribute ownership to as many people as possible. G K. Chesterton did address how to implement this at the national level, and he needs to be heard along with Cavanaugh.


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Linkage Here

My friend Jason Carter has posted a Distributist Biblio on his blog Outlines of Sanity. I highly recommend your taking long draughts from this well!

Augustine, Distributism, & Empire

In preparing to teach on on Augustine's City of God I ran across the following passage:

Let them see the possibility that good men really shouldn’t rejoice at the expanding of the empire.[1] … ; and human affairs being thus more happy, all kingdoms would have been small, rejoicing in neighborly concord; and thus there would have been very many kingdoms of nations in the world, as there are very many houses of citizens in a city. Therefore, to carry on war and extend a kingdom over wholly subdued nations seems to bad men to be felicity, to good men necessity…. [Victory] would have surely been the case if, instead of a stone on the capitol,[2] the true King of kings and the Lord of lords would have dwelled there and been known.[3]

Augustine believed that the city of God was the last best hope for the city of man. The Roman Empire was too big for its own good and had gotten to where it was by being bad. Rome did not conquer because it had to wage just wars, but because it worshipped Jupiter. It hurled its lightening bolts around the Mediterranean until they began to short circuit.

The Barbarians had been biding their time and now, a la St. Jerome, the city of man that had taken the world was about to be really taken. Too bad they hadn't worshipped the true king of heaven (at least until lately and even then half-heartedly). Maybe then they would have stayed small and neighborly. Trying to do too much as an individual or a nation only diminishes you. Stay small and beautiful. Empires are for chumps.

__________________

[1] Trans. mine: Videant ergo ne forte non pertineat ad uiros bonos gaudere de regni latitudine. The rest is Dod's trans. unless noted otherwise.

[2] Statue to Zeus/Jupiter.

[3] Trans. mine: Quod profecto haberetur, si non lapis in Capitolio, sed uerus rex regum et dominus dominantium cognosceretur atque coleretur.

Distributing Ownership Instead of Money

Anthony Esolen in his Politically Incorrect Guide to Western Civilization points out three factors that contribute to lower birth rates:

1. High taxes
2. Scarcity of land for private property and agrarian lifestyles
3. Poor living conditions

The Wall Street Journal just published the following on the increased cost of child-rearing:

A child born in 2009 will cost nearly a quarter of a million dollars, or about $222,360, to raise to maturity, up a little less than 1% from 2008, the Agriculture Department said Wednesday in its annual report on the average cost of raising a child. (The department runs the survey to help courts and state governments set child-support guidelines.) Expenses for child care, education and health care rose the most compared with 2008, while the cost of transportation for a child actually fell, the department said. Annual child-rearing expenses for the average middle-income, two-parent family range from $11,650 to $13,530, depending on the age of the child, the department says.

Child care accounts for 17% of the total spending, and education for 16% of the total. The cost of housing makes up nearly one-third of the total; this is gauged by the average cost of an additional bedroom. But the tally excludes any spending on kids over age 17, so it doesn't include one of the biggest and fastest-growing single financial outlays many parents make: the cost of sending your child through college. Higher-education costs aren't included, the department says.

Families in the Northeast have the highest costs, followed by cities in the West, then cities in the Midwest. Families in rural areas and in Southern cities have the lowest child-rearing costs.

For families with many kids, however, there is some good news: The more children you have, the less it costs to raise each one. These economics of scale deliver 22% savings per child for families with three or more children. That is because kids can share a bedroom, hand down clothing and toys to each other, and consume food purchased in bulk quantities, reducing costs. Also, private schools and child-care centers may offer sibling discounts. The data is compiled based on spending by 11,800 two-parent families and 3,350 single parents with at least one child under 18 living at home.

What if we started distributing land instead of money? What if we created tax laws in favor of small business, family farms, and distribution of ownership to employees instead of corporate combinations owned exclusively by big businessmen?

In such a new climate, would we find our work more fulfilling and quit working for a paycheck? Could we start finding fulfillment in our families instead of individual consumption?

Might I propose that God made us to flourish in families, living in gardens, working with our own tools, and not on assembly lines, working with other people's machines, and looking forward to the weekend and our next spending spree.

Dawson's Critique

It may, I think, even be argued that Communism in Russia, National Socialism in Germany, and Capitalism and Liberal Democracy in the Western countries are really three forms of the same thing, and that they are all moving by different but parallel paths to the same goal, which is the mechanization of human life and the complete subordination of the individual to the state and to the economic process. Of course I do not mean to say that they are all absolutely equivalent, and that we have no right to prefer one to another. But I do believe that a Christian cannot regard any of them as a final solution to the problem of civilization, or even as a tolerable one. Christianity is bound to protest against any social system which claims the whole of man and sets itself up as the final end of human action, for it asserts that man's essential nature transcends all political and economic forms. Civilization is a road by which man travels, not a house for him to dwell in. His true city is elsewhere.

(Christopher Dawson, Religion and the Modern State, 1938).

Blessed Are the Limited

Chesterton on property:

Property is merely the art of the democracy. It means that every man should have something that he can shape in his own image, as he is shaped in the image of Heaven. But because he is not God, but only a graven image of God, his self expression must deal with limits; properly with limits that are strict and even small. 

I am well aware that the word "property" has  been defiled in our time by the corrupton of the great capitalists. One would think, to hear people talk, that the Rothschilds and the Rockefellers were on the side of property. But obvioulsy they are the enemies of property; because they are the enemies of their own limitations. They do not want their own land; but other people's. When they remove their neighbour's landmark, they also remove their own. A man who loves a little triangular filed ought to love it because it is triangular ; anyone who destroys the shape, by giving him more land, is a thief who has stolen a triangle. A man with the true poetry of possession wishes to see the wall where his garden meets Smith's garden; the hedge where his farm touches Brown's. He cannot see the shape of his own land unless he sees the edges of his neighbour's. It is the negation of property that the Duke of Sutherland should have all the farms in one estate; just as it would be the negation of marriage if he had all our wives in one harem (What's Wrong with the World).

Capitalism vs. Socialism? Or Another Model?

G. K. Chesterton championed an economic model that was the antithesis of both capitalism and socialism. As Americans, we tend to view capitalism and socialism as the last two survivors of economic evolution, who are now locked in a titanic struggle. Our more immediate concerns in the U. S. revolve around the next elections and whether big government will get bigger by raising taxes, expanding programs, and redistributing the wealth or will it withdraw and give the reins to big business and the profit motive?

In 1935, near the end of his life, Chesterton reflected on his G. K.'s Weekly, which had just released its 500th edition:

I am the editor of the only a paper in England which is devoted to what is a perfectly normal idea - private property. Most modern property isn't private, and ordinary capitalism makes it even less private if possible than ordinary communism. The system under which we live today is one of huge commercial combinations in which property isn't private ... What we mean by private property is that as many people as possible should own the means of production; the ground in which to dig, the spade with which to dig, the roof under which to sleep at night, the tools and machinery of production should belong to as many separate individuals as possible. There is a case for communism; there is even a case for capitalism; but they are both cases against private property. They both mean that it is not a good thing that separate men should own separate tools, separate farms, separate shops, but that all should be linked together in one great machine, whether it is a communist State or a capitalist business.

If Chesterton could see the division of labor we have today in our "huge commercial combinations" he would probably stagger. Our ever increasing division of labor has cut workers off from nature and, as Chesterton said, this means being cut off from the "causes of things." This distorts our perception of reality as we begin to think that food comes from supermarkets and clothes from malls or that everything comes from Super Walmart or Target Greatland.

In light of the industrial revolution, was Chesterton longing for something impractical ? Maybe. But even though Chesterton was an idealist he was practical. Even though he romanticized the small cities and the country life of noble peasants of the medieval past, he had a plan for his day. Merry England might have been a faint memory, but England could still be the home of merry men if the land were distributed as equally as possible to the maximum number of them. This would mean that people would be able to sell what they made and buy what they needed in their local communities. This would produce a quality of life that has been largely lost (and cut down on transportation costs too).

Chesterton's economic model is called Distributism. Is Distributism feasible apart from a Marxist type revolution or an economic catastrophe? Chesterton thought it was: "Every contract by which small property would pass into the possession of large property should be prohibitively taxed, and similarly the setting up of every small business or every small ownership of land should be advantaged in the same fashion."

Could it be that easy?