Economics

The Class Analysis

At the request of my friend and fellow contributor to The American Catholic, Darwin Catholic, I will elaborate more on some of the general points I introduced to the discussion over his latest post about economic morality. For those who did not follow the exchange (of me versus everyone, understandable on this somewhat more conservative blog), I questioned the accuracy of any scientific theory of economics that did not take into account class conflict (or, as some insist on saying, “class struggle”). Darwin and others responded by questioning the validity of the very category of class. Hence, we have a great deal of ground to cover – I hope you will bear with me, and that we all end up learning something.

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Will Health Care Reform Create (More) Health Care Shortages?

MSNBC recently did an interesting piece on the shortage of primary care practitioners, which has become particularly acute in rural and low-income areas. As a result, many older doctors feel that they cannot retire because there is no one to take their place:

There are not enough general care doctors to meet current needs, let alone the demands of some 46 million uninsured, who threaten to swamp the system.

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It's Not Really About Markets

What do many communists and many advocates of laissez-faire capitalism share in common? Both claim that their ideologies have never been given a fair shake, both claim that their ideologies are based upon immutable laws of either historical progress or human behavior, both reject ‘real world’ examples that supposedly show the error of their views, and both believe that only their ideological visions will lead to a future worth living in.

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Capitalism — When People Sell Things I Don't Like

With the garden currently shooting up, I’ve found myself again disposed to read gardening and food related books. I finished reading The Omnivore’s Dilemma last week, and aside from a few gripes in regards to Michael Pollan’s understanding of economics, I enjoyed it quite a bit. On the last run by the library, I picked up a copy of Barbara Kingsolver’s Animal, Vegetable, Miracle: A Year of Food Life. The idea of moving out onto acreage and growing much of one’s own food is something that I find interesting. I enjoy gardening, I enjoy cooking gourmet food, and I think there’s a cultural and psychological value to remaining in touch with the way that humans have gained food for themselves in past centuries.

However, Kingsolver is far more passionate (and less balanced) in her jeremiads against “industrial food” than Pollan, and more prone to denunciations of what “capitalism” has done to our food culture. Indeed, so much so as to crystallize for me a trend among those who denounce “capitalism” and its impact on Western Culture. Kingsolver had just reached the crescendo of a complaint in regards to large seed companies peddling hybrids and genetically modified strains, when she turned to the subject of heirloom vegetable varieties, and her joy at paging through lengthy seed catalogs full of heirloom seeds.

…Heirloom seeds are of little interest to capitalism if they can’t be patented or owned. They have, however, earned a cult following among people who grow or buy and eat them. Gardeners collect them like family jewels, and Whole Foods Market can’t refrain from poetry in its advertisement of heirlooms….

So you see, when large agribusiness firms sell farmers seeds for field corn which are genetically modified to repel pests,
that’s capitalism. But when catalog and internet businesses build a thriving niche selling heirloom vegetable seeds, and Whole Foods ad men wax poetical over $7/lb tomatoes, that’s… Well, it certainly can’t be capitalism, can it? Not if it’s good.

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Your Wealth Makes Me Wealthy

One of the concepts in economics that people seem to have difficulty grasping at an intuitive level is how other people’s income affects one’s own income. Many people instinctively ascribe to the “lump theory” of money, in which one may imagine all wealth to consist of a set amount of money, like a dragon’s hoard. If you capture more of it, that means that someone, somehow, has ended up with less.

In certain circumstances, this theory might describe things pretty well, but in most times and places wealth grows and shrinks with productivity. Basically, if I am able to produce more goods and services of value to othe people in the same amount of time, then my income grows.

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Picturesque and Primative

From last weekend’s Wall Street Journal, an article on the not-yet-crowded heritage treasures in the world:

As dawn breaks on top of a mountain near the China-Vietnam border, hundreds of water-filled rice terraces reveal themselves, clinging to the mountainside in geometric patterns in every direction. The rising sun, reflecting off the water, turns some of the terraces bright shades of orange and gold. Then solitary figures appear, black against the rising sun — peasants with their water buffaloes hitched to wooden plows.

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The Culture of Death and Consumerism

Contributor Joe Hargrave posted a link to an interesting new essay of his today on the topic of the Culture of Death and its connections to consumerism. It’s an interesting essay, and I encourage people to read it. I do not pretend to similar length or erudition in this piece, but in formulating some thought about Joe’s essay I realized that it would be very long for a comment, so I’m writing it up as a post here instead.

There are a lot of things I found interesting and wanted to discuss (or dispute) in your essay — perhaps in part because I get the impression that our areas of historical knowledge are somewhat non-overlapping (I know most about 3000 BC to 400 AD, you seem to be most expert on the last two centuries), and the person who imagines himself an expert in anything invariably has all sorts of quibbles with what the “outsider” writes. However, I’m going to try to stick to what I think is my most central critique.

Joe finds at the root of the culture of death the materialistic and individualistic phenomenon of modern consumerism, and about consumerism he says the following, beginning with a quote from Pope John Paul II:

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Capitalism, A Beneficial Exchange

Blogger Sam Rocha wrote a post the other day titled, “A Brief Defense of ‘Capitalism'”. However, Rocha’s attempt is, I think, somewhat hampered by the fact that he by his own description does not think much of capitalism.

For the most part we (by “we” I mean those of us on the left, yes I will own up to being something of a leftist, whatever that means) like to say that all capitalism, and its governing libertarian sentiment, desires is for there to be no limit at how much one can take for one’s self. It is a creed of the indulgent and the rich. Greed, selfishness, isolationism, sterile individualism and other nasty things, are what we enjoy making capitalism out to be.

With such an opener, what might wonder what it is that Rocha then finds to praise in capitalism. What he find is, I think, not at all unique to capitalism narrowly defined, but it is something which those of us in the West are much attached to:

If we can cut-out the name calling, I think we can find a powerful meaning within capitalist sentiment. Namely, the much-abused, taboo, and rejected idea of the individual, the person-singular. I think that if we take notions of private property and negative freedom (“freedom from”) inherent in capitalist sentiment, and ponder what they mean, we will find that we all value such things privately….

Here is my defense: Capitalism, as it is believed in benevolently, reminds us of our radical existence as images of God with a potency to as we wish within the vast sea of possibility. What we need next is the ability to control ourselves with the prudence, grace, and love of our Creator in this stormy sea of freedom. But we should never be too quick to accept external-control over our bodies, minds, and hearts. We need to be free. And perfect freedom is not the raw, brute force of libertarianism, to be sure. At the same time, it also is that imposing force.

I don’t find what Rocha finds to praise unappealing, but at the same time I think that there is something more to be found in capitalism as described by Adam Smith and others which even many of those who frequently condemn capitalism would find it in themselves to admire if they could look past their preconceptions and see Smith-ian capitalism for what it is.

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No Guarantees

I was struck by this Megan McArdle post, of which I will go ahead a quote a large chunk:

Guess what, honey? You’re not entitled. You can do everything right, and the universe doesn’t owe you anything. Neither do your fellow taxpayers. If there is any way to save the banking system without paying you $2 million a year, I will do it, not because I hate you and want to rob you, but because I don’t want to pay more than I have to. You may have come across this concept in business school. At Chicago, we called it “a market”.

The real problem with investment bankers goes deeper, and is the problem of the entire upper middle class: we have come to believe that complying with the rules produces excellent results as by some natural law. In school, if you do your work, teacher gives you an A. It comes to seem like a sort of a natural law: if you have a good education and work hard, the universe is supposed to reward you. After school, the upper middle class gravitates towards careers with very well defined advancement hierarchies: medicine, law, finance, consulting, where this subtle belief is constantly reinforced. →']);" class="more-link">Continue reading

Will The Real Utopians Please Stand Up?

To follow up my last post on the Papal defense of Distributist ideas, I think it is also time we cleared up this notion of  ‘what can work’ and what actually does work.

Distributism, if it is practically defined as a set of social or political initiatives that encourage greater ownership of property, and specifically, worker ownership of the means of production, does exist and does work.

Here are some regional facts to consider:

Canada

“In Canada, there are distinct trends in worker co-operatives in Québec and the rest of the country. From 1993 to 2003, there was 87% growth in Québec and 25% growth in the rest of Canada.”

The United States

” In 2004, there were 300 worker co-operatives and 11,500 ESOPs covering over 8.5 million participants and controlling about $500 billion in assets.”

Spain

“Spain is home to the world’s oldest and most famous worker co-operative, the Mondragon Corporacion Cooperativa (MCC), established in 1956. In 2004, this group located in the Basque County, had sales of 10.4 Billion euros, 10.0 Billion euros of administered assets, with a workforce of 71,500.”

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