Saturday, August 25, 2007

Capitalism and Economic Liberty, and the aims of Distributism

I could do a great many things before I came to definitely anti-social action like robbing a bank or, worse still, working in a bank.
-G.K. Chesterton

One of our opponents, is still confused by a modern myth, the idea that wages (which are not within his control) and renting (something which is owned by others and consequently not within his control) are more "stable" and provide more "freedom" (over things he has no control over) than owning one's own means of production (which he does have control over) and owning his own property (which surprise! he also has control over). If that is the case, then by all means, let us call unstable "stable" and restriction "freedom". For that matter, let us also call the spend crazy "frugal", and that which is poisonous "healthy", or, that which is cheap "good quality". In fact, industrial capitalism does all that too!

In attempting to make various terms clear in the debate between Distributism and Capitalism, he says (note: all emphasis mine)
The capitalist tends to define an economic system by what the legal apparatus does and does not allow. This point of view defines capitalism as the system in which economic freedom maximized, i.e. where goods and services are bought and sold freely without government interference. (source)
This is entirely false. If Capitalism maximizes economic freedom, it does so for only one group: the wealthy owner. This is because one type of freedom is maximized within the capitalist system: the freedom to buy. It turns the traditional understanding of freedom into a materialist, like an angel dressing up as a devil. The traditional understanding of freedom is the ability to choose to do the good. For the capitalist, it is to buy, and only one group in society benefits from this, that is the owner. The owner decides what is made and consequently what men will buy. Men then basically have the freedom to do what the owner wishes them to. Perhaps we are not so far from Belloc's servile state as we may think.

The reality is, the standard by which freedom is judged is entirely false, which is why everything else in the Capitalist system is false. Furthermore there is no other area of society in which freedom is judged by this standard. To be true to reality, this view in fact represents a minority of the thought within Capitalist economics to begin with, which makes the idea that it could be a science more laughable. There are numerous different schools of capitalism, some favoring tarrifs and trade protection, some favoring high taxes and government made social services (which are not tantamount to socialism per se), and some, those of the economic liberals, which favor no government action of all in the realm of economics, that somehow, a hidden hand will make markets smooth and all men rich.

Of course when we come back to reality not many men are rich. In fact, not many men are well off. Some are better off than others. Now some have nice trinkets and goods, nice computers, nice televisions (which they don't really own, some bank owns them through funds it lent them via a credit card). Most struggle to get by and require their spouse to work in order to pay the bills. They are not free to start a business venture, because a bank will not give them a loan, or if one does, it is on such unfavorable terms as to make the venture impossible or so risky as to be foolish. A company which is already millions of dollars in debt with a proven track record for inefficiency and poor customer service on the other hand has no problem getting large loans, much more money than what is proposed to be given to those who start a small business. Why is this state of affairs? Because without any interference in the economy, there is only one motive: greed. The larger businesses, indebted as they are with debts bigger than the economies of 3rd world nations, have the illusion of permanence, and thus the bank invests in the large businesses, because the interest on large loans (that will never be paid off) will yield more money than the small business will ever see. It may be that the small businessmen will never have economic freedom, will work until they are dead, and be forced to buy from the big shops where the bank invests, but that scarcely bothers the businessman, or the banker. It is quite simple, human beings, when left to themselves, operate according to a wounded human nature. This human nature so wounded, places an immediate good in place of a final good. As such, the immediate good of enrichment is far more desirable to most men than the overall good of a healthy society, or helping the poor not with a handout but with a share in ownership, which Pope Leo XIII described as the only way to cure the social evils addressed in Rerum Novarum.

Capitalism in all of its forms necessitates toward the same end, what Belloc and Chesterton called the "Capitalist paradox". What this means is that the laborer will become so poor that he is unable to buy the goods he produces, and the owner will be unable to find a market for the goods. Is that any surprise since wages are now lower than they were in the previous generation? Mortgage loans are defaulting at a staggering level, which had caused a free-fall in the stock market until recently when the government borrowed money from other countries to put money in the banking industry. As men have less money at their disposal, they are unable to meet usurious rates of loans, which are now necessary to own property in this country. Then of course no one will have economic freedom. Given the high cost of the basic means for getting to a job, gas and a car, can we seriously maintain there is a high level of economic freedom simply because the wealthy can market their products to us without the government keeping open a window for us to enter the playing field?

Thus, the definition given by Belloc, that capitalism is the concentration of wealth and the means of production in the hands of the few, is entirely correct for this reason: In every capitalist society this is the net result of so-called "economic freedom". Arguing this point is almost like arguing with Communists about the evils of Communism. They often deny that Communism is intrinsically bad, they will just say it got corrupted by Stalin (ignoring Lenin's murderous rampage). The fact is that wherever Communism has been tried it requires a murderous rain of terror to concentrate property in the hands of the state. Likewise in Capitalism, wherever it is tried it concentrates society's wealth into an elite: a small class of owners and a group of bankers whose interests are international. If you doubt that consider World War II. International banking and oil interests bankrolled both the Nazis and the Allies throughout the war. J.D. Rockefeller helped produce tank engines for Roosevelt and sold fuel additives from U.S. standard oil to Hitler through a partner, I.G. Farben which allowed Hitler to bomb Britain. Union Banking Corps, based in New York City, gave millions to Hitler, funded his rise to power, and at last after the war was discovered with tons of Nazi money in their vaults. American business and banking interests supported both sides, because in war, governments borrow from banks, and enrich banks, they buy from big business, and enrich them, which is why big business necessitates toward war. That is why we had a World War twice, and have been involved in umpteen billion wars since. What of the economic freedom of the men putting their lives on the line for these business interests? In war, no wealth is produced, though it is often destroyed. Governments borrow money, and money produces more money, for the elite, which they hold from the community and invest in the interests which they alone wish to invest. It is not the common man who is economically free.

Moreover, it is in a desperate attempt to cling to this false reality, that our opponent must mischaracterize our solution, unless we have been so vague as to cause him to not yet grasp it:
The capitalist defines distributism as the system in which the government prejudices the legal apparatus against the large business, in favor of the small venture (source).
This is also incorrect. Distributism, unlike Capitalism, favors local government. The term "government" is used of course in the pejorative, as if it is a bad thing to have government! With the exception of economic liberals such as our opponent, Capitalism supports big government since the big government necessarily must borrow money from banks, and the interest guarantees a continued indebtedness to the banks and a slave status for government. Our opponent is an unwitting ally of this concept by supporting big business, even though it is against his ideology.

Distributism does not favor big government. It favors strong local government, and mediating economic bodies such as a guild, to set pricing, restrict (though not eliminate) competition,
and protect small business from ruination by the direct actions of larger entities. By applying this controls and checks on the economy, Economic freedom is thus preserved for the family, at the expense of the greedy. No grandiose promises of wealth and fortune are made, they are certainly possible, but something far better is offered within this framework, security for the family.
Distributism is then defined as the economic system in which the vast majority of people have personal ownership of productive capital, ie are running small businesses. The historical exemplar of this is an agrarian farming community with the occasional non-farming specialty tradesman, but distributists stress that they are not advocating that everybody turn to farming or reject technology (source).
This should be expanded and clarified. The agrarian question is a thorny issue. What percentage of society will have to be agrarian in order for the society to have enough food. Donald Goodman, in his e-Book "Distributism, a Catholic system of economics" suggests that it would need to be as much as 50%. This is possible, but perhaps it is lower, maybe 35%. To interject with my subjective experience, the number of people who I have known who wanted to farm but could not meet the financial burden placed by the twin evils of big government and big business suggests to me that it is a sufficient number in society to meet that percentage. Furthermore, most economic liberals (though I believe our opponent is an exception in this) have advocated in recent years opening the borders, getting in as many illegal immigrants as possible to do farm work. Why? Because major bloated farms need lots of workers, but they can't pay a lot of money to attract commuters because Agribusiness is overproducing food, and in the absence of an agent to set prices to a just level, they follow simple supply and demand and drop. When the prices drop, privately owned farms suffer. Because these farms operate on a Capitalist rather than Distributist model, they are big and bloated and removed from habitation, so there are no young children to hire for a few hours of work, no teachers on summer vacation, no townspeople in general to assist, and no local market for the food which drives up the costs to begin with. So abusing Mexicans and paying them low wages seems like the answer to most free market economists! By having farms near markets, that meet the demands of local markets, most of these evils are eliminated or severely reduced.
The historical exemplar is not an agrarian economy per se, because the Roman Empire used such an economy, but it was a slave economy. Distributism's exemplar was the economic model that the Catholic Church built during the middle ages, which transformed the Roman Slave into the serf who inherited rights and protection, and from that into the medieval peasant who was free and who could will his land to his descendants, and no one could take it from him, until society itself broke down, as it did with the Reformation.
Now modern society provides all forms of private enterprise that can be understood as Distributive. The concept of a co-operative for example, where all the employees are owners, would not qualify as a big business, because all the employees were owners. This follows the concept of subsidiary, namely if smaller units can do the work they ought. There are irreducibly complex goods like computers, like cars (although one man could build a car, that would scarcely be possible economically), power equipment and industrial goods. Distributism does not propose thousands of technicians in shops producing these goods night and day to meet demand. Instead we propose co-ownership as the means of "gaining the share in the land". Then workers will receive a living wage verses a minimum wage, and profits according to the goods they produce.
The distributist defines his terms differently, although both competing definitions seem to referencing the same state of affairs in most cases. (Source)
The difficulty here is there are two different applications. There is the society we want to get to, namely a society that can be called Distributist, where the mark of that society is of widespread ownership, and there is the present society, where wealth is concentrated in the hands of a few, which we want to see made into a Distributist society. That means transformation. The principles inherent to a process of transformation do not apply after the transformation is complete. When you have turned flour, oil, butter, salt and yeast into a loaf of bread by applying heat of 400 degrees Fahrenheit in an oven, you do not continue applying that temperature after the transformation! This is true in transforming the character of society, except with Communism, where the murder used in establishing the government seems to continue after it is established. Thus, where Belloc talks about using taxation against large businesses and subsidizing small business for a time, he does not intend that to mark Distributive society, but to establish one. When he talks about taxing heavily the purchase of property by the wealthy from the small man, but lightly taxing if taxing at all the purchase of property by the small man from the wealthy, it is only for an intermediary period. Thus these are the two applications of ideas in establishing a Distributist society. However, unlike Capitalism and Communism, which as far as we are concerned is generally the same thing, one where an elite owns capital, and another where the state owns it, Distributism can not be established from above by a minority on the majority. There must be desire for it in society. You can not entrust property to someone who has no desire for it, the stroke will go rather astray. Thus the first mission of Distributism, is to increase a desire for economic liberty that comes with property amongst the populace, and then, only then, can some reform be enacted.

44 comments:

Kevin said...

Median Personal Income, adjusted for inflation, for men ages 30-39, from the study Athanasius points to:

1964: 31,097
1974: 40,210
1994: 32,801
2004: 35,010

Kevin said...

By the way, those figures don't include the value of some benefits such as health insurance, which it is much more common for employers to provide today, at considerable cost.

Aaron Traas said...

Athanasius evidently lives in a different world than I do. I live in a world where everyone around me has clean water, great variety of food, affordable health care that didn't exist 50 years ago, inexpensive and comfortable clothing, and big machines that allow us to travel vast distances in a short amount of time. I'd say that's a rich society.

I fail to see how people having a bunch of maxed-out credit cards that they used to buy stuff they don't need is the fault of capitalism. That's individual stupidity, not the fault of an economic system.

I stopped reading halfway through, as this just seemed like a vitriolic diatribe on the subject of "capitalists are stoopid" rather than a rational discussion. Samwise went through the trouble to define his terms, and you simply replaced your definitions for his, and said he was dumb.

Kevin said...

What is the difference between these three things:

economic freedom
economic power
economic security

Kevin said...

"Most struggle to get by and require their spouse to work in order to pay the bills."

The 2004 median income for men aged 25-34 who have a bachelor's degree and work full time was $41,640. (source: census.gov)

Is it your position that this is not a just wage??

Kevin said...

Quoting Athanasius:

"Mortgage loans are defaulting at a staggering level, which had caused a free-fall in the stock market until recently when the government borrowed money from other countries to put money in the banking industry."

Quoting Ben Stein:

"Subprime is a mess. But it's a small mess. Subprime mortgages account for roughly 20 percent of mortgages even in the most heavily exposed states. About 20 percent of them are delinquent in some way. That's 4 percent of mortgages.

Of these, maybe half, or 2 percent, will go into foreclosure. There will be roughly 50 percent recovery on sale of these. This is a loss of 1 percent in the mortgage market -- a sum the lenders have already made many times over because of the hefty fees on those deals. In the context of the size of the U.S. financial sector, it's nothing.
"

BTW, the lowest the Dow dropped was to about 12,500 which is where is was at the beginning of the year, after rising over 15% in 2006.

Kevin said...

One more comment on the state of today's workers. I did some looking around census.gov. The median income for an American aged 25 to 34 is:

$30,126

This is plenty to raise a family on if you have your priorities in order. But if you have your priorities in order, you won't have to raise a family on that. The median income of Americans aged 25 to 34 who worked full time year around is:

$34,996

The median income of Americans aged 25 to 34 who worked full time year around and who had bothered to get themselves a Bachelor's Degree in anything is:

$44,125

With a Masters:

$51,244

And those numbers include the humanities majors...

benedictus said...

>> "I fail to see how people having a bunch of maxed-out credit cards that they used to buy stuff they don't need is the fault of capitalism."

By analogy a similar argument is "I fail to see how ruthless dictators and oppression of everyone who is not high up in the party is the fault of Communism."

Certainly high credit card debt is not intrinsic to capitalism. Niether are most the ills that distributists decry. But in actual practice they often go hand in hand with capitalism.

benedictus said...

Kevin>> "the lowest the Dow dropped was to about 12,500 which is where is was at the beginning of the year, after rising over 15% in 2006."

Sure, but if you adjust for inflation the DOW is still not back to its 2000 high.

There are plenty of web sites that have that info, for example:
http://tinyurl.com/xqje

Gen Ferrer said...

I need to review those income stats versus average real estate values for the same years (also inflation adjusted).

While employers in some cases pay for health insurance (in others none at all, and others partially), we also have to account for past pension plans (vs. 401K 3% max contribution) which are virtually non-existent save for limited executive positions.

Kevin, in order to determine if 40k is a 'just wage' we need to measure what the living standards are in a particular area. I don't live in a rich neighbourhood or area, but the average income in my county is 35k and townspeople cannot afford a home here. They are moving out (in some cases out of State entirely, in others 1 and 1/2 hours away from their work).

Gen Ferrer said...

There is a problem I think with one of your comments.

30k-35k is enough to raise a family? Yes, quite possibly in certain areas you might be right, but I know of few areas which pay according to a wage which would not place a burden on both heads of households to work, as well as to have a possible second job and make affordable local market real estate pricing. I know I can definitely afford real estate in another state, if I choose to buy that property and one day retire there (otherwise my moving there will place me in the same boat, on a different scale).

I also disagree with what appears to be snobbery (I apologise if you didn't mean it this way) to suggest if someone isn't making a living wage it is because he/she didn't 'bother' to get a Bachelor's degree and that is their error in not being fiscally sound.

I assume we can agree,as non-Socialists, that there is no such thing as an egalitarian society, correct? So we agree that not everyone may have the means to afford this education or the apptitude to attend college, correct? Then the only way out of this is by suggesting those who cannot pursue 'higher education' (it is debatable if that is what it is) either must just deal without a living wage, or turn to socialism (state employment).

In my native Spain we have more college-level grads (both bachelor's and master's) than jobs. The assumption that all we need is to all have a bachelor's degree is the snake biting its tail in this society. After all, isn't it economically sound to state that for wealth to exist there must be poverty? And if we all had bachelor's degrees wouldn't we need master's and so on and so forth? (hence my original point about employment competition so long ago)

Athanasius said...

Before responding to the overall points, let me just say that Ben Stein's points are irrelevant, because he ignores the cause of the problem: the lack of any real capital. Our whole economy is imaginary. Money is created by the federal reserve bank ex nihilo, lent to the government at interest, put into circulation as currency, based on no real capital or wealth. It is paid to the worker, who uses it to make payments on things for which he is paying interest. More money is created ex nihilo by the worker for the banker, and the worker is paying 8-10 times the house's actual worth for the privilege of laying his head down at night. The only actual capital that exists is the property, the rest is all imaginary created by bankers to enrich bankers. It is nothing but a big house of cards that is due to fall apart any time now.

Kevin said...

"the worker is paying 8-10 times the house's actual worth"

How do you figure?? You've claimed this several times in different conversations and you've never backed it up.

Kevin said...

Rich: What expenses do you think are necessary to raise a family?

Kevin said...

Benedictus: What do you think that chart means for this discussion??

Kevin said...

Regarding college, while not everybody does go, everybody can go. So if we see that a certain wage is available to people who went to college, that means its available to anyone that bothers to pursue it.

Also, you'd have to be quite a dunce not to make it through today's low college standards. Most drop-outs just find something else they'd rather do or are addicted to drugs and alcohol, etc.

Gen Ferrer said...

Kevin,

I will write about the meaning of a just wage in a future article as well as your concerns about the poor priorities of the average consumer.

Also, I don't want our readers to think we don't have anything to say about the government's role in excessive taxation. These issues will be addressed as well.

benedictus said...

"What do you think that chart means for this discussion??"

It was a response to your comment that the DOW rose 15% in 2006, by which I took you to mean that the economy is doing just fine.

So I was pointing out that the DOW is actually still down overall for the last seven years.

Kevin said...

Benedictus, the economy is doing wonderfully. If you were dollar-cost averaging (look it up) over the last seven years you would have made a good profit. The fact that the market hit an inflated high several years ago doesn't mean anything, unless you were out of the market all through the great rally of the 90s, invested all your cash in the market at the very moment it topped out, and then stayed in all the way to the bottom. The percent of investors this describes is probably a lot closer to 0% than to 1%. Besides, if you had a rational asset allocation including a diverse set of industries and further diversification in bonds depending on your age, you likely didn't lose out too badly during the dot-com bust either.

You can't judge an economy by a seven-year old bubble that popped. If the Dow had been LOWER in 2000, (ie stock prices hadn't been inflated by an unreasonable optimism) would you say that would mean the economy was doing BETTER today?

benedictus said...

"You can't judge an economy by a seven-year old bubble that popped."

You're right. An arbitrary seven your period doesn't necessarily mean much overall. My point was simply that a single good year (i.e. 2006) doesn't mean much either.

You say the economy is doing wonderfully. I am not convinced of that, but I am no economist so it's hard for me to judge. It's a complicated issue and I honestly don't know enough at this point to discuss it, though I am trying to learn more. I guess it is getting off topic for this thread anyway.

Maybe at some point later when more groundwork has been laid, the site owners could start a thread for the purpose of discussing the status of the economy from the distributist and capitalist perspective. That might be fruitful for better understanding each perspective.

Kevin said...

I agree that this is a tangent. The only reason I brought up the 2006 values was to counter Athanasius's claims that the subprime mortgage defaults caused a "free-fall". He is attempting to put the worst possible spin on the daily economic news chatter, in order to tear down capitalism.

Kevin said...

Re: Ben Stein

Athanasius, the GDP is 13.2 Trillion dollars right now. You say there is a "lack of any real capital." Name one kind of capital we lack! We have homes, infrastructure, agriculture, etc. What's missing?

Athanasius said...

stopped reading halfway through, as this just seemed like a vitriolic diatribe on the subject of "capitalists are stoopid" rather than a rational discussion. Samwise went through the trouble to define his terms, and you simply replaced your definitions for his, and said he was dumb.

I don't see how you could come to that conclusion. I defined terms very clearly, as we see them, and I was sure to show that not all Capitalist arguments are necessarily free market libertarian types either.

It can't be more clear. We don't believe you are economically free if you don't control anything but your own labor. We don't believe the free market makes anyone free but the wealthy because their power is maximized, whereas in a Distributist environment the power of the wealthy is equalized. That is why some type of group, accountable locally and made up of local men, should set and control prices, as was done, so that there be competition, but controlled competition rather than unrestrained competition. Its not that capitalism is stupid, it is that it makes man unfree under the appearance of freedom.

Kevin said...

What is the difference between these three things:

economic freedom
economic power
economic security

Gen Ferrer said...

Who "We" are, is the crux of the distributist argument.

There is something economics does not measure because it isn't mathematical and that is quality. The claim is that quality is subjective, but certainly any capitalist or distributist would argue that we wish to remove debt from our lives. A country that imports more than it exports (such as the US) is not healthy. A nation that borrows exorbitantly is not healthy (whether as a State or individually).

There are two things vanishing today. Inheritance and a wage comparable to real estate pricing. If one is to take note of the trends of a city, where renting has become the norm (with salaries unadjusted to this reality) and ownership is of the few, then we say it isn't a 'rich' society, but there are those in society that are very rich. And with the bottomless pit of renting, there certainly is little to no inheritance.

What we have, in my opinion, is a nation of debtors. Now I am the last person to not admit the consumer is partially responsible for his debt. But I am certainly not going to insist on it.

Now what can we do to change? Begin creating a nation of owners. Even Jeff Gates, the capitalist author of "The Ownership Solution" admits we have less owners and more people indebted to the slavery of a wage that doesn't pay. A wage that is unrealistic (and as promised, I will be writing an article on this) with the living standards of today.

Again, if we claim ownership is a lifetime of owing, then I would disagree that "we have" anything. If we once could afford a home on a single income and today we require two (and soon three) people to afford a household, then we have become more primitive, not progressive.

Kevin said...

Gen: Housing prices are high because dual incomes are common, and not the other way around. No one is ever forced to pay more than they are willing for a house. The fact is there are a lot of dual income families competing for the houses, so the prices reflect that, because they have to outbid each other. This isn't a weakness in the wage rate. Its a reflection of our changing societal norms. If you want to lower housing prices in relation to wages per worker, just outlaw dual income families.

Good luck with that.

Kevin said...

Regarding quality, economics as a behavioral science will incorporate any higher value to the degree that the people act on it. Economics studies how people pursue their goals in the economic sphere. If the people prefer to live in debt they will act that way, and likewise if they prefer to live without debt.

Miranda said...

Kevin says:
"If you want to lower housing prices in relation to wages per worker, just outlaw dual income families."

Wouldn't that go against the freedom for families to make their own decisions about finances that you keep purporting is the goodness of capitalism? If the government stepped in and outlawed dual income families, I would see that as much more government interference in the life of the family than the so-called interference that Distributists would like to see from a localized government.

Is that really what you believe to be a solution to the outlined problem?

Anonymous said...

Kevin is a prime example of a man with lots of knowledge, and LITTLE Wisdom. As with much in libertarian economics, all sounds well enough on paper and in the all vaunted "studies", but one problem- it does not work in real world. If "Economics" was so all powerful, predictavely, why are there so many "Schools" of Economics? Each with its "correct" Ideas- each backed up with their own "scientific" studies (repleate with data, stats and formulas)- yet each school differs from the other- each calling for a different presciption, yet each claims to be the one and only correct School of Economics?
Hint kevin- a rhetorical question- it is self answering!

Kevin said...

Ok, John.

Kevin said...

To Miranda: No, I was being rhetorical.

Kevin said...

Quoting Athanasius:

"One of our opponents, is still confused by a modern myth, the idea that wages (which are not within his control) and renting (something which is owned by others and consequently not within his control) are more "stable" and provide more "freedom" (over things he has no control over) than owning one's own means of production (which he does have control over) and owning his own property (which surprise! he also has control over). "

I added the bold face to highlight a certain curious turn of phrase that I think is highly relevant to our debate. Is Athanasius confusing freedom with power and control?

Kevin said...

Regarding the distribution of capital, I am just getting into looking at the actual data. Up until now, I've let that complaint go.

In fact, fully 1/2 of all households in America own capital, generally through mutual funds. Although most people are not small business owners, they do participate in the benefits of capital ownership by receiving dividends and benefiting from appreciation of the stock, etc.

The stockholders as a whole employ the CEO to manage the capital. This is an extemely difficult and extremely technical job in most cases, supported by teams of people who do market analysis, risk modeling, economic forcasting, etc. The capital management decisions that are ultimately made by the judgement of the CEO impact the profitability of the company more than any other factor. In a billion dollar business, it is more than worth it to the stockholders (most of whom are middle-income) to pay a lot of money, even hundreds of millions of dollars, to obtain a CEO that can best manage their capital. These high salaries are designed to engender fierce competition for the job of CEO so that the very best talent can be skimmed from among the applicants. A large portion of CEO pay is often in the form of stock options, which make it conditional on the return to the stockholders who the CEO is working for.

Anonymous said...

Does Kevin remind anyone of the dweeb in school that knew a lot- but nothing. No Wisdom- No humility.

He can quote a lot of high faultin' economic rhetoric- but has absolutely NO real world experience.

Kevin-before you go getting your unders in a bunch- I also studied economics in college and yes I follow your arguments- and in a self contained universe (the class room) they do work - given certain starting assumptions (A BIG ISSUE for REAL economists). The problem is it does not quite work out the way you "thought" it would in the real world- there are way too many NON-economic variables that do NOT fit in to a pure "price is all the information you need" micro-economic world and people (actors in the economic realm) have other, higher, priorities in their motivations in choosing their actions (thank God! for they are not dry, dull calculating machines Economics professors assume we are- we are -gloriously - REAL flesh and blood). The idea of homo econimicus is just that an Idea - a useful assumption for teaching Micro-Economics, but little else!

Here is a much more able writer on Kevin's type - Fred Reed (also like Kevin, a self-described Libertarian):
"Consider: William Buckley is very smart. So is Gore Vidal. Yet in their debates they wrangled like excessively elegant cats and could never agree on anything, except that they were both very smart. So what was the use? Two taxi drivers in a Chicago bar could have failed equally well to decide anything. Or they could have come to opposed and equally erroneous conclusions.

Pick your subject—economics, say, or foreign policy, or crime. You will find brilliant men on Left and Right, each arguing intricately to a bellowing claque of witless followers who don’t know anything about it either. You can tell where they will come out by seeing where they went in—on the Left or on the Right"

Sounds a lot like Kevin- posts here and on other distributists sites because he has no real world in which to interact. Oh- one more thought- you claim the internet domain of "Hobbit Manor"- but most scholars of the subject would agree that Hobbits were driven more by NON economic issues tin their daily their lives than the little cramped people that only see the material things- and mere maximizing profits. In short- Hobbits would be aligned with Distributists NOT Homo Economicus

Dr. J S Wilson- the Anonymous above- NOT "John" as Kevin presumptuously presumed! (sorry- do not have a Google account- but visit almost every day!)

Kevin said...

Dear Doctor J,

I'm sorry I mistook you for Someone else based on the sound of your voice.

Kevin said...

Here's an interesting article" showing just how sensitive a company's performance is the actions of the CEO. This goes to show why stockholders are willing to pay CEOs such high salaries in order to get the very best management of their capital -- whereas distributism wants to break down that paradigm and have each man manage his own capital.

Kevin said...

Dear Anonymous Doctor J

Since I have "no wisdom", why don't you do the charitable thing and give us some examples of "NON-economic variables" that invalidate standard economics? As long as I have "no real world in which to interact", I might as well be learning something. Maybe I will begin to understand, and stop being one of the "little cramped people that only see the material things".

Athanasius said...

Does Kevin remind anyone of the dweeb in school that knew a lot- but nothing. No Wisdom- No humility.

Please, let's not employ ad hominum attacks and focus on issues, Kevin you are wrong because x=y, Kevin this does not follow. Of all the people on this blog, who comment, I am the only one who knows Kevin. I lived with him for two years. Kevin is neither a fool nor without wisdom in the sense you mean it, he is just wrong from the Distributist perspective, and let us leave it at that without engaging in tomfoolery and ad hominum attacks. If anyone should be allowed to do that it is me because he knows I am just employing it as amusing banter, not as an attack, and even I don't do so. Let us not forget Christian charity, and whoever cries Raca shall be liable to the hell of fire and all that business. Comments that stray from substantive conversation on topic will be deleted. FYI. :D

Kevin said...

One more remark to Dr. J S Wilson.

Let me extend an olive branch to you on the topic of economics & materialism. I've revised my essay entitled What is Economics? in order to address your specific concerns, and I hope you will take the time to consider my thoughts on this important topic. The revised essay is here on my website. Feel free to share any insights that it provokes in the comments section there.

Sorry for my initially brusque remarks here. Lets talk.

Anonymous said...

Kevin- and Athanasius-
Olive Branch Accepted- and in a Sprit of Charity, I will withdraw the tenor of the comments. But not the substance.

Let me be clear about this-these are my perceptions based only on the words written on the screen, I do not personally know anyone here. BUT contra Athanasius, one can and should come to an opinion of a writer based on a corpus of work that is as extensive as what is presented here and elsewhere. That is not judging the eternal destination of a soul, for which the admonition is directed,( and I would not presume to do) but real discrimination.

To be clear my discernment is based on the voluminous body posted by Kevin. I do not see much Charity or Wisdom in the exchanges. To this interested observer, it seems that there is less a mutual search for the Truth (Capital "T")then a set of preconceived notions that must be debated, defended, and "scored" as if it were a formal debate and the one that Scores more points "wins."

One who is so hardened in a position the is Contra the Truth must often be "depth-charged" so to speak- as Jesus did to the Pharisees ("you Brood of Vipers", "you white washed..." to also quote the Bible. So my Olive branch is extended to Kevin to indicate that was the purpose of the comments, and it may have opened true mutual searching for the Truth, without the Brusque retorts.

One more thing- Please note that I never indicated Kevin was dumb- quite the contrary- he appears to be bright, and knowledgeable. That is why exchanges with him can be frustrating and ultimately fruitless- because he is smart, and has a lot of facts, data and theories (that are true to an extent!) it seems to me that he is unable to be open to a broader set of issues, assumptions and data that are in a sense "above" the issues debated.

As an aside- this seems to be the root of a big divide among Catholics that support a libertarian model of economics, and pooh-pooh Magisterial teachings on Social and Economic Justice. They see economics as a free standing scientific discipline hermetically sealed from the Teachings of the Church, and therefore they can safely ignore the Church. Woods et al. When there are prior and in a sense "higher" issues that are PRIOR to economics- to wit: they are based on Choices of man- and therefore have a moral value-laden content prior to the economic issues. As I once read- the Libertarians are to social teachings of the Church what the "Pro-Choice" crowd is to the sexual teachings of the Church.

Hopefully I have made myself clear- and it was not merely a venting or flaming of Kevin. So in the true Spirit of Charity:

Kevin- as to the non-economic factors that are not part of a price, which within economics is the basis of information, There are the baser motives of all men- Power being the most prevalent in the actual economy- and this has been pointed out to you previously by others, The CEO pay issue is a good argument the Power determines pay not actual economic value- and please review the sound arguments AGAINST CEO pay and you will see that they usually bring in outside issues that are not taken into account on the Pro- CEO side (i.e. stacking of the Board, as one example). There is also greed, social acceptance, rivalry, expressions of sexuality, envy and sloth- that all go into actual economic decisions of the individual actors, and thus impact the aggregate Micro economic issues. This applies both to the rich and powerful, and those without college educations (which if memory serves- I may be incorrect- so forgive me in advance- - you have previously dismissed rather callously). There are also the higher non-economic motivations that go into economic decisions- Love, Beauty and Truth. I have read a Libertarian make great, sound logical arguments that I should be able to sell my parental rights to another if I so choose! And another indicate with equally sound economic rationales why I have no duty to the offspring at all! (Block) Now I would not lump your arguments with those, but I use it as a exemplar of a "self-contained" logical economic argument that is "rational", and therefore "good economics". But if one
steps outside of "PURE SCIENTIFIC ECONOMICS" most would agree that there is something VERY wrong with these conclusions.

Kevin- a lot of what you say is correct, but in a limited sense, with given assumptions. And that is why it is so deceptive- Near truth is so appealing that it often blinds to the Truth. If you can examine your underlying (often not acknowledged) assumptions, they will enrich your economic understanding- not hinder it. As stated- you seem to be bright- use that talent to really understand and engage the issues. You may still hold to your positions, (and therefore be wrong :)) but you will be the better for having examined the deeper assumptions into you economic assumptions.

Peace

Wilson

Kevin said...

I'll link once again to my revised essay, What is Economics?. I'll assume those reading this comment have already read and understood that post.

Let me first confess that I'm not sure what the central point is that you are trying to express about economics, particuarly concerning human motives. What's your point? Are you claiming that positive economics doesn't reach the correct factual conclusions about human behavior? Do you think its just not possible to examine human behavior in its material economic aspect alone? Are you just claiming that libertarian normative judgments are wrong?

You say, "I have read a Libertarian make great, sound logical arguments that I should be able to sell my parental rights to another if I so choose!" I don't get it: Clearly you disagreed with the conclusion of said argument. If the logic was valid, then you must have disagreed with the assumptions. So what were they? Also, I disagree with your characterization of this argument as an "exemplar of a "self-contained" logical economic argument that is "rational", and therefore "good economics"". If you mean positive economics, it is nothing of the sort, because it is impossible for positive economics to conclude that a certain thing ought to be legal or illegal. It can only try to predict the results of each. Obviously the Libertarian was either using moral value assumptions outside of positive economics (again, what were they?) or his argument was not nearly so sound as you thought it was. I suspect a little bit of both. You say, "But if one steps outside of "PURE SCIENTIFIC ECONOMICS" most would agree that there is something VERY wrong with these conclusions." Sure, but there is something equally wrong with those conclusion inside pure scientific economics, because that kind of economics can't ever say what ought to be.

Now, about CEO pay: Are you claiming that stockholders would be better off if CEOs were paid less? Would investing in companies that pay their CEOs very little be a good move, financially? What "power" does a CEO have that allows him to receive such a pay except the power in the company's desire to benefit from his management, even at so high a price? (And surely there are others willing to manage it for much less!) Is it morally wrong for stockholders and directors to desire to pay a CEO a lot of money in order to profit from his management of the capital? I only vaguely know what you mean by stacking the board. Maybe you could elaborate on that? Also what are the other "examples" you hinted at that I'm not taking into account?

Finally you say, "a lot of what you say is correct, but in a limited sense, with given assumptions." What assumptions, particularly what false assumptions, do you imagine I am using to reach my conclusions? Lets examine them! You aren't going to lead me out of darkness unless you get more specific!

Kevin said...

As I suspected... No more "Doctor" Wilson. LOL

Anonymous said...

Sorry "kevin". Wrong again. It is more a matter of marginal utility- I simply do not want to waste my time- Others, and I, have pointed to flaws in your arguments- things not taken into account in your world-view- repeatedly and substantively- but there is no real attempt on your part to understand- Only to dismiss- only to try to score "Debate" points- so why waste time? It has all been said before. And the addition of the "LOL" indicates no real intent on your part to engage- only to justify your position.

On to people who are interested in real dialogue!

Pax tecum

Dr Wilson

Kevin said...

Hey, whatever you need to tell yourself is fine with me, but don't expect me to believe your baloney. I'm STILL "Laughing out Loud" (seriously). The only way you're going to get the kind of "dialogue" you want is to buy a pet parrot. That way you won't ever be pressed for details or challenged on your ambiguities or apparent contradictions.

I'm still committed to exploring the distributist ideology in all its details, despite my disagreement with it. If you decide to contribute to the discussion, you're always welcome, but I'd appreciate it if you tone down the ad hominum attacks in the future. You've done no credit to your ideas so far.