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Archive for the ‘Distributism’ Category

In this video clip, Michael Sandel claims that in the last three decades we’ve gone from being a market economy to a market society. Everything is for sale. He says that his book, ‘What Money Can’t Buy’, is not suggesting that we abandon capitalism – which (he suggests) works well for organising the production of goods and services, but that we debate the limits of the market – where do markets serve the public good, and where should other values prevail?

H/T to Michael Cook on Mercator, who outlines the two flaws Sandel sees in a market society:

The first is that it justifies inequality. Why should more affluent people get the best medical care, live in the safest neighbourhoods, or have the most political influence? He discusses this problem by examining the morality of queues. For instance, New York City puts on free outdoor Shakespeare performances in Central Park in the summertime. Demand is intense and the queues are long. Some people pay line standers over $100 to stand in the queues so that they don’t have to wait. In Washington lobbyists use the same system for congressional committee hearings. Time for money: isn’t this fair?

Not necessarily, says Sandel. The moral justification for markets is that they distribute goods efficiently to the people who want them most. But this isn’t always the case. Willingness to pay for a ticket may not indicate that the purchaser values the good more highly. In fact, a wealthy queue-jumper may not value Shakespeare nearly as much as people who wait for hours.

One of the great defects of a “market society” is that the affluent and the poor live in isolated silos. This is not good for democracy, says Sandel. A democratic society can only flourish when all citizens take responsibility for the common good. But unless people of different backgrounds mix and negotiate their differences, how can this happen?

Second, commercialisation can corrupt goods by treating them inappropriately. We all accept some limits: selling votes or trafficking babies is universally condemned. But the very fact that a price is set on a transaction changes people’s attitude towards it. Sometimes it demeans them.

He offers an interesting illustration. Switzerland needed a site to store radioactive waste. Economists studied the attitudes of residents of one small town to a proposed waste dump. A slim majority said they would support it, presumably out of a sense of civic duty. But when they were offered compensation for the site, support halved. “The intrusion of market norms crowded out their sense of civic duty,” observes Sandel. “Altruism, generosity, solidarity and civic spirit are not like commodities that are depleted with use. They are more like muscles that develop and grow stronger with exercise. One of the defects of a market-driven society is that it lets these virtues languish.”

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MercatorNet led me to this interesting little essay on the Keynesian theory that the future would bring an economy where most people would need to work only four hours a day:

It was exactly this prospect that John Maynard Keynes conjured up in a little essay published in 1930 called “Economic Possibilities for Our Grandchildren.” Its thesis was simple. As technological progress made possible an increase in the output of goods per hour worked, people would have to work less and less to satisfy their needs, until in the end they would have to work hardly at all. Then, Keynes wrote, “for the first time since his creation man will be faced with his real, his permanent problem—how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won for him, to live wisely and agreeably and well.” He thought this condition might be reached in about 100 years—that is, by 2030.

In the article, the writers look at the faults of capitalism – and a possible post-capitalist economy – through the lens of Keynes’ essay. They say:

Let us state firmly that we are not in favor of idleness. What we wish to see more of is leisure, a category that, properly understood, is so far from coinciding with idleness that it approaches its polar opposite. Leisure, in the true, now almost forgotten sense of the word, is activity without extrinsic end, “purposiveness without purpose,” as Kant put it. The sculptor engrossed in cutting marble, the teacher intent on imparting a difficult idea, the musician struggling with a score, a scientist exploring the mysteries of space and time—such people have no other aim than to do well what they are doing. They may receive an income for their efforts, but that income is not what motivates them. They are engaged in leisure, not toil.

This is an idealization, of course. In the real world, extrinsic rewards, including financial rewards, are never entirely out of mind. Still, insofar as action proceeds not from necessity but from inclination, insofar as it is spontaneous, not servile and mechanical, toil is at an end and leisure has begun. This—not idleness—is our ideal. It is only our culture’s poverty of imagination that leads it to believe that all creativity and innovation—as opposed to that specific kind directed to improving economic processes—needs to be stimulated by money.

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I’ve just been listening to Kim Hill interview Chandran Nair about his book Consumptionomics. He has a website under the same title, with resources and discussions, where I found this article.

The extreme form of capitalism which has permeated the world, particularly in the last 30-40 years, is in deep trouble and we are in denial.

It is important to understand that fundamental principles of capitalism – that human beings are rational and markets behave rationally, and that markets will assign prices – are flawed. It is also important to understand the roots of modern capitalism.

You could argue that slavery was the first attempt to under-price resources. When slavery came to an end there was colonisation, which was again an attempt by the capitalist model to use resources cheaply. With the end of colonies, we had the globalisation argument of economic growth and then the globalisation of finance.

When I speak about this in Europe, they say there has been 30 years of over-leverage, but I say they should multiply that by 10 and look at 300 years of essentially exploited growth.

What we need to recognise now is that the world is a very different place from what it was 100 years ago when we had one billion people. With a current population approaching seven billion, things will have to change.

A fundamental issue that the world will have to recognise, and which Western capitalism has conveniently ignored, is that the goods and services which companies and economies seem to thrive on are based on under-pricing resources and externalising costs.

That game is over and we need a fundamental restructuring – essentially about how people will live, and we need to move beyond simple notions about growth to more sophisticated, nuanced discussions about human progress.

That is not the same as suggesting that economic growth will be able to deliver i-toys and cars to everyone. This is not possible and that is where capitalism has essentially hit a wall and a very different conversation needs to take place.

The extreme form of capitalism which has permeated the world, particularly in the last 30-40 years, is in deep trouble and we are in denial.

It is important to understand that fundamental principles of capitalism – that human beings are rational and markets behave rationally, and that markets will assign prices – are flawed. It is also important to understand the roots of modern capitalism.

You could argue that slavery was the first attempt to under-price resources. When slavery came to an end there was colonisation, which was again an attempt by the capitalist model to use resources cheaply. With the end of colonies, we had the globalisation argument of economic growth and then the globalisation of finance.

When I speak about this in Europe, they say there has been 30 years of over-leverage, but I say they should multiply that by 10 and look at 300 years of essentially exploited growth.

What we need to recognise now is that the world is a very different place from what it was 100 years ago when we had one billion people. With a current population approaching seven billion, things will have to change.

A fundamental issue that the world will have to recognise, and which Western capitalism has conveniently ignored, is that the goods and services which companies and economies seem to thrive on are based on under-pricing resources and externalising costs.

That game is over and we need a fundamental restructuring – essentially about how people will live, and we need to move beyond simple notions about growth to more sophisticated, nuanced discussions about human progress.

That is not the same as suggesting that economic growth will be able to deliver i-toys and cars to everyone. This is not possible and that is where capitalism has essentially hit a wall and a very different conversation needs to take place.

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This quote from one of the blogs I follow for my work seems pertinent to our discussion on poverty and population:

In her remarkable new book about life in a Mumbai slum, Katherine Boo, a New Yorker staffer, concludes that the world’s unequal societies don’t explode into violent insurrection because poor people pick on other poor people, not the rich. Just as the wealth flowing into India has yet to trickle down to its very poorest (though it has already lifted hundreds of millions out of poverty), the troubles of the poor leave the better off unaffected. Hundreds of Muslims died in riots in 2002 because poor Hindus expressed their frustrations at day-to-day life against equally poor Muslims. In 1992, when similar riots spread across India, it was the poorest towns and neighbourhoods that became war zones. The nice bits of town remained relatively peaceful.

The rich prey on the poor. Not every single individual rich person, of course; but many of them, and the system as a whole. To increase their personal wealth, some people, some companies – and some countries – prey on those who are poor.  But more than this, the poor prey on the poor. For example, the US Bureau of Justice has released statistics that show those at the bottom end of the household income scale are three times more likely to be burgled than those at the top end – those who have the least to lose are most likely to lose it. They’re also four to five times more likely to be assaulted. The same holds true from Mumbai to Durban to Sydney to Hong Kong. The poor prey on the poor (possibly because it saves the cost of a bus fare).

Of course, the rich are foolish if they think that the troubles of the poor will never affect them.

In 1959, Morris West wrote a book called ‘Children of the Sun’ about poverty in Naples. He predicted that, if the rich did not heed the dire state of the poor, they would need armed guards to accompany their children to school, and would in effect end up living in gilded prisons, terrified of their own countrymen. He was ignored.

Witness what has happened in the last forty years in Italy: kidnappings, murders, gang wars… not just of the criminal classes as is usually the case at the moment in New Zealand, but of those whose lives of privilege made them targets of envy.

Social justice for all is not just a ‘nice’ thing to strive for; not just a piece of Catholic rhetoric (and suspect liberal Catholic rhetoric at that). Social justice is not just obeying the Gospel command to ‘love one another as I have loved you’ – though we haven’t obeyed that command without social justice. Social justice is enlightened self-interest; by helping others to live in dignity, we help ourselves.

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Here’s something for Chris and Jerry to get their teeth into – an article by Sean Dailey on the latest pronouncement from the Pontifical Council on Justice and Peace. If for nothing else, I liked it for one of the best subheadings I’ve read all year: ‘Whoops! Man is fallen. Who knew?’ Dailey manages to take a swipe at the Pontifical Council, the Vatican bank, the US Government, and the United Nations, as the following excerpts show:

While “Towards Reforming” blames the financial crisis on too-easy credit and too much lending, it makes no mention of usury, and the omission may be linked to the embarrassing practices of the Vatican bank. And despite all the talk about easy credit, lending, and international trade, the Note makes no mention of ruinous deficit spending by governments…

…If the Pontifical Council cares about justice, how can it fail to excoriate Congress for shackling the poor to the usurer’s chain, all in the name of a “right” to become a homeowner? The Catechism of the Catholic Church identifies shelter as an “essential need,” and private property ownership is a sacred right. But no man should be oppressed by usury, so that he is unable to acquire productive property and is forced to live beyond his means, going into debt beyond his ability to pay…

…The United Nations? You mean, the same United Nations that put Saudi Arabia on its human rights commission? The same United Nations whose “diversity of tasks” includes pushing abortion and contraception in every developing nation on earth? And speaking of global institutions, again, while “Towards Reforming” rightly condemns the growing disparity between the world’s rich and poor, this disparity has certainly been aided and abetted by such existing global institutions as the UN, the International Monetary Fund, the World Trade Organization, GATT, NAFTA, and so on…

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Who is my neighbour?

There’s an article in the Washington Post on distributism – and a counselor of David Cameron who is pushing it:

“What we are creating in our society is a new model of serfdom,” Blond declared Friday (Oct. 14) in a lecture at New York University. “The rhetoric of free markets has not produced free markets; it has produced closed markets,” and the nation’s “social capital” is declining, leaving behind isolated individuals and fractured families who must depend on Washington for support.

With a flurry of charts, Blond graphically demonstrated the breakdown of both social norms and the family unit — and the growth of government to address those ills — as well as the dominance of corporations and the rich in the current economy.

It’s a result of an “oscillation between extreme collectivism and extreme individualism,” Blond argued. Both are manifestations of the same impulse: a concentration of power first in the state and then in the markets. And both those liberal and conservative “orthodoxies” have led to the same society-destroying outcome.

Or, as he put it more bluntly, libertarianism on both the left and the right “produced an economy where people thought you could screw each other and everybody would get rich.”

“Occupy Wall Street and the Tea Party are essentially different expressions of the same phenomenon,” Blond said. Both are angry at the concentration of power, but both are on rocky ground when they demand salvation from either the gods of the market or government.

Distributism, Blond argues, calls for going smaller and more local in search of solutions (music to the ears of classic conservatives) while leaving the central government to build the infrastructure and guarantee basics like education and health care (ideas that would warm any bleeding heart).

Little wonder that Blond has adopted the moniker of a “Red Tory,” or what Americans might call the “Red Right,” or perhaps “Tea Party Socialism.”

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Growing - or buying and eating - heritage crops helps retain genetic diversity as insurance against future environmental challenges.

From the article that led me to the Onion spoof I posted yesterday, a more serious look at how to bring about change:

How could distributism come about as an economic system?John Searle, philosophy professor at UC Berkeley since 1959, has witnessed a fair number of protests. I’m going to ineloquently paraphrase him on how you create your own social institutions:

“You just do it. If you want to start a new social institution you and enough other people just start living it, as though the old institution were no longer there, and your new institution is just how things are.”

In other words, if you don’t like oligarchic capitalism with its exploitative banks and other practices, just set up new, or support already-existing alternative social institutions and go with them. Divest from the old banks. Join a credit union.  Divest from the old business structures everywhere. Support or start your own small business. Anything you reject on moral grounds, really reject it!  To get it to work, all you need are enough people to accept the new reality.  (And a government willing to give you a fair playing-field… and that is another issue…)

Now this is easier for some things and harder for others. So start small: you can shop at the local small store or cooperative store. You can move your money to a credit union. You can support local agriculture.

These are tiny steps, but taken together they can change the economy. You may object that it costs more to shop at a small local store than the local big-box store. And you may be right and you may not be able to afford it.  Just do what you can.

The financial system which we are a part of is only a reality if we all choose to agree that it is. We can choose otherwise.

 

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H/T to Mark Shea, who calls this ‘the pitiless voice of unfettered pagan capitalism in a post-Christian culture that no longer feels an obligation to the common good’.

An article in the Wall Street Journal on 10 people who got richer in the 1930s concludes: ‘So what can the list tell us about how to make a fortune in today’s Great Recession? It’s best to be a celebrity, thief, game-maker, bottom-feeder or inside-trader.’

“Choose you this day whom you will serve… but as for me and my house, we will serve the Lord.”

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Dr Michael-Burkhard Piorkowsky, Professor for Household and Consumption Economics at the University of Bonn, is one of a number of social scientists who thinks society should recognise the economic value of households, and particularly of unpaid care giving. He told MercatorNet:

Private households are the basic socio-economic units of the economy and society: Firstly, the private household is the most successful institution for providing personal goods which are strongly related to individual needs and small group life, at least cost and in the most satisfying way. The alternative — that is, total provision by institutional households such as like boarding schools, boarding houses, and old people’s homes — is not what people generally want.

Second, the most important function of family households is to bring up children and maintain the latent pattern of society, which includes informal rules, like how to behave in relationships or at the table. In this way the family household produces human capital, starting from very basic and necessary knowledge and competencies. Capital is, after all, only human knowledge impressed upon the material world. The problem of transmission and expansion of knowledge is the crucial problem of any society.

Third, caring for the elderly is mostly done within enlarged family households or in close proximity with support by adult children. Institutional old people’s homes are very cost intensive and not desired by most of the elderly.

His working paper, The competences of housework, is available (with others) on the Home Renaissance Foundation website.

In New Zealand, the value of unpaid work has been estimated at $40 billion per year, or 39% of GDP (Statistics NZ figures). About a quarter of this work is caregiving of some kind – so around $10 billion per year.

In principle – and in defiance of the rhetoric of the childfree – I think a good case can be made for paying people who care for relatives.  It raises a few issues, though: affordability and accountability for performance are two that come immediately to mind.

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…In a time such as this, when we have been seriously and most cruelly hurt by those who hate us, and when we must consider ourselves to be gravely threatened by those same people, it is hard to speak of the ways of peace and to remember that Christ enjoined us to love our enemies, but this is no less necessary for being difficult.

Even now we dare not forget that since the attack of Pearl Harbor —to which the present attack has been often and not usefully compared—we humans have suffered an almost uninterrupted sequence of wars, none of which has brought peace or made us more peaceable.

The aim and result of war necessarily is not peace but victory, and any victory won by violence necessarily justifies the violence that won it and leads to further violence. If we are serious about innovation, must we not conclude that we need something new to replace our perpetual “war to end war?”

What leads to peace is not violence but peaceableness, which is not passivity, but an alert, informed, practiced, and active state of being. We should recognize that while we have extravagantly subsidized the means of war, we have almost totally neglected the ways of peaceableness. We have, for example, several national military academies, but not one peace academy. We have ignored the teachings and the examples of Christ, Gandhi, Martin Luther King Jr., and other peaceable leaders. And here we have an inescapable duty to notice also that war is profitable, whereas the means of peaceableness, being cheap or free, make no money.

The key to peaceableness is continuous practice. It is wrong to suppose that we can exploit and impoverish the poorer countries, while arming them and instructing them in the newest means of war, and then reasonably expect them to be peaceable.

We must not again allow public emotion or the public media to caricature our enemies. If our enemies are now to be some nations of Islam, then we should undertake to know those enemies. Our schools should begin to teach the histories, cultures, arts, and language of the Islamic nations. And our leaders should have the humility and the wisdom to ask the reasons some of those people have for hating us.

Starting with the economies of food and farming, we should promote at home, and encourage abroad, the ideal of local self-sufficiency. We should recognize that this is the surest, the safest, and the cheapest way for the world to live. We should not countenance the loss or destruction of any local capacity to produce necessary goods.

We should reconsider and renew and extend our efforts to protect the natural foundations of the human economy: soil, water, and air. We should protect every intact ecosystem and watershed that we have left, and begin restoration of those that have been damaged.

The complexity of our present trouble suggests as never before that we need to change our present concept of education. Education is not properly an industry, and its proper use is not to serve industries, either by job-training or by industry-subsidized research. Its proper use is to enable citizens to live lives that are economically, politically, socially, and culturally responsible. This cannot be done by gathering or “accessing” what we now call “information”—which is to say facts without context and therefore without priority. A proper education enables young people to put their lives in order, which means knowing what things are more important than other things; it means putting first things first.

The first thing we must begin to teach our children—and learn ourselves—is that we cannot spend and consume endlessly. We have got to learn to save and conserve. We do need a “new economy,” but one that is founded on thrift and care, on saving and conserving, not on excess and waste. An economy based on waste is inherently and hopelessly violent, and war is its inevitable by-product. We need a peaceable economy.

Wendell Berry, on America after September 11

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