Tuesday, January 22, 2013

Forget about Sex, Let's Idolize Money!

Mark Shea today posted today this interchange I had here a few weeks back ...

Kevin O’Brien writes:
On a recent blog post, I said, “The economy was made for man, not man for the economy.” Reader Manny replied,
“The economy is not made for man … If you find it flawed, then fix mankind.”
This has sparked a number of comments on Mark's post, some of which seem to say some rather odd things.  One commenter insists that "The Economy" is not a real thing.  It's just what men do.  In fact ...

The actual truth that’s getting lost here is that man didn’t make the economy. Man IS the economy. The “economy” is just an abstraction we’ve come up with to describe humans, and the collective choices they make with the resources they have. All attempts to fix the economy are therefore attempts to fix human behavior in some way.
But this odd nominalism  ignores some basic facts, the most basic of which is that the sphere of man's commercial activity ("The Economy") does not define man.  Man IS NOT the economy, no more than Man IS sport and leisure or Man IS the electoral college or Man IS the internet.  Like anything else that man does, our economic activity should serve to make men happier and ultimately to give glory to God.  But even if you ignore the latter end and just focus on the temporal end of economic activity, "fixing the economy" is not exactly tampering with human nature, in the sense this comment seems to imply.  Yes, fixing the economy means to some extent fixing the bad behavior of men, but that's my point.  We should alter our bad behavior to live together in a happier way; we do that with laws regulating everything else - and we do that even now with laws that regulate the economy.

Think of it this way

  • Slavery was once an integral part of "The Economy" in this nation.  Since freedom and human dignity are more important than economic activity, we Yankees fought a war to abolish slavery.  We "fixed the economy" by eliminating forced labor as one of its pillars.  And even though slaveholders lost a lot of money on the deal, this is an example of realizing that the economy was made for man, not man for the economy.

  • At one time, the courts in this country actively used to prosecute unfair competition; "trust busting" was aimed at fixing the injustice of monopolies.  This is another example of realizing that the economy was made for man, not man for the economy.

  • Regulations prohibiting unfair labor practices, sweatshops, and other laws regarding dangerous working conditions are an attempt to fix man's economic behavior so that the powerful do not take advantage of the weak.

  • Today, Big Business has merged with Big Government so that more and more wealth and power is being transferred from the poor and the middle class to the very rich.  Instead of throwing up our libertarian hands and sighing, "Well, you can't fix a free market, even when that market stops being free," or saying, "Capitalism is great, even Unreined Capitalism, despite what the Church says," we can say, "You know what?  The economy was made for man, not man for the economy.  We can fix this.  We can regulate how people behave with money, the same way we regulate how people behave with contracts, marriage, interstate commerce and many other things.  We can work to build a society the commercial and economic structure of which is not antithetical to man's happiness or human dignity, as slavery and monopolies and Big Business / Big Government are.  We need not cower in fear before something that doesn't exist because it's an abstraction or that can't be fixed because it's just there.  The Economy is no more taboo than roads and bridges, which are also products of man.  We put up street lights and speed limit signs because we're not in awe of streets and highways.  But we keep hearing we can't touch the economy, as it's a kind of god that no one understands, or an abstraction that can't be touched, or something that is integral to who we are like sex and we can't regulate sex can we?  Although of course we do and we must."

I must say that if we had a Fear of God equal to our Fear of the Economy, we'd be a much more seriously religious people.


Julian said...

"We need not cower in fear before something that doesn't exist because it's an abstraction or that can't be fixed because it's just there." Brilliant! I'm working on this topic with a few friends http://theontologicallapsometer.blogspot.com/2013/01/sane-economy.html and plan to repeat that line

TMLutas said...

The economy is an epiphenomenon of the activity of man. It is not man himself nor is it separate from man, a tool like a hammer. This isn't too different than your own explanation but you seem to be very naive about what happens when we regulate the economy. This process itself is an economic one and thus subject to all the bad behavior that all other human activity is prey to.

The regulation of the economy is the order of political agents to fine, imprison, and even kill if an economic actor violates the regulation. This regulation is bought and sold just like any other service. It has an amazing power though. For a quite modest expenditure, great effects can be achieved.

Furthermore, if you think that forced labor has been eliminated, you are simply in error. Forced labor in prison is actually legal in the US and has an economic effect. FPI in the US is a wholly owned government corporation that uses prison labor.

You claim that you stand against the merger of Big Business and Big Government. This is a sick joke.

How do you think they merge? They do so via the very regulations you say should be applied more liberally.

Capitalism, via its economic empowerment of individuals, enhances everyone. If we are good christians, Capitalism will take a christian turn. If we are evil, it will enhance that turn too.

Kevin O'Brien said...

TMLutas, you clearly missed my point about slavery, which is that when we want to fix the economy for the good of man, we can do it. The forced labor you point to is allowed as a punishment for crime. The fact that it still serves an economic function totally misses my point, which is that we can change our economy. We could outlaw forced labor at prison if we wanted to. This simple fact refutes the Idolaters who insist that nothing can be done with the economy, which they think runs by ineffable laws that are stronger than the laws of physics or the laws of nature.

This type of argumentation ("You say we abolished slavery? Oh, yeah, well there's forced labor in prison, you know!") is very common. If you say, "The sky is blue", and someone jumps up and says, "Oh, yeah, what about at night!!!" and you have to patiently explain that this is hardly a valid response to your observation ... well, welcome to the internet.

Now, TML, are you saying that all regulation of the economy is bad and that any regulation of the economy produces Big Government / Big Business? You misread me if you think I'm anti-government. I am not opposed to government. Government is a necessity. I am opposed to what we have now, the merger of government and private business interests into a ruling thing that is trying to master us.

I don't know TMLutas, dear readers, but I'm beginning to pick up on patterns in these internet discussions of the economy. There is a very powerful libertarian streak at work in defenders of Capitalism. There is a presumption that all regulation is bad, that all government is bad, and if you question a libertarian at any length, you will find that they don't even think there is such a thing as a common good. Anarchy is the secret delight of many of them.

I don't know if this accurately describes TMLutas, but I suspect that if we watch this combox, we will see played out the following errors of thinking ...

1. All regulation is wrong - either in principle or because it won't work.

2. Pointing out that our economy is broken and should be fixed is naive; only those who are not naive, the specialists, should be allowed to speak on the economy; economy is a holy field that has its own priesthood.

3. The economy can neither be understood nor changed. It is a god and all we can do is cower before it and serve it our children on a platter. (See the above post).

Kevin O'Brien said...

As to your point that if we are good Christians, we will have a good economy, I heartily agree.

If we were good Christians, we would have a good society in general.

But since we are fallen men, whether Christian or not, we need laws - laws against murder and rape and theft and so forth. Should we not have such laws on the principle that if we were good we wouldn't need them?

That's all I'm saying.

If we were not greedy, we would not need laws to limit the appropriation of the means of production, laws to limit the forming of monopolies, laws to protect the worker, laws against unfair trade, laws to prevent the continued merger of government and business. But we need these laws because we are all still sinners, and because if you don't regulate Capitalism, it becomes what the popes said it would become - a monolith that enslaves.

TMLutas said...

Since we're splitting hairs about slavery, what subset of slavery do you call real slavery? Is it just the happy coincidence of the forms outlawed by the 13th amendment? Or do you want to limit the discussion further? Please do share what real slavery is so we can determine if, within the bounds of your own definition, your statement is correct. I would caution you that you are unlikely to find a viable definition that is worth defending and is defensible. But feel free to try or, more wisely, withdraw the point.

You are an adept fashioner of straw men, I have to say. Not all regulation of the economy is bad. The driving of contract killers out of the above ground economy is not a bad thing, for instance. But in any circumstance where private economic regulation is practical, I would say that it is preferable to government regulation because private regulation doesn't include violence as a legitimate enforcement mechanism and using negotiation and contract is better than violence where possible.

Government is an institution that is made up by human beings, as fallible and as sinful as any in the private sector. Government regulation does not deserve the benefit of the doubt but should be judged by performance, as should any private solutions that compete with it on any particular question. In the overwhelming number of cases, private regulation provides better solutions over time and often enough better solutions right away. The 20th century saw the biggest practical experiment in the comparative efficaciousness of private and public regulation. Public regulation lost, fairly consistently.

The problem of greed in today's society is not one of damage to others by withholding the means of production. That simply does not fit the facts.

People who wish to trade gain for the security of being paid ahead of sales can do so, and are poorer because of it. People who are willing to wait until later in the sales process are compensated more for the risk they take, with the one who waits last, the capitalist, having the biggest risk of non-payment and the biggest gain when a sale actually happens and profit occurs. This is not unjust.

Our current problems toward monopolies unfortunately persists because the three legged stool of capital, rent, and labor is unbalanced and labor (which naturally is against monopolies) is in a frozen limbo with its greatest voice appropriated by unions locked into outmoded patterns and who do not serve the actual needs of workers. Were we to gain better institutions to serve the laboring class, I suspect that capitalism would improve and the tendency towards monopoly would be reduced if not entirely eliminated.

Capitalism is no monolith. By design, it is not a complete system for living, thus it cannot become totalitarian. Government, as has been well demonstrated in the 20th century, is rather more malign in its possibilities.

TMLutas said...
This comment has been removed by the author.
Kevin O'Brien said...

TML, thanks for your comments.

What you're overlooking in your stress on freedom of contract is that the free market, which you and I both admire, can not remain free in an economy of unregulated Capitalism. The ability of people to contract freely is limited when the means of production are controlled by fewer and fewer owners, which is inevitably the case with unregulated Capitalism.

And you are still missing my point about slavery. Even if we still have slavery here in the form of forced labor in prisons, and I admit that we do, we have eliminated slavery as a pillar of our economy, as it was in the South before emancipation. My point is not whether we still allow limited forms of slavery or not. My point is that we can change any part of our economy that we wish. We did it with racial slavery. We could do it with prison slavery as well, if we chose. My point is simply that we can and do regulate economic activity, and we can do so for the common good - as we did when we fought a war to end racial slavery.

My question to you - is there a common good and should there exist a government to protect it? Either in the field of economy or in any part of our society?

I ask you this because I honestly don't want to set you up as a straw man. I suspect your answer will fit the so-called straw man you say I've built, but I want you to answer, not my straw man.

Paul Stilwell said...

"One of the social rights and duties most under threat today is the right to work. The reason for this is that labour and the rightful recognition of workers’ juridical status are increasingly undervalued, since economic development is thought to depend principally on completely free markets. Labour is thus regarded as a variable dependent on economic and financial mechanisms." --Pope Benedict XVI


TMLutas said...

Kevin O'Brien - Please define the slavery you say that we've eliminated. I noticed you dodged this one.

The reality is that while it is greatly reduced, slavery is still practiced world-wide and does still happen in the US. I insist that we should not get back slapping happy about an evil that isn't quite dead yet. It endures precisely where there is an economic void where it can fill and enough money to be made to overcome the disincentive of law enforcement.

To actually get rid of slavery, you have to get rid of the economic niches where it can flourish. That will kill it. Regulation only suppresses it imperfectly. I am interested in slavery's death more than slavery's reduction.

My point on regulation is that you should not use the government to protect the common good when there are alternatives that protect the common good better. You pick the best tool for the job and do not privilege government as the tool of choice as you seem to be doing.

Your construction is chock full of the assumption that regulation is something done only by government action. Look around you and you will very likely see an electrical outlet whose standards are set by Underwriter's Laboratory, a private regulatory body. Virtually nobody has a bad thing to say about UL as they've done very good work for a very long time. The more things that are settled by institutions like UL and the less settled by institutions like USDA, the better.

I can't sue USDA for their botched nutritional guidelines that have played a role in the US' obesity epidemic. They just keep on putting out new versions as the evidence rolls in regarding the negative aspects of previous guidelines. If UL botches something, I have recourse in the courts.

Now for certain things, we haven't yet figured out how to get the average 0.5%-1.5% additional productivity growth that private solutions tend to have over government solutions to problems. For those, a government solution is a necessity. But every time we do it, we reduce economic growth over time and lengthen the time it will take us to get past our current sad economic state.

Paul Stilwell - We generally are having trouble with labor because we've economically liberated a huge mass of humanity over the past few decades and, inevitably, the increased supply is depressing prices. Fortunately we've ridden out the majority of the problem and I expect things to get better over the next decade or two if we don't regulate the world economy to death in the meantime.

Kevin O'Brien said...

TMLutas, I will not explain again what I mean when I use slavery as an example. I have explained it three times.

1. In the original post.
2. In my first response to you.
3. In my second response to you.

Don't accuse me of dodging the question when you keep doing exactly that. The point is not slavery, but the fact that we are able to change elements of our economy if we so choose - and that these changes, which are legislated and regulated, benefit the common good.

But since everything you write indicates that you believe the common good can be maintained without law, in a libertarian paradise, you are simply an ideologue.

And ideologues do not argue in good faith.

I will refrain from responding to you from here on out, but feel free to illustrate what I've said, and what I predicted commenters here would illustrate, in any future comments you might make.

Kevin O'Brien said...

Ladies and gentlemen, welcome to the internet.

Kevin O'Brien said...

Just so you're all clear on this ...

1. We can't change our economy by laws and regulations.

2. We can change our economy by laws and regulations, but only for the worse.

3. Slavery still exists but the popes are wrong about workers tending to become slaves; the reason they're becoming enslaved is because we've liberated them. The economy liberates everyone (as long as we leave it alone) except slaves, or people we've liberated.

Kevin O'Brien said...

There is no God but Mammon and Ayn Rand is his prophet.

Kevin O'Brien said...


TMLutas said...

Wow, going from straw men to slander (timestamp January 24, 2013 at 1:10 AM). Please consult your nearest confessor on this thread. You have a need.

I have explicitly stated that one certainly can regulate the economy via government and laid out the circumstances where I believe that one should do so. I have also laid out alternative forms of regulation that *sometimes* provide better results in terms of a better economy and less tyranny and when that alternative should be picked.

Ayn Rand would want me strung up by my thumbs, metaphorically speaking. I am not an objectivist, though I understand the philosophy of it well enough, at least as well as I understand Marx and Hitler whose life works I actively loathe.

The use case of slavery was not picked by me and is not, frankly my favorite, but it was introduced in the thread so I went along, suspecting what would happen.

As many government groupies do, our host sounds great on first glance but when you dig into the weeds and examine the details, things start to change. Thus our host's unwillingness to discuss debt bondage and how it's creeping back in to the US in the form of the charges of coyotes, snake heads, and sex traffickers, along with other forms of slavery coming in via the odd african and arab potentate who fly in with theirs.

Legal prohibition suppresses slavery. Global economic progress dries up the supply of desperate people who sell themselves into bondage or who don't have enough money to rescue their relatives kidnapped into the trade. The latter simply is more reliable and a better permanent solution and that bugs our host so much that he won't walk down the conversation path now that it's fairly obvious that this is where it will lead.

My actual solution on slavery is legal suppression *and* economic attention paid to dry up our excess labor supply as fast as possible so that slavery becomes uneconomic as well as illegal. The past bad acts of a variety of nations (including the US but certainly not limited to it) have created a huge overhang of labor supply. We're working our way through that. We need to work faster. A freer market would help.

I do not contradict popes, as a rule, unless I have actual words in front of me and, after very careful deliberation, I determine that it's not a matter of their core competence of faith and morals, something that I give broad deference on. Here I do not have access to the words, I don't even know the pope I'm supposed to be contradicting, and I view this accusation as a calumny, see first paragraph, this comment.

Money is stored value, the work of yourself and others in the past put into a form that can be redeemed in the future. The more you have, the more economic potential you have. With a well formed conscience, the effects can be large indeed.

My argument is that when one is choosing regulation, one should not be sentimental, but practical, and choose from the two major camps on offer, private regulation or public (government) regulation. Insist on finding out both camps' solution to any regulatory problem. Be aware that over time, private solutions tend to improve in their cost efficiency faster by a 0.5%-1.5% per year rate. It doesn't *always* happen that way but it happens often enough that it is a good rule of thumb. This assertion of a compounding efficiency advantage to private regulation is supposed to (by reference to the linked article in timestamp January 24, 2013 at 1:28 AM) mean that I feel that government is "always evil, the only evil, the ultimate evil". I reject that belief and have never believed it and cannot, for the life of me, figure out what I said to trigger such an intemperate, disproportionate, inaccurate comparison.

This belief that private regulation in the main provides a long term advantage in efficiency, according to our host, makes me an advocate of unregulated markets. This is bizarre to me.

Kevin O'Brien said...




a post of only three days ago, where I observe ... 'Why is it that Catholics in comboxes think it's OK to tell other Catholics to "go to confession" when they disagree with them? This is not the first time someone angry at me has said this.'

And apparently disagreement = slander not only for Christopher West supporters, but for libertarians as well.

Kevin O'Brien said...

The Guest just doesn't get it. The Guest should tell us what the hell "private regulation" is. The Guest should tell us how the host is afraid to discuss slavery, when his entire post is about how unregulated Capitalism, like Socialism, invariably enslaves.

The Guest is, at the very least, entertaining.

Kevin O'Brien said...

TMLutas, I'm sorry you're mad at me. I actually enjoy your comments, and I hope you comment on many more posts. I also hope you focus on what you're trying to say so that fools like me don't misinterpret you or slander you. And if I'm misunderstanding you, I suspect other readers are too. Glad you're not a Randian, but you're a libertarian - and what the hell is "private regulation"?

If you mean contract or social contract, fine - but you can't freely contract in an unfree market. See slavery.

Anyway, this is for you ... http://thwordinc.blogspot.com/2013/01/i-hate-it-when-im-right.html

Paul Stilwell said...

Yes. What is "private regulation"?

Oh. It's regulation by banks. I see.

So "private regulation" is plutocracy: rule by the rich.

So, now that is all cleared up. What about the gold standard?

Oh, yes, that's not absolute imposition by law of an unbending regulation to which everyone in the private sector must conform their productions and labours according to a value that is set by man (by rich people).

Ah yes, private regulation.

So, we have the option between regulation by government or by banks.

Right now we have regulation by banks who create the bulk of the money supply as debt.

So let's give them total power and call it "private regulation".

TMLutas said...

I can't speak to other comboxers but when I get slandered by a Catholic out of consideration that we share a faith and operate (more or less) by the same moral rules, it's just politeness to say you've gone wrong and sinned against me when I believe that you have. I've had it done to me as well and, once or twice on mature reflection, I realize that I've gone over the line and am actually grateful for the correction and promptly apologize and add it to the regular tally of my failings I keep for confession. More frequently, I've actually checked and learned something about my own faith in the process, generally about the gray areas that the Church takes care not to take actual positions on. And then of course, there are the nonsense cases which I just let slide because, well, the other ones outweigh the annoyance by so very, very much.

If you cease associating positions to me that I've explicitly denied holding you should find my upset with you passing quickly. Frankly, I would be surprised.

I find it hard to believe but if you are unfamiliar with private regulation, it's the difference between USDA certification (US government) and Kosher or Halal certification (private) of food. I already mentioned UL listing. I don't believe that there is a government equivalent of that. The code inspectors just incorporate the UL requirements into their own codes. They don't find a need to do any more on the government side. Was the UL example not clear the first time?

Inspections are a service like any other and whether that service should be done privately or by the government is an economic choice like any other. Private companies can be bribed, but so can government inspectors and you'd be surprised at how little campaign money it takes to generate a letter from a Congress member to a bureaucracy to back off from their good friends at Company X and how often such understandings are reached in government regulatory dealings.

TMLutas said...

Paul Stilwell - Private regulation means just that, regulation by a private group. In the case of meats, it might be regulation by imam (halal) or rabbi (kosher). In the case of UL, it's regulation by insurance company. In the financial sector, it's supposed to be regulation by independent ratings agency. Only problem is that in 1974 the US Congress eliminated the free market in ratings agencies and created a sort of near monopoly with just a few ratings agencies permitted to do the job.

In a market in private regulatory agencies, insiders who see fraud in a regulatory company can blow the whistle, open up a competing firm, and make a killing on the scandal. By stopping that from happening, Congress improved the odds for the sort of ratings fraud that caused our recent troubles.

You really need to read up on the subject of regulatory capture. We've already got powerful insiders perverting our government regulatory system. The difference is that if you have corrupt private regulators, you can open shop and compete. If you do that with government regulation, words like treason and insurrection pop up with alarming frequency and rapidity.

Take Citibank. They now have the label "too big to fail" slapped on them so they know that if they foul up, the government will backstop them. That's the result of government regulation. In a private regulatory system, the label they would bear would be "insufficiently insured" and that label would force them to shed units until their size was reduced to a safe level. The ability to extract tax dollars and give them to Citibank doesn't exist in a private regulatory system. You just can't do it. I think that private regulation would be better.

Paul Stilwell said...

"too big to fail"

So who do you think has the power in that relationship?

It's not the government.

You really think that when Kevin talks of government regulation he means the petty regulations you refer to?

It is now quite obvious, when referring to "private regulation" one is talking of a regulation that is entirely different in scale and kind than what is meant by government regulation. In fact, one is just referring to everyday practices which isn't regulation; it's just people doing stuff that people do.

What you mean by "government regulation" is merely government interference. Government interference in the everyday stuff that people do. That is not what Kevin means when he is referring to government regulation.

You clearly don't believe that there is something deeply wrong and evil at the heart of what we refer to as the economy.

Anyways, Congress really ought to claim its sovereign right to create and issue the money in the public interest, debt free, rather than borrow the bulk of the money supply at compounding interest from the private banks to whom the government is completely beholden, and in which relationship the banks have power over the government - for as it says in Proverbs: the borrower is servant to the lender.

TMLutas said...

Paul Stilwell - Hint, when one party in a relationship has the power to bankrupt you because they've made the legal code so complex you're guilty of violating the law every day, can put you in a cell, and can even kill you, that is the party that has the power.

I really need to withdraw from this thread because the sheer level of obtuseness has exceeded my capacity to be charitable. Congratulations, you've graduated to being a near occasion of sin and I need to tend to my own soul. A final parting bit of information from the wonderfully profane financial wizards at ZeroHedge:


The people at Egan-Jones downgraded US debt because, as is self-evident to anyone with eyes and a brain, we are in serious financial difficulty. That's private regulation. The public regulation response was to prosecute them. They settled. Egan-Jones now has to stay clear of rating US debt for the next 18 months. And that, in a nutshell, should tell you the difference between a wholly corrupt public regulation system and the parallel private system that is only partially corrupt (S&P, Moody's, and Fitch are toeing the govt's line).

Wake up!

Paul Stilwell said...

"...when one party in a relationship has the power to bankrupt you..."

You mean the "power" to let a bank bankrupt themselves because of the banks' criminal practices, which is what the government should have done - let them fail.

And note one thing: the government *did not* let them go bankrupt - nor will it.

That is because the banks have the power over the government. The government borrows from the banks. In fact, that is precisely what the government did when the government "bailed" them out - borrowed more money from them.

Paul Stilwell said...

"In truth, money is one of the simplest and most easily produced and managed of all the innumerable tools of trade used in modern trade and commerce. And this is true notwithstanding all the superficial wisdom that pours forth from our so-called academic economists, who constitute a group who know more that isn’t so, than any other group of “snootocrats” that our modern educational system has produced. As metaphysicians they are marvellous. Their outstanding achievement is to glorify the absurd and the impossible and to “snoot” hilariously at realities and the simple things that constitute the real foundations of economic progress. The academic economist, of course, is cheered on by the oligarchy of Money Power when he assumes that the understanding of money involves great achievement in the most complex and perplexing of all the realms of science.

"This is so because the bankers and financiers are fully aware that they could not co-operate without the sheltering and concealing power of the facade of mysticism that the academic economist throws over the entire monetary system. Were it not for the fact that most of the important monetary transactions are concealed from public gaze, the private money system would have been abolished long before now." --Gerry McGeer, The Conquest of Poverty, 1935

Nothing new under the sun.