Monday, April 23, 2012

The Value of the Free Market

Recently, during my jaunt through my usual internet activity, I encountered two quotes. "In a democracy, like in any open market, having everyone pursue their own self-interest is supposed to generate the best outcome for society." and "The free market is the only force in human history to uplift the poor, establish the middle class and create lasting prosperity."

Now, correct me if I'm wrong, but "free" and "open" markets are essentially the same. These statements aren't exactly contradictory, in fact they both blatantly mention the free/open market in extremely positive terms, but in my mind, they say two completely different things about the market.

The first quote, which is from a piece in the Washington Post, implies that in an open market, self-interest is the key to success. Apparently, this self interest on the market is supposed to create the best society. Now, I don't know about you, but in general, I'm wary of straight up self interest. It's a little like straight up vodka. It sure gets the job done, but don't expect to feel well in the morning. If it is true that the idea of open market is based on self interest, then no wonder it is only "supposed" to generate the beat outcome; no one can say it has done so. A market based on self interest is, I assume, also related to the idea of competition as the highest of all goals. I'm no economist, so I can't for sure say that competition does or does not create the best economic climate, but I can say with certainty that self interest in the market will lead to further vice in the market. If you are interested in only how an action will affect you (in the economic, market sense), then considerations such as whether it will destroy the earth, harm other humans or damn your immortal soul are not really on your mind. Self interest may aid in the accumulation of wealth and prosperity, but that is not the definition of "the best outcome for society." We have to remember that all our actions have consequences far beyond what we immediately see.

Imagine that you make toys. Toys have a pretty short shelf-life in general because the whole human race is somewhat attention-deficient, so you think to yourself, "Why make quality toys that last? They're just going to be done playing with them soon. They might as well throw them away." So you make cheap toys with cheap labor and produce a terrible product but everyone buys it because they need toys and yours are the most plentiful. Weeks later, they are back to buy more toys because the toys you sold them are no longer fun/usable/what have you. You make tons of money because of this constant flow of cash and the fact that you don't have to pay your laborers much money. Then, the landfills fill up with broken useless toys that you sold to people.

How is any of that good for society? I would say it wasn't. Now, I'm not saying the free market or some adaptation of it is exactly like that (though this situation seems to occur a lot in our current society), but I am saying that that is an example of self-interest, and it does not produce the best outcome for society. If you make quality toys (or any other product) then they will last longer and the people will be more willing to pay more because of this. You will have to hire skilled laborers to make these higher quality products and so you will have to pay them more. Does this sound like it will make you rich? Maybe not, but I suspect that an industry based on quality will do better than one based on fast, cheap, mass production. In any case, you have created a society where skilled labor is valued, the consumer is provided with a good product and there is less waste of materials, energy and labor. I would argue that this was a better society.

Now, this isn't to demean self-interest entirely. After all, I am willing to believe, as I said, that this practice would actually produce a more thriving industry. Thus, it would be self-interested to be other interested. In fact, the dichotomy between the two is one of the more harmful ideas that pervades our society. The idea of self-interest is not a bad one and thus the free market idea isn't an unjust one, but self interest in conjunction with other interest, in fact one might say common interest, will be less prone to injustice and may perhaps do more for society than the self serving idea of the free market as many see it today.

As to the second quote, it is from a rhetorically potent video which is only missing an image of Obama at the end to indicate what they think of the current administration (although I believe Biden figures prominently a couple times.) The man in the video says a lot of interesting things some more believable than others, but the quote I put at the top is what really struck me. I actually very much disagree with it.

For one thing, the free market is not the only force in human history to uplift the poor. Not by a long shot. Let me give you one example of another force which does this. The Catholic Church. I won't, for now, dispute that the free market does indeed uplift the poor, because I'm not knowledgeable enough about that aspect of it (and I'm not sure anyone else is either...see my third point.) However, to hold the free market up as the only great force that can save the poor from their poverty is just plain laughable. Another point that I'd like to at least mention is that not having a lot of money is not a bad thing. It might be considered poor by our rich nation, but to have a roof over your head and a steady supply of food and enjoyable leisure time is possible with what could be considered a very low income. The kind of poverty from which the poor need to be uplifted is something different. It is the wretched existence of those who are starving to death or who are without homes. How the market can save these people is hard to imagine. It takes people who are willing to take these people in and help them start a life which will involve the marketplace, not the market itself.

Secondly, the video states that the free market is the only force in human history to "establish the middle class." I'm not sure I quite understand the term "middle class" but it seems to me that is means people who aren't poor and who aren't rich. Or something. Unless it refers to a very specifically American phenomenon of Suburban Living. In any case, there have always been the Wealthy, the Poor, and then everyone else, so it's impossible to claim that it's the free market that established this. And in any case, the current "middle class" we have in America is smug, cause they've gotten a job and worked for a living and can be comfortable in their suburb, and envious, cause they don't have that third car or the bigger house in the suburb and a lake home in the country. American middle class is different from "working class," which is still looked down on by most of America. The manual laborers are probably poor because they couldn't afford or didn't try for a good education which could get them a salaried position at the corner law office. Higher education is the norm for the middle class because we have to always get that better paying job. We're always wishing we weren't middle class. Middle class, in other words, is a very unpleasant and vicious place, full of smug, dissatisfied, back-stabbing, white collar Americans who think they're really educated because they watch MSNBC or Fox News.

Ma'am, please.

And so when the man in the video says that the free market established the middle class, not only is it not quite true, but in the American sense, it's not even that good.

And now for my third point, which  referenced before. The man in the video claims that the free market creates lasting prosperity. This is probably the falsest of all the claims. The free market is certainly not the only force in the world working toward prosperity in all the senses of the word "prosperity." Certainly financial prosperity is the one that most closely concerns the free market, so that might be what he meant. I will act as if he did. Our world, our nation and even the majority of people in our nation are not prosperous, even financially. Yes, we have access to capital, we have access to goods, we can produce and sell and import and export and all these things, but the financial system we have set up isn't particularly good, and it certainly doesn't seem like it will last very long. Some may argue that that is because we don't actually have pure free market economies, and that may very well be the case, but if we don't have free market economies now, how can we know that they will create lasting prosperity? We have already discussed how the free market is based on self-interest, and so perhaps it would create prosperity in some of us, but history shows that even the most self interested of investors and capitalists fall prey to economic depressions and recessions. Since we don't know what Free Market Capitalism pure and simple looks like, we can't possible know for sure that it creates any sort of prosperity whatsoever and it certainly is impossible to say whether it is lasting.

These descriptions of the free or open market are not impressive. In fact, one of them is downright deceptive. I support neither vision of the free market, the one based on self interest nor the one which claims to be the economy of salvation. What's the answer? I'm not sure we know, but one where each member of society is considered a contributor and where the interests of others are seen as your own.

Is it possible? Maybe not, but perhaps we should still try to include these ideas in our plans and theories.

Tuesday, April 17, 2012

He get it right

My brother, that is.

I am not one to let Notre Dame pass on its failures. In fact, I am one of the most vocal people I know for true reform in an educational and religious sense. I am an avid critic of Notre Dame on almost every level, from its obsession with sports (to the point that they stopped walking to the stadium from the Basilica, which they used to do) to its Catholic intellectual integrity (some of the theology classes, which ought to teach us about God, are taught by non-Catholics or even anti-Catholics. I mean, if the University is trying to teach its students about God, shouldn't it do so from a Catholic perspective?)

For all its failings, it has the potential to be what no other school in the United States has. It could be the model for a faithful Catholic research university. Its establishment is already in many ways in the tradition of the Catholic Universities of the Medieval period. If those became the seats of Catholic intellectual inquiry, why not Notre Dame?

And the reason it still has the potential is, as my brother say, because Christ and His Mother are on its side. And who are we to abandon that which God has not abandoned?

Distinction and Division

At the risk of over-simplification, I would wager that the most common human activity is distinction. What I mean by that of course is that we as humans see two things and we say "This is one thing, that is another." We make distinctions often without thinking about it. We can distinguish between two objects based on their physical quality, their quantity, their origin, their purpose or their relation to us.

For example, my first batch of french toast today burned, and so I fried up another batch (I promise though I did eat the first one too.) I acted in this way based on distinctions I made. I said "Here are two separate batches, one is burnt, one is not yet burnt, thus one and only one has the potential to be unburnt. The assumption I will make is that the burnt will be less tasty than the unburnt. Thus, I will make the second batch in the hopes of it being tastier and I will not leave the kitchen without making it." In many ways, the batches of french toast were the same. They were made in the same pan, they were both made to be eaten, and they were both made by me for me. Yet, because of the fact that they would be different, thus distinct, I made the choice, a distinct unique choice, to cook the second batch.

Another, perhaps more serious example, is what I have to do today. In the Notre Dame community, we call it DARTing, though it's really no more than registering for classes. I have 4 classes that I'm required to take for my major and one open slot (because I'm not going to overload). Because I have a choice for this last class, I have to make distinctions. I have to distinguish between a class that would interest me and one that would not, between a professor who I respect and one that I don't, or one I've never even heard of. My current plan is to take "The Age of Charlemagne" taught by Thomas Noble, a class that would interest me and a professor I respect.

We make these distinctions in our mind and make choices based on the distinctions. From this, we get actions that effect our world and ourselves. Looking at these actions, we make distinctions again, we say that they are either good or bad, virtuous or vicious. In other words, throughout our lives, we are constantly making judgements and without making them, we can not do anything. I could not write this blog post if I had not first decided that I wanted to and that I should, what topic it should cover, and that I should use "this" and not "that" (a real choice I made earlier in this post.)

Thus, judgements, whether judgements of quality, quantity, origin, purpose, or relation, are a normal and necessary part of our lives. So when we say that we should not judge the actions of ourselves and our fellow humans, we are fooling ourselves into thinking that we can live without such judgements, that we can just say "What I have done, I have done. There is nothing you can say of it."

And yet, we make these judgements, oftentimes, not in order to distinguish between what is a good action or a bad action, but in order to divide humanity, whether individuals, families, communities or countries. When we say that one person acts well and another acts wickedly, our natural (but not in any sense necessary) response is to reject the wicked person and welcome the good person. When we say that one family is a loving environment and one is dysfunctional, we wish to avoid the dysfunctional. When we say that one community is charitable and another is not, we wish to live in the one which is charitable. Thus, we set up dichotomies between persons, families and communities that set them against each other.

Now, it is not in any way to true that all people are equal in every way. We all have equal dignity before God and are all deserving of rights that result from this dignity. However it would be an equivocation to assert that that equal dignity meant that all humans were equal in every way. For example, some humans are less physically strong, others are less mentally strong. Some are more imaginative than others. Some are architects, some gymnasts, some teachers, some football players. These people are all different and have different strengths. In that sense they are not equal.

This inequality has many implications which I may go into later, but what it does not imply is a moral distinction. An architect is no more moral than a bricklayer, a teacher no more moral than a scientist, a theologian no more moral than a coal-miner. In fact, intellectual understanding of morals does not necessarily create a more moral life. Not only that, but an intellectual understanding of life does not make a more useful or productive or happy life.

The greatest problem, then, is when these inequalities, which are distinctions, are made the basis for judgements of quality, or moral judgements. All of us do bad things, and the distinctions between these actions and good actions are as I said necessary for the survival of humanity. However, less physical strength does not mean you are more or less likely to do bad things. Intellectual prowess does not either.

Thus we get divisions among humans, not because we have to keep our children away from sociopaths, but because we somehow think that the Lawyer is more respectable than a Carpenter. We set up the white collar against the blue collar. We set up intellectual against manual labor. We confuse distinction for division, and we suffer for it.

That's all.

For now.

Wednesday, April 11, 2012

Ends and Means

After attending perhaps one of the coolest Masses ever followed by Exposition and Adoration, you might not think that the day could get better.

Well, it did, not that what follows is in any way better or more important than what went before.

I was walking through Trastevere with a fellow architecture student and we passed a bookshop that sold books in english. We did a double take and went in. The first book I picked up was "Ends and Means" by Aldous Huxley. I opened the book and the first page I opened to was Chapter X. Let me quote:

"Chapter X: Individual Work for Reform"

Let's just stop there. I read it and suddenly got really excited. This was a book after my own heart. Let me continue:

"We have seen that the only effective methods for carrying out large-scale social reforms are non-violent methods. Violence produces only the results of violence and the attempt to impose reforms by violent methods is therefore foredoomed to failure. The only cases in which violent methods succeed are those where initial violence is rapidly followed by compensatory acts of justice, humaneness, sympathetic understanding and the like. This being so, mere common sense demands that we shall begin with non-violence and not run the risk of stultifying the whole process of reform by using violence, even as an initial measure."

I realized after reading this that I agreed with what he said and that he said it with an eloquence which I admired. These are exactly my thoughts and I said "I wrote this book." My friend corrected me saying "No, he wrote the book just for you." And I believe it's true. Further proof:

"In communities ruled by hereditary monarchs it has sometime happened that an exceptionally enlightened king has tried to make reforms which, though intrinsically desirable, did not happen to be desired by the mass of his people. Akhnaton's is a case in point. Such efforts at reform made by rulers too far advances to be understood by their subjects are likely to meet with partial or complete failure.
In countries where rulers are chosen by popular vote there is no likelihood that startlingly novel and unacceptable reforms will be initiated by the central authority. In such countries the movement for reform must always start at the periphery and move toward the centre. Private individuals, either alone or in groups, must formulate the idea of reform and must popularize it among the masses. When it has become sufficiently popular, it can be incorporated into the legislation of the community."

He then goes on to talk about war and the militaristic mindset. I of course must read this book in its entirety, but I know I will enjoy it.

In any case, he seems to agree with C.S. Lewis that the most important political act is evangelization, or in other words, we must change the hearts of the people before we change the law.

How are we doing?

I don't often comment on American Politics...

...but when I do, I laugh.

I'm sure it has now come to the attention of my fellow Americans that they have once again succeeded in setting up the dichotomy that accompanies every election cycle. Disagreement, debate, and taking sides has always been part of the political decisions of the human race. There is always a dissenting voice to the voice of power. Throughout history, this has shown itself in the fights between tribes, fights between slave and master, fights between serf and lord, fights between people and their king. In these fights and disagreements we see a truly different viewpoint. Often the one side is coming from a position of power while the other is coming from a position of work and poverty.

America changed that. In America, hard work means starting at the bottom and working your way up. There is no sanctioned slavery that keeps a group of people poor (whether there is an unofficial is above my pay grade to discuss...for now). There is no "lords vs. serfs", no 'king vs. people." We all have equal voice.

And so when we come to elect politicians, it is assumed that we want someone who represents this idea. We want someone who is successful because that represents the American Spirit. We want someone who is neither king nor slave. We want the Middle Man. In fact, we worship the Middle Man.

The Middle Man is the one who is just grey enough not to set up a division with either the extremely wealthy or the extremely poor. Our good friend Obama is a moderately wealthy man who is able to associate with the wealthy because he graduated from Harvard Law and knows the ropes, so to speak. He is also a great friend to the poor, has set up all sorts of welfare programs and spends a lot of time with the poor. Ok, so maybe I'm getting my facts wrong. I don't know. I don't live in the US any more.

On the other hand, our good friend Romney is a Mormon bishop who is quite wealthy to the point of not being able to hide it at all. He also cares about the poor, setting up healthcare programs in his state and appealing to minority (?) groups like poor pro-life Christians.

Like I said, maybe I've got it all wrong, but these men apparently both really love the poor...and they are both really involved in the world of the wealthy. They are the perfect Middle Men. They are the perfect American Politician. We no longer have a wealthy class who supports the wealthy class candidate and a lower class supporting the rights of the lower classes. We have Middle Men who are supported by members of the wealthy class and Middle Men who are also supported by the lower classes. Generally these Middle Men are themselves in the wealthy classes.

Maybe it was just his facade, but at least Santorum didn't look like he graduated from the Ivy League. In any case, it doesn't matter because he's no longer in the race. It is the two Middle Men in the race, and when we have a choice between two middle men, who are we supposed to choose?

I guess the only thing we can do is choose our color and go with whichever grey most resembles that color. That's what it's come down to. If we have to choose between two Middle Men, the main difference is the party to which they belong. They both support the American Dream. The difference is how that is to be accomplished. And when you no longer disagree on what is good but rather how to accomplish it, you can only look at how each method works. And so you have to try them out. We have many examples of 4-8 years of each method and thy both work in some ways and not in others. Thus we have a never ending cycle of distrust. One Party can easily say "See, the other party's way didn't work."

The people may care about different goods, but in a political system that caters to the Middle Man and relativism, we can't assert one good above the other. Yet, we have parties that claim that they do assert one good above the other so as to get the support of the people.

But what is important? The survival of America. Why is the economy important? So that American and its system will continue. Thus it doesn't matter if we keep borrowing money to bolster said economy because it keeps the US project working. Why do we fight wars? To keep our ideas, the idea of America alive so that we are not destroyed by those that disagree. Why is the government allowed to spy on its citizens and detain them indefinitely? So that the System can stay in place. Why are the incredibly wealthy allowed to bolster up their wealth at the expense of their workers? Because they are the ones funding the system, the ones backing the politicians that keep this System in order.

We are a country obsessed with itself. A country obsessed with itself will eventually implode.

But as long as we continue to grey-wash our disagreements with Middle Men and relativism, we will not overcome them and the country will not survive. Thus all that we hope for will in fact not come to pass.

It's not working. If you care so much about results, know that it's not working.

Romney vs. Obama 2012?