A confluence of articles online this week highlights the need for fundamental economic change.
- William Galston’s “Visions of a Permanent Underclass,” a review of Tyler Cowen’s Average is Over in the Wall Street Journal, to which I alluded already once.
- Patrick J. Deneen’s Two Nations, Under Mammon, at The American Conservative, a sharply pointed review of Galson’s review in light of Galston’s personal role in building that permanent underclass.
- Thomas Storck’s The Profit Motive at Distributist Review. Storck makes me ashamed, as he reminds me of things I knew quite well 45 years ago but have suppressed.
So let’s take a survey.
1. Galston
Galston was the first out of my gate, though I had already noted Storck and “marked” his piece for revisiting and comment. Here’s a repeat of what I said about Galston:
[T]he members of Mr. Cowen’s new underclass would accept their lot without much complaint, certainly without revolting against it. Even though they had no prospects for escape, they would enjoy cheap food and cheap fun, and that would be enough to pacify them.
If this were Swiftian satire, Mr. Cowen could retire the Best Deadpan Award. But it isn’t. It’s a prediction coupled with the injunction that resistance is futile. There’s nothing we can do, says Mr. Cowen, to avert a future in which 10% to 15% of Americans enjoy fantastically wealthy and interesting lives while the rest slog along without hope of a better life, tranquilized by free Internet and canned beans.
Bread and circuses is not the policy of a republic, but rather of an empire entering moral senescence.(Wall Street Journal review of Tyler Cowen’s Average is Over.)
Whether by accident or design, Mr. Cowen’s book represents a fundamental challenge. To government-hating, market-worshiping conservatives, it poses a question: If this is the consequence of your creed, are you prepared to endorse it? To liberals and progressives: What are you going to do about it? And to all of us: Is this a country you would want to live in?
I know I wouldn’t.
I’ve seen the future—and it doesn’t work.
There’s a pay wall, and I hesitate to quote too much more. I’ll just say that Galston’s review was chilling, and that the second block quote seemed most apt.
2. Deneen
I don’t know that Deneen would disagree with “apt,” but he uses “a real howler” instead, since Galston helped make the mess:
We should be unsurprised, as Galston seems to be—shocked, shocked!—that this world comes ever more clearly into view. Indeed, as domestic policy advisor for President Clinton, Galston assisted in the expansion of this social and economic arrangement, participating in one of the most libertarian administrations the world has ever seen. According to Cowen, “technology” is displacing middle-class workers into either a shrinking class of “winners” or a growing class of “losers,” but assuredly, part of that “technology” is a regime of free-trade agreements and a host of other government incentives that have supported the infrastructure of globalization and worker replacement.
This inconvenient fact makes Galston’s closing paragraph a real howler: “Whether by accident or design, Mr. Cowen’s book represents a fundamental challenge. To government-hating, market-worshiping conservatives, it poses a question: If this is the consequence of your creed, are you prepared to endorse it? To liberals and progressives: What are you going to do about it? And to all of us: Is this a country you would want to live in?”
It is altogether risible that Galston, or anyone, thinks there is any significant difference between Republicans and Democrats in this regard. One need only look at the widening chasm of income inequality under Obama who—as a candidate running for his first presidential primary—dispatched Austan Goolsbee to Canada directly after pretending to be a populist for rust belt voters in the 2008 Michigan primary, to assure the Canadians that he would do nothing to touch NAFTA.
Deneen acknowledges the importance of Galston’s review (some of the importance no doubt derives from its publication in the Wall Street Journal, of all places). But there’s a reason why Deneen thinks Galston’s surprise is risisble: the prophet Kurt Vonnegut:
Aficionados of science fiction know that Kurt Vonnegut predicted this world already in 1952, with the publication of his first novel, Player Piano. There he describes with chilling accuracy this world ever-more coming into view—one divided between a meritocratic class with all the right degrees (even the secretaries will have Ph.D.s in a credential-inflated future) and the “Reeks-and-Wrecks,” who a visiting dignitary from the Middle East insists on calling “Takaru”—”slaves.”
Deneen doesn’t have much use for any of the builders of this new world, Right and, yes, Left:
The fact is that this project was readily discernible to the likes of Vonnegut in 1952 and Michael Young (author of The Rise of the Meritocracy) in 1958, and national and international elites have been busy constructing this world ever since, regardless of political label. The Right laments the decline of “family values” as it supports economic policies that support this arrangement (even as it has garnered votes from those displaced by an increasingly rapacious economy, attracted to its message of traditional values. Notably, many of these voters simply stayed home during the last election, rightly perceiving that neither of the major candidate was in their corner.). The Left laments the income gap, and proposes various forms of social welfare that will cushion the blow, all the while even more enthusiastically constructing the meritocratic society and populating government and leading thinkeries with Ivy League “winners.” These button-down hipsters increasingly accumulate in a select number of urban echo-chambers described most recently by Charles Murray, where they lament the rise of a growing underclass while sipping $7 lattes. These social policies are purportedly to be supported by a tax base of theoretical future citizens that are not being born, a logical outcome of an aggressively expanding and government-subsidized sexual revolution, contracepting, gay marriage, and abortion culture advanced by the very same Left.
(Emphasis added)
3. Storck
Perhaps Galston’s surprise is genuine. But if so, it’s because we’ve strayed far, very far, from Christian roots. This is the burden of Storck’s essay, for my money the most devastating of the lot.
[P]rofit is not a well-understood word or idea …
“[An entrepreneur] realizes that, after paying for labor of all sorts, returning interest to the capitalist and rent to the landowner, defraying the cost of repairs, and setting aside a fund to cover depreciation, [what] he has left for himself …constitutes the share called profits….”
… Why is, or why should there be, something left over for the businessman after all the expenses noted have been paid? What elements enter into or justify this? … Profit, as he means it, is “the return for his [the entrepreneur’s] labor of organization and direction, and for the risk that he underwent.”
… Profit comes from a twofold source. On the one hand, the business owner’s “labor of organization and direction,” on the other hand “the risk that he underwent.” Now the first of these is actually a wage or salary for the owner, something to which he is surely entitled. Whether he has others working for him or not, the entrepreneur is almost always performing some sort of work of management, and possibly much more, for which he, like all other workers, deserves remuneration. The second title to profits, the risk that the businessman undergoes, is more complicated, and is peculiarly associated with a capitalist economy.
Risk can be for two reasons. One is the ordinary risk that any businessman undergoes. The second is the special type or degree of risk associated with a new or better product or service. In a capitalist economy there is always considerable risk, since the failure rate among businesses is high. But in the case of a new product, there are extra expenses for making the public aware of it and its advantages, for example. It seems fitting that someone who does take a risk to provide something new—provided of course that we are talking about a truly useful product—is entitled to some reward for that. In the case of ordinary risk involved in the operation of a business under capitalist conditions, it seems less clear that a special reward is due simply for that, for this is common to all or most business owners …
When profit, however, instead of being understood as recompense for labor and (possibly) reward for risk, is understood merely as “the difference between total sales and total costs,” there is no suggestion as to why such a sum should exist. It simply happens, and, naturally, those who enjoy the use of such profits would like them to be as large as possible. In this view there is no moral linkage between profits and the work or the risk of the owner – no moral linkage to anything. Thus if owners can manage to obtain huge profits, that creates no moral problem, for profit (in this understanding) has and needs no moral justification. But when profit is specified … as compensation for labor and risk, then we do have the suggestion that such profits must bear some reasonable relation to that labor and risk. For example, if someone taking a risk to provide a needed good or service is entitled to a reward, then presumably the greater the risk, the greater ought to be the reward. And if part of the profits received is compensation for the labor of the proprietor, similarly this should be in proportion to the amount and type of labor. If we accept Msgr. Ryan’s understanding of what profits are, then the entrepreneur is not entitled to open-ended compensation, to whatever might happen to be “the difference between total sales and total costs,” but his profits must bear some sort of reasonable relation to his work and risk. If a businessman is becoming immensely rich, especially in a short period of time, then there is reason to suspect that something is amiss: either his customers are being charged too much or he is not paying just wages to his workers.
…
Capitalism encourages the idea that economic activity exists for personal enrichment, and the more enrichment, the better. Distributism encourages the Christian idea that economic activity exists to provide for mankind’s needs, including of course the producer’s need for a decent and reasonable living for himself and his family. The remuneration of the producer or merchant would be, as St. Thomas Aquinas put it, simply a payment for his labor (stipendium laboris), and such gain could licitly be sought for the support of his family or to give alms or to provide for the common welfare.[vi] This approach to wealth getting is deeply rooted in the teachings of the Church, both in Holy Scripture and the papal magisterium. In his first epistle to Timothy, St. Paul wrote:
“If we have food and clothing, with these we shall be content.
But those who desire to be rich fall in temptation, into a snare, into many senseless and hurtful desires that plunge men into ruin and destruction. For the love of money is the root of all evils; it is through this craving that some have wandered away from the faith and pierced their hearts with many pangs. (I Tim. 6:8-10)”
…
The conclusion:
One of the most essential, yet apparently most difficult of economic lessons for modern man to learn, or rather relearn, is that economic goods, including money, the universal surrogate for real goods, exist to serve and support human life in its fullness. Although they are necessary, they are not ends in themselves. There can come a time when a person has enough of such goods, and if he continues to seek more for no sufficient reason, he is in fact hurting his own spiritual life and compromising his soul. Our society looks with favor on great riches, and CEOs who earn in one year more than they could reasonably spend in a lifetime, instead of being ostracized as anti-social criminals or pitied as contemptible fools, are envied and looked upon as successful winners in the capitalist game.
The fact that this is so, the fact that the seeking and gaining of immense wealth is a socially acceptable pursuit, points to the fact that the moral standards of our society are not based on those of Jesus Christ. Capitalism, rather, has poisoned that moral sense ….
(Emphasis added)
45 years ago, capitalism’s appeal to avarice bothered me a lot, and struck me as a flaw from which no good could flow. People tried mightily to put some Christian lipstick on that pig, but I still saw the pig clearly.
Until, that is, I just didn’t think about it any more. Sigh. Mea culpa, mea culpa, mea maxima culpa! The craven things we did to avoid being Ayn Randed, nearly branded a communist cause I’m left-handed!
Let’s put aside for a moment that the game is rigged, and that the key to winning is more in knowing how it’s rigged than in producing good goods.
Combine the appeal to avarice with the reality that these supposedly big “risk takers” invariably have elected an LLC or Corporate form precisely to limit the risk while preserving the upside if they win, and isn’t it clear that the economy is deeply corrupt, rewarding some winners insanely out of proportion to the risk they really took – just because big “profit” is sometimes a fact and someone(s) gets it?
I excised a lot of the Christian content from the Storck article, including many attributions to a Msgr. Ryan. But Distributism is rooted (at least in its modern advocacy in the capitalist west) in Roman Catholic social teaching back at least in the 19th century. I think, though, that it’s not utopian. It doesn’t require that all men be saints.
I don’t think anybody’s promising utopia if we replace Capitalism with Distributism, and I try not to fancy that’s what will come. But Capitalism seems to have only one answer, delivered (I fancy) in Al Gore’s hectoring tone: “more.”
Every one of the popular modern phases and ideals is a dodge in order to shirk the problem of what is good. We are fond of talking about “liberty;” that, as we talk of it, is a dodge to avoid discussing what is good. We are fond of talking about “progress;” that is a dodge to avoid talking about what is good . . . The modern man says, “Let us leave all these arbitrary standards and embrace liberty.” This is, logically rendered, “Let us not decide what is good, but let it be considered good not to decide it.” He says “Away with your old moral formulae; I am for progress.” This, logically stated, means “Let us not settle what is good; but let us settle whether we are getting more of it.”
(G.K. Chesterton) Could we, pretty please with sugar on it, consider an economic system with a clue about what’s actually good?
Tipsy Teetotaler ن 