Category: Education

Economic Stork Theory

I recently finished reading John Mêdaille’s Toward a Truly Free Market, and have been transcribing some notes from it. It was both a helpful review of economics (in which my formal education is minimal, much as I enjoyed it) and a fairly powerful brief for Distributism as a “Third Way” economics. A conservative temperament doesn’t rush into things, so I’m taking it slow, but I like Distributism more and more.

The family is in some ways at the center of Distributist thought — unlike standard-issue modern economics:

If economics requires fully socialized participants, and if economics is about social provisioning, then the question of the family cannot be divorced from economic questions. For economic actors, producers, and consumers are “produced” and socialized within the confines of the family; without the family there will be  no next generation, and hence no future, for the economists to worry about. Therefore, it is the family that is the basic economic unit as well as the basic social unit. Modern economics tends to ignore the role of the family completely to focus on the individual. However, the individual, by himself, is sterile and not a self-sustaining entity. Neoclassical economics thus has no way to explain how new workers come into the economy, and hence it has no way to explain growth. John Mueller has characterized these shortcomings in economics as “The Economic Stork Theory.” In the stork theory, workers arrive in the economy fully grown, fully trained, and fully socialized. These storks born workers are a “given”; that is, there is no way to explain the growth in workers or their level of training and socialization, and hence little reason to support them with political or fiscal policies

…

It is an oddity of modern economics that it depends on treating the worker as just another commodity (labor) for purposes of pricing that labor, but treats the production cost of that “commodity” as something beyond the price system. If we take any other commodity, say a bar of pig iron, it is assumed that the price must cover the cost of production, maintenance,  and depreciation, or the product will be withdrawn from the market. But in regards to labor, this assumption is never examined. For labor has its own “production cost” (the family) and its own “maintenance” cost (subsistence and healthcare) and its own “depreciation” costs (sickness and old age). Labor cannot simply be withdrawn from the market when these requirements are not met. Therefore, labor – and the family – does not even gain the dignity of the bar of pig iron in modern economic theory.

(Pages 39-41)

In order to accomplish the material provisioning of society, the economy must provide for the material provision of the family, because the family is the basis of both the social and economic orders; it is the reason for having an economy and the indispensable condition of an economy.

(Page 43)

However, we need to note that that this [supply and demand] model applies only to commodities, that is, reproducible, elastic objects and services that are made mainly to be exchanged in the marketplace.

Obviously, many things do not fall under the category of a commodity in that sense. The supply  of rare wines and fine paintings is not affected by the price.  Even when a Monet fetches $30 million, Mr. Monet will not supply the market with any new pictures. Now the importance of Monet’s to the market is not very great, and we can ignore the impact, no matter how high the price. But there are three things of great importance to the market, which also have no equilibrium point; these things are money, nature, and man. Their price and quantity are not regulated by supply and demand, and they are not “manufactured” for the market …

(Page 72)

In chapter 4, we introduced John Mueller’s economic stork theory (EST), which demonstrated that economists have no way to account for arrival of workers in the economy. Even as they “commodify” the workers, economists have no way to account for the “production” of this “commodity”; the worker just  mysteriously “appears” in the economy. Economists are willing to talk about the production of other “commodities,” such as pigs or pig iron. They know that the price of these commodities must cover the cost of production, maintenance and depreciation, or the commodity will simply disappear from the market. When it comes to labor, however, they are reluctant to concede that this too is “produced” and has production, maintenance and depreciation costs. In other words, they can modify labor, and then refused to speak of it as they would any other commodity. Hence, even under its own terms, the neoclassical theory is incomplete; it cannot account for this rather basic “commodity” per se, but must accept its creation out of thin air.

Mueller’s economic stork theory has a rather curious corollary. Under the EST, The only useful work done in the economy is work done for wages or other economic rewards, and hence there are only two kinds of economic activity, work and leisure. Thus, there are only two kinds of individuals in this theory, what I call Partially Useful Individuals (PUIs) and  Totally Useless Individuals (TUIs). The PUIs are partially useful because they spend some of their time at “work” producing things in the exchange economy. The TUIs, However, don’t “work” at all. Rather, some of the TUIs,  otherwise known as “mothers,” spend their time in such leisure activities is taking care of household pets, some of these pets are called “cats” or “dogs,” and others are called “children,” another form of TUIs.

(Page 98)

Mêdaille, an economist, sticks fairly closely to his economic points. I, a curmudgeon (slightly younger than Mêdaille, actually), don’t need to. If Mêdaille is right, I don’t see how this standard market theory can engender enthusiastic support from any serious Christian believer to whom family also is central. (There are multiple ways in which our economy disrupts family. This only scratches the surface.)

In their appreciation of the importance of the family to children (future “labor” to economists, “human resources” to personnel departments), the French have shown themselves to be far more sophisticated than increasing numbers in the U.S. and than standard-issue “capitalist” economic theories.

The French! God works in mysterious ways His wonders to perform!

* * * * *

Some succinct standing advice on recurring themes.

Tipsy vents his spleen

From the Religion Clause blog Wednesday, two evocative items.

First:

Miami-Dade Commission Re-institutes Opening Prayer
In Florida yesterday, the Miami-Dade County Commission voted 8-3 to re-institute prayer before the opening of the Commission’s formal meetings.  The Miami Herald reports that the vote comes after an intensive 18-month lobbying effort by the Christian Family Coalition to bring back prayers instead of the moment of silence that replaced the invocation in 2004. Commissioners will rotate in choosing someone to lead the prayer, or lead it themselves. The invocation must be non-denominational, and will be offered before the roll call of commissioners. During debate on the bill, the commissioners agreed to the rotation format, instead of having the county clerk compile a database of local religious leaders to choose from which would have cost $26,000 to implement. The ACLU said that if the prayers turn out to be sectarian, it will file suit.  However, Anthony Verdugo, executive director of the Christian Family Coalition, said the vote ended “8½ years of discrimination.”

(Emphasis added)

Second:

Indiana Legislator Wants To Require Science Teachers To Prove Truth of Their Teachings
In Indiana, state senator Dennis Kruse, chairman of the Senate Education and Career Development Committee, says he will try a new approach now that he failed last session to get legislation to allow the teaching of creationism along with evolution in the public schools. According to the Indianapolis Star yesterday, Kruse will introduce what he calls a “truth in education” bill.  As the senator describes the proposal: “If a student thinks something isn’t true, then they can question the teacher and the teacher would have to come up with some kind of research to support that what they are teaching is true or not true.”

(Emphasis added)

* * * * *

First, what, pray tell, is a “nondenominational,” or in ACLU terms, “nonsectarian,” prayer?

This is not a rhetorical question. I’ve been asking for more than 40 years what possible good it does for public meetings or school classrooms to throw some fatuous little unitarian ditty at the ceiling that offends the Unitarians (because it’s uttered in public), amuses the Trinitarians (because it’s not “in the name of the Father, and of the Son, and of the Holy Spirit”), ought to offend the Evangelicals who presumably are so desperately seeking it (because it’s not closed “in Jesus’ name”) and presumably offends every other real religion that has a characteristic or prescribed idea of authentic prayer?

Our nada who art in nada, nada be thy name thy kingdom nada thy will be nada in nada as it is in nada. Give us this nada our daily nada and nada us our nada as we nada our nadas and nada us not into nada but deliver us from nada; pues nada. Hail nothing full of nothing, nothing is with thee.

(Ernest Hemingway) Or maybe this:

To whom it may concern:
Some of us down here think there is a “whom” that this ritual “may concern,” and who would be offended by mere silence. If so, we (and I think I’m speaking now even for the ones who think there is no whom that this may concern) would really appreciate it if you’d keep us from tearing each other’s throats out over things like religion, and also help us to be good, compliant consumers,  producers and above all borrowers, so that this house of cards we’re pretending not to notice won’t collapse until we’re dead and buried and it falls on our posterity (and the posterity of the undocumented workers who are keeping Social Security afloat) instead. Amen.

Does anybody think that God is pleased by that sort of thing?

And who, other than the ever-vigilant ACLU, judges foot-faults on the sufficient neutrality (i.e., fatuousness) of the prayers? The government? Really? Caesar deciding what prayer is inoffensive enough to be permissible?

Second, does Senator Kruse really want a bunch of smart-ass adolescents disrupting class with imperious questions that probably have been answered already multiple times that semester? Or is he trying to give Creationist kids a nuclear option, scaring teachers out of mentioning evolution and Darwin by the knowledge that they’ll be besieged with harassing questions if they do, on pain of punishment for not citing “research” quickly enough?

I see a connection between those two examples: insincerity. That’s another word for “bearing false witness.” That’s supposed to be a no-no.

Yes, I’m saying that the Christian Family Coalition and Senator Kruse are being disingenuous about their objectives. The former does not want fatuous unitarian ditties. The latter does not want better citation of research in support of evolution. Besides abasing themselves, they bring disrepute to their putative Lord.

Or I could be wrong. They could be delusional, unaware of the obvious nonsense-on-stiltsiness of such proposals. (Some Krustians consider it a victory to get a creche on the courthouse square because, the court reasons, it’s devoid of religious significance, having become effectively secular. You like the taste of that sawdust, boys?)

Or I could be an obnoxious old curmudgeon – instead of, or in addition to, the preceding two options.

* * * * *

Some succinct standing advice on recurring themes.

Mitch Daniels

Our esteemed local Gannett newspaper has above the fold today the introduction to a pretty interesting tit-for-tat kerfuffle between Governor Mitch Daniels and the teachers union, which Daniels blames for illegal activities that supposedly brought down Superintendent of Public Instruction Tony Bennett.

I like Mitch. I’ve voted for him. I’ll probably like a lot about his tenure at Purdue starting next month (happy December, by the way). But I have two beefs with him:

  • The reckless glee with which he (though his FSSA head) destroyed our former system for administering Medicaid. I will now acknowledge that Modernization 2.0 is starting to work. But a lot of poor people fell through the safety net during Modernization 1.0, for which only the most willfully blind would have predicted success since the private contractors carpetbaggers picked to implement it had an unbroken record of failure in other states.
  • The sour grapes with which he’s greeting Tony Bennett’s defeat. I guarantee you, gentle reader, that Bennett’s defeat had to do with a lot more than ticking off the teachers’ union (and local school superintendents, be it noted), with vouchers and charter schools. Some of Bennett’s mandates were resisted as sheer, willful idiocy by teachers and staff in the very private schools that are accepting vouchers. Tipsy knows this with a high degree of confidence. Tipsy trusts his sources enough that he didn’t vote for Bennett.

Maybe a measure of willfulness is the dark underbelly of a genius at political reform. There’s no doubt that Medicaid reform is a necessity (just listen to Purdue’s Larry DeBoer talk about the challenge of state budgeting some time). But I don’t have to pretend the underbelly isn’t dark because the top is cute and furry.

* * * * *

Some succinct standing advice on recurring themes.