John Paul the Great at New Ruskin College
www.NewRuskinCollege.com
Lecture Notes: 4-14-05
Conditions of Time and Place
Pope John Paul the Great was born in the East and lived for years in a Marxist state. His view of the market was colored by Marxism and by the Church’s own teachings about the market, commercialism, consumerism, usury, (i.e. the charging of interest).
Like most classically educated philosophers he found the theories of the market as disturbing as classically educated physicists found the new physics of the quanta; e.g. Dr. Einstein’s “God does not play dice with the universe.”
Can “value” really be so ephemeral as to be nothing more than the transitory subjective evaluation of the consumers in one fleeting moment in time? Are there no absolutes?
So, because of his limitations of time and place he was skeptical of the market. He could not accept that the “market” was encoded in our genes, that it works because it is the direct expression of how we are wired, how we think, perceive. He thought that this was a question of “ideology.” In philosophical terms the market may be regarded as a theory of how to organize society and that communism is another competing theory. But this is not quite right. True they are both of them “theories” yet only a philosopher can find this equivalence meaningful.
Our market theory results from the study of human evolutionary development over millions of years, with conscious and deliberate study of market interactions as a subject of scientific inquiry over the last several hundred years. Communism was merely the result of a few philosopher’s speculations founded on the false notion of “scientific objectivism” developed in the Nineteenth Century, and shown to be false both analytically and by practical experiment in which several individual countries were walled off with one side being the experimental portion and the other the control.
Communism’s failure proved that there is not an “objective” one best way despite the appeal of this idea to our simian minds. This idea of an objective “best” is appealing to the human brain because the social animal man, this social predator, evolved in a social organism, a social structure of dominance hierarchy, of progressively “superior” power organization, culminating in the leader, the best, God. This single hierarchical structure of the best, though intuitively appealing, does not correspond to reality, in which there are various contending values, which arise and decline over time in our minds, which is itself an ever changing pattern of neuron networks, ideas, spilling into consciousness joining with other neuron networks, and for which a marginal increase or decrease can be noted but to which no single absolute “objective” value can be affixed. We live in a floating world. This realization, far from being an example of "egotism", (as the new pope cliams with scorn), rather it humbles us. The "I" turns out to be a fake, an apperition, in Christian terms we should say we must admit that we are a branch on the vine of Christ. As Alan Watts put it in his prayer: Lord save us from our beliefs and deliver us unto our faith.
The way we define our human ancestors in archeology, the way we distinguish ourselves from the other ancient great apes, is by the presence of tools among the fossils. Tools? (It is a male thing.) ‘Property’, is better. Stone Age property among the fossils. We have the bone needles and knives too. And then too there is all the other property which we have not inherited. The mats woven out of reeds, the animal skins. We have the sea shells, but not the utensils made of leaves, bark, twigs, gourds, all those female things whose existence we can guess at; but over the millions of years, all of these have been reduced to dust, only the stones, and bones, and sea shells remain, proclaiming: these were mankind’s ancestors: Owners of Property.
Then there is all the “real property”, the territory, that the ancient ancestors guarded; again all this can only be guessed at from anthropological observations of modern human hunter bands, and by inference from our field studies of our fellow creatures. More attention has been paid to the ‘competition’ between hunter groups than the cooperation within the hunter communities. (Again a male thing; another limitation of time and place.) I think John Paul the Great would have appreciated the find of the toothless skeleton about whom it was theorized he had been cared for by someone, a whole group of someones. .(http://www.thisislondon.co.uk/news/articles/PA_NEWA25125781112785897A0?source=) Not all churchmen would have. Even today some churchmen would have been threatened by the dating: 7 million years. (More limitations of Time and Place.) But he was not afraid.
However, the problems he identified were not themselves the product of the market but were rather problems resulting from our failure to utilize the market; the failure to use our human creativity. This failure results from two reasons:
One, the most common reason for the failure to use the market is the limitation of time and place itself, i.e. the universe. Ludwig von Mises relates the story of the Menshevik at an early communist congress, who, after listening for hours to one Bolshevik speaker after another denounce the “exploitation” of the workers, stood up and shouted, “The universe is the greatest exploiter!”
Just that, the brutal cold universe is the main reason for our failure to use the market. The universe gives up its secrets only grudgingly. Our simian brains grasp the meaning only haltingly, painfully. We do not know how to develop energy more efficiently, or mine minerals, or grow crops, all the things we do not know how to do, these are what prevent us from utilizing the market.
This failure is not the failure of the market mechanism itself, as Ludwig von Mises points out, if the capitalists can be faulted for anything in this respect, it is there utter credulity, their sometimes laughable willingness to “try” seemingly anything. He notes for example, that the constantly heard claim of a 100 miles per gallon carburetor sitting in a safe deposit box in a Detroit bank vault is not believable if only because of the accumulated evidence that in a market economy no idea is unfunded for long.
But the more obvious and vexing cause of all the rest of the world’s grief, which John Paul the Great observed, is again not the result of the market but rather results from the unwillingness of humanity to allow the market to operate. Thus the second cause for our failure to use markets to end suffering then, is the failure of governments, society, us, our failure, to establish stable legal environments in which the market can operate to end human suffering to the extent alleviation is humanly possible.
One wishes for the opportunity to tell John Paul the Great that we ought not blame the market for our grief but the unwillingness of humanity to allow the market. The market is the most efficient way of organizing human action. (The name of Ludwig von Mises’ book.) If the first problem in utilizing markets can be surmounted, i.e. if we can overcome our human ignorance, then the only thing standing between ourselves and the alleviation of human suffering is not the market but our shameful disorganization, or irrational obstruction of the market.
As George Gilder pointed out in his ‘Wealth and Poverty’, reversing a liberal piety : “Crime causes poverty.” It is easy to see that Mugabe in Zimbabwe, for instance, is a villain whose policies have run that country into ever more hideous poverty. However the clarity of our observation misleads us into supposing that here in America all is right with the world and markets are busy ending human suffering.
In housing, education, medicine, transportation, agriculture, electrical energy production, oil and gas, the currency and banking, in fact in every sector of the economy our interference with the market is sometimes far more invasive than anything Mr. Mugabe has ever contemplated in his little basket case of a country, and perhaps our interference is in many instances more destructive to the operation of the market, yet we are unaware of the damage we have done, are doing this very moment, only because our vast wealth is matched by our vast stupidity, selfishness, which blinds us to the harm we do, are inflicting on others, our fellow if anonymous countrymen, protected as we are by our thickly wadded ignorance.
Counselor: . . . What is it? Why have you stopped . . . what’s wrong?
Nothing. It is better to continue, it takes my mind off the time running out.
Counselor: But you want to come here full time don’t you?
Yes. Yes of course. It is just, . . . you know, the change . . . from living.
And if you are thinking, “Just what we need, another apologia for free enterprise,” then you still have not grasped the point. There is no alternative to the market. That is all there is. That is who you are.
It means nothing more to criticize the market than to criticize our noses, or our thumbs, or the way our feet go back and forth when we walk.
Once and for all give up your illusions, hallucinations, pretensions. There is nothing else. There is no “third way.” There is the market, and there is the market at various levels of distortion, where it has been manipulated by powerful people, sometimes acting under color of law, and sometimes not bothering with the mask of righteousness: brazen plunder.
Or if you say that you don’t see what difference it makes if we criticize markets or, as I would have it, if we instead criticize the way markets are implemented? Doesn’t it amount to the same thing? Either we are being screwed by the market or we are being screwed by the rich and powerful who have manipulated the market; doesn’t it come out the same way? What’s the difference?
It makes no difference if you do not mind straying around aimlessly lost in your illusions.
John Paul the Great might have focused his criticism where it belonged. Not on the abstraction, the intellectual construction, ‘the market;’ he might have criticized what deserved criticism: humanity, and humanity’s sin: ignorance.
By focusing on the market he misdirected the people’s scrutiny away from themselves, where it belonged, and instead encouraged them to look ‘out there’ as if they were being thwarted, poisoned, by markets.
First realize what we are not discussing. We are not discussing “Christian charity.” Go ahead and give, give all you like. What we are discussing is not charity but how society is best organized. And when John Paul the Great criticized consumerism, commercial culture, the market, he was not himself offering charity as an alternative. The Church does not teach that charity is a substitute for the ordinary work a day world. The Church would rather a man had a job, a job of his own, and the dignity that that confers, than that he be the beneficiary of charity, no matter how generous.
Also consider how first was the good created that is to be given in charity?
And have you never reflected that the social welfare regulations were first written not in times of famine and ruin, but in times of surplus? It was only after capitalism began heaping up abundance that child labor, minimum wage, collective bargaining, 40 hour work week, safety and health, pollution, and all the other laws which we now teach our children protect us became possible. Now, several generations later, this dogma, ideology is accepted as ‘truth.’
But know this, before the welfare state there was the market that begat the welfare that the statists now claim to have been their beneficence. (Some simpleminded conservatives feel the need to speak against charity as if they feel compelled to choose up sides.) We are not speaking against charity, or social welfare legislation, we are examining the conditions that make them possible.
Or more to the point what we are really examining is not the underlying reality of the market but how that reality is misperceived, by John Paul the Great, and others, and how this misperception leads us further and further away from the reality of our situation into darkness.
For example, consider how far you are already surrounded by darkness. See how John Paul the Great was not alone in having limitations of time and place.
Which country has greater state involvement in its economy, the U. S. or Sweden?
At first one would suppose Sweden. Taxes are higher there so their 60% income taxes must mean higher state involvement in the economy, right?
First consider that not all Swedes pay the highest tax rate, (not even the ones who are supposed to pay). Second consider that in Sweden the medical sector is counted as part of the “state” sector. In America 15% of the GDP is tied to the medical sector ( http://la.indymedia.org/news/2005/03/124278.php ), higher than any other country. Why do you suppose that is? Could it be that some very smart people have taken control of this sector and are using it to enrich themselves? Have you never wondered why America is not training tens of thousands of doctors a year and sending them out to all the world? Instead we must bring into our country half (50%) of our doctors admitted to practice each year. Thus do we drain the world of its best doctors. (Open University has created a medical school program for people around the globe. But not the USA. Why? Greed? Selfishness? Plunder? Manipulation of the market to the grief of the people? ) But please do not tell me that this is the result of the market. Yet the medical sector is one of the most tightly regulated, controlled sectors of the economy.
You call the medical sector “private” yet from a purely economic perspective this label is arbitrary. There is no innovation of products and services to meet consumer’s changing demands. There is no free entry. Most importantly substitution is not allowed. A priesthood of “medical doctors” exercises a monopoly control and has decisive influence over the legislative regulation. What would the U. S. statistics look like if we moved the medical sector over into the government sector based on the degree of regulation?
Let’s see: Federal 20 -22% of GDP, (http://www.house.gov/jec/growth/govtsize/govtsize.htm), State and Local at 16-17% (http://www.house.gov/jec/growth/govtsize/govtsize.htm), 1993 estimate, plus 15% medical = why that is 54%! Astonishing!
And here we have just briefly examined one sector of the economy. [Note: Federal spending is projected to become 35% by 2050 if Medicare and Social Security continue as expected. (http://www.humaneventsonline.com/article.php?id=7117)] (Yes, thank you class. There is a little overlap in Medicare appearing here as Federal and then being counted again in the medical sector. Thank you. We are ball parking these numbers. As will be seen we can not even calculate all the control exercised over real estate, manufacturing, pensions, etc. Technically they are “private” but the question we are examining is are these sectors still part of the market economy?) And see how you have accepted this, even enjoying feelings of superiority over Sweden, and yet what is your misunderstanding of all of this but another example of the limitations of time and place.
What is really shocking is how little free enterprise there is in the American economy.
For example, you may feel that in America the insurance industry is private. So all the statistics reflect this. But what possible difference does it make to you if you pay “tax” dollars or “insurance” dollars? Because one is “voluntary”? What do you mean voluntary? Do you want health insurance or not? Yes, ok, you can choose company A, or company B, but the dollars will leave your wallet and go to a huge bureaucracy, tightly controlled by the legislature, state or federal, sometimes, as in medical insurance, both. The amounts charged taxes or premiums, (as you like it), are determined by state regulators. The amounts paid also are determined by regulators, and the legislatures, and of course, all of this is overseen by the judiciary.
You call this free enterprise? And not just health insurance but in all sectors of insurance the “products” offered by the insurance industry are determined by the state not the consumer’s demand. The language of the policies is often written by the state, the pay outs determined by the state, the amounts charged, (premiums or taxes) determined by the state. Many states require auto insurance so even the fig leaf of “voluntary’ action is removed. The judges, i.e. the state, oversee all.
Often it is claimed that there is no litigation explosion because the number of new law suits has not sharply risen. This is true and false. Once the precedence is established, insurance adjusters start adjusting their claims accordingly. For example, at one time insurance adjusters did not pay for the loss of psychic abilities. Then after the California courts said that a fortune-teller’s claim that her injury in an accident caused her to lose the ability to see into the future, all of the adjusters took the judicial instruction and began taking releases in similar claims. Only "new" cases, i.e. cases with a new theory of liability, go to trial. What is significant is not the total number of new lawsuits but rather the total number of new rulings, i.e. instructions to pay.
What possible difference can it make to you if your money is siphoned off in taxes by the legislature, or by the judiciary in premiums? The insurance industry is the tax collector for the judiciary. The judges sit like kings of olden times in their courts ruling on this case or that and then some startling money awards are reported in the press. What most readers do not think to consider is that for every trial court decision there are tens of thousands of similar claims in insurance claims offices around the country awaiting the court’s decision. And from that day forward, until legislation to the contrary is passed, or policies rewritten, (of course only with regulatory or legislative approval), claims are paid based on that judge’s ruling. Payments made not for that one award that you read about in your newspapers but for the tens of thousands of other similar claims If the tort claims were a tax it has been estimated that this one portion of the insurance industry would account for a 3% wage tax or an 8% capital tax, ( http://www.policyalmanac.org/economic/archive/torts.shtml ) or 2% of GDP, ( http://www.insurancejournal.com/news/international/2005/04/08/53576.htm ), and that is tort claims alone.
So now what? 54% of GDP under state control plus 2% for tort claims = 56% state controlled. Can you speak Swedish? The rest of insurance (other than tort and medical) accounts for another 1%? 57% of the GDP either directly under state control or so closely directed as to make no difference. 57% of the economy removed from the market and directed by the state. What else?
From the perspective of the market, from the perspective of “free enterprise”, what is “free” about any of this enterprise? What free association of consumers and producers is really taking place? Are the demands of the consumers being carefully analyzed and satisfied by entrepreneurs responding to the changing marketplace? Of course not.
Our regular College Visitors will already have been lectured to about the intervention of government in the housing sector and how zoning and building codes are used to limit supply. {see Lecture Notes: 03-21-05 [see paper no. 1948. Edward L. Glaeser and Joseph Gyourko The Impact of Zoning on Housing Affordability ( http://post.economics.harvard.edu/hier/2002papers/2002list.html )]; Lecture Notes: 03-18-05 Betrayal IV; Lecture Notes: 03-17-05 Betrayal III; Lecture Notes: 03-15-05 Betrayal ; Lecture Notes: 12-17-04 Betrayal . . .
Counselor: He has a lot of issues with betrayal.
. . . Lecture Notes: 12-02-04; Lecture Notes: 10-28-04, How do you sustain yourself?; Lecture Notes: 09-30-04, Junkie Nation; Lecture Notes: 08-03-04, The Truth; Lecture Notes: 06-30-04, Upper Class Warfare; Lecture Notes: 06-28-04; Lecture Notes: 06-26-04}
Thus far we have yet to put a figure on this government manipulation of the market. How much of real estate is out of the market economy and under state control? (?%) Well? Oh, you have not thought about it? Ok, we can wait? . . . So? What is the answer? Come on we do not have all day. How much?
Agriculture? 17% of the GDP but how much should be put in the private sector and how much under government control? (http://www.ndu.edu/icaf/industry/IS2003/papers/2003%20Agribusiness.htm ) Direct farm subsidies of $20 billion a year, with 45% going to just 7% of the farmers, ( http://www.retrovsmetro.org/book/chapter_2.html?c=2&p=1 ) however this represents only a fraction of all subsidies. Ag research, rural electrification and phones, small business administration, Army Corps of Engineers, guaranteed and subsidized loans, a constant torrent of public money flows out to the farm states protected by a Senate which is disproportionately weighted with representatives of agricultural states. These farm state Senators do not see their constituency as the United States but rather know their job is to secure more subsidies for their states. Where are we now 59%? 62%?
Regular College Visitors will have read about the state monopoly of the roads and highways and will have already considered how state control has retarded technical innovation in this sector of the economy. (After Technical Correction Number Five was posted Michael Krasney had a couple of local bureaucrats on his KQED radio program to discuss the Bay Area highway system. A caller asked about “how digital technology can improve the carrying capacity of our highways?” The guests snipped that “well . . . (long sarc II pause) . . . the technology is just not there yet that can drive your car for you.” Of course, the caller did not ask about cars that “drive your car for you.” He only asked about “digital” technology which he did not define. (But I was encourage that from their answer they appeared to be responding not to the caller but to my posting here at New Ruskin College.)
But here we now consider the value to the GDP of our state controlled highway system. When a highway is built through real estate how much of the resulting increase in property value should be accounted for as private and how much as public? I realize that all the profits will be counted as private and all the costs of the road will be billed out as public, but how much of the GDP is thus public sector? Are we Swedish yet? 63%? 65%?
And if you are thinking well yes, of course, roads they are public, then think again, or at any rate read Technical Correction Number Five. They could be sold off and privatized. But reflect why are not elevators public? How about hall ways? Why do we build fire houses, and install fire mains in our streets as a public enterprise, but regard sprinklers in a high rise buildings as private? We will pave our city streets as a public project and let private cars park on the street for free, but the building of a parking garage for a multi story building is entirely a private activity. Why? What is this, this misunderstanding of yours, but another limitation of time and place?
I originally argued for government assistance in the development of computer aided individualized instruction by pointing out that the huge government subsidies to public schools made it impossible for private companies to compete. Therefore I argued that a private market could not develop the innovative new methods that were so desperately needed to educate the children of the world. President Bush, (41), commented at the time he had “heard about that sophisticated argument” when a reporter presented him with this argument in a press conference. (see New Ruskin College Project in the Moynihan)
Though he had “heard” the “sophisticated argument” before he still had no answer for it. He did not help develop the laser disks. He was not reelected either. There is a rough justice in the world.
See here conservatives two things: First see in what darkness you walk. You think that yes America is the home of free enterprise and Sweden is socialist or nearly so. But what if this “objective” reality of yours was an hallucination? An accounting gimmick? What if you have been suckered?
And that is the second point: How many times have you been beseeched that we need just a little more, please, a few dollars, and all will be well. But see now, the darkness is pushed back a little and you can see how much of our money has already been taken from the private market economy and redirected to highways in West Virginia, stop lights in Chicago, tractor research grants to California, new regulation to “improve” health care in our hospitals, or help the little scholars in our schools, or . . . and on it goes . . . a never ending torrent of money . . . and then there is the so called “private economy”: as we have seen medicine, insurance, operate, exist as they do only at government sufferance, “private real estate” development at public expense with all of its zoning and building codes, supported by government finance monopolies and protected by tax shelters in the tax code, the private pension funds regulated, controlled, and directed by government, regulation of products, labor, construction, from corner markets to nuclear power plants, autos, aircraft, medicines, and the look of a new building’s façade, regulation upon regulation, review commissions, planning boards, and after all of that the judiciary and litigation, litigation sometimes for years, and all of this money which is in truth being directed by government is still counted as “private”. Ah, private, then it must be ok.
Private gains, public losses. Yet I tell you that people are dying because of these distortions. However, owing to the limitations of your place and time you are not even aware of the extent of your intervention in, your manipulation of, the market.
Not even aware of the harm you are causing. That is how far you are from the truth.
www.NewRuskinCollege.com
Lecture Notes: 4-14-05
Conditions of Time and Place
Pope John Paul the Great was born in the East and lived for years in a Marxist state. His view of the market was colored by Marxism and by the Church’s own teachings about the market, commercialism, consumerism, usury, (i.e. the charging of interest).
Like most classically educated philosophers he found the theories of the market as disturbing as classically educated physicists found the new physics of the quanta; e.g. Dr. Einstein’s “God does not play dice with the universe.”
Can “value” really be so ephemeral as to be nothing more than the transitory subjective evaluation of the consumers in one fleeting moment in time? Are there no absolutes?
So, because of his limitations of time and place he was skeptical of the market. He could not accept that the “market” was encoded in our genes, that it works because it is the direct expression of how we are wired, how we think, perceive. He thought that this was a question of “ideology.” In philosophical terms the market may be regarded as a theory of how to organize society and that communism is another competing theory. But this is not quite right. True they are both of them “theories” yet only a philosopher can find this equivalence meaningful.
Our market theory results from the study of human evolutionary development over millions of years, with conscious and deliberate study of market interactions as a subject of scientific inquiry over the last several hundred years. Communism was merely the result of a few philosopher’s speculations founded on the false notion of “scientific objectivism” developed in the Nineteenth Century, and shown to be false both analytically and by practical experiment in which several individual countries were walled off with one side being the experimental portion and the other the control.
Communism’s failure proved that there is not an “objective” one best way despite the appeal of this idea to our simian minds. This idea of an objective “best” is appealing to the human brain because the social animal man, this social predator, evolved in a social organism, a social structure of dominance hierarchy, of progressively “superior” power organization, culminating in the leader, the best, God. This single hierarchical structure of the best, though intuitively appealing, does not correspond to reality, in which there are various contending values, which arise and decline over time in our minds, which is itself an ever changing pattern of neuron networks, ideas, spilling into consciousness joining with other neuron networks, and for which a marginal increase or decrease can be noted but to which no single absolute “objective” value can be affixed. We live in a floating world. This realization, far from being an example of "egotism", (as the new pope cliams with scorn), rather it humbles us. The "I" turns out to be a fake, an apperition, in Christian terms we should say we must admit that we are a branch on the vine of Christ. As Alan Watts put it in his prayer: Lord save us from our beliefs and deliver us unto our faith.
The way we define our human ancestors in archeology, the way we distinguish ourselves from the other ancient great apes, is by the presence of tools among the fossils. Tools? (It is a male thing.) ‘Property’, is better. Stone Age property among the fossils. We have the bone needles and knives too. And then too there is all the other property which we have not inherited. The mats woven out of reeds, the animal skins. We have the sea shells, but not the utensils made of leaves, bark, twigs, gourds, all those female things whose existence we can guess at; but over the millions of years, all of these have been reduced to dust, only the stones, and bones, and sea shells remain, proclaiming: these were mankind’s ancestors: Owners of Property.
Then there is all the “real property”, the territory, that the ancient ancestors guarded; again all this can only be guessed at from anthropological observations of modern human hunter bands, and by inference from our field studies of our fellow creatures. More attention has been paid to the ‘competition’ between hunter groups than the cooperation within the hunter communities. (Again a male thing; another limitation of time and place.) I think John Paul the Great would have appreciated the find of the toothless skeleton about whom it was theorized he had been cared for by someone, a whole group of someones. .(http://www.thisislondon.co.uk/news/articles/PA_NEWA25125781112785897A0?source=) Not all churchmen would have. Even today some churchmen would have been threatened by the dating: 7 million years. (More limitations of Time and Place.) But he was not afraid.
However, the problems he identified were not themselves the product of the market but were rather problems resulting from our failure to utilize the market; the failure to use our human creativity. This failure results from two reasons:
One, the most common reason for the failure to use the market is the limitation of time and place itself, i.e. the universe. Ludwig von Mises relates the story of the Menshevik at an early communist congress, who, after listening for hours to one Bolshevik speaker after another denounce the “exploitation” of the workers, stood up and shouted, “The universe is the greatest exploiter!”
Just that, the brutal cold universe is the main reason for our failure to use the market. The universe gives up its secrets only grudgingly. Our simian brains grasp the meaning only haltingly, painfully. We do not know how to develop energy more efficiently, or mine minerals, or grow crops, all the things we do not know how to do, these are what prevent us from utilizing the market.
This failure is not the failure of the market mechanism itself, as Ludwig von Mises points out, if the capitalists can be faulted for anything in this respect, it is there utter credulity, their sometimes laughable willingness to “try” seemingly anything. He notes for example, that the constantly heard claim of a 100 miles per gallon carburetor sitting in a safe deposit box in a Detroit bank vault is not believable if only because of the accumulated evidence that in a market economy no idea is unfunded for long.
But the more obvious and vexing cause of all the rest of the world’s grief, which John Paul the Great observed, is again not the result of the market but rather results from the unwillingness of humanity to allow the market to operate. Thus the second cause for our failure to use markets to end suffering then, is the failure of governments, society, us, our failure, to establish stable legal environments in which the market can operate to end human suffering to the extent alleviation is humanly possible.
One wishes for the opportunity to tell John Paul the Great that we ought not blame the market for our grief but the unwillingness of humanity to allow the market. The market is the most efficient way of organizing human action. (The name of Ludwig von Mises’ book.) If the first problem in utilizing markets can be surmounted, i.e. if we can overcome our human ignorance, then the only thing standing between ourselves and the alleviation of human suffering is not the market but our shameful disorganization, or irrational obstruction of the market.
As George Gilder pointed out in his ‘Wealth and Poverty’, reversing a liberal piety : “Crime causes poverty.” It is easy to see that Mugabe in Zimbabwe, for instance, is a villain whose policies have run that country into ever more hideous poverty. However the clarity of our observation misleads us into supposing that here in America all is right with the world and markets are busy ending human suffering.
In housing, education, medicine, transportation, agriculture, electrical energy production, oil and gas, the currency and banking, in fact in every sector of the economy our interference with the market is sometimes far more invasive than anything Mr. Mugabe has ever contemplated in his little basket case of a country, and perhaps our interference is in many instances more destructive to the operation of the market, yet we are unaware of the damage we have done, are doing this very moment, only because our vast wealth is matched by our vast stupidity, selfishness, which blinds us to the harm we do, are inflicting on others, our fellow if anonymous countrymen, protected as we are by our thickly wadded ignorance.
Counselor: . . . What is it? Why have you stopped . . . what’s wrong?
Nothing. It is better to continue, it takes my mind off the time running out.
Counselor: But you want to come here full time don’t you?
Yes. Yes of course. It is just, . . . you know, the change . . . from living.
And if you are thinking, “Just what we need, another apologia for free enterprise,” then you still have not grasped the point. There is no alternative to the market. That is all there is. That is who you are.
It means nothing more to criticize the market than to criticize our noses, or our thumbs, or the way our feet go back and forth when we walk.
Once and for all give up your illusions, hallucinations, pretensions. There is nothing else. There is no “third way.” There is the market, and there is the market at various levels of distortion, where it has been manipulated by powerful people, sometimes acting under color of law, and sometimes not bothering with the mask of righteousness: brazen plunder.
Or if you say that you don’t see what difference it makes if we criticize markets or, as I would have it, if we instead criticize the way markets are implemented? Doesn’t it amount to the same thing? Either we are being screwed by the market or we are being screwed by the rich and powerful who have manipulated the market; doesn’t it come out the same way? What’s the difference?
It makes no difference if you do not mind straying around aimlessly lost in your illusions.
John Paul the Great might have focused his criticism where it belonged. Not on the abstraction, the intellectual construction, ‘the market;’ he might have criticized what deserved criticism: humanity, and humanity’s sin: ignorance.
By focusing on the market he misdirected the people’s scrutiny away from themselves, where it belonged, and instead encouraged them to look ‘out there’ as if they were being thwarted, poisoned, by markets.
First realize what we are not discussing. We are not discussing “Christian charity.” Go ahead and give, give all you like. What we are discussing is not charity but how society is best organized. And when John Paul the Great criticized consumerism, commercial culture, the market, he was not himself offering charity as an alternative. The Church does not teach that charity is a substitute for the ordinary work a day world. The Church would rather a man had a job, a job of his own, and the dignity that that confers, than that he be the beneficiary of charity, no matter how generous.
Also consider how first was the good created that is to be given in charity?
And have you never reflected that the social welfare regulations were first written not in times of famine and ruin, but in times of surplus? It was only after capitalism began heaping up abundance that child labor, minimum wage, collective bargaining, 40 hour work week, safety and health, pollution, and all the other laws which we now teach our children protect us became possible. Now, several generations later, this dogma, ideology is accepted as ‘truth.’
But know this, before the welfare state there was the market that begat the welfare that the statists now claim to have been their beneficence. (Some simpleminded conservatives feel the need to speak against charity as if they feel compelled to choose up sides.) We are not speaking against charity, or social welfare legislation, we are examining the conditions that make them possible.
Or more to the point what we are really examining is not the underlying reality of the market but how that reality is misperceived, by John Paul the Great, and others, and how this misperception leads us further and further away from the reality of our situation into darkness.
For example, consider how far you are already surrounded by darkness. See how John Paul the Great was not alone in having limitations of time and place.
Which country has greater state involvement in its economy, the U. S. or Sweden?
At first one would suppose Sweden. Taxes are higher there so their 60% income taxes must mean higher state involvement in the economy, right?
First consider that not all Swedes pay the highest tax rate, (not even the ones who are supposed to pay). Second consider that in Sweden the medical sector is counted as part of the “state” sector. In America 15% of the GDP is tied to the medical sector ( http://la.indymedia.org/news/2005/03/124278.php ), higher than any other country. Why do you suppose that is? Could it be that some very smart people have taken control of this sector and are using it to enrich themselves? Have you never wondered why America is not training tens of thousands of doctors a year and sending them out to all the world? Instead we must bring into our country half (50%) of our doctors admitted to practice each year. Thus do we drain the world of its best doctors. (Open University has created a medical school program for people around the globe. But not the USA. Why? Greed? Selfishness? Plunder? Manipulation of the market to the grief of the people? ) But please do not tell me that this is the result of the market. Yet the medical sector is one of the most tightly regulated, controlled sectors of the economy.
You call the medical sector “private” yet from a purely economic perspective this label is arbitrary. There is no innovation of products and services to meet consumer’s changing demands. There is no free entry. Most importantly substitution is not allowed. A priesthood of “medical doctors” exercises a monopoly control and has decisive influence over the legislative regulation. What would the U. S. statistics look like if we moved the medical sector over into the government sector based on the degree of regulation?
Let’s see: Federal 20 -22% of GDP, (http://www.house.gov/jec/growth/govtsize/govtsize.htm), State and Local at 16-17% (http://www.house.gov/jec/growth/govtsize/govtsize.htm), 1993 estimate, plus 15% medical = why that is 54%! Astonishing!
And here we have just briefly examined one sector of the economy. [Note: Federal spending is projected to become 35% by 2050 if Medicare and Social Security continue as expected. (http://www.humaneventsonline.com/article.php?id=7117)] (Yes, thank you class. There is a little overlap in Medicare appearing here as Federal and then being counted again in the medical sector. Thank you. We are ball parking these numbers. As will be seen we can not even calculate all the control exercised over real estate, manufacturing, pensions, etc. Technically they are “private” but the question we are examining is are these sectors still part of the market economy?) And see how you have accepted this, even enjoying feelings of superiority over Sweden, and yet what is your misunderstanding of all of this but another example of the limitations of time and place.
What is really shocking is how little free enterprise there is in the American economy.
For example, you may feel that in America the insurance industry is private. So all the statistics reflect this. But what possible difference does it make to you if you pay “tax” dollars or “insurance” dollars? Because one is “voluntary”? What do you mean voluntary? Do you want health insurance or not? Yes, ok, you can choose company A, or company B, but the dollars will leave your wallet and go to a huge bureaucracy, tightly controlled by the legislature, state or federal, sometimes, as in medical insurance, both. The amounts charged taxes or premiums, (as you like it), are determined by state regulators. The amounts paid also are determined by regulators, and the legislatures, and of course, all of this is overseen by the judiciary.
You call this free enterprise? And not just health insurance but in all sectors of insurance the “products” offered by the insurance industry are determined by the state not the consumer’s demand. The language of the policies is often written by the state, the pay outs determined by the state, the amounts charged, (premiums or taxes) determined by the state. Many states require auto insurance so even the fig leaf of “voluntary’ action is removed. The judges, i.e. the state, oversee all.
Often it is claimed that there is no litigation explosion because the number of new law suits has not sharply risen. This is true and false. Once the precedence is established, insurance adjusters start adjusting their claims accordingly. For example, at one time insurance adjusters did not pay for the loss of psychic abilities. Then after the California courts said that a fortune-teller’s claim that her injury in an accident caused her to lose the ability to see into the future, all of the adjusters took the judicial instruction and began taking releases in similar claims. Only "new" cases, i.e. cases with a new theory of liability, go to trial. What is significant is not the total number of new lawsuits but rather the total number of new rulings, i.e. instructions to pay.
What possible difference can it make to you if your money is siphoned off in taxes by the legislature, or by the judiciary in premiums? The insurance industry is the tax collector for the judiciary. The judges sit like kings of olden times in their courts ruling on this case or that and then some startling money awards are reported in the press. What most readers do not think to consider is that for every trial court decision there are tens of thousands of similar claims in insurance claims offices around the country awaiting the court’s decision. And from that day forward, until legislation to the contrary is passed, or policies rewritten, (of course only with regulatory or legislative approval), claims are paid based on that judge’s ruling. Payments made not for that one award that you read about in your newspapers but for the tens of thousands of other similar claims If the tort claims were a tax it has been estimated that this one portion of the insurance industry would account for a 3% wage tax or an 8% capital tax, ( http://www.policyalmanac.org/economic/archive/torts.shtml ) or 2% of GDP, ( http://www.insurancejournal.com/news/international/2005/04/08/53576.htm ), and that is tort claims alone.
So now what? 54% of GDP under state control plus 2% for tort claims = 56% state controlled. Can you speak Swedish? The rest of insurance (other than tort and medical) accounts for another 1%? 57% of the GDP either directly under state control or so closely directed as to make no difference. 57% of the economy removed from the market and directed by the state. What else?
From the perspective of the market, from the perspective of “free enterprise”, what is “free” about any of this enterprise? What free association of consumers and producers is really taking place? Are the demands of the consumers being carefully analyzed and satisfied by entrepreneurs responding to the changing marketplace? Of course not.
Our regular College Visitors will already have been lectured to about the intervention of government in the housing sector and how zoning and building codes are used to limit supply. {see Lecture Notes: 03-21-05 [see paper no. 1948. Edward L. Glaeser and Joseph Gyourko The Impact of Zoning on Housing Affordability ( http://post.economics.harvard.edu/hier/2002papers/2002list.html )]; Lecture Notes: 03-18-05 Betrayal IV; Lecture Notes: 03-17-05 Betrayal III; Lecture Notes: 03-15-05 Betrayal ; Lecture Notes: 12-17-04 Betrayal . . .
Counselor: He has a lot of issues with betrayal.
. . . Lecture Notes: 12-02-04; Lecture Notes: 10-28-04, How do you sustain yourself?; Lecture Notes: 09-30-04, Junkie Nation; Lecture Notes: 08-03-04, The Truth; Lecture Notes: 06-30-04, Upper Class Warfare; Lecture Notes: 06-28-04; Lecture Notes: 06-26-04}
Thus far we have yet to put a figure on this government manipulation of the market. How much of real estate is out of the market economy and under state control? (?%) Well? Oh, you have not thought about it? Ok, we can wait? . . . So? What is the answer? Come on we do not have all day. How much?
Agriculture? 17% of the GDP but how much should be put in the private sector and how much under government control? (http://www.ndu.edu/icaf/industry/IS2003/papers/2003%20Agribusiness.htm ) Direct farm subsidies of $20 billion a year, with 45% going to just 7% of the farmers, ( http://www.retrovsmetro.org/book/chapter_2.html?c=2&p=1 ) however this represents only a fraction of all subsidies. Ag research, rural electrification and phones, small business administration, Army Corps of Engineers, guaranteed and subsidized loans, a constant torrent of public money flows out to the farm states protected by a Senate which is disproportionately weighted with representatives of agricultural states. These farm state Senators do not see their constituency as the United States but rather know their job is to secure more subsidies for their states. Where are we now 59%? 62%?
Regular College Visitors will have read about the state monopoly of the roads and highways and will have already considered how state control has retarded technical innovation in this sector of the economy. (After Technical Correction Number Five was posted Michael Krasney had a couple of local bureaucrats on his KQED radio program to discuss the Bay Area highway system. A caller asked about “how digital technology can improve the carrying capacity of our highways?” The guests snipped that “well . . . (long sarc II pause) . . . the technology is just not there yet that can drive your car for you.” Of course, the caller did not ask about cars that “drive your car for you.” He only asked about “digital” technology which he did not define. (But I was encourage that from their answer they appeared to be responding not to the caller but to my posting here at New Ruskin College.)
But here we now consider the value to the GDP of our state controlled highway system. When a highway is built through real estate how much of the resulting increase in property value should be accounted for as private and how much as public? I realize that all the profits will be counted as private and all the costs of the road will be billed out as public, but how much of the GDP is thus public sector? Are we Swedish yet? 63%? 65%?
And if you are thinking well yes, of course, roads they are public, then think again, or at any rate read Technical Correction Number Five. They could be sold off and privatized. But reflect why are not elevators public? How about hall ways? Why do we build fire houses, and install fire mains in our streets as a public enterprise, but regard sprinklers in a high rise buildings as private? We will pave our city streets as a public project and let private cars park on the street for free, but the building of a parking garage for a multi story building is entirely a private activity. Why? What is this, this misunderstanding of yours, but another limitation of time and place?
I originally argued for government assistance in the development of computer aided individualized instruction by pointing out that the huge government subsidies to public schools made it impossible for private companies to compete. Therefore I argued that a private market could not develop the innovative new methods that were so desperately needed to educate the children of the world. President Bush, (41), commented at the time he had “heard about that sophisticated argument” when a reporter presented him with this argument in a press conference. (see New Ruskin College Project in the Moynihan)
Though he had “heard” the “sophisticated argument” before he still had no answer for it. He did not help develop the laser disks. He was not reelected either. There is a rough justice in the world.
See here conservatives two things: First see in what darkness you walk. You think that yes America is the home of free enterprise and Sweden is socialist or nearly so. But what if this “objective” reality of yours was an hallucination? An accounting gimmick? What if you have been suckered?
And that is the second point: How many times have you been beseeched that we need just a little more, please, a few dollars, and all will be well. But see now, the darkness is pushed back a little and you can see how much of our money has already been taken from the private market economy and redirected to highways in West Virginia, stop lights in Chicago, tractor research grants to California, new regulation to “improve” health care in our hospitals, or help the little scholars in our schools, or . . . and on it goes . . . a never ending torrent of money . . . and then there is the so called “private economy”: as we have seen medicine, insurance, operate, exist as they do only at government sufferance, “private real estate” development at public expense with all of its zoning and building codes, supported by government finance monopolies and protected by tax shelters in the tax code, the private pension funds regulated, controlled, and directed by government, regulation of products, labor, construction, from corner markets to nuclear power plants, autos, aircraft, medicines, and the look of a new building’s façade, regulation upon regulation, review commissions, planning boards, and after all of that the judiciary and litigation, litigation sometimes for years, and all of this money which is in truth being directed by government is still counted as “private”. Ah, private, then it must be ok.
Private gains, public losses. Yet I tell you that people are dying because of these distortions. However, owing to the limitations of your place and time you are not even aware of the extent of your intervention in, your manipulation of, the market.
Not even aware of the harm you are causing. That is how far you are from the truth.
www.NewRuskinCollege.com
0 Comments:
Post a Comment
<< Home