Greg: Ain't Somethin' Better than Nothin'?

  
Hi Jack,

You're right that I am deliberately seeking out your opinion.  I have always respected not only your intellect, but also your Christian faith. And since, as Christians, we have come to such radically different conclusions on matters of economics and politics, I'm eager to learn why.  Hopefully, our exchanges will also be helpful for those who read the blog.

You have brought up an argument that my father brought up in some of our discussions recently and it is a very common one: private industry does a more efficient job than government at almost any economic task.  It is better at making cars, it is better at meeting consumer demands, it is better at customer service, it is better at determining the worth of wages, and so on.  To some extent, I agree with you.  In fact, I find it very hard to argue that government is efficient.  And I have no interest in defending the waste, corruption, and general unprofessionalism of many government agencies.  As one who depended upon Medicaid for my healthcare during my years as a pastor, I can assure you that as I waited in three-hour lines merely to make an appointment, I was muttering angry words about government inefficiency.  Nevertheless, as unhappy as I was with the unprofessionalism and inefficiency, I was thankful to have healthcare.  I certainly couldn't afford to buy it on my own with the salary I was pulling in. Which leads me to my question for you this time around…

It's very easy to beat up on various government programs for their many flaws.  Social security is insolvent.  Medicare is easily abused and wasteful.  Welfare promotes generations of dependency.  And on and on the stream of criticism goes, providing endless hours of material for the pundits at Fox News.  But what I want to know (and, more importantly, what those trapped in poverty want to know) is what's the better solution?  It is very easy to deconstruct, but very difficult to construct.  Any kid playing with blocks will tell you that.  The swift kick of a younger sibling can topple hours of work.  And perhaps I'm just missing it, but I don't hear a lot of conservatives out there proposing answers to the problems of systemic poverty.  I just hear them taking cheap shots at our nation's efforts (pitiful as they may be) to actually DO something about the issues people are facing.  Can you point me to a conservative solution to poverty that provides an answer not only for individuals, but that also addresses larger systemic causes of poverty?  

Perhaps what we are butting up against here is our view of society.  You rightly brought this up a few weeks ago when you asked what I meant by "we."  To bring a bit of theology into the conversation, as I read the Scriptures I see a heavy emphasis placed on the value of the community.  In fact, according to some Old Testament prophets, God judges the morality of any given nation by how it treats its poor.  There is a strong value attached to the common good with particular concern for immigrants, widows, the poor, and other marginalized groups.  So when I hear Margaret Thatcher claim that there is no such thing as society, I must stand up and object.  We are more than a mass of isolated individuals.  Scripture teaches us that we are connected to one another and "when one part of the body suffers, the rest of the body suffers with it."  

I often hear the argument made from many conservatives that alleviation of poverty is not the job of the government, but of the church.  If that is your belief, please indicate so in your next email because that idea alone is worth its own letter.  But I won't speculate as to your own conclusions about how to alleviate poverty.

So to sum up, you seem to have a great deal of confidence in the ability of the free market to answer its own problems.  And to a large extent I agree with you.  If people demand shoes, the free market generates shoes to meet the demand.  And I do think that history has shown that capitalism is excellent a generating wealth.  But we part ways here: I do not think that the free market alone ever has or ever will address many of the social and economic ills that our nation currently faces.  We must instead collectively take action against a problem that, if left unaddressed, will eventually destroy not only the poor, but everyone. Systemic problems require systemic solutions.

By the way, what is your opinion of FDR's New Deal?  It seems to me that it did not solve the problem of the Great Depression entirely, but most historians agree that it did help people more than hurt them.  And that's all I'm arguing for here:  something that helps those who suffer most.

- Greg

Jack: The Self-Correcting Market

Hi Greg--

I must compliment you on the quality of your challenges.  As far as I know, you just took the one humble econ course--which I got sick and couldn't even complete for you--and yet you're asking really good questions.  They mostly seem to come from one school of thought; but here you are seeking an alternate viewpoint to see if my iron can sharpen yours.

You ask:  "Is it possible for free markets to truly remain free without at least a minimal amount of regulation?"  Your word "minimal" seems to be where we would have to explore; how much is that minimum?  I'm arguing for something like a system of laws applying to all, and forbidding anyone from interfering with another's life, liberty, or property.  This would apply also to government, except where necessary to protect these rights.  So the government can GOVERN [Think of a gas engine's governor, preventing it from generating more power than it should] but REGULATING is another story.  

A government has no special wisdom or insight about the efficient operation of a productive business.  People in government do not have the same interest or intimate knowledge of a business's function; so it makes no sense that government can improve what a business does in serving its customers or owners.  But that's not the heart of your question.

You want to use government to restrain a business from using its very efficiency to exploit its customers and workers, to their disadvantage, due to its bargaining power and freedom to do as it chooses.  To do that, you want to limit or dictate the terms of business contracts, including labor, and reduce the bargaining power of firms that acquire too much of it.  Generally, I don't see the need for that, and in fact find it, in most cases, counter-productive or even destructive.

Here's a historical example:  the trust-busting you referred to.  In the latter 19th century there were indeed some powerful monopolies.  But for the most part they did not get that way by stealing or defrauding.  They did it by competing very efficiently, slashing the costs of energy, transport, and communication.  In the cases where they achieved impenetrable monopoly, however, they did it by using government influence.  Government, posing as "regulators," used force to violate the rights of new competitors by keeping them out--often with limited licensing rules or requirements for high-priced procedures that kept them out.  This did of course allow the monopolies to keep their prices and profits higher, for a longer time, before competitors inevitably broke through.  The railroads tried to keep the trucking industry out, but ultimately couldn't.  More recently phone companies tried also to use government to keep competition at bay, but that system of competition-killing also broke down.  Market pressure erodes monopolies, but more slowly if the government helps defend them.

But note:  When the Sherman Act was passed in 1895, the motivation was not to serve consumers.  They had already been served by these big-efficient companies as they cut prices to take over markets.  No, the support came from smaller businesses that were unable to produce as efficiently; so they pressured their representatives to break up the big companies and reduce their big-scale efficiency.  Better overall if the government could have remained out of it altogether, except as referee. But you can only get government to stay out if you have a carefully-written constitution.

Now, what would we do without OSHA, and the FDA, and others?  Can consumers find any protection, outside of government, from dangerously sloppy services?  Well, yes.  For example, when you moved:  How did you know that the vehicles you used were safe and clean?  When you stay in a motel, how do you know they gave you fresh sheets?  When you stop for some fast food, how do you know the kitchen was cleaned that day?  You can't expect government inspectors to hang out at all those businesses and supervise them.  No, instead you rely on their own self-interest.  They benefit from a good reputation--it adds to their profits!  Consumers are not ignorant; they learn and they talk to each other.  Also they seek out information.  Same with workers.  If a business cuts corners in ways that harm customers or workers, they'll have a harder time making contracts with them; and they'll get very publicly sued.  Henry Ford didn't get rich selling lemons, or by injuring his workers.

Other regulations you cite have in many cases resulted in harm to the very people they ostensibly were supposed to help.  For example, minimum wage laws prohibit work contracts that pay less than a certain amount.  This of course means that any worker whose productivity level falls below that can't have a job.  So unemployment increases among young, unskilled workers, especially among minorities.  These aren't the people who pushed for the laws, though; that came from labor unions who gain a partial monopoly in the labor market, eliminating competition from young, unskilled minorities.  Child labor laws:  parents in general don't want their kids to have to go to work; they'd rather have them in school or on a playground.  But in societies where child labor is common, those are not the true alternatives to child labor.  If you forbid child labor for a family that poor, the alternative is either prostitution or the most dangerous kind of unsanitary agriculture work.

I first ran across these discussions many years ago when I read Milton Friedman's "Capitalism and Freedom," and was astounded.  After that I had to reconsider my very-"liberal" position, and eventually I had the privilege of formally studying economics.

Surprisingly enough, I even came across a strong argument, a few years back, against the prohibition of payday-loan companies.  Since these loans are voluntary, you have to look at the alternatives that await the customers if the payday loan companies are closed or hamstrung.  They get their power shut off, and have to pay big penalties to get hooked up again.  This situation is the typical motivation for getting these loans--much more common than covering drug and gambling losses..

I'm out of time now, so let me send this to you.  If I've omitted some of your favorite points, bring them up and I'll try to address them on the next go-round.

Best wishes,

Jack

Greg: The Sin of Usury, or Why Credit Card Companies Are Evil

Hi again Jack,

We are finally fully moved in here in Evanston.  Courtney put the last box away last night.  So I'm happy to have the time and energy renew our conversation.

I found it very insightful for you to point out that one of my examples of a dysfunctional society is actually due to the fact that "a free market has been eliminated."  You state this about my argument concerning the collapsed building in Bangladesh and other similar tragedies that befall poor laborers who work in nations with no or very minimal labor laws.  So perhaps I can ask a similar follow-up question:  Is it possible for free markets to truly remain free without at least a minimal amount of regulation?  Labor laws protect the rights of workers to be able to use their mental and physical abilities to attain the full worth of what they create.  Trust-busting and anti-monolopy laws improve competition driving down prices for the consumer and reducing the practice of price gouging.  OSHA makes sure that the hamburger I buy at Joe's Sandwich Shop doesn't kill me.  Financial regulators ensure that large banks don't cook the books so that our nation is led into a terrible recession (2008).  I could cite many others laws and regulations such as the minimum wage, child labor laws, worker safety protections, etc.  Do you see where I'm going?  If you agree that the conditions I have describes are actually examples of free markets malfunctioning, then do you also accept proposals for regulations of the free market to ensure its viability?  If so, you will sound very close to my own position (and the position of more left-leaning economists like Paul Kruegman and his "Conscience of a Liberal," among others).  You have suggested the necessity of a "constitution" to safeguard against the natural tendency of the strong to oppress the weak, but I suggest that we must go beyond a mere constitution and be proactive about addressing social problems as they arise.  Or perhaps I'm misunderstanding the meaning of how you are using "constitution."

I have been thinking recently about a business practice ubiquitous in the inner city which I always found particularly angering -- the practices of loan sharks.  On almost every street corner you find places that will give you cash today for a "small fee" and provided that you sign over your paycheck to them later.  (I'm referring to businesses like "Check N to Cash," for example).  Now the medieval Christians as well as the long Judeo-Christian tradition dating back to Moses has always condemned this practice and termed it the sin of "usury."  Interestingly, the church has largely fallen silent on the issue (in fact, in the 32 years of my life, I have never once heard a sermon on the subject of usury).  I interpret this as one way in which the church has accommodated to (and capitulated to) the American capitalist ethos.  In short, do you find it morally reprehensible for businesses to take advantage of the poor who desperately need cash right away for basic necessities like food, healthcare, water, shelter, and clothing?  I do.  Do you agree with the vast majority of the Christian and Jewish tradition (and I believe Muslim as well) that usury is a sin?  I would suggest that the Christian Church must actively oppose such systematic abuses of power since they keep the poor in poverty and, in fact, exacerbate their plight.  You could apply this to credit card companies and their 39% interest rates as well.  For this reason, I applaud the Obama administration, for example, for setting restrictions on credit card companies for the fees and interest rates that they are allowed to charge.  I once met a man (a janitor and maintenance worker at Greenville College, actually) who foolishly racked up thousands of dollars of debt on his credit cards shortly after graduating from high school.  He told me that he was just about to pay off the last of his debt, but as a 35 year old man it had taken him over twelve years to do so.  I suppose the conservative might say that this man deserved to basically work as an indentured servant (let's call a spade a spade here) for over a decade since he made such rash decisions.  I, however, don't take that line.  I find fault in a credit card system and a society that allows such an injustice to take place legally.

To boil down this post (and I realize I'm only touching on a fraction of what we have been discussing), I'll state things this way:  You claim that there are three ways to get money (creating it, stealing it, or receiving it as a gift).  I believe that many businesses in our nation such as the loan sharks, pawn shops (some of which are attached to liquor stores so that you can go right in, sell your stuff, and come out with your whiskey all at once), and banks/credit card companies are actually STEALING rather than creating wealth.  What say you, good sir?  Ought Big Brother step in and meddle with the lassie-faire free market to prevent such theft?  I vote yes.

Yours,

Greg

Jack: What Do You Mean By "We"?

In this post, Jack has replied by interspersing his comments into the previous email.  If you have read the last post, you can skip all that is in blue (Greg's thoughts) and just read what is in black and italicized (Jack's thoughts).

----

Greg:

OK, I'll try inserting responses to your many questions--good ones, in my opinion:  

Jack,

The time has finally come for me to reply.  It's been a hectic few weeks.

For the sake of clarity, I'm going to try to summarize your main points.  You can correct me if I'm wrong.

1.  Humans CREATE wealth through their own work and effort and ingenuity.

2.  Since an individual creates his own wealth, he or she alone has the right to that wealth.  No one should be allowed to take that away.

3.  A proven method of attaining human happiness is through "earned success" (i.e. the rewards of hard work).  (By the way, I do not dispute that; I would dispute that it is the only or even the primary means to happiness).

I didn't mean to imply that earned success the only means to happiness; I just offered it as one where social scientists have been able to demonstrate a clear correlation--and one that seems to flow causally.

4. All of the great captains of industry created wealth out of thin air; they did not steal it from others.  Their actions are morally praiseworthy.

5. A free market system delivers greater justice and greater happiness to people than any other system.

I want to note, on this one, that no system delivers PERFECT justice and happiness; but freedom surpasses all others ever tried.

I realize that I've offered an oversimplification of your points, but I think that's the basic gist of what you're driving at.

I think you did a pretty good job.

So here are a few of my own thoughts.  First, are you willing to admit that there are some instances in history in which the rich gain their riches by oppressing others and using them as a means for their own end (i.e. increasing their wealth)?  An obvious example of this is slavery.  If you are willing to admit this, then the obvious follow up is "Is this still taking place today and what can be done about it?").  If you control the means of production and I do not have any capital of my own save the strength of my own muscles and the ability of my own mind, then you have me at a great disadvantage.  The starting line is not the same.  The scales are already balanced in your favor.  If I'm desperate enough, I will sell you my labor for a small amount of money in order to feed my family and, in the meantime, you profit greatly from my willingness to work for you for very little.  Thus, YOU have not CREATED the wealth; I have created the wealth and you have skimmed off all but a meager hourly wage that you must pay me -- just enough to keep me coming back.  This is, of course, what happens in Southeast Asia and throughout the world every day.  And, in order to increase your bottom line, you might skimp on maintaining the factory that I work in and after a few years -- boom -- a roof collapses and I die.  Without labor laws to protect me from you (the captain of industry), what power do I have?  Should not something be done in the name of justice and fairness to balance the scales?  

Now, in your very first expository paragraph about the limitations of a free market, you have begun by describing conditions in which a free market has been eliminated.  Not such a good test of free markets.  

There are in fact three ways to gain wealth:  create it, steal it, or receive it as a gift or bequest.  Only the first increases the amount of wealth available for all; and free markets maximize that.  What you described fits the many kleptocracies that have always existed when the strong got away from taking from the weak. A free market by definition doesn't permit that, and needs structures in place (a "constitution") that will restrain those whose strength and lack of conscience enable them to exploit what others have created.

I stumbled across an interesting statistic the other day:  those who are born in the top 1% have a 99.87% chance of remaining right there in the top 1%.  How would you explain this fact?  Are those born in the top 1% that much more intelligent or beautiful or talented or strong than the rest?  I interpret it as a sign that our common notions of social mobility are a myth.

Your statistic may describe some societies in which people are not free to create, keep, and rise economically.  But it does not describe the US or any other western democracy.  Statistics from the US census show clearly that households in lower socio-economic levels will tend to rise to higher levels even after one decade.  You always will have households in the lower quintile; but they tend to be newer ones, headed by workers who have not yet learned to create wealth very productively.  We have a mobile society.

If we can agree that people do not all start with equal opportunity (do you agree with at least that?), then what do you propose ought to be a way that we even the scales?  Or is that even an effort worth undertaking?

I should pause to ask you to use first-person plural references as thoughtfully as you can.  When you say "we" should do this and that, do you mean you and I and other Christians or Americans; or do you mean the government by means of force?

Of course people start with different talents.  So equal opportunity can only try to restrain anyone from interfering with your best efforts to create with what you have.  Nothing will even the scales, unless you use force and discourage people from creating.

Turning to a more theological argument, I would ask you, "How are you able to create?"  You are right that our human ability to create is a function of our being made in the image of God.  But you run the risk of sounding like Homer Simpson when he prayed before a family dinner, "Well, God, I worked hard to make the money to buy this food so thanks for nothing."  We are able to create because we have brain and brawn.  Those are God-given.  You are able to be a professor because God gave you a good mind.  Thus, in what sense is the wealth that you create by using that good mind in any way your own?  You mind is on loan from God.  Of course, the implication of this is something that I think you will agree with:  we own nothing.  We are merely stewards of what God has entrusted to us.  And this is not mere wordplay or semantics or holy-church-speak.  This has implications for our understanding of property and what we are to do with our property.  I find in the Bible a God who is particularly concerned with the poor and who demands that his people care for those poor.  In fact, God cared about them so much that he established laws to ensure that sinful human nature did not forget or neglect to care for his beloved poor. 

Let me quote my earlier letter.  I didn't say that what I create is my own.  I agree that in the end, all our claims are subordinate to God's.  What I said about what you create was, and I quote, "you have first claim to, prior to the claim of any human who did not create it."  If you created something, I have no claim on it or right to take it from you.

Out of curiosity, in your view, if a human is created mentally handicapped, then how should she or he be cared for?  How much money should they make?  Do they CREATE wealth?  If not, what is our societal obligation to them?

Here's a good place to be careful about "we."  Some handicapped persons have little or no ability to create anything.  So they can't "make" money since they can't "make" anything to trade for money.  Does that mean they should starve, and I should or would let them?  Certainly not!

A free environment doesn't restrain compassion in any way.  In fact, it provides the means to enable more compassion, by producing many times more material goods.  But in such an environment, the decision to help the handicapped or unfortunate falls to those who produced the wealth.  They give voluntarily.  They don't sit and hang on to all they have until an Imperial "we" levies a tax to force them to practice compassion.

Does this happen?  Not in the theories of those who want a more powerful "we."  But in the real world, where do you find the most voluntary sharing of wealth?  The US.  How about Europe?  No, the government levies and redistributes, and the total sharing is far less.  When the typhoon hit SE Asia a couple of years back, the US was criticized by numerous Europeans because "we" didn't give as much as they did--in absolute terms, or per capita, or as a percent of GDP.  But what they overlooked was that so much of our aid for that disaster was from private giving; they had only counted government endowments.  When you include private giving (for every country) Americans were by far the most generous, as they have always been.

If you go back to 1900 or so, the US didn't have a lot of public tax-funded welfare programs.  But we did care for our poor, using church and community organizations to help them on a far more individual basis than you'd see now.  It was generous, especially considering that people had much less disposable income from which to share than w have now.  Much of this got supplanted by government programs as a result of the Progressive movement.  One remnant of these early organizations is the Salvation Army.

I think that the basic, foundational problem I have with your argument is how it assumes a rigid individualism.  In reality, we are all far more interconnected to one another than your model seems to assume.  The generation of wealth has many sources.  Yes, it can be hard work.  But other factors also come into play -- social structures, geography, inherited socio-economic status, laws, values, moral formation, social capital, etc.  

I don't think I argued that only hard work produces wealth.  It comes, in fact, more from entrepreneurship (broadly defined).  We spot a need and fill it in whatever way we can that's better than some other way to fill it.  Maybe that means developing a skill that others need and will pay for; maybe it means opening a retail business in a place where people need certain goods available; maybe it means developing a new means of transport or communication.  The factors you listed will affect how efficient a person can be at doing this, and how inclined he will be to do it.

I also have a host of theological and biblical questions for you.  For example, why does Luke teach us that communal property and sharing was normative among early church members?  How compatible is the Lockean language of private property ownership with this?  

Well, the early church didn't try to eliminate private property or freedom.  Ananias and Sapphira were under no obligation to share their property, and were not punished for their failure to do so.  But the Christians did voluntarily use their own created means to help one another.  I think that's fully compatible with Locke.

What do you make of Leviticus 25 and the Jubilee laws?  There are many others but those seem most relevant to our current discussion.

I find them curious--an interesting constraint on rights to real estate.  You couldn't make a perpetual assignment of your right to land granted to your family.  Therefore such an assignment--like a modern sale of land--would become more like a leasehold as you approach Jubilee year.  Again, it's interesting.  Am I correct in understanding that Israel never actually enacted it?

For the record, I am not a socialist.  I believe in much of what you believe -- the right to work hard and earn your keep.  But I also believe that society can and ought to take certain measures to curb the excesses and abuses of the free market.  

Here, look at your use of the word "society" and see if it falls into the warning I gave about saying "we" should do certain things.  Jesus and the Bible tell us, everywhere, to use our means to care for the poor.  But where does Jesus, or the Bible, tell "us" to take from others for the benefit of the poor?

I find the current distribution of wealth in our country to be morally reprehensible.  

I already addressed this.  The word "distribution" is cleverly passive.  It suggests that someone distributes the wealth, and is doing it unfairly.  So "we" need to use force to correct this maldistribution.  But wealth is not gained by access to a "distribution," but by creation.  Or by theft.  (That's how the Royal families got theirs, as do those who profit from government preferences.)

This is because my sense of what is right and wrong are rooted in the biblical themes of love, compassion, equality, fraternity, community, the interconnectedness of human life, and a concern for the common good.  I know that you may not list the same virtues and themes from your own reading of Scripture, but then we enter into the world of biblical hermeneutics which is a world I most certainly welcome us to enter if you so desire.

"The quality of mercy is not forced."  That is, a virtue is not a virtue unless practiced voluntarily.  An environment of freedom allows more voluntary action, and therefore more and better practice of any virtues.

Your turn.  (I actually don't like saying that because I don't believe we are having a competition here.  I'd prefer to think of us as cooperating with one another in seeking the truth.  But perhaps that emphasis on cooperation over and against competition makes me a liberal softie).

I agree with your idea of using point-counterpoint to clear away vague notions and zero in on the truth.  I like it.  So how are we doing?

Jack

Greg: The Uneven Starting Line

Jack,

The time has finally come for me to reply.  It's been a hectic few weeks.

For the sake of clarity, I'm going to try to summarize your main points.  You can correct me if I'm wrong.

1.  Humans CREATE wealth through their own work and effort and ingenuity.

2.  Since an individual creates his own wealth, he or she alone has the right to that wealth.  No one should be allowed to take that away.

3.  A proven method of attaining human happiness is through "earned success" (i.e. the rewards of hard work).  (By the way, I do not dispute that; I would dispute that it is the only or even the primary means to happiness).

4. All of the great captains of industry created wealth out of thin air; they did not steal it from others.  Their actions are morally praiseworthy.

5. A free market system delivers greater justice and greater happiness to people than any other system.

I realize that I've offered an oversimplification of your points, but I think that's the basic gist of what you're driving at.

So here are a few of my own thoughts.  First, are you willing to admit that there are some instances in history in which the rich gain their riches by oppressing others and using them as a means for their own end (i.e. increasing their wealth)?  An obvious example of this is slavery.  If you are willing to admit this, then the obvious follow up is "Is this still taking place today and what can be done about it?").  If you control the means of production and I do not have any capital of my own save the strength of my own muscles and the ability of my own mind, then you have me at a great disadvantage.  The starting line is not the same.  The scales are already balanced in your favor.  If I'm desperate enough, I will sell you my labor for a small amount of money in order to feed my family and, in the meantime, you profit greatly from my willingness to work for you for very little.  Thus, YOU have not CREATED the wealth; I have created the wealth and you have skimmed off all but a meager hourly wage that you must pay me -- just enough to keep me coming back.  This is, of course, what happens in Southeast Asia and throughout the world every day.  And, in order to increase your bottom line, you might skimp on maintaining the factory that I work in and after a few years -- boom -- a roof collapses and I die.  Without labor laws to protect me from you (the captain of industry), what power do I have?  Should not something be done in the name of justice and fairness to balance the scales?  

I stumbled across an interesting statistic the other day:  those who are born in the top 1% have a 99.87% chance of remaining right there in the top 1%.  How would you explain this fact?  Are those born in the top 1% that much more intelligent or beautiful or talented or strong than the rest?  I interpret it as a sign that our common notions of social mobility are a myth.

If we can agree that people do not all start with equal opportunity (do you agree with at least that?), then what do you propose ought to be a way that we even the scales?  Or is that even an effort worth undertaking?

Turning to a more theological argument, I would ask you, "How are you able to create?"  You are right that our human ability to create is a function of our being made in the image of God.  But you run the risk of sounding like Homer Simpson when he prayed before a family dinner, "Well, God, I worked hard to make the money to buy this food so thanks for nothing."  We are able to create because we have brain and brawn.  Those are God-given.  You are able to be a professor because God gave you a good mind.  Thus, in what sense is the wealth that you create by using that good mind in any way your own?  You mind is on loan from God.  Of course, the implication of this is something that I think you will agree with:  we own nothing.  We are merely stewards of what God has entrusted to us.  And this is not mere wordplay or semantics or holy-church-speak.  This has implications for our understanding of property and what we are to do with our property.  I find in the Bible a God who is particularly concerned with the poor and who demands that his people care for those poor.  In fact, God cared about them so much that he established laws to ensure that sinful human nature did not forget or neglect to care for his beloved poor. 

Out of curiosity, in your view, if a human is created mentally handicapped, then how should she or he be cared for?  How much money should they make?  Do they CREATE wealth?  If not, what is our societal obligation to them?

I think that the basic, foundational problem I have with your argument is how it assumes a rigid individualism.  In reality, we are all far more interconnected to one another than your model seems to assume.  The generation of wealth has many sources.  Yes, it can be hard work.  But other factors also come into play -- social structures, geography, inherited socio-economic status, laws, values, moral formation, social capital, etc.  

I also have a host of theological and biblical questions for you.  For example, why does Luke teach us that communal property and sharing was normative among early church members?  How compatible is the Lockean language of private property ownership with this?  What do you make of Leviticus 25 and the Jubilee laws?  There are many others but those seem most relevant to our current discussion.

For the record, I am not a socialist.  I believe in much of what you believe -- the right to work hard and earn your keep.  But I also believe that society can and ought to take certain measures to curb the excesses and abuses of the free market.  I find the current distribution of wealth in our country to be morally reprehensible.  This is because my sense of what is right and wrong are rooted in the biblical themes of love, compassion, equality, fraternity, community, the interconnectedness of human life, and a concern for the common good.  I know that you may not list the same virtues and themes from your own reading of Scripture, but then we enter into the world of biblical hermeneutics which is a world I most certainly welcome us to enter if you so desire.

Your turn.  (I actually don't like saying that because I don't believe we are having a competition here.  I'd prefer to think of us as cooperating with one another in seeking the truth.  But perhaps that emphasis on cooperation over and against competition makes me a liberal softie).

- Greg

Jack: Individuals CREATE Wealth

I'm going to try to offer only brief comments, but ones that may stimulate good further discussion.

I'm not into formalities with old friends.  If you find it comfortable to call me Jack, please do.

I think your definitions of wealth and happiness work pretty well; but would like to refine them further.  Individuals create wealth--they CREATE wealth--by combining resources and specializing in skills valued by others. I emphasize the creating, because God our Creator created us in his image and gave us the capacity to create.  Most of the wealth that exists today did not exist at all 1000 years ago, or even 100 years ago.  People created it.

They did this creating mostly as individuals, seeking profitable ways to meet the needs of others so they could trade for wealth that those others, with other specializations, had created to trade.  This will take us directly to a Justice argument, in which I would say that whatever you create, you have first claim to, prior to the claim of any human who did not create it.  This is both just and prudent--prudent because such a property right creates a natural incentive to create all you can, and the human race grows better off.

For a working definition, we could say that wealth is anything that can give benefit to people--either in itself or by enabling a greater productivity of other things that produce benefits to people.  We create it by producing more than we consume, and then using the surplus for the purposes above.  And your definitions of happiness seem nice; although they are hard to quantify.

When social scientists try to measure happiness (in order to correlate it to other things) I think they usually use self-reported questions:  How happy are you?  How bright does your future look? Things like that.  It's hard, though, to find other phenomena that consistently correlate.  One that has shown up in recent scholarship is a sense of "earned success."  Those who believe they have experienced success from their own purposes and efforts, also tend to rate themselves as happy. See Arthur Brooks of the American Enterprise Institute for scholarly studies on this.

About the film you asked me to look at:  Again, beautiful graphics.  BUT:  Look at it again and take note of the verbs he uses in reference to income and wealth.  He's arguing for injustice by talking about how much income different people "receive" or "get" or "take home."  He sees the great disparity as unjust.  Also, regarding wealth, he's concerned with who "has" it, or "controls" it.  (I think that's accurate; I didn't look at the film again before writing this.  But typically such arguments do use these verbs.)

The problem is that he ignores what caused the income, or the wealth, to exist in the first place.  An individual creates income by delivering a service to someone who places a higher value, on that service, than the money (wages or profit) he exchanges for it.  So both gain in wealth.  And we create or accumulate wealth by consuming less than we produce, using the surplus to form capital--items that multiply the productivity of labor and other resources.

My point is that people PRODUCE income; they don't just "receive" it.  They CREATE wealth; they don't just "have" it.  It's theirs.  Go through your film, or any text that makes the same point, and mentally substitute the words "produce" or "create" where the author uses "receive" or "have" or whatever.  It changes the whole tenor of the argument.  For example, if the top 1% PRODUCE 25% of the income (or whatever amount), you might tend to ask a different kind of question.  Instead of "why do we allow the injustice of those few "getting" so much," we might ask "Why do those few bear such a heavy productive burden, even though all of society benefits from what they've produced to earn that income?"  Or, "When will the other 99% get off their collective duffs to produce more?"  Or perhaps more compassionately, "What can we do to help those at the bottom to produce more, so they can relieve their poverty?"

The fallacy in the film author's argument, I think is common to such people as Jim Wallis et al:  They look at people primarily as Consumers, rather than as Producers/ Creators.  People are a liability rather than an asset; an appetite rather than a discovering, producing mind.

When Steve Jobs grew so rich, his high income and net worth took nothing from people in lower classes.  He gave more than he received; the reason he got so rich was that he managed to produce so richly of his gifts.  The same is true of the very richest of entrepreneurs--Bill Gates, Warren Buffett, John Rockefeller, the Vanderbilts, the Astors, Henry Ford, Thomas Edison, and so forth.  All of these people produced in order to trade, and all of them made everyone, at all social levels, better off economically.

I do want to respond to your answered objections: For #2: Economics is not amoral, any more than physics is.  Both are concerned with finding the truth, and we all should try to behave morally and rationally in reaction to what those disciplines reveal.  For #1:  you quote "some economists" suggesting that the poor are worse off than 30 years ago.  This is demonstrably false, both nation- and world-wide.  The pie is indeed getting bigger.  It is almost impossible to come up with even a strained measure that would suggest otherwise.  We all eat better, live longer, and have access to wider opportunities.  The only exceptions occur under regimes that seek to control people more tightly, ostensibly for "their own good."

But now here's Objection #3 for you, based on all the above:  A free market, more than any less free environment, delivers greater justice (to each his own) and greater human flourishing.  Individuals combine voluntarily in various companies, teams, and families, to produce as much as the earth will permit them to, motivated by the common and natural desire to improve their own lot and that of their families and neighbors.  All they need is Rule of Law and Property Rights, so that they can have confidence that whatever they create, they can keep and enjoy.

Your turn.

Jack