Notes from underground

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Archive for the tag “economics”

It’s cool to be Christian again

I’ve seen various comments along the lines of “It’s cool to be Christian again”, pointing to recent statements by the Roman Pope and retired Anglican Archbishop Desmond Tutu.

There seemed to be something missing there, however, because the Anglican Archbishop of Canterbury made some statements that were just as newsworthy, and just as widely reported, it seems, but were not, apparently, seen to be cool by the current arbiters of “cool”.

Here, for the record, are some of the blog posts and comments on the Archbishop of Canterbury’s statements.

I suppose it depends on how you define “cool”.

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Youth Wage Subsidy

There has been a proposal for a youth wage subsidy in  some quarters. Those who are touting this idea say that it will help to solve the problem of youth unemployment.

The Congress of South African Trade Unions (Cosatu) opposes the idea, and has set out its reasons in a paper, which I think all who are interested in the topic should read.

I think that this kind of proposal needs to be considered very carefully. History can teach us something here. If the Speenhamland System had a better record, I might say that a youth wage subsidy was worth considering,  but it didn’t. Actually, if one applied the Speenhamland System in South Africa, it would be more akin to a farm labour subsidy. If the striking farm workers at De Doorns, and others in a similar position, were to have their wages subsidised, it would be a closer parallel, and some of the same constraints apply: if the wages of farm labourers are increased, the money must come from somewhere, and the most obvious place for it to come from is an increase in the price of agricultural produce, which would hit the unemployed poor hardest.

The question of a youth wage subsidy is slightly different, especiqally in urban areas.

One of the things that prevents young people being employed in entry positions in many firms and organisaqtions is that the salary bill is heavily weighted towards top management. In other words, if the bosses weren’t overpaid, there would be more money to employ young people at entry-level positions. So what is presented as a proposal for a “youth wage subsidy” could just as easily be seen as a “fat cat management income subsidy”. Mrs Buthelezi at Nkwalini would be  paying 15c in the Rand on her groceries  in part to subidise the six and seven figure salaries of top management in Gauteng.

This is exacerbated by the so-called Black Economic Empowerment (BEE) policy. Among other things, this requires firms to have a certain proportion of black people at top management level. This means that black managers can command (and get) higher remuneration than their white counterparts. So a black person who replaces a white person at top management will be paid more — a lot more — than their predecessor. And that money could have been used to employ several young people at entry level. So BEE could more accurately be termed Black Elite Enrichment.

That does not mean that the white management people were or are underpaid. Far from it. The income disparity between rich and poor in South Africa is one of the biggest in the world, and is still growing, regardless of race. And a youth wage subsidy would simply exacerbate that.

I’m no professional economist, so the views I have expressed are those of an ordinary citizen. Well, a deacon is also supposed to be an “economist” of sorts, and the first deacons practised ekonomia. So I have a proposal.

I would like to see a gathering of Christian economists and Christian theologians getting together to discuss this and other related problems, to try to formulate a possible Christian response. Two that I know personally, who are concered about these things, are Dr Azar Jammine and Prof Tinyiko Maluleke, and I am sure that there are several others. Is there anyone else who thinks such a meeting might be useful?

 

The Poor Mouth: Vulture Funds Act made permanent

The Poor Mouth: Vulture Funds Act made permanent: “It seems to have gathered little or no coverage at the time but it very leasing to see that The Debt Relief (Developing Countries) Act 2010 was made permanent last month.

The main effect of the act was to prevent creditors from using British courts to seek harsh payments from some of the poorest and most vulnerable countries for debts that the likes of vulture funds may have bought for a fraction of the cost.”

Well, that’s at least one good thing that the Tory/LibDem government in the UK have done.

Mere Ideology: The politicisation of C.S. Lewis

I recently read a couple of articles that appear to me to be attempts to co-opt C.S. Lewis for the cause of American Libertarianism.

C. S. Lewis on Mere Liberty and the Evils of Statism, Part 1:

In comparison to contemporary ‘progressive’ Christians such as Jim Wallis, Tony Campolo, Ronald Sider, and Brian McLaren, who clamor for the foolish and disastrous notion of achieving ‘social justice’ through gigantic government powers, was Lewis just ignorant or naive about modern realities, or was he aiming at a deeper and more significant purpose? (See Robert Higgs’s book refuting the ‘progressive’ myth in American history, Crisis and Leviathan, and his book on the disastrous ‘progressive’ state since 1930, Depression, War, and Cold War; see also Arthur A. Ekirch, Jr.’s The Decline of American Liberalism and The Civilian and the Military, and Jonathan Bean’s Race and Liberty in America.) In this article, I only begin to touch on some of Lewis’s many writings pertaining to the subject of liberty and Christian teachings because any truly adequate examination would warrant at least an entire book.

Hat-tip to C S Lewis on economic and social liberty – National Hobbits, Narnia & Spirituality | Examiner.com.

Though the authors of both these articles acknowledge that C.S. Lewis was decidedly non-political, he was also, and I would say even more decidedly non-ideological. Yet both authors seem to want to co-opt Lewis to support an ideology.

What gives me that impression is the use of the word “statism”, which I associate with the decidely anti-Christian ideology of Ayn Rand. I know she didn’t invent the term, but she used it and her followers used it to give it a particular meaning, so it has become an ideologically loaded term.

Not that I like “statism”. It also speaks to me of the totalitarianism of Hitler and Stalin, which elevated the state to the highest value.

I suppose as a political (but not economic or theological) liberal I could make a case for C.S. Lewis being a liberal, and supporting a liberal view of society. When he says things like:

I am a democrat… I am a democrat because I believe that no man or group of men is good enough to be trusted with uncontrolled power over others. And the higher the pretentions of such power, the more dangerous I think it both to the rulers and to the subjects. Hence Theocracy is the worst of all governments. If we must have a tyrant a robber baron is far better than an inquisitor. The baron’s cruelty may sometimes sleep, his cupidity at some point be sated; and since he dimly knows he is doing wrong he may possibly repent. But the inquisitor who mistakes his own cruelty and lust of power and fear for the voice of Heaven will torment us infinitely because he torments us with the approval of his own conscience and his better impulses appear to him as temptations. And since Theocracy is the worst, the nearer any government approaches Theocracy the worse it will be. A metaphysic, held by the rulers with the force of a religion, is a bad sign. It forbids them like the inquisitor, to admit any grain of truth or good in their opponents, it abrogates the ordinary rules of morality, and it gives a seemingly high, super-personal sanction to all the passions by which, like other men, the rulers will frequently be actuated. In a word, it forbids wholesome doubt (Lewis 1966:81).

It was sentiments like that that led me to sign up as a card-carrying member of the Liberal Party when I was a student, and to reject the ideology of the ruling party — Christian Nationalism — as evil and anti-Christian. When Lewis says “I am a democrat because I believe that no man or group of men is good enough to be trusted with uncontrolled power over others” that decided the case for Liberalism back then, because the Liberal Party was the only legal political party that advocated a policy of “one man, one vote”. Even the Progressive Party (whose descendants, the Democratic Alliance, like to claim to be heirs of South African liberalism) believed that one group of men, the rich and the educated, were good enough make decisions on behalf of others.

And Lewis goes on to say

Being a democrat, I am opposed to all very drastic and sudden changes of society (in whatever direction) because they never in fact take place except by a particular technique. That technique involves the seizure of power by a small, highly disciplined group of people; the terror and secret police follow, it would seem, automatically. I do not think any group good enough to have such power. They are men of like passions with ourselves. The secrecy and discipline of their organisation will have already inflamed in them that passion for the inner ring which I think at least as corrupting as avarice; and their high ideological pretensions will have lent all their passions the dangerous prestige of the Cause. Hence, in whatever direction the change is made, it is for me damned by its modus operandi. The worst of all public dangers is the committee of public safety. The character in ‘That hideous strength’ whom the Professor never mentions is Miss Hardcastle, the chief of the secret police. She is the common factor in all revolutions; and, as she says, you won’t get anyone to do her job well unless they get some kick out of it (Lewis 1966:82).

And in the fascist South Africa of the 1960s the Security Police (Veiligheidspolisie) were literally the “safety police”.

Lewis may have been non-political, but it is clear from the above that he was not just non-ideological, but anti-ideological, and I’m pretty sure he would have rejected ideologies like Randism or American Libertarianism just as strongly as he rejected Hitlerism and Stalinism. Ideologies, of course, have codes of political correctness, and American Libertarians make it very clear indeed what views and attitudes they regard as politically incorrect, and we have been given a list of people whose views must be regarded as politically incorrect: Jim Wallis, Tony Campolo, Ronald Sider, and Brian McLaren.

I know nothing of Tony Campolo, but I’ve read some of the writings of some of the others, and I’ve not noticed a great love of totalitarianism or theocracy in what they write. Missing from the list, however, is Rousas John Rushdoony, who advocated something like the theocracy that Lewis thought the worst of all possible forms of government.

I agree with David Theroux and Mark Sommer to some extent, when they say that not all human problems can be solved by politics. But their silence on the ways in which they think they can be solved leaves me wondering whether they perhaps think that it is better that they not be solved at all. Christian attempts to solve all problems by politics do not work too well, as Will D. Campbell and James Y. Holloway point out in their book Up to our steeples in politics. As they say, what is wrong with us that can be solved by politics is not all that is wrong with us.

But we in the Church persist: we are still hopeful that though all these means we can build a kingdom in which all things will be set right between man and man (and occasionally between man and God), refusing to recognize that these means are an attempt to build a kingdom by our guidelines and blueprints, by our sociology and politics, not by what God’s reconciliation has already done for the world in Christ. In this book we are trying to confess that the goals of the contemporary Church – that is to say, the Church of St John’s by the Gas Station, the Christian College, the denominational and interdenominational seminary – the goals of these Christian communities are blasphemous. The reconciliation the Church is seeking to accomplish today by these subterfuges has already been wrought. The brotherhood – the “one blood” of Acts 17, 26 – that the Church makes its goal today is already a fact. And because this is so, that very fact judges our goals and our efforts to achieve brotherhood by social action as blasphemous, as trying to be God. Instead of witnessing to Christ, the social action of the Church lends support to the totalitarianism of the wars and political systems of the 20th century. By its social action, the Church permits and encourages the State and culture to define all issues and rules and fields of battle. The Church then tries to do what the State, without the Church’s support, has already decided to do: to “solve” all human problems by politics. And this is specifically the political messianism of contemporary totalitarianism and of Revelation 13. “Politics” by definition can only “adjust” and “rearrange.” It cannot – as politics – “solve” anything. But the Church’s social action encourages the very movements in the contemporary political processes which are moving us straightaway into 20th-century totalitarianism (Campbell & Holloway 1970:2).

But the way American Libertarians talk, it sounds as though while they reject the attempt to solve all problems by politics, they propose instead to solve them all by economics, and specifically by American big business, whose interests must take precedence over everything else.

And I doubt very much that C.S. Lewis would have supported that notion. The nearest equivalent to Ayn Rand’s heroes — Dagny Taggart, John Galt and Howard Roark — in C.S. Lewis’s novels is Dick Devine, and Lewis gives him an altogether different treatment. The Sackville-Bagginses could also be said to represent the “entrepreneurial spirit”, which probably needs to be exorcised rather than encouraged.

A few weeks ago my blogging friend Matt Stone posted this ikon on his blog, asking “What is it saying theologically and politically?”

My response was that what it is saying theologically and politically is that political power and authority are to be exercised subject to Christ, and not sought for their own sake. The task of those in authority is to make the earthly kingdom an image of the heavenly one in righteousness and justice.

And I think that C.S. Lewis had somewhat similar notions, when he made Peter, Susan, Edmund and Lucy kings and queens of Narnia to promote justice and righteousness. And when their successors in Prince Caspian abused their power, they returned to Narnia to put things right. Mark Sommer in his article extols freedom and social liberty, but despises social justice. Yet in The Silver Chair Jill Pole discovers at her school (a libertarian institution, if ever there was one) that liberty without justice is a recipe for misery.

We cannot solve all problems though politics because what is wrong with us that can be solved by politics is not all that is wrong with us. It is a bit like the relation between law and grace. Law can restrain us from evil, but it cannot make us good. Justice is not love. The most that can be said is that it is a kind of congealed love. Law and politics cannot make men love one another, but they can restrain the effects of their lack of love, and that is justice.

As for trying to trying to solve problems by economics, let the Orthodox philosopher Nicolas Berdyaev have the last word:

The Origin of Russian Communism (Ann Arbor Paperbacks)The Origin of Russian Communism by Nikolai Berdyaev

My rating: 5 of 5 stars

Quote: It was the industrialist capitalist period which subjected man to the power of economics and money, and it does not become its adepts to teach communists the evangelical truth that man does not live by bread alone. The question of bread for myself is a material question, but the question of bread for my neighbours, for everybody, is a spiritual and religious question. Man does not live by bread alone, but he does live by bread and there should be bread for all. Society should be so organized that there is bread for all, and then it is that the spiritual question will present itself before men in all its depth. It is not permissible to base a struggle for spiritual interests and for a spiritual renaissance on the fact that for a considerable part of humanity bread will not be guaranteed. Such cynicism as this justly evokes an atheistic reaction and the denial of spirit. Christians ought to be permeated with a sense of the religious importance of the elementary needs of men, the vast masses of men, and not to despise these needs from the point of view of an exalted spirituality.

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Notes and References
Campbell, Will D. Holloway, James Y. 1970. Up to our steeples in politics. New York: Paulist.
Lewis, C.S. 1966. Of other worlds: essays and stories. London:Geoffrey Bles.

The end (of the recession) is not in sight

The end of the global recession is not in sight, and seems to be perpetually receding. It seems that we are still on the road to a full-scale depression, thanks to “casino capitalism”.

Merkel Reaches Her Overdraft Limit: Greek Bailout Could Push German Debt Through the Roof – SPIEGEL ONLINE – News – International:

The end of the spiral of debts is nowhere in sight. It just continues to grow — and soon it will grow further if Germany provides €8.4 billion ($11 billion) in financial aid to Greece. Initially, that assistance will only come in the form of credit guarantees from the federal budget for state development bank KfW, which will then provide the money in the form of loans to Greece. So they aren’t technically debts. But what happens if cash-strapped Greece is unable to pay back its loan? Then Germany’s deficit would grow in real terms by several billion.

While free-marketeers prescribe “hair of the dog that bit you”, others take a different view: Pension Pulse: Beyond the Greek Crisis: Will Capitalism Survive?:

It is clear to me that pensions and the global economy have succumbed to Casino Capitalism – a form of capitalism which benefits the financial and corporate oligarchs, leaving the rest of the population behind. Greece is the birthplace of democracy, will it also be the birthplace of a new form of capitalism?

Some commentators seem to be moving into conspiracy theory territory, though some might attribute this to the law of unintended consequences: First of May 2010: Organize and Fight Against Capitalist Exploitation! | Mostly Water:

Information indicates that the US and UK finance capital are using speculation in other countries’ economies as a weapon against competitors. Various Anglo-American financiers [intended] that a diversionary attack on the euro, starting with some of the weaker Mediterranean or Southern European economies, would be an ideal means of relieving pressure on the battered US greenback which was at a record low in November 2009.

At the time as the EU was launching its Lisbon Treaty in December 2009 there were speculative assaults or bear raids against Greek and Spanish government bonds as well as the euro itself, accompanied by a press campaign targeting the so called PIGS (Portugal, Ireland, Greece and Spain). Both the Greek and Spanish Prime Ministers reacted against these speculative attacks.

And an apparently capitalist-favouring source makes a perceptive comment: The Greek Tragedy Unfolds – Walter Russell Mead’s Blog – The American Interest:

For many Greeks, capitalism still feels wrong. The substitution of market forces for traditional social relations undermines aspects of Greek life that are very dear to many people; the inequality that so often results from capitalism offends deeply held social ideas about fairness. More, since the rising powers whose policies and interventions have done so much to shape Greek history have been capitalist, Greeks associate institutions like the IMF and the ECB (European Central Bank) with foreign meddling and unjust usurpation. And the successful capitalist countries (and the foreign multinational corporations who come with it) have never scrupled to press their advantages in less developed or weaker countries like Greece.

I wonder if those social ideas about fairness ultimately spring from Orthodox theology, and church fathers like St John Chrysostom and St Basil the Great who suggest that goods that we own in excess of our needs are stolen from the poor.

PamBG’s Blog: Christian Economic Life – Post 1: Foundation

Pam BC has just started an interesting series of posts on Christianity and economics. I’ve read the first two, and it looks very promising indeed. PamBG’s Blog: Christian Economic Life – Post 1: Foundation:

I’m going to try a thought-experiment here. I want to think about what an economy run on Christian principles might look like. And this is quite literally a ‘thought experiment’. At the moment, I have no idea of what I intend to write in the future, but I want simply to think out loud, building on ideas step by step.

So here are some initial thoughts for a foundation:

1) Christian thinking on economics should begin with Christian and biblical principles, not with economic principles.

2) That being said, it seems to me that a good principle for a Christian thought experiment on our economic life would be: honor God and love your neighbor. (There are actually a number of principles that the bible expresses on economic life that a lot of us might not like; forbidding the giving or receiving of debt is one of these.)

3) As I think and write, I will try to separate ‘What works’ from ‘What should be’. I will recognize that ‘What should be’ doesn’t always work well. In separating the two principles, I intend to avoid what seems to me to be a usual problem in Christian economic thinking: ‘That operational method doesn’t work, therefore it is unjust’.

That is a very good start, and I recommend that people who are interested in the topic read the whole series.

If one is really going to discuss such things properly, however, blog comments are rather inadequate. It is the kind of thing worth discussing in the Christianity and society forum.

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And you can see my take on it at Notes from underground: The Invisible Hand.

Haiti: Microcosm of the crisis of development

Pambazuka – Haiti: Microcosm of the crisis of development:

Haiti is a tragedy for us all. It is a tragedy for you and me. It is a tragedy for Africa, for the poor countries of Asia, Latin America and the Caribbean. An earthquake is a global phenomenon, it can happen anywhere. It can happen in the US, in Europe and in Japan. So why then is it so destructive in its effects in the countries of the South? It is because of the failure of development. Haiti is a microcosm of the disastrous outcome of the failed so-called ‘development’ policies of the last thirty years in the South, and the destructive effects of foreign interventionist policies in the affairs of the poor countries of the South – from Somalia to Bangladesh to Haiti.

Jean-Bertrand Aristide, Haiti’s first democratically elected president, in his passionate book, The Eyes of the Heart: Seeking a Path for the Poor in the Age of Globalization gives a graphic account of what happens when local economies and local initiatives of a poor country like Haiti are subordinated to the will of global finance and corporate power masked by the ideologies of ‘free trade’ and ‘development aid’. ‘In a world oriented only toward profit, it may be difficult for us to hear God’s voice among the din and the racket of the moneychangers who have filled the world’s temples’, he writes.

Organisations trying to bring aid to Haiti after the earthquake two weeks ago have criticised the actions of the US government, saying it looks more like a muilitary occupation than disaster relif, and some have said that priority has been given to bringing in armed sodiers, and humanitarian aid has been delayed.

Haitians Dying By The Thousands As US Escalates Military Intervention:

CNN’s Karl Penhaul reported from Port-au-Prince General Hospital, where US paratroopers have taken up positions. He said that Haitians questioned why so many US troops were pouring into the country. “They say they need more food and water and fewer guys with guns,” he reported.

He also indicated that American doctors at the hospital seemed mystified by the military presence. “They say there has never been a security problem here at the hospital, but there is a problem of getting supplies in.” He added, “They can get nine helicopters of troops in, but some of the doctors here say if they can do that, then why can’t they also bring with them IV fluids and other much needed supplies.”

There was much criticism of former US President George Bush for his tardy response to the devastation caused Hurricane Katrina a few years ago. Perhaps Presdent Barack Obama has learned from this, and was quick with the rhetoric and the photo-ops, but such action as there has been has been criticised as inappropriate.

Haiti: An Unwelcome Katrina Redux:

President Obama’s response to the tragedy in Haiti has been robust in military deployment and puny in what the Haitians need most: food; first responders and their specialized equipment; doctors and medical facilities and equipment; and engineers, heavy equipment, and heavy movers. Sadly, President Obama is dispatching Presidents Bush and Clinton, and thousands of Marines and U.S. soldiers. By contrast, Cuba has over 400 doctors on the ground and is sending in more; Cubans, Argentinians, Icelanders, Nicaraguans, Venezuelans, and many others are already on the ground working–saving lives and treating the injured. Senegal has offered land to Haitians willing to relocate to Africa…

One Katrina survivor noted that the people needed food and shelter and the U.S. government sent men with guns. Much to my disquiet, it seems, here we go again. From the very beginning, U.S. assistance to Haiti has looked to me more like an invasion than a humanitarian relief operation.

The Invisible Hand


One of the most persistent forms of idolatry in our time has been the worship of economic forces. There have been huge debates about the nature of these economic forces. For Marxists the name of the deity is “the dialectical forces of history” while for the Free Marketeers it has been “the free rein of the market mechanism”.

But these are simply two denominations of the same religion. Both believe in subjecting man to the power of economics and money.

Hat-tip to A Pinch of Salt: Invisble hands of all kinds, who comments:

What is more rational or realistic – believing in a Father in heaven or an All Encompassing Love, or in this invisible hand? Just this one time let us ask the question.

Megachurches and the recession

Bishop Alan has been attending a conference at an American megachurch on the topic of how to weather the recesssion. Bishop Alan’s Blog: Church and MegaChurch Stress Test:

There’s some comfort in knowing the seas look rough from a supertanker as well as from our little English dinghies. Of course my Anglo tendency is to be sarcastic about the differences, but it’s a fact that a place like that, as well as yea many more dollars resourced (the thing people always notice first) is also yea many more dollars committed and exposed.

Real Economic Development, Not Slogans

Half an Hour: Real Economic Development, Not Slogans:

Indeed, the remark reflects the fallacious belief that all private sector economic activity is wealth producing, while all public sector activity is wealth draining. This is simply not the case. A wide variety of public sector activities can directly drive revenue into the province (for example, sales of energy by a crown corporation) while others can drive it indirectly (for example, tourism marketing and promotion). Meanwhile, private sector activity can be nothing more than an unproductive drain on society.

Hear! hear!

And we know how private sector activity and “structural adjustment programmes” have impoverished many parts of Africa, though of course asset stripping does “produce” wealth for a few.

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