What’s Money Good For?
This gentleman John Steinsvold emailed me this self-described utopian article, on the wonders of abolishing money. I told John I would post it here, so long as he agreed to go at least a few rounds in debate. I also assured him that I would keep any comments courteous. So by all means, tell John why you think he is wrong, but we don’t want him feeling like this at the end.
For my part, I’ll just criticize a few things and leave the heavy lifting to readers who care to cross swords with John.
Here John describes the alleged evils of society’s reliance on money:
Needless poverty, unemployment, inflation, the threat of depression, taxes, crimes related to profit (sale of illicit drugs, stolen IDs, muggings, bribery, con artists, etc.), conflict of interest, endless red tape, a staggering national debt plus a widening budget deficit, 48 out of 50 states in debt, cities in debt, counties in debt, skyrocketing personal debts, 50% of Americans unhappy at their work, saving for retirement and our children’s education, health being a matter of wealth, competing in the “rat race”, the need for insurance, being a nation of litigation, being subject to the tremors on Wall Street, fear of downsizing and automation, fear of more Enrons, outsourcing, bankruptcies, crippling strikes, materialism, corruption, welfare, social security, sacrificing quality and safety in our products for the sake of profit, the social problem of the “haves” vs. the “havenots” and the inevitable family quarrels over money.
So my first question is, which of the above problems are due to money per se, and which are just related to simple acquisitiveness or greed? For example, right now a heroin addict might break into your house and swipe your wedding ring, in order to get the money with which to buy heroin. But OK, suppose there is no money. Won’t the addict still want to steal my ring to trade for his heroin? Or are you proposing the abolition of trade itself, not just trading with a medium of exchange?
But let’s get back to John:
Yes, everything will be free according to need. All the necessities and common luxuries will be available on a help yourself basis at the local store. Surely, this country is capable of supplying the necessities and common luxuries for everyone in this country many times over.
I would like John to clarify his reasons for this belief. Of course the economy is physically capable of cranking out more necessities, but only if it produces fewer units of other type of goods. I.e. unless he is also going to accuse the capitalist system of wasting resources (and maybe he will take that tack), then in order to increase the amount of bread and milk produced, we will have to make due with fewer plasma screen TVs and yachts.
So now, if John agrees with me so far that more necessities will imply fewer “luxuries,” then the question becomes: Why are the current people who bust their butt going to put in so many hours? It is true that many people currently acquire their wealth in order to wear as a badge of honor around their peers. But whatever their motivation, many of these people put in insane hours (at law firms, hedge funds, etc.).
In John’s world, I imagine that most parents don’t choose to put in 100 hour work weeks. So the total amount of focused labor is going to go way down. Is John still so sure that the basic necessities will all be easily produced?
To repeat my argument: It’s not enough to look at “total output” right now, and realize that a slight change on the margins will allow enough of the necessities to be produced. Because one of the main things supporting the level of “total output” right now are the incredible hours and other energies some people devote to their jobs, when it is possible for them to amass far more wealth than their neighbors. These people might become poets in John’s world.
My other big question for John is: why do you still have Congress in your world?! We’re going to be so utopian and dreamy, that we’re disposing of money in a few paragraphs–and yet you can’t also imagine people interacting without an institution of organized violence?!
I should make clear that I am open to the possibility that a truly voluntary shift in people’s perspectives might allow something that “looked like” the abolition of commerce. For the sake of argument, suppose I am so persuasive that I convert 99.9% of the world to Christian pacifism. Since no one supports the use of violence to achieve political goals, everybody stops voting. But new, despotic governments don’t rise up in their place, because only 0.1% of the population is willing to use violence, and that’s not enough people in any given country to really setup a system of exploitation.
So anyway, in this incredible world, there are no taxes or other government distortions with the economy. So there’s unbelievable economic growth. But at the same time, you also don’t have all of the things generating crime. (You don’t have a drug war, government welfare systems, minimum wage laws, government schools, etc.) And because there is no threat of “war” (the people would forget what that word even meant after a few generations), everybody would be very very relaxed.
Now in that context, it is entirely possible in my mind that those people would be so incredibly wealthy and yet at the same time so spiritually strong, that from our perspective it would appear that they had abolished economic scarcity.
The theorems of economics would still be valid, they just would no longer be applicable. The very first assumption of economics is scarcity, the fact that consumers have unlimited desires but only limited resources.
However, in the idyllic world I am describing, perhaps desires would be so utterly different, and the material “production possibilities frontier” would be so incredibly large, that the blessed creatures of that era would no longer agree that people had “unlimited desires, limited resources.”
But anyway, even if that were possible, it doesn’t require the conscious abolition of money. That would happen naturally, as the deeper motivations of people changed.
Two Great Articles on Myths About Deflation
Here is George Selgin discussing good vs. bad deflation. Selgin says that good deflation occurs when businesses cut unit production costs, allowing them to charge lower prices. If this is what’s driving falling prices, then none of the typical fears will materialize. On the other hand, Selgin says that a “bad” deflation occurs when the money supply contracts as in the 1930s, due to a collapse in bank loans (in the midst of a fractional reserve system). In the big picture view, Selgin says that supply-driven deflation is good (same amount of money chasing more goods), whereas demand-driven deflation is bad (much less money chasing fewer goods).
I have now become so radical (due to my work on the forthcoming Depression book) that I won’t even follow Selgin in calling the price deflation of the 1930s bad. At worst, I think that’s like calling the headache you get when you have a fever bad. I.e. it’s still a symptom of something deeper, and in fact is related to the economy’s attempt to cure itself of the fundamental problem. (And yes yes, you purists, Selgin is using “deflation” to mean falling prices.)
Now here’s an article that almost lost me in the beginning, but then about halfway into it I decided the guy was a genius. I want to draw your attention to this chart:
Now here’s what the author–Daniel Amerman–has to say about the above chart:
If you’re concerned about a new US depression leading to unstoppable price or monetary deflation because of what happened in the 1930s, let me suggest that you study and remember the graph above. When you get worried about monetary deflation – take another look at March of 1933. Remember as well the one near universal lesson from the long and convoluted history of money: every time the rules governing a currency lead to a problem that causes too much pain for a government to bear – the government just changes the rules….
[W]hat the Great Depression of the 20th century in the United States historically proves is not the unstoppable power of deflation, but the opposite: that a sufficiently determined government can smash deflation at will, virtually instantly, even in the midst of depression, and replace it with inflation.
Cut Taxes for the Right Reason
I explain here. The intro:
In their zeal to oppose the lunacy of the so-called “stimulus” plan, many radio talk show hosts and other pundits have fallen into the Keynesian trap. Rather than the politicians spending nearly a trillion dollars, they argue, it would provide much more stimulus if the government gave massive tax cuts. This would “put money back in the pockets of average Americans” and they would go to the mall and “get that money into circulation and boost the economy.”
Although the instincts behind such arguments are sound, they often betray an underlying Keynesian mindset. By justifying tax cuts on the grounds that the taxpayers will go out and spend the money, these critics actually concede the entire case. After all, why take a chance on those fickle taxpayers, who might selfishly decide to pay down some debt or to stick the extra cash under the mattress? If buying stuff is the way to promote recovery, then nobody can top the DC politicians.
I Need a Stage Name
This is getting ridiculous. Besides the golf announcer, a million athletes, and a Boston College economics professor, there are just too many of us Bob Murphys walking around. I came across this blog post and was getting really upset when it said:
Perhaps, argues Bob Murphy, Greenspan was motivated by his Objectivist beliefs to act like the perfect unrestrained Keynesian in order to show us that Keynesianism does not work. He was deliberately trying to break the system instead of thinking, as his admirers did during his tenure, that he was trying to find the winning combination that would result in unending prosperity.
I was thinking, “What in the HECK did I write, that led this blogger to so completely misunderstand my position?!”
But then I followed his link, and it was to, um, some guy named Robert Murphy who did indeed advance that theory about Greenspan.
Glad I did 2 minutes of due diligence before leaving a sarcastic comment!
I think it is clear that I need a stage name. “Vanilla Ice” is taken, so I don’t know that we should even strive for coolness at this point, and instead we should settle for clarity.
Jesus and Parables
Last night I read a certain passage that had always puzzled me, and for whatever reason it clicked into place on this latest reading. In Matthew 13 Jesus gives the “parable of the sower” to the masses:
Behold, a sower went out to sow. 4 And as he sowed, some seed fell by the wayside; and the birds came and devoured them. 5 Some fell on stony places, where they did not have much earth; and they immediately sprang up because they had no depth of earth. 6 But when the sun was up they were scorched, and because they had no root they withered away. 7 And some fell among thorns, and the thorns sprang up and choked them. 8 But others fell on good ground and yielded a crop: some a hundredfold, some sixty, some thirty. 9 He who has ears to hear, let him hear!
Now the part that had always puzzled me. His apostles ask him, “Why do you speak to the people in parables?” and Jesus answers:
Because it has been given to you to know the mysteries of the kingdom of heaven, but to them it has not been given. 12 For whoever has, to him more will be given, and he will have abundance; but whoever does not have, even what he has will be taken away from him. 13 Therefore I speak to them in parables, because seeing they do not see, and hearing they do not hear, nor do they understand. 14 And in them the prophecy of Isaiah is fulfilled, which says:
‘Hearing you will hear and shall not understand,
And seeing you will see and not perceive;
15 For the hearts of this people have grown dull.
Their ears are hard of hearing,
And their eyes they have closed,
Lest they should see with their eyes and hear with their ears,
Lest they should understand with their hearts and turn,
So that I should heal them.’16 But blessed are your eyes for they see, and your ears for they hear; 17 for assuredly, I say to you that many prophets and righteous men desired to see what you see, and did not see it, and to hear what you hear, and did not hear it.
Now maybe it was just because of a different translation I had used on earlier readings, but for whatever reason, I always thought that Jesus was saying that He was purposely hiding the true meaning of His words from the masses. And there definitely is some of that going on in the above, especially verses 11-12.
But at the same time, it is clear that these people choose to be “dull.” They are not willing to put in the effort to really understand the ways of the Lord. And thus, for these people, Jesus is speaking in parables to teach them as best He can, given the limited effort they will make to meet Him.
However, Christians need to keep in mind the other interpretation, namely that from the beginning of time, these people didn’t stand a chance of knowing the mysteries of God; it was not “given” to them.
Here we butt up against another of the thinking Christian’s conundrums, namely the reconciliation of free will (and hence moral accountability) with God’s sovereignty. If God designed every last quark of the universe, and everything that has happened since the beginning has unfolded exactly in accordance with His will, then it’s a bit weird to get worked up about the Pharisees, or to respect the courage of John the Baptist.
I will tackle this (humongous) issue in a future post. For now, let me tease you by pointing out that it makes NO SENSE to say, “I’m not going to worship this ‘Yahweh’ or accept this so-called ‘Jesus’ into my heart if we don’t have free will anyway, according to this worldview. That makes no sense.”
Now, the reason THAT statement makes no sense, is that it presupposes the existence of free will. In other words, if everything really were merely the blind laws of physics, with no higher “meaning,” then the people urging you to read the Bible are just globs of cells interacting in ways likely to produce copies of their DNA, and thus there is no “reason” that “you” (whatever that means) should respond one way or the other.
Let me try to make the point a different way: When I was an atheist, certain Christians in my college would say stuff like, “Well that’s so bleak. According to your worldview, I shouldn’t even look before I cross the street, because I can’t control my actions anyway. It’s an illusion to think that I can affect whether I get hit by a car.”
Now for you atheist readers, can you see why THAT was a ridiculous objection to my atheist worldview? The person was telling me that he was going to CHOOSE not to choose to strive for his survival, because in my worldview choice doesn’t exist. But that is a complete non sequitur. If free will really is an illusion, then “choosing” to look or “choosing” to dash headlong into the street, are equally illusory expressions of a collection of cells’ metaphorical choice.
Anyway, to wrap up this whole post, let me reiterate: Jesus used parables to get across a watered-down version of His true message, because the masses were not prepared–as His apostles were–to literally discard their old lives and follow Him 24/7. So they couldn’t possibly understand what His mission really was.
However, at the same time, Jesus was acknowledging that their decisions were preordained from before they were born. Part of the story God wanted to tell, involved most people not really appreciating who Jesus was even as He cured the lame before their very eyes.
Glenn Greenwald Analyzes David Brooks
In another great article, GG takes an apparently innocuous statement by David Brooks:
What I’m really annoyed by, though, is the withdrawal of Tom Daschle. What are we, a nation of virgins?…Of course, Obama asked for all this with his cynical promise to ban lobbyists from his administration. There’s a word for lobbyists: experts. Some are sleazy and many are quite admirable, but the idea of trying to run Washington without them is absurd.
GG then quotes Brooks who also said:
I assumed Obama understood all this [that lobbyists were good and necessary] and the campaign blather was just for show. But it turns out he’s created a climate of Puritanism in which any error is grounds for disqualification.
Now had I just read Brooks’ quote on my own, I would have thought it ridiculous. But GG really drives home just how revealing it is:
Those with rewarding positions inside an imperial court (such as Brooks) naturally view the masses outside of the court with condescension and contempt — as ignorant, dirty, irritating rubes who need to be pacified with empty, deceitful words (“campaign blather,” as Brooks admiringly calls it), in order to keep them placated and believing (at least enough to enable hope) that the imperial court actually cares what they think. But all Serious, savvy, sophisticated royal court members know that none of that is supposed to matter. Not only do political elites have the right to ignore the claims they make to pacify the masses, they have the affirmative obligation to do that. That’s how the worst nightmare of the political establishment is avoided: namely, having mass sentiment affect and infect what they do.
It’s amazing how explicitly Brooks here is endorsing — and demanding — deliberate deceit of the public. There is, for obvious reasons, extreme anger among the American citizenry towards the piggish sleaze, systematic corruption, and wholesale destruction permeating the political establishment and our political and financial elites. In order to pacify those sentiments, political elites tolerated, perhaps even desired, a presidential candidate with credible outsider pretenses who claimed to empathize with that popular anger and who wanted to combat the political elites who were the targets of it — but only on the condition that he didn’t really mean any of it, that it was all just a means to deceive people into believing that they still live in some sort of responsive democracy and they retain even a minimal ability to shape what the Government does. The anti-Washington rhetoric Obama was spouting was tolerated by media elites only to the extent that none of it was sincere.
Rob Bradley Names Names
…in the energy movement. I gather that he will have more posts on this topic in the future.
Also, I want to once again give a generic plug for MasterResource. If you scroll down the main page, you’ll see they have all their big guns in the rotation now.
Peter Schiff Tells China How to Take Over the World
Seriously, can you imagine if the Chinese implemented Schiff’s scheme (HT2 Tim Swanson)? (You don’t need to watch the whole clip; you’ll hear it in the beginning.) The Saudis couldn’t do it realistically, because they can’t repel a US invasion if push comes to shove. But nobody’s invading China in the next ten years.
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