The Riot of the Rich

Alan Blinder and Ben Stein don't often agree on economic issues, but this week in their respective columns in the New York Times, they joined in an attack on Wall Street's welfare queens, equity fund managers who make 100 of millions, but pay a lower percentage in taxes then their secretaries. Prof. Blinder is a former deputy chairman of the Federal Reserve Bank and a frequent adviser to Democrats; Mr. Stein is a Conservative economist, actor, and investor. They are united, however, on the issue of tax fairness. Prof. Blinder takes on the hedge fund managers who “earn” excessive salaries, but pay little tax. They are normally compensated on a “2 and 20” scheme: they get 2% of the total funds under management and 20% of the profits. So, for example, a manager of a fund with $2 billion in assets that makes 15% return gets a $40 million management fee plus 20% of the $300 million profit, or another $60 million, for a total income of $100 million. The $60 million is not taxed as ordinary income, but as capital gains which means it is taxed at a rate of 15% for a tax bill of $9 million. But if it were taxed as ordinary income, at 35% plus 2.9% for payroll taxes, the bill would be $22.7 million, or a savings of $13.7 million. Note also that the total $100 million compensation means investors are paying one-third of the profits to a manager. Why would investors accept such an arrangement?

The reason for taxing capital gains at a lower rate is that it is supposed to encourage investment. But as Prof. Blinder points out, it really favors one kind of investment over other kinds. Indeed, the Tax Reform Act of 1986 taxed capital gains at the same rate as income without affecting investment at all. Indeed, the problem in the economy right now is not too little capital, but too much, capital that has difficulty finding profitable investment opportunities; that is why investors are willing to accept such law returns and high fees. Instead of real investment, that is, giving funds to entrepreneurs to expand production, the money goes to stock-market speculation (which provides almost no new funds to business) or to consumer credit (usury).

Ben Stein takes on the private equity funds that rip, strip, and flip companies. Using just a small sliver of their own capital, the managers buy up companies, tear them apart, lay-off workers or outsource them, and sell off the pieces at a profit, profit that is taxed at the capital gains rate. As Ben Stein points out: We are in a war. We are apparently not winning the war. The military is desperately shy of funds, to the point where our fighting men and women are being shortchanged in training and equipment. We also need more money for our soldier's pay, so their families do not live like church mice while their spouses are deployed in Iraq or Afghanistan. In these circumstances, it is fitting and morally right for the richest of the rich to be paying either very low taxes or no taxes at all?...Or, put it like this: do we dare send our men and women to fight for an America in which the very rich are so favored by the government that it amounts almost to an aristocracy?

It is this last point, the rise of an aristocracy, that is most telling. American government (Democratic or Republican) now serves the rich more and more to the detriment of the common good. That is to say, our government long ago ceased to be a real democracy, and has become an oligarchy in which government serves only those with money. And oligarchy, as G. K. Chesterton points out, is not really rule, but a riot—a riot of the rich. But riot is the very definition of disorder. As Ben Stein puts it, Long ago, I had a European history teacher [who said] that one of the causes the French Revolution was the sad truth that the aristocracy was not taxed at all, while the workers and burghers were taxed highly. Is this our future?

When even Ben sounds like a Bolshevik, you know there is a serious problem.


More on Harry Potter

In a previous post, I noted the lack of both depth and religious symbolism in the Harry Potter series, and the reduction of magic to a mere controlling technology. However, a good alternate view comes from Jeffrey Weiss, a religion reporter for The Dallas Morning News. In an editorial today, Mr. Weiss gives the contrary view, and finds the religious theme embedded in the self-sacrifice of both Harry's mother and Harry himself; for Mr. Weiss, the ending provides the religious depthe that the series seems to be missing. I am not sure I agree, but since I haven't read the ending I'll suspend judgment. But either way, Mr. Weiss provides an interesting perspective.


The Myth of Reaganomics

I have just watched the most appalling piece of historical revisionism I have seen in a long time, the first part of the PBS series, The Commanding Heights, first broadcast in 2002. This two hour film purports to show the history of 20th-century economics up through the Reagan administration. Never mind that the film presents this history as a simple contest between the "free market" and "socialism," or as a contest between J. M. Keynes (whom they seem to think was a socialist) and Friedrich Hayek; television, I suppose has to simplify. Nevertheless, you know something is afoot when, in discussing (in glowing terms) Reagan's economic policies, they do not mention the economic theory that was the driving force of the administration's policies and great debate of the day, the now thoroughly discredited supply-side economics.

The film presents Reaganomics as not only an unqualified success, but also as an unqualified victory for the "free market." One can, if one likes, call Reagan's policies a "success"; one cannot, if one is honest, call them "free market." And giving the right name to things is half the problem of understanding them. So what name should we properly give to Reaganomics? To answer that question, we will first have to evaluate what they accomplished, and evaluate it on their own terms, because the best way to evaluate anybody is by the goals they set for themselves; someone can argue about goals others set for them, but there is no disputing an evaluation in terms of one's own stated goals. Reagan stated four goals for his administration: 1) Reduce government spending; 2) Reduce taxes; 3) Balance the budget, and ; 4) Reduce government regulations. Let's look at the numbers to see how well he accomplished these goals. (Incidentally, I take the numbers not from some left-wing Reagan-haters, but from the purest of the Libertarian theorists, Murray Rothbard; you can find his 1986 evaluation of Reagan here.)

Government Spending

In 1980, the last year of Jimmy Carter's administration, the fed­eral government spent $591 billion. In 1986, the federal government spent $990 billion, an increase of 68%. Federal spending as percent of GNP in 1980 was 21.6%, and after six years of Reagan, 24.3%. A better comparison would be percentage of federal spending to net private product, that is, production of the private sector. That percentage was 31.1% in 1980, and a shocking 34.3% in 1986. So whether in absolute terms or in percentages, the Reagan administration has brought us a substantial increase in government spending.


Despite the much touted tax cuts of 1981, taxes for the average person actually rose, and they rose every year thereafter. Of course, they weren't called "tax increases," they were called "fees" or "plugging loopholes; but the effect was the same.
The facts are that federal tax receipts were $517 billion in the last Carter year of 1980. In 1986, revenues totaled $769 billion, an increase of 49%. Taxes fell from 18.9% of the GNP to 18.3%, or for a better gauge, taxes as percentage of net private product fell from 27.2% to 26.6%. While that is a slight decrease, it hardly matches the overheated rhetoric. What actually went down was not tax cuts, but tax shifting, from upper income taxpayers, to middle and lower-income taxpayers. This was accomplished through an $165B increase in Social Security taxes, monies which were spent as ordinary revenue. Taxes were increased again in 1986, to prevent a market meltdown.

Balanced Budgets

In the last year of Carter's administration, the budget deficit has $74 Billion. By 1984, the deficit was $200Billion and rising.
In 1980, the debt of the United States was $712 Billion; when Reagan left office, it was over $2 trillion; when the elder Bush left office, it was $3 trillion. This kind of borrowing is also a tax increase, but an increase on future generations; we spend ourselves into prosperity by taking the money form our children; so much for "family values."

Government Regulation

The Reagan administration took credit for the deregulation of the airline and trucking industries, but in fact thses happened, or were begun, under the Carter Administration. All that extra money the Reagan Administration was spending went, in fact, to a larger and more intrusive government.

I have hewed pretty close to Rothbard's critique so as to avoid any charges of mere ideological bias, but in fact there are other grounds on which the "free market" bias of the Reagan administration can be cast into doubt, much less its deliterous social effects. Further, this critique, written in 1986, did not cover the end of his term and the presidency of the Bush I, where the situation only got worse. But if we cannot label Reaganomics as "free market," what should we call them? Clearly, this was not the ideas of Hayek at work, but those of Keynes. Further, it was not merely Keynesian, but hyper-Keynesian, with deficits that would have shocked Keynes himself, and without the moderating influeances of Keynes. In Keynes's theory, the government lowered taxes and borrowed in bad times to prop up demand, and raised taxes in good times to pay off the deficits. In Reagan's hyper-Keynesianism, the government borrowed
all the time to sustain ever-higher levels of demand; the debts just keep piling up, and no matter how low corporate taxes are, they are never low enough.

Why Keynes?

Clearly the Reaganites used Hayek's rhetoric to achieve Keynesian policies, and Hayek himself--to his everlasting shame--connived in this deception. But why the deception in the first place? The answer lies in the fact that America is not, and has not been for over 100 years, a "free market" capitalist country, but a "corporate capitalist" economy, and corporate capitalists require government power to defend their position. The reason is that corporate capitalism is--and has always been--highly unstable. The accumulation of wealth and power in the hands of a relatively small oligarchy has always made economic equilibrium impossible, and it has always been necessary for the government to intervene to prop up demand and insure order. This is the one constant in capitalist history: as corporate power has grown, the size and expense of government has grown; there are no exceptions to this rule. The real historical battle has not been, as The Commanding Heights would have us believe, between "free-market" and "socialist" economies, but between left-wing and right-wing Keynesianism; the left-wing would give greater weight to social concerns, and the right to corporate concerns, but both rely on govmint power.

By the second half of the 20th century, every industrialized nation had adopted some form of Keynesian economics, and they did so whatever the ideological stripe of the regime in power. They did so because they had no choice. Or rather, they had a choice between government intervention and social chaos; their economies had been captured by large corporations, and only a similar growth in government power could insure corporate control on the one hand and some modicum of social peace on the other.

Keynes himself would have been appalled by all of this; he did not guess that the mechanisms he outlined for stabilizing an economy could, in a democracy, so easily be captured by corporate power. Had he been a better student of history, he would have realized that this was an inevitable outcome. Great fortunes need high fences to protect them, fences made of laws and regulations in fortune's favor; and these high fences need big governments to build and defend them.


What is Missing with Mr. Potter?

The Harry Potter series has been attacked by some fundamentalists for introducing our children to magic and witchcraft. But I believe his problem is somewhat different: It is not too much magic that plagues Potter, but too little. Or rather, it is a magic that looks too much like technology. At one point, before the computer, the cell-phone, and other instances of electronic magic, technology was something we felt we could understand, at least in principle. Many of us could, for example, do major repairs on our cars, or fix the appliances around our house. But no more. The computer is as mysterious as it is ubiquitous, and no one "expert" comprehends the whole thing. The applications expert defers to the operating system guru, who defers to the hardware specialist, who gives way to the electrical engineer, who relies on the micro-code specialist, who (in order to actually use the computer) relies on the applications expert. From the standpoint of any one person, however much he knows about his piece of the system, the whole thing is magic.

But what kind of magic? It is, I believe, a magic that has no other end but itself. It is true that Harry and friends struggle, in their efforts to grow to manhood and womanhood, with the "evil" Malfoi's and such-like. But the evil of the Malfoi's seems to consist mainly in snobbery and bad manners. Potter and friends, on the other hand, seem to represent an amorphous liberalism, an "equal rights for muggles" polity. Beyond that, he is just nicer and more attractive and Drako and companions. But perhaps what Harry really is, is just what we can never seem to find these days, a true master of the technology of the magic that routinely surrounds us. It is a technology much like ours: taught in vast institutes by teams of specialists, managed bureaucratically by the ministry of magic, and sold commercially in shops, shops that will tailor the magic wand to the personality of the wizard, much as Dell computer claims to do in their ads. Harry is the master of the potions, incantations, wands, and broomsticks that are the reigning technology of his world. But is there something missing from that world?

J. K. Rowling has literary forebears in J. R. R. Tolkien and C. S. Lewis, who also wrote magical tales, but it was a magic that arose from their deeply-held religious convictions. Their magic was a connection to a wider world of ultimate values. But Harry strikes as merely a very charming technologist. Hence it comes as no surprise that one of the best commentaries I have seen on Mr. Potter comes not from a literary critic or a theologian, but from a technologist, Lev Grossman, who writes a technology column for Time magazine and its blog. Mr. Grossman comments:

"If you want to know who dies in Harry Potter, the answer is easy: God.

Harry Potter lives in a world free of any religion or spirituality of any kind. He lives surrounded by ghosts but has no one to pray to, even if he were so inclined, which he isn't. Rowling has more in common with celebrity atheists like Christopher Hitchens than she has with Tolkien and Lewis.

What does Harry have instead of God? Rowling's answer, at once glib and profound, is that Harry's power comes from love. This charming notion represents a cultural sea change. In the new millennium, magic comes not from God or nature or anything grander or more mystical than a mere human emotion. In choosing Rowling as the reigning dreamer of our era, we have chosen a writer who dreams of a secular, bureaucratized, all-too-human sorcery, in which psychology and technology have superseded the sacred."

I would not disparage the stories on the level at which they are written: charming tales of children confronting the world, a world that has, much like ours, enough real monsters--and enough real monstrosities--to challenge anyone, child or adult. But still we can ask, "In a world that lacks real transcendence, is their any real reason to prefer Harry to Drako?"


Distributism and the Web

Distributism is about giving as many families as possible the means of production. In the past, this largely meant land and tools, the space and means of making one's own living in cooperation with others. These days, there is a new kind of space, cyber-space, and new means, computers and networks. And while these new things, these rerum novarum, will never displace the old, they can augment them, providing a new center of resistance to the capitalist tendency to concentrate wealth and power in the hands of a few at the expense of the many. Don Ward has written an interesting article on this topic, Distributism and Web 2.0. Check it out!



In oppressive societies with heavy censorship and large numbers of secret policemen, artists learn to communicate in coded messages, messages vague enough to escape the notice of the police, but specific enough to appeal to the oppressed audience and to express what is happening in their lives, to say what cannot openly be said.

One such sociely was Tudor England and one such artist was William Shakespeare. England did not, as the official Whig histories have it, easily convert to Protestantism; rather it was a long and brutal struggle, one that involved an extensive spy network, torture, rebellion, war, censorship, and unending court intrigue. (See Eamon Duffy's The Stripping of the Altars: Traditional Religion in England, 1400-1580, Second Edition) In this process, England forged all the tools of repression that have come to be associated with the modern nation-state. These tools were perfected by Queen Elizabeth's able, if unscrupulous, advisors, especially William Cecil and later his son Robert. To describe them, one need only to imagine what American would look like if it had been ruled for 45 years by Dick Cheney.

William Shakespeare was part of these struggles. Now, any text must be understood in the context of the times which produced it, and if the understanding of those times is lost, so will be lost a complete understanding of the text. Likewise, a full understanding of Shakespeare can only come from an understanding of his time and his role of the political struggles of that time. Indeed, many of the images in his plays and poems seem unitelligable to us, and many scenes seem out of place and jarring to the structure of the play they are in. But these scenes and images spoke to their original audiences. And not only did the intended audience understand, but so did the Cecils, so did Walsinham (head of the Secret Police), and so did Elizabeth herself. Commenting on Richard II, a play about a deposed king, she said, "Know ye not that I am Richard?"

But if these understood it, how are we to understand, how are we to recapture the lost times and true history of this period and of this, the greatest of English authors? Comes now Clare Asquith with her book, Shadowplay: The Hidden Beliefs And Coded Politics of William Shakespeare. Mrs. Asquith follows the twists and turns of Shakespeare's place in the Catholic resistence by comparing his work to the "recusant" literature of the time and the political events that surrounded the composition of each play. We learn, for example, how the early Comedy of Errors reflects his analysis of the effects of the "unjust divorce"; how Titus Andronicus expresses his rage at the persecution of Catholics; how The Merchant of Venice is a direct appeal to the Queen for reconcilliation, and so forth.

Anyone interested in history (a history uniquely connected with our own) or with literature in general or Shakespeare in particular, or how oppressed people's manage to find a voice even in repressive regimes, ought to read this book.


I Owe, I Owe, It's Off to Work I Go

I could go on and on about the purely economic evils of a nation that lives in debt, and I probably will in future posts. But there is a more serious issue. Debt is not just an economic question, but a moral one. And a moral fault is always a kind of enslavement. Sometimes, we must live beyond our means, because our work does not provide us with reasonable means to live, or because we can't find work at all. But that does not seem to be the cause of most debt today. Rather, most consumer debt today reflects our status as consumers; we identify ourselves not by what we are, but by what we have; identity has become a matter of having rather than being.

This is a kind of slavery. Americans work more than anyone else because we owe more. It is not the so-called "Protestant Ethic" that keeps us chained to our desks, but rather its break-down. Our forebears might have gone into debt for a few long-lived items: a house (purchased with a heavy down payment), a car, a piano, a little furniture. But the idea of putting a burger on the tab would have struck them as strange; the idea that they would be paying next year for a shirt they threw away yesterday would have struck them as bizarre.

In order to become a nation of debtors, we had to change our moral views; we had to acquire a sense of entitlement, and one that operated immediately: we cannot wait for what we want; all our desires must be filled this moment. But when we do this, we lose some degree of freedom. We work now not merely to get the things we need, but to pay for things we probably didn't need; in other words, we work for Mastercard; we labor for Visa. And Mastercard and Visa can never have enough of our work. If a man is working to get what he needs, the things he needs send him a signal as to when to stop working; but a man of unlimited desires, desires he largely gets from advertising, doesn't know when to stop working. Soon he does not own the things he bought with borrowed money; they own him.

Individuals and families go bankrupt for a variety of reasons; sometimes because they are spendthrifts, but other times there is illness, job loss, tragedy of some kind. But with nations, it is otherwise; before they lose their freedom they lose their character. Moral bankruptcy is the prelude to, and cause of, financial bankruptcy.



There! I've said it. I know it's not supposed to be said. I know it's an outmoded, even medieval word, a relic of clerical meddling in economic science. And yet, the shamans may be ahead of the scientists on this one.

First, what is usury? It is not, as some suppose, charging interest on a loan. Rather, it is charging interest on a non-productive loan. What does that mean? Well, we can lend money for production or for consumption; we can lend money to start a business (or expand one) or to finance current consumption, such as buying a hamburger (which is now commonly put on plastic.)

When money is lent for a productive enterprise, the lender is entitled to a share of the rewards, since he also shares in the risk. The loan will then be liquidated by the success of the enterprise, or will be written off with the failure of the enterprise. But in either case there will be no additional burdens, hence no “usury,” that is, no “using up” the stock of society.

But if the loan produces nothing, then nothing can be charged for the loan, or else it is a simply wealth transfer rather than real growth. The scholastics also recognized the right to receive compensation for certain “externalities” of money, namely for risk and the loss of the use of the money. But beyond these legitimate claims, usury is simply a transfer of wealth from one class to another that produces nothing of itself: It is wealth without work. This is especially true of consumer loans. They are merely a claim against future earnings without contributing to those earnings. An economy that depends on consumer lending to fuel consumption is in fact merely borrowing from consumption in future periods.

Usury, aside from its character as avarice, as the desire for wealth without work, has troublesome practical consequences as well. On the one hand, it “covers up” problems in the distribution system, that is, with the wage system. If we did not inject massive amounts of consumer credit, there would be a massive failure of demand and the problems of inadequate pay would become apparent to all. As it is, these problems are hidden and will remain so until the ponzi-scheme collapses (as it must), as it does in depressions. On the other hand, usury detracts from the amount of capital available for productive investments; the absurdly high rates of interest make investment in production less attractive than investments in financing consumption.

Perhaps the last well-known economist to take usury seriously was John M. Keynes, who said:

Provisions against usury are amongst the most ancient economic practices of which we have record. The destruction of the inducement to invest by an excessive liquidity preference was the outstanding evil, the prime impediment to the growth of wealth, in the ancient and medieval worlds…I was brought up to believe that the attitude of the Medieval Church to the rate of interest was inherently absurd, and that the subtle discussions aimed at distinguishing the return on money-loans from the return to active investment were merely Jesuitical attempts to find a practical escape from a foolish theory. But I now read these discussions as an honest intellectual effort to keep separate what the classical theory has inextricably confused together... (The General Theory, 351-52)

The standard economic theory treats all interest as just another form of profit. But this is incorrect. Indeed, it would be like calling the funds from a bank robbery profit; in a narrow sense they are, since they represent an excess of income over outflow. But interest and profit serve different ends. It is legitimate to think of interest as profit only when it is a participation in profits; but when it merely finances current consumption, then it is that greatest of social evils, wealth without work, growing rich without adding anything useful to society.


A House of Cards?

The Fed reported yesterday that consumer credit rose 6.4% in May, the biggest increase in credit card debt in six months. Why are so many people turning to the tab to finance their lives?

One could cite a variety of reasons: convenience, consumerism, materialism, and so forth. But there is a darker truth. Even without all of these other things, our economy would still require vast sums of credit to keep the average household afloat, and the economy with it. The problem is the vast inequality in pay and wealth. When wealth concentrates at the top, then there is simply not enough purchasing power in the mass of men and women to clear the markets of all the goods that are produced. This purchasing power has to be re-cycled in some way, or consumer markets will simply fail, and with it, the economy. The major way of re-cycling purchasing power has come to be consumer credit.

However, such credit is a trap. It does save the economy from short-term distress, but only at the expense of guaranteeing its eventual collapse. We can increase demand by a borrowed dollar today only be decreasing demand by that same dollar--plus interest--tomorrow. And the interest rates are, as everyone knows, astounding. This has two effects. first, it further concentrates income and wealth at the top, which in turn necessitates an ever-greater influx of lending to the middle and lower income groups, which further concentrates wealth at the top, etc., leading to a vicious cycle,

The second effect is that consumer credit competes with the capital available for business expansion--for the creation of new jobs and products. Think about it: would you rather lend to a business that will return 10% on your money, or to a consumer who will pay 15%, 20%, 25% or even more? Thus the supply of capital is limited by the need to finance consumption.

An economy built on consumer credit (which in more sensible ages was called "usury") may appear to be strong, but in fact it is, quite literally, a house of cards--credit cards. All the statistics about the health of the economy are meaningless if they do not offset for the amount of activity financed by non-productive debt (i.e., consumer credit). This is simply a matter of proper accounting; one has to show not just the assets, but the liabilities as well. And anybody whose books do not show the liabilities is living in a dream world and heading for a fall.



I will not comment on the movie, because I haven't seen it. I probably will see it; Michael Moore is a clever and amusing filmmaker and polemicist. But the general commentary seems to be that Moore has set up an opposition between “socialized” medicine and a “fee-market” system, with the former defeating the later. However, this is a false dichotomy: the American system isn't “free-market” and the European system isn't socialism. Both are merely a different combination of private market and govmint management. But defenders of either system usually practice a kind of sycophancy which ignores the faults of one and recognizes only the faults of the other. The truth is that medical care is an inelastic product (sick people will pay whatever they are charged to regain their health) that is provided through a series of monopolies or oligarchies. Licenses, patents, technology, and endless regulations (many of them actually necessary) tend to limit entry into the market, thereby preventing even a semblance of a free market. On the other hand, when medicine is “free” it is over-consumed, and waiting lists, rather than high prices, are the allocation mechanism. The European system does seem to perform better than ours, by most social measures, but only because they consciously adopt social measures and work towards them; the idea of a “common good” has not completely disappeared from Europe. However, there is some doubt as to how long such systems can be maintained, and in any case they make each person a ward of the state rather than a citizen. True, when one has a life-threatening disease, one may prefer to be a living ward of the state rather than a dead citizen; nevertheless, it is not an ideal choice.

Is insurance the answer?

Can insurance function as a middle term between the market and socialism? Not really. Insurance can only be a means of cost-averaging; some must pay too much and others too little, but one way or another, the cost must be paid by the users, which will price many out of the market. And healthy purchasers will seek plans that eliminate as many “risky” applicants as possible; they will seek the safest “risk pool” which is reflected by the lowest cost. So nothing is gained towards a universal, affordable system. But how about if we made insurance mandatory and universal? Fine, but that's just another name for a tax, and you're back to the same problems. And if you are going to handle it through taxes, it would be better for the govmint rather than the Hartford to collect the taxes. We used to believe that “private” business could do public functions better than the govmint, but that was before we learned about Halliburton, where two contractors do the work of one soldier on a “cost-plus” basis, with both the cost and the plus being astounding numbers.

In any case, and however you collect the money, if govmint provides universal care without expanding the supply of such care, the immediate result will be to expand demand faster than supply, which is to say, to raise prices. And the higher prices will require more taxes (I mean, “premiums”) or will require price controls, which will dampen demand, leading to waiting lists, not to mention a vastly expanded bureaucracy.

I have no easy answers, but I do have some suggestions about increasing the supply of health care, which ought to go a long way (if it is really a market system) towards reducing the cost. There are three “easy” things we could do, two on the supply and one on the demand side.

Increase the Supply of Medical Practitioners

Getting an M.D. Is an expensive and arduous task. But not all health care requires an M.D., while other types require quite a bit more. There should be different levels of licenses: midwives, nurse practitioners, general practitioners, medical doctors, and more advanced doctors of medicine. First line care could easily be provided by NP's working in their own neighborhood clinics, perhaps in loose association with a hospital or a GP or MD. In fact, as most have us have discovered, even when we go to “our” doctor, most of the service is actually delivered by an NP. Another area where this applies is in orthodontics. The is no reason why we anybody needs a degree in dentistry to install orthodontics; the work could be as safely performed by orthodonturists, and at a far lower cost. It is only the legal monopoly that dentists have on the business which keeps the prices so high, thereby denying this useful and normally affordable service to many poor people, while charging the rest of us unreasonable prices.

In a “free market” increasing the supply should lower the price; in any case, if we are about to increase the demand, which seems inevitable and should happen, we had better have a means of increasing the supply.

Replace Patents with Licenses

Currently, when a company develops a new medicine that get a monopoly on that medicine for a period of time, and they charge monopoly prices. But this is not necessary to fund research and development. R&D can be funded with licenses; that is, when a firm develops a new medicine they get the right to license that product to any number of production firms. The licenses should be for a longer term than the current patents, which will provide R&D firms with a much more secure revenue stream from which to fund further research. Manufacturers, on the other hand, will have to compete on price and service, and will therefore have to find the most efficient ways to manufacture and distribute the medicines. This also provides an easy way to fund third world medicines; the first world could just pay the license fees for less-developed countries, which could then produce the medicines locally, providing both inexpensive medicines and local jobs.

Improve Education

In the bad old days, when we had mothers that actually had the time to attend to children, a lot of advanced medical care was actually given by these obviously backward women. Well, nobody has mothers like that any more, but every school seems to have a “health education” curriculum. My impression of these classes, perhaps an incorrect one, is that they have little to do with health and a lot to do with condoms. No matter. There is no reason why they couldn't actually teach something about how to care for one's self and one's family, about how to actually use easily available products (and I don't mean the detritus of the patent medicine industry) to both prevent and treat simple cases. Mothers and fathers would thereby be the first line of medical practitioners. After, sometimes, chicken soup really does do the job, and at others, other simple remedies exist, if anybody knew about them. But as long as medicine is the private preserve of licensed practitioners, no one will learn anything.

Perhaps these suggestions are not so easy after all. For one thing, expecting mothers to have the time to attend to these things would throw women back into the dark ages of the Eisenhower administration, and nobody wants that. And both the licensing of medicines and a diversity of medical practitioners would introduce competition into the free market, and wouldn't that be a horror.


Distributist Music

This, so I am told, is the most down-loaded song in Quebec these days:


Darfur: Give War a Chance!

It seems today that "peace negotiations" are as much a part of war as are tanks and artillery. Indeed, it would seem that there is a proportion between the violence on the ground and the amount of useless diplomacy in the hotels. And nowhere is this diplomacy more useless than in Darfur. Sanctions won't work because the Sudanese govmint is protected by the Chinese, who lust after their oil and their development projects. And the Sudanese are happy to attend conference after conference; its a comfortable living and involves little risk.

Of course, the Left, and others, would like us to send a "peace-keeping" force, and have kept up a drumbeat of pressure to do just this. One certainly agrees with their fervor, although what "peace" there is to keep, I cannot detect, but no matter. Even if our army was not tied down in other places, this idea of a non-starter. A modern army is a technological marvel. Unfortunately, it depends on lot's of other technological marvels: roads, water filtration plants, electricity, and so forth. Darfur lacks all of these; every drop of water, every bite of food, every gallon of fuel will have to be brought in from the outside; the logistical problem far outweighs every other problem and we simply can't afford to enrich Halliburton anymore than we already have. Further, Darfur is the size of Texas, but is just a loose network of villages. This means that each village is no more important than any other, and all have to be defended, which means we would have to spread the army in small groups across a Texas-sized landscape; further increasing the logistical nightmare. No general is going to allow that to happen. The truth is, no foreign army can defend Darfur.

So can nothing be done to stop the slaughter? Well, there is, in fact, one army that can defend Darfur: an army of Darfurians. An armed and determined population can resist even a modern army, and much more a band of thugs and cowards such as the Janjiweed. This is a time-tested method. This is how we won wars in Nicaragua, Afghanistan, and Kurdistan. The latter is the war in Iraq that we actually won; we won it by not fighting it, but rather by arming the Kurds to fight their own battles. Hence, having won their own freedom, which some support from us, they have established a stable and prosperous enclave right in the midst of chaos, a chaos that follows a foreign army wherever it goes.

To be sure, it is a method not without its own dangers. In Afghanistan, against the Soviet Army, we backed an obscure group of "freedom fighters" called the Taliban. After their stunning victory over both the Russians and their own internal rivals, their gratitude towards us did not last long. And in Kurdistan, we have created a state within a state that the Turks, the Iranians, and even the Iraqi govmint (such as it is) regards as problematic, if not downright threatening. Nevertheless, this principle is sure: the best army to defend any country is an army of that same country. Nations like the United States can change the balance of power by arming and training one side or the other. But they are unlikely to ever win such a war by fighting it themselves. There are exceptions, of course, such as the American conquest of the Philippines, but the Philippine army had no outside backers to provide them with arms against the Americans, and even at that it took us 13 years to completely subdue them.

An operation to arm the Darfurians with rifles, machine-guns, and grenade launchers would be relatively cheap and small-scale. We could also provide some heavy support by bombing Janjiweed barracks and logistical centers. And it is the only option which has any chance of success. A Janjiweed thug, intent on rape, may find his ardor cooled if his victim is herself pointing a rifle at his "gun." Indeed, the mere threat to arm the population may by itself cause the govmint to reign in the militias.

So why do we not take this option? I suspect that it is because we have made a fetish of peace, forgetting that everyone has right--or rather the duty--to defend themselves. But defense requires the tools of defense, and when only one side has them, defense is futile. The United Nations must realize that as long as the Chinese are willing to ignore any sanctions, then the UN can do nothing, and leave the questions to others who can. And we can, if we would. But we must be willing to give war a chance. Not a war of a foreign army, but a war of indigenous soldiers defending their own heritage, hearths, and homes. We can go on talking peace in the face of genocide, or we can actually do something about it. I believe we have a responsibility to act in the name of solidarity with the poor and helpless, but I do not believe that we can do the job for them, anymore than we could do it in Vietnam or in Baghdad.


G. K. Chesterton, Postmodernist

Postmodernism is not a movement that one would associate with G. K. Chesterton. But comes now the postmodernist critic Slavoj Žižek's Welcome to the Desert of the Real. The title comes from the movie, The Matrix. When the hero is released from artificial world of the Matrix, he awakens to a devastated Chicago and is told "Welcome to the desert of the Real." The remarkable thing about Žižek's book is that the single most-cited source is G. K. Chesterton's Orthodoxy.

Now, postmodernism is not usually associated with Chesterton. However, Žižek may be on to something. The essence of postmodernism is a rejection of modernistic notions of truth and "objectivity," and the bogus claims to be able to reduce everything to a rationalistic "science." For the postmodernist, the narrative is primary, the story of our relationship to the world and the truth. However, postmodernism tends to end up in nihilism. Why? Because they secretly accept back that which they reject; they critique the modernist notion of truth, but then they regard this as the only possible definition of truth, and hence have nowhere to go but to the void. Therefore, the real problem with postmodernism is that it is insufficiently postmodern; it grants too much--everything in fact--to modernism, and in rejecting it rejects everything.

The Christian can make better use of the postmodern critique because we have an older notion of truth to fall back on; we are not trapped by nihilism, but can rely on the narratives known as Scripture and Tradition.

So what has this to do with Chesterton? In Orthodoxy, he examines the faith not as a series of propositions to be proved or disproved, but to be examined through his personal experience, through his own history. It is a history that begins with a rejection of all that Christians hold to be true and an acceptance of all that the moderns want. But he discovers, on this journey, that the only way to get the liberty that the moderns want is to accept what the Christians hold as true. That is to say, in order to be fully modern he must be fully Christian. This is not the explication of a rationalistic proposition, but the discovery of a real and personal relationship with the truth. It is through his own narrative that G. K. discovers the narrative beyond his own. Therefore, he may be the first and truest of the postmoderns.

Or perhaps not the first. The first may be someone from a long time ago. We assume that God gives us the best gifts possible. And in Scripture, God gives us not a catechism to be memorized, but a narrative to be lived. He gives us first the story of Israel's relationship with God, and then the story of God's own Son on earth; in other words, He gives us history and biography; He gives us narratives. Where we might prefer a Summa, He gives us a sermon; where we might expect a syllogism, He gives us a psalm. Prayer, prophecy, poetry, and parable are the means of truth.

This is not to reject the tools of logic, proposition, syllogism, etc. These are indispensable tools in understanding the narratives we have been given. But it is to establish the proper order between the narratives and their explication. We need theology to properly understand God, but at the same time we understand that God cannot be "trapped" in some "Theo-logic." The Logos both founds and exceeds all logic. In the last analysis, we are not interested in analysis for its own sake, but only for the sake of following more closely in His footsteps. So the first postmodern may be the first pre-modern, that is, the Holy Spirit, who guides us to all truth.


Apocalypto Now!

I watched Mel Gibson's Apocalyto last night, a film which has been critiqued by many for many reasons. I, however, found it a moving and thought-provoking film, well-worth wading through the violence that has become Gibson's signature. But to concentrate on the violence would be to miss the larger points. Gibson has certainly built his career on a certain amount of violence, either the rather pointless violence of his acting career, and the more pointed variety of his directorial career. The Passion of the Christ was certainly violent, but then, so was the real Passion.

In Apocalypto, Gibson looks at violence and the collapse of empires. He announces his theme from the start, with a quote from the historian Will Durant that empires first collapse internally before they are conquered by foreign enemies. We are invited throughout the movie to make comparisons to our own situation. At first, this may seem an impossibility, since he begins with a forest people and village life, a life as foreign to us as the obscure language that they speak. But the scene soon shifts to a sophisticated urban society, a society of stone buildings, elaborate temples and rituals, of deep class divisions, of luxury and poverty, of slavery and of human sacrifice. There is even a Dick Cheney look-alike in a feathered headdress who gives a rousing speech to a cheering crowd about the strength of the empire--just before he cuts the heart out of a victim, beheads the life-less corpse, and hurls head and body down the temple steps, a gesture that pleases the crowd no end.

In this confrontation of absolute power and relative innocence, the later would seem to have no chance. And it doesn't, not as a group. One man alone has the chance to escape the violence and cruelty, a chance he can take only with great courage and suffering. But it is only at the end when we see the ultimate conquerer of both cruelty and innocence, and then we get but a brief glimpse. It is all we need; we already know how the story will end.

The actors are not actors at all, but people who are themselves connected to this history and who speak the language. And since, as in The Passion, the film is not in our language, it is not language that carries the film, but a stunning visual imagery and vocabulary. But even without speaking the language, the acting is as moving as any you would see from professionals whose language we share. Often I found myself ignoring the subtitles to watch the actors; words weren't necessary, the action said it all.

This is not a movie for the squeamish (my wife won't watch it). Yet I think it is a worthwhile effort; in the strange accents and architectures of an alien past, we see the reflection of the present moment.


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