Is Economics a Science?


One salient fact about this recession is that 90% of the working economists missed the warning signs, and those who predicted a disaster were marginalized and ridiculed. This, however, is not surprising; 90% missed the last disaster, and the one before that, and the one before that, etc. With that in mind, do we not have warrant for suspecting that economics is not a complete science and is unable to give us real information about the economy?

The Roman pontiffs have long insisted that something was missing. They have insisted on the role of distributive justice in economics. Beginning in 1891, with Leo XIII’s Rerum Novarum, they have insisted on the just wage as the basis of economic science, a position that has been repeated by every pope since Leo. The economists, on the other hand, have always found this problematic. A just wage can make no sense, since the wage is just the price of that particular “commodity” known as “labor.” Clearly, there is a dispute here about the nature of economic science. Given that the economists are presumed to be the experts in their own field, is there any reason for them to take the claims of the Roman Church seriously? In other words, can they subject their science to the moral claims of the Church and still be scientists, or would they be like Galileo, forced to recant what they know to be the truth?

Benedict XVI, in his latest encyclical, Caritas in Veritate, locates precisely the source of the disagreement.

The market is subject to the principles of so-called commutative justice, which regulates the relations of giving and receiving between parties to a transaction. But the social doctrine of the Church has unceasingly highlighted the importance of distributive justice and social justice for the market economy, not only because it belongs within a broader social and political context, but also because of the wider network of relations within which it operates. In fact, if the market is governed solely by the principle of the equivalence in value of exchanged goods, it cannot produce the social cohesion that it requires in order to function well. (35)

By insisting on the priority of distributive justice, the Pope poses a special problem for the economists, a problem that goes back to the late 19th century. At that time, the study was known as political economy, a discipline firmly located within political and social structures. However, many practitioners of the discipline felt that this was far too “philosophical” and hence insufficiently scientific. In order to become a true science, they would have to reduce economics to strict calculations. In order to do this, they reduced all economics to a science of exchanges, that is, to commutative or corrective justice alone. The economy was to be modeled as a series of exchanges governed only by free contract and beginning with “an exchange with nature.” The absurdity of originating production with such an exchange is made clear when we ask, “Who negotiates in nature's behalf, and what, precisely, does nature get in return? “Dear mountain, please give us your coal, and we will give you this nice slag heap in return.”

But leaving aside the question of the exchange with nature, the new economists claimed that exchanges under free contract would result in workers getting a fair wage and capital getting a fair return. There would be no reason to bring up the messy questions of distributive justice; commutative justice, the justice that regulates exchanges between individuals and firms is sufficient to guarantee fair returns to labor and capital. “Fairness” was built in to the system, because free contracts are always fair, or so the theory has it.

All this seems very reasonable, but it is not. There are at least two problems. The first problem is that commutations deal only with change in ownership of already existing commodities, such as when we exchange money for bread or labor for money. But the first problem for any economics is not exchange, but production. Before the bread comes into existence, it must be produced by human labor. When we take a tree and produce a set a chairs, we call the chairs into being; we are dealing with something that did not exist before. The great question of economics is how to divide this new thing among those who had a hand in creating it. Production produces values that did not exist before, hence commutations cannot answer the question, “How many of the new chairs should be given to the labor that produced them or to the owners of the tools by which they were produced?”

This is a matter for distributive justice. The problem that the new economists had with distributive justice is that it can never be (as Aristotle pointed out) a matter of calculation, but a matter of judgment, and different social arrangements would produce different answers. This reliance on reasonable judgments struck the new scientists as unreasonable, and certainly as unscientific. Without being subject to a strict mathematics, economics could never be “scientific.”

The problem of trying to describe production as a series of exchanges came to a head in the 50's with the so-called “capital controversies.” Simplifying a very complex argument, the debate dealt with the adequacy of the standard production function, with purported to describe the appearance of new things by the function P=(K,L), where K aggregates all the different exchanges of capital and L of labor. However, K cannot be used directly in the formula, since capital comes in various shapes and sizes (trucks and tools and raw materials, etc.) without any common denominator. So in aggregating capital into the formula they used the price of the various capital goods. However, this turns out to be circular: The price of capital depends on the return to capital, but the formula is supposed to determine that return. In other words, in order to use the formula, you would first have to know the results of the formula. In trying to deny the role of reasonable judgments, they had to sneak a judgment into the formula. The whole thing is self-contradictory.

The interesting thing about the capital controversies is that the defenders of the commutative production function admitted defeat. In fact, Paul Samuelson, the leading economist of his day and chief defender of the function, not only admitted defeat, he actually refined the mathematics to show how the formula was internally self-contradictory. Samuelson did make some corrections to his textbook, but nevertheless the formula is still taught as if the controversies had never taken place. Why? Because there are no other alternatives available within a pure theory of exchanges.


This leads to a startling conclusion: Modern economic science—the science of production and exchange—lacks a coherent production function! And lacking such a function, it can never be a complete description of any economy. Hence, it can never accurately predict the course of any economy nor make any rational policy recommendations. Now we can understand how 90% of the economists fail to see its most obvious failures: they simply lack the tools with which to do a complete analysis of the economy.

The irony of this is that political economy become economics in the name of scientific computation, only to end up with a formula that can't be computed. In attempting to explain everything in terms of numbers, they explain nothing at all. But they needn't have worried for computation's sake. Although distributions depend on judgments, or on power, the results can be computed and compared. For example, if it is determined that labor ought to receive no more than bare subsistence, then economists can accurately compute the results, most likely in terms of over-supplied capital markets and under-supplied consumer markets. And if it is decided that the capitalist shall live in rags and the worker as a king, then the under-supply in capital markets will reduce everyone to rags.

If the positive claims of economics break down, so do the normative ones. Fair contract, the argument goes, is supposed to ensure fair wages, but Adam Smith destroyed this argument. In any dispute over wages,

It is not, however, difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage in the dispute, and force the other into a compliance with their terms....A landlord, a farmer, a master manufacturer, or merchant, though they did not employ a single workman, could generally live a year or two upon the stocks which they have already acquired. Many workmen could not subsist a week, few could subsist a month, and scarce any a year without employment. In the long-run the workman may be as necessary to his master as his master is to him; but the necessity is not so immediate.

In other words, wages depend not on productivity, but on power, and the more powerful party will prevail. Contract alone cannot insure fair wages. And without fair wages, there will be an oversupply of capital and a shortage of demand, and a recession is the result. Recessions can be delayed by using government spending to prop up demand, or by usury, that is, by supporting demand by consumer borrowing. But both of these methods have their limits, and we are smack up against the limits of both remedies in the current crises. It is precisely this double failure which makes this recession so persistent.

With all this as background, we can ask, “Is economics a science?” The answer is, I think, “not in its present form.” The present form takes its cues from physical science, a science that rarely ventures into questions of justice. But economics, if it is to be a science, must obviously be a humane science, and such sciences cannot avoid questions of justice. This is to say, economics ought to be a science; it ought to be the science of political economy. In pointing to the importance of social and distributive justice, the Church is speaking only as a moral authority; but in doing so, she turns out to be a pretty shrewd economist. The moral requirement is not, as Benedict points out, something that is added to an otherwise complete science, but something that lies at its very core, and without which it cannot be a science at all.

28 comments:

Besorge Sunday, October 11, 2009 at 12:09:00 AM CDT  

Might I remind that the Church has yet to work on the ontological connections to distributism, and it still has a radically materialistic origin as though G.K. and Belloc were great people, they fell to the stupid opinion of Marxist dialectic, so in a way, they have a scientific perspective themselves, such as the Marxist. Now I am not saying anything against distributism, I am saying it needs to be redefined.

John Médaille Sunday, October 11, 2009 at 8:39:00 AM CDT  

Interesting comment, Besorge. Perhaps you could expand on that for us so that we can know more precisely what you mean.

Grace Potts Sunday, October 11, 2009 at 9:17:00 AM CDT  

Thanks for this, John. My sister likes to make a little joke about economists:

When I told her that I was outraged that economists recommended 4% unemployment to keep the economy stabilized, she said "I really don't see a problem." Shocked, I asked her why. She said: "Aren't economists 4% of the population?"

Chris Campbell Monday, October 12, 2009 at 10:22:00 AM CDT  

"and it still has a radically materialistic origin as though G.K. and Belloc were great people, they fell to the stupid opinion of Marxist dialectic, so in a way, they have a scientific perspective themselves, such as the Marxist."

????

Not seeing what is materialistic about a man wanting his own land to farm or run a buisness...

along with John, can you offer proof that Belloc,et all were marxists? Marxism after all wants Govt control of productive property, which would me collective farms,factories,etc....a far cry from private enterprise or workers self contracting on the work bench (to paraphrase, badly, JP2).

Clarify please...

Besorge Tuesday, October 13, 2009 at 8:27:00 AM CDT  

I never said he was a Marxist. I am saying that their line of thinking follows the use of the material dialectics of Marx. For instance the word 'capitalism', it is a word coined by Marx, and it is a false idea of understanding economics. As the communist gains capital also, and is a materialist as well. I don't expect things to change over night, but I am surprised you guys continue the use of the word 'capitalist'. Your rich understanding of theology and history, I would assume would redirect your choice of words in another direction. After all, John, I would say what you have to say is beautiful and well developed in thought, I just believe the choice of words used does not allow for us to attack Marxist perspective of economics, since we are using Marxist dialectics.

As a philosophy major, and my various papers against the Marxist phenomenological perspective, I have chosen to attack the Hegelian and post-modernistic expression to destroy Marxist thought at its root.
(See Fromm's Marx Concept of Man)

The Capitalist and the Communist are in the same line of thought, they are materialists. They are just two brothers going in different directions, but have the same birth mother.

Also the name Distributist is materialistic as it assumes with its name, its main concern of proper distribution, as that is what is the main problem.

Chris Campbell Tuesday, October 13, 2009 at 8:47:00 AM CDT  

Distributism has always been an unweildy name, not popular, but too known now to ignore....could call it Catholic Economics or plainly, CST....

the term distributism comes from:

"Among the many and grave duties of rulers who would do their best for the people, the first and chief is to act with strict justice -- with that justice which is called distributive -- toward each and every class alike." RN #33

Questions:

1. is the Pope then a materialist?
2. is the Pope following Marxist dialectics?
3. If Marx lablled food "food" and I use the term food as well, am I then guilt of Marxist dialectic?
4. In some countries, clergy normally use the word "proteleriat"..does this mean they are using marxist?

Besorge Tuesday, October 13, 2009 at 10:35:00 AM CDT  

lol, your still obsessed with that idea, that has nothing to do with what I am saying. Of course Ratzinger, who has a clear understanding of ontology is not a materialist. But we must also be aware that all people are limited by their own cultural backgrounds, that including the Popes.

For instance, the Papal view of the embargo in Cuba. If he was properly informed on the full situation I am sure he would change his mind. If he knew that the Cuban government borrows money with the intention of never paying back and the bill is left to the American people to pay off, he would see things differently. The Pope's Theology is infallible, but he is still human.

What makes Capitalism wrong is not that Marx coined it, but the context of the philosophy/theology behind it. Though Marx was an atheist, Hegel was not and his phenomenological perspective goes against the Church's current ontological perspective of reality. As it removes the possibility of God being a Person or even a subject and reduces God to a changing Being.

It is backwards theology. Now, no one is saying that Pope Benedict is a materialist. All that I am saying is stop using that word. I am sure Pope Benedict would agree with the use of the word Capitalism, and in the context which I have seen him use it, he uses it to identify a person who believes in material gain only when he view economics. Or someone who sees economics as not relating to God or morality.

That word does not mean what you think it means, and it also limits our perspective of economics to just materialistic opportunities.

What should be focused on is how Distributism is the way to properly view economics, while using current modern theological terms. Capitalism is not the only view that runs the market. There is the idea of Free Market that unfortunately has misappropriated ideas of what is an economy in the first place, but it looks to have a economy where government control is not necessary, while it may seem anarchistic in approach, we have seen that the reality is the government just needs little involvement as possible, so Free Market is the closest in ideal.

Distributism is Free Market, but from a Catholic perspective, as I see with the early Distributist, God's economy is not separated from ours, and it avoids this false dichotomy as much as possible (God separated from Economy that is).

Marx has some truth, it is sensitive to the ideals that can run from someone/some who just keep all the capital to himself/themselves. While Free Market historically acknowledges individualism and right to property.

Besorge Tuesday, October 13, 2009 at 10:45:00 AM CDT  

What I mean to say about the Church making the connection is that the Church has no one making the proper connections. It has all the right things to say, it has the right direction, but no one is working on it.
I have yet to read something, please send me something if you have seen it, that makes clear understandings and redefines economics from its ontological root.
See Marx has his Hegelian phenomenology, while Free Market has a Puritanical/Protestant rationalistic background.

Chris Campbell Wednesday, October 14, 2009 at 8:19:00 AM CDT  

Besorge, I do not "obsess", it is you that is obsession of dialectics, words,etc...Distributism at its heart is very simple....

We do agree that Puritan/prot thinking has poorly affected economics and its relations-our ours-to God,etc...

As far as using "current theological terms"..what then do we do when those terms are exhausetd and/or no longer used?? We would have to go back to the drawing board and start again..it is liek the word "capitalism", which in Orwellian double speak has been co-opted to mean really what Distributism stands for, ie private enterprise, ownership and minimal Govt involvement...though in Bellc,et al's time it meant something somewhat different...change the words, you change the meanings....

as far as "free market", there never was one nor likely will be one...economics is never "free" in that you have to deal with Govt's, economies of scale (WalMart will alwaays buy more and sell cheaper in its present state then Joe the Plumber), greed, old boy systems of "you wash my back, I will wash yours",etc....

What you are saying is partially true, words can be manipualted...what I would urge you to do is get anything Belloc, Chesterton, McNabb wrote on Distributism.....also, Joseph pearce and of course, John Medaille's book.read those, I think you are on the right path already, but these would clarify more....I do agree that "Capitalism" is widely misunderstood term and not the same in meaning within America, let alone the rest of the world....

we agree on some, agree to disagree on other areas.....

Anyone else have input?

Besorge Wednesday, October 14, 2009 at 11:02:00 AM CDT  

My main concern right now is this:

What Archdiocese or what Church is not investing in large corporations. Where is the example of social justice.

John Médaille Wednesday, October 14, 2009 at 11:18:00 AM CDT  

Besorge,

I confess to still being confused at what you are getting at. It is true that "capitalism" was orginally a term coined by Marx, but it is a term that capitalist proudly accept for themselves. And it is an accurate term, no matter who coined it.

I certainly agree that capitalism and communism are materialist systems, which is why we reject them. But I don't see how we are trapped in the same dialectic.

The Guild Master Wednesday, October 14, 2009 at 1:56:00 PM CDT  

Ahem, back to the posting, and a good one too.

On the question of basing economics on a purely contractual exchange basis, you rightly point out what, to me, is the biggest weakness of this system, namely, contracts are often between unequally powerful parties, so obviously there will be a high risk of injustice.

The law recognises that contracts can be made under duress, or undue influence and sets them aside. Now, although that is strictly limited to certain categories of persons by the courts, there are, in the real world, plenty of other contractual arrangements where a strong party has his way over a weaker party and justice is subverted.

OK, in the world of business, sometimes you get a good deal, and sometimes a raw one, but to base an entire system on that....! Surely we can do better. It really is the law of the jungle. BTW, speaking of the law of the jungle and injustice, I'd suggest you check out the way Amazon does business (they sell your books!). Not pretty and not just.

Besorge Wednesday, October 14, 2009 at 2:13:00 PM CDT  

Listen guys, I am not saying not to identify capitalists but not all people engaging in Free Market ideals are Capitalists. You do understand the idea was free market, yes it failed, duh, and we barely had one to begin with, but that was the attempt. It doesn't then magically make this whole system capitalistic. Though I do agree there are people who do agree with the term 'capitalists', not all economists or Wall Street are Capitalists. And just because of this they are not magically Distributists also.

Capitalism is associated with capital and private ownership.

To talk about a Capitalist country is to talk about an imaginary entity. There can be no rigor in such a concept because it doesn't exist. Marx concept of economics does not EXIST, because Hegelian Phenomenology/informal logic does not exist. They are illusions from their own word, 'Transcendental Egotistic' bullshit thought up by the German Idealists.

So now we can focus on the important stuff as to how to lego piece Modern Church Theology, not just social justice issues, to Distributism, so that we can try our best to be in the REAL ECONOMY, God's Economy.

Matthew Wade Wednesday, October 14, 2009 at 3:18:00 PM CDT  

I have to admit I'm quite confused by the slew of post/response sequences within this comments section. I hope to avoid starting my own.

Have any of the distinguished gentlemen who post on this blog read anything by John Mueller (I think its 'u' before 'e', although I may be wrong) at the Ethics and Public Policy Center? He calls for a return to "Augustinian Economics", involving the four main actions of human economic life: production, distribution, exchange, and consumption. Any comments? Thank you.

Sincerely,

Matthew Wade

Chris Campbell Thursday, October 15, 2009 at 8:18:00 AM CDT  

"So now we can focus on the important stuff as to how to lego piece Modern Church Theology, not just social justice issues, to Distributism, so that we can try our best to be in the REAL ECONOMY, God's Economy."

Both John and Thomas Storck write and tie the economic theories of Distributism with Christian Order and biblical themes.

part of theology includes social justice, one cannot exist without the other...

Please explain what a "real economy" is and what is "God's economy"? (per your statement)

Besorge Friday, October 16, 2009 at 11:58:00 PM CDT  

nevermind...keep using the word. I am not that advanced in my studies to give a good enough explanation, mostly because I don't know where to start off at, I don't know where we need to begin?

At ontological terms? At the difference between informal and formal logic? At the difference between pantheistic mindset vs a panentheistic? At the difference of the proper appropriation of wisdom? (Hokmah vs Sophia)

Do you know what I am talking about?

It has to do with fact that Capitalism is not what is being practiced. It is another shallow form of thinking. One not defined properly, I have yet to find a word for it, I call it American Mythic Thinking. Mostly doing with invincibility and the pursuit of knowledge over a concern for the real core center of Economics, which is Family. But then again Europeans think the same way also.

The center of Economics is Family and a mind towards Family, without it, we shallow.

Yeah very vague I suppose, but what exactly is so exact about God, or His Plan? Economics designed outside of this is just imitation and really, the study of keeping something floating longer without God. I am not saying not to be in the world, but I am saying not to be fooled by the world while you are in it.

If Distributism does not make these Ontological ties and if the Church does not practice it, it becomes a "Pie in the Sky." Without ontology, it is not from reality, it can be mistaken for activism, or wishful thinking.

Septeus7,  Saturday, October 17, 2009 at 12:03:00 PM CDT  

Quote from Adam Smith: “…A landlord, a farmer, a master manufacturer, or merchant, though they did not employ a single workman, could generally live a year or two upon the stocks which they have already acquired. Many workmen could not subsist a week, few could subsist a month, and scarce any a year without employment. In the long-run the workman may be as necessary to his master as his master is to him; but the necessity is not so immediate.”

Quote from John: "In other words, wages depend not on productivity, but on power, and the more powerful party will prevail. Contract alone cannot insure fair wages. And without fair wages, there will be an oversupply of capital and a shortage of demand, and a recession is the result."

John really hits the nail on the head here and starts getting dangerously close Henry Carey’s science of political economy which starts the question of power.

Notice that power being described by is actually of two kinds but Smith fails to describe the differences and interconnection.

The first the physical power requires for subsistence and the second is the political power that requires we have a situation where the workmen must surrender his productivity to his “master” in order to survive?

Is it a natural occurrence that labor must depend on non-labor for subsistence?

No, it only political power that determines that to be the case and what determines that allocation of political power are the ideas that man forms about himself that rule him.

What is a wage but merely the legal power to purchase that which labor has already produced?

So how is it sane to deny labor access to its own production and still expect them to produce at growing rates?

Since what is produced is physical and in its consumption produces the physical power needed for later production doesn’t nature itself require a harmony of interest that to have growth there should be an increase in the value of labor and everywhere raising wages, increasing material comforts, and a improved intellectual and creative culture?

What good is wealth hoarded to these ends?

The one of the tradition ways allowing labor to increase its productive power is to have a strong public sector and infrastructure so that everyone has access to transportation, water, power, etc…

If you privatized these things you decrease everyone’s productive power and thus make folks even more dependent on wages and the system centralizes power around a few small owners.

Anarchist will respond that you have just substituted the State for the slave master but this is not so because if the public sector functions only to increase the general welfare i.e. increases the productive power of everyone why would such a free and productive people want or allow the State to intrude into areas where it cannot act but decrease everyone’s freedom of action by excess? Only deception and corruption would cause such a thing to occur.

In short, the lost traditional American thinking would answer Smith’s question of the owner’s stock versus the worker’s stock by increasing the individual’s power through education, public infrastructure, cheap land and homesteading rights then problem is mooted because every individual or family is increasing physically independent and thus is actually being more politically independent and free and that sounds strangely like Distributist thinking but doesn’t deal with the question of ownership structure but physical access to power and resources.

Anonymous,  Monday, October 19, 2009 at 1:19:00 AM CDT  

So many points...

'fair' - As in 'without fair wages, the system will collapse'. What is it, who decides, can it change over time? Do you really think with some sort of central planning effort, a being non-related to the work at hand can determine 'fair'? or even efficient?

I think its completely outrageous that you site the integral of some function of capital and labor as the most advanced production function economics has available. There's been plenty of work done in that arena in the last century since Paul Samuelson and the Perfect Competition model. Which was never even meant to reflect the real world?!

I'm just flabbergasted with the number of holes this article has.

Septeus7,  Monday, October 19, 2009 at 8:55:00 PM CDT  

Quote from Anonymous said...: "So many points...'fair' - As in 'without fair wages, the system will collapse'. What is it, who decides, can it change over time?"
Anonymous is very confused. It is the nature of things to change over time and question of economy is how human beings come know, understand and use the principles of this changing universe in a fashion necessary for our reproduction.
Quote from Anonymous: "Do you really think with some sort of central planning effort, a being non-related to the work at hand can determine 'fair'? or even efficient?"

It is "central planning" or the idea human beings are creatures of planning you object to? Human Beings by their nature and by God's grace are creatures that have the ability to act toward producing the future good and indeed how can any moral action exist without regarding future planning?
Are you suggesting that humans take no moral interest how an economy operates because that would be central planning and opposing morality on people?
Tell me where do you get the authority to tell nation that they can’t “centrally plan” their economy i.e. take authoritative action to hopefully produce certain moral and necessary change for that people?
Why must they be slaves to your deterministic apriori models and have no political rights when it comes to the future economic actions their nation? What right do you have impose your economic shock doctrine on sovereign nations and deny the people right participate in a political economy?
Quote from Anonymous: “I think its completely outrageous that you site the integral of some function of capital and labor as the most advanced production function economics has available. There's been plenty of work done in that arena in the last century since Paul Samuelson and the Perfect Competition model. Which was never even meant to reflect the real world?! I'm just flabbergasted with the number of holes this article has.”
Yawn….apparently what didn’t understand is that it doesn’t matter how advanced you you’re your production model if they are based on the incorrect linear functions and they all are at least in neo-classical economics. If you would like detailed technical debunking of all neo-classical economics I would suggest Steve Keen’s “Debunking Economics.”
In real world economics there is no use for linear i.e. deductive system because they are incomplete systems trying to model a complete but non-linear dynamic system i.e. the “finite and unbounded” process of human economy.
Stop trying to drag obsolete linear mathematical models borrowed from 1840s era physics into the human world of political economy. That’s the one thing I like about Austrians is that even they don’t even try make mathematical production functions to supposedly prove how the economy work they just assert things apriori like the true anti-science cult that they are.

Dave,  Tuesday, October 20, 2009 at 6:11:00 AM CDT  

What a strange lot of comments! What exactly do you think ontology and dialectic are all about, Besorge?

John, I just loved this article, and agree with what seems to me to be your conclusion: as of now it is neither science nor "a" science, while what SHOULD be a science is political economics.

Septeus7, I'm very close to you on the inadequacy of economic mathematics, but what to do about it? My own pennyworth here is that applied mathematicians have also become too specialised, so despite economies being active information-based control systems, those advising economists are not familiar with the relevant maths and logic, i.e. that used by technologists to characterise not the data but the workings and RELIABILITY of computing, control and communication systems.

On the latter, Besorge, I'm sorry to say you have completely missed the point of dialectical logic, which is not once-and-for-all to deduce true results but to progressively eliminate false ones. We all start off "seeing through a glass darkly" and consequently "missing the mark" (i.e. sinning); but we stay that way (as economists have done) if we don't actively learn from each other and examine our intellectual consciences in light of mankind's growing understanding of ontology, i.e. what KIND of things God, the world, science, our political economies and we humans are. Are we all the same because we are all described as human? In light of what Matthew Wade's valuable comment above, read 1 Cor 12 and think what it implies about mankind and our duties to each other.

Viking Tuesday, October 20, 2009 at 2:12:00 PM CDT  

Septeus, your critique of Anon.'s points seems to me misguided. On the "fair wage", with literally tens of thousands of different jobs in the modern economy, it would indeed be a Herculean task to assign a fair compensation for each without causing shortages in some fields and gluts in others. I share Anon.'s skepticism as to the advisability of letting any government attempt to do so. Your attempt to rebut this by noting that things change is IMO very simplistic. Incidentally, isn't Distributism a movement to largely eliminate wages, fair or otherwise, and replace them to the greatest extent possible with entrepreneurial income?!

Your remarks on central planning strike me as similarly confused. Of course we all must plan, but "central planning" means, in modern parlance, the sort of command economy which Moscow and Beijing practiced. That DOES seem to be something to be avoided at all costs. As far as the issues of morality and non-determinism go, the Communist regimes cited above largely took those away from their subjects. It's unfortunate that you couldn't see the irony of your saying that Anon.'s system would make the people slaves!

Viking

John Médaille Tuesday, October 20, 2009 at 2:34:00 PM CDT  

Let me suggest that "fairness" in wages is no so much a number as a standard of judgment. While the wage might be difficult to judge in an individual case, it is fairly easy to judge in the overall (or macroeconomic) case. We can say that wages are fair when workers seem to live at the level of dignity appropriate to that society, that they can do so without working unduly long hours, without putting children and wives to work, that they are not dependent on borrowing to make ends meet, and that they have some surplus for savings against the educational needs of their children, against times of sickness, unemployment, and old age.

When wages are not fair, markets cannot be cleared without the use of gov't spending or consumer credit. Thus the moral requirement is also a hard-headed economic requirement.

Besorge Wednesday, October 21, 2009 at 9:11:00 AM CDT  

I like the focus on putting woman and children to work. I am not saying a woman cannot chose a profession of her liking, but I for one am a believer that what women were doing in the home traditionally was more important to society as whole.

My wife was all about women working and pulling their equal share, but recently after the birth of our son, and the one on its ways, we both are looking at the possibility of one of us staying at home as what is most important for our children. She seems to desire wanting to stay at home, and I hope soon I can provide that ability to her.

My question is what do you think about the idea of a working mother and a stay at home father? I can see what we would say socially, but also there is something weird about that culturally for me, because its not about 'fairness' here, I almost desire naturally to want to go and provide.

Reflecting on the concept of priest and temple, I can see this. Also, please lets not throw in dust bunnies, like a situation where the male is handicap, I am talking about this generally, and exceptions to the rule do not toss out the generality.

Septeus7,  Friday, October 23, 2009 at 6:43:00 AM CDT  

Quote from Viking: " Incidentally, isn't Distributism a movement to largely eliminate wages, fair or otherwise, and replace them to the greatest extent possible with entrepreneurial income?!"

Yes and that is a reason why we want wages to be regulated so they don't disrupt the more natural process of becoming worker-owners. We want to make paying wages a difficult and narrowly defined model so people will start adopting open co-operative models that reflects individual productivity rather than power.

Quote from Viking: "Your remarks on central planning strike me as similarly confused. Of course we all must plan, but "central planning" means, in modern parlance, the sort of command economy which Moscow and Beijing practiced. That DOES seem to be something to be avoided at all costs."

Well that is because you don't know anything about those economies and how they worked, when they didn't, and different methods of so-called "central planning" used by different Governments at different times.

Do you really think that Soviet economy never had periods of economy growth?

Do you understand that a kind of "central planning" has build the United States and every industrial economy in the world since the time of Jean-Baptiste Colbert?

And if you know so much about the central planning tell me difference between Brezhnev's USSR and de Gaulle's France?

Despite what vulgar libertarians claim not all government intervention is the same so actions taken under the rubric of "central planning" of one state could be of a decidedly different character than the "central planning" of another state. That’s why I don’t use the term is because like “socialism” Libertarians/Republicans have co-opted it to mean anything that is socially necessary for government to do and the plutocrats don’t want to pay for.

Quote from Viking: "As far as the issues of morality and non-determinism go, the Communist regimes cited above largely took those away from their subjects. It's unfortunate that you couldn't see the irony of your saying that Anon.'s system would make the people slaves!

I suppose the Free Trading British Empire never stole from anyone or used slaves and neither have those lovers of the “free market” on Wall Street. Pinochet, so loved by many an Austrian and Chicago Boys, was a strong believer in human rights and freedom. I mean if we want play “so’s your Uncle” on right wing fascist versus left wing socialists we can do this all day and not get anywhere.

The reason that I brought up determinism and morality is because both “socialism” and “capitalism” is just two sides of the same modernist Liberal coin and the legacy of the British Empire. They both have the same view of man because that denies the Imago Viva Dei and instead forces man into a Cartesian Box where he is nothing but digital processor for pleasure and pain.

You missed the greater irony that Anon's Liberalism and Marx's "socialism" are cut from the same cloth and he is simply raging at his mirror image.

James praker Tuesday, October 27, 2009 at 4:16:00 AM CDT  

I am a web designer and designing a economical site so this post is helpful for me in the economical Web Designing site.
Thnx for the sharing!

Term Friday, November 6, 2009 at 3:42:00 AM CST  

A great article indeed and a very detailed and realistic keep posting..!

CrisisMaven Thursday, February 4, 2010 at 4:47:00 AM CST  

God post, great discussion! By the way, I have just added a Reference List to my economics blog with economic data series, history, bibliographies etc. for students & researchers. Currently over 200 meta sources, it will in the next days grow to over a thousand. Check it out and if you miss something, feel free to leave a comment.

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