A Christian Approach to Doing Justice

First and foremost I think that the goal of Christian anarchism is similar to yours in that it seeks primarily justice, after identifying state, church, and other institutional structures as systematic generators of injustice.  Free markets often get included in this list, but I think that is wrong.
Further, I think many approaches suffer from the Nirvana fallacy.  This is a term from economics, coined by Harold Demsetz.  The problem has to do with fomulation of ideals rather than approaches.  We cannot get to anyone’s ideal just state.  There is no way to sufficiently constrain people whose motives have been twisted from harming others. Injustice will always occur.  Institutions which systematically generate injustice may be improved, but the road to getting there is seldom described.
Any system of injustice will create oppressed peoples and privileged peoples.  As time goes on, however, the effects of the injustice get spread, both the costs and the benefits.  Slavery imposed horrific costs upon a select class, whether in Roman times, in colonial Caribbean times, or in America.  It also created concentrated benefits.  However, over time, costs spread throughout society.  First, economically.  Chattel slavery is a most inefficient way to produce sugar.  But also, living in a society in which slavery is normative damages the imago dei in all of us.  The benefits are also dispursed over time.  The man who first enslaves another human has robbed them of their lives.  But the man who buys the slave for use on a farm winds up spending a good portion of the expected future benefits of owning the slave in the initial purchase.  To suddenly emancipate all slaves without compensation would rob the man who purchased the slave without in any way punishing the man who first robbed the slave of his liberty.
In economics we talk about such a situation as a “transitional gains trap.”  That is, the gains from the injustice were captured during the transition to injustice, and to transition out of the injustice would simply impose a new injustice on someone else.
Thanks be to God there is a way out of this trouble!
Jesus Himself demonstrated this way to us, in His personal sacrifice.  We were all unjust in our sins, and yet he died for our sins, paying the price of our unjustness, freeing us from injustice, and simlutaneously redeeming those who had done injustice to us!
This is the way we must imitate.  The path to justice, the way to do justice as Christians, is through personal sacrifice.  Any attempt to reform, amend, or destroy the institutions around us through political means serves only to impose the injustice on someone else.  But as believers, we are to redeem even the oppressors.  This is among the most offensive of all Christian doctrines, particularly to those who have been oppressed.  Indeed, inasmuch as Christian Anarchists of various stripes have recognized and adopted this doctrine, we become unattractive to oppressed peoples who desire retribution for the injustices which they have suffered.  This may, in part, explain why Christian anarchism is easier for white men than for others.
The way to justice is through sacrifice.  The movement for abolition in Great Britain served more to get Evangelicals permanently ensconced in Parliment than to free slaves.  The real heros were those who purchased and freed slaves sacrificially.
But, wait, wouldn’t this only encourage slave drivers to bring more slaves?  Initially, yes.  But this point only serves to highlight a more essential miracle.  That the act of sacrificing for the sake of others’ justice has a transformative effect on the oppressor.  If more Christians had sacrificed in order to free slaves through peaceful, subversive means such as I have described, then perhaps more lives could have been transformed.  As it was only very few adopted this approach, Anabaptists such as Quakers and Mennonites being among the best, though even few among these sects participated.  There is injustice in the world only inasmuch as Christians are not sacrificing to change things.
Another will object that there will never be enough Christians who do adopt the right way to have a meaningful impact.  This might be true.  And here again, I will offend.  God is sovereign over the suffering of His innocents.  This world is not the end.  We are not promised justice in this life, but in the life to come.  To that effect then, it seems the primary purpose of acting for justice is to rescue not the oppressed, but the oppressors!  That the oppressed are redeemed becomes a mere by-product of rescuing villians!
Here we must remember that we are all the villains.  And this is difficult to do.  We want to feel good about doing justice.  We want to be deserving of a reward for doing good.  We want it to be about us being the good guys.  But when we remeber that we were once sinners, we see that sacrifice for the sake of redeeming the enslaved is merely our reasonable act of worship.  None of this is satisfying for those who believe that it is possible for us to change the world and to create a better earth.  Indeed, almost all of it is offensive and humiliating to the prideful mind of men.  Again, all of this is particularly offensive to those who have been oppressed.
It is likewise offensive to the state, which becomes strictly a wicked influence, incapable of redemptive good.  The only hope then for those who are oppressed are those who have previously enjoyed privilege, but have repented and become willing to sacrifice for the sake of the oppressed.  This leaves the previously oppressed in a state of debt to the previously privileged at first glance.  This will not do.
What is required is a right understanding of what makes it possible for a person to willingly sacrifice for the sake of the oppressed, that is, regeneration.  But Anabaptists are light on regeneration, preferrign to focus on the sanctification which occurs in community.  Here, I come across as Reformed.  Apart from regeneration which is the consequence of an existentialist encounter with God, repentance, and acceptance of God’s justification, there can be no change in the heart of men and women which makes them capable of anything other than self-interested motivation.  If they do good it is for reward, or to assuage guilt.  It is never freely given apart from regeneration.  There is also never any joy in it.
And further, for those who are redeemed, we are not then required to sacrifice for every person under oppression whom we encounter!  Jesus Himself did not heal every sick person, nor exorcize ever demon, nor tear down every wicked institution.  He only did what He saw His Father in heaven doing, and we are only to do the same though listening to the Holy Spirit.
Ah, now having added this Charismatic element I have nearly absolved myself as a white man from all responsibility to the oppressed!  Surely this is evil!  But it is only evil inasmuch as God Himself does not immediately come down from heaven and set all aright.  He tarries, not because He has wicked motives, nor because He is ambivalent about the suffering of His innocents (notice again whose innocents they are!) but because He desires that all should come to repentance.
To those of us who become too focussed on injustice rather than God’s sovereignty this will always be a difficulty.  We must always rightly understand the motive to justice coming as a consequence of regeneration, and accept full responsibility for doing justice, in

First and foremost I think that the goal of Christian anarchism seeks primarily justice, after identifying state, church, and other institutional structures as systematic generators of injustice.  Free markets often get included in this list, but I think that is wrong.

Further, I think many approaches suffer from the Nirvana fallacy.  This is a term from economics, coined by Harold Demsetz.  The problem has to do with fomulation of ideals rather than approaches.  We cannot get to anyone’s ideal just state.  There is no way to sufficiently constrain people, whose motives have been twisted, from harming others. Injustice will always occur.  Institutions which systematically generate injustice may be improved, but the road to getting there is seldom described.

Any system of injustice will create oppressed peoples and privileged peoples.  As time goes on, however, the effects of the injustice get spread, both the costs and the benefits.  Slavery imposed horrific costs upon a select class, whether in Roman times, in colonial Caribbean times, or in America.  It also created concentrated benefits.  However, over time, costs spread throughout society.  First, economically.  Chattel slavery is a most inefficient way to produce sugar.  But also, living in a society in which slavery is normative damages the imago dei in all of us.  The benefits are also dispursed over time.  The man who first enslaves another human has robbed them of their lives.  But the man who buys the slave for use on a farm winds up spending a good portion of the expected future benefits of owning the slave in the initial purchase.  To suddenly emancipate all slaves without compensation would rob the man who purchased the slave without in any way punishing the man who first robbed the slave of his liberty.

In economics we talk about such a situation as a “transitional gains trap.”  That is, the gains from the injustice were captured during the transition to injustice, and to transition out of the injustice would simply impose a new injustice on someone else.

Thanks be to God there is a way out of this trouble!

Jesus Himself demonstrated this way to us, in His personal sacrifice.  We were all unjust in our sins, and yet he died for our sins, paying the price of our unjustness, freeing us from injustice, and simlutaneously redeeming those who had done injustice to us!

This is the way we must imitate.  The path to justice, the way to do justice as Christians, is through personal sacrifice.  Any attempt to reform, amend, or destroy the institutions around us through political means serves only to impose the injustice on someone else.  But as believers, we are to redeem even the oppressors.  This is among the most offensive of all Christian doctrines, particularly to those who have been oppressed.  Indeed, inasmuch as Christian Anarchists of various stripes have recognized and adopted this doctrine, we become unattractive to oppressed peoples who desire retribution for the injustices which they have suffered.  This may, in part, explain why Christian anarchism is easier for white men than for others.

The way to justice is through sacrifice.  The movement for abolition in Great Britain served more to get Evangelicals permanently ensconced in Parliment than to free slaves.  The real heros were those who purchased and freed slaves sacrificially.

But, wait, wouldn’t this only encourage slave drivers to bring more slaves?  Initially, yes.  But this point only serves to highlight a more essential miracle.  That the act of sacrificing for the sake of others’ justice has a transformative effect on the oppressor.  If more Christians had sacrificed in order to free slaves through peaceful, subversive means such as I have described, then perhaps more lives could have been transformed.  As it was only very few adopted this approach, Anabaptists such as Quakers and Mennonites being among the best, though even few among these sects participated.  There is injustice in the world only inasmuch as Christians are not sacrificing to change things.

Another will object that there will never be enough Christians who do adopt the right way to have a meaningful impact.  This might be true.  And here again, I will offend.  God is sovereign over the suffering of His innocents.  This world is not the end.  We are not promised justice in this life, but in the life to come.  To that effect then, it seems the primary purpose of acting for justice is to rescue not the oppressed, but the oppressors!  That the oppressed are redeemed becomes a mere by-product of rescuing villians!

Here we must remember that we are all the villains.  And this is difficult to do.  We want to feel good about doing justice.  We want to be deserving of a reward for doing good.  We want it to be about us being the good guys.  But when we remeber that we were once sinners, we see that sacrifice for the sake of redeeming the enslaved is merely our reasonable act of worship.  None of this is satisfying for those who believe that it is possible for us to change the world and to create a better earth.  Indeed, almost all of it is offensive and humiliating to the prideful mind of men.  Again, all of this is particularly offensive to those who have been oppressed.

It is likewise offensive to the state, which becomes strictly a wicked influence, incapable of redemptive good.  The only hope then for those who are oppressed are those who have previously enjoyed privilege, but have repented and become willing to sacrifice for the sake of the oppressed.  This leaves the previously oppressed in a state of debt to the previously privileged at first glance.  This will not do.

What is required is a right understanding of what makes it possible for a person to willingly sacrifice for the sake of the oppressed, that is, regeneration.  But Anabaptists are light on regeneration, preferrign to focus on the sanctification which occurs in community.  Here, I come across as Reformed.  Apart from regeneration which is the consequence of an existentialist encounter with God, repentance, and acceptance of God’s justification, there can be no change in the heart of men and women which makes them capable of anything other than self-interested motivation.  If they do good it is for reward, or to assuage guilt.  It is never freely given apart from regeneration.  There is also never any joy in it.

And further, for those who are redeemed, we are not then required to sacrifice for every person under oppression whom we encounter!  Jesus Himself did not heal every sick person, nor exorcize ever demon, nor tear down every wicked institution.  He only did what He saw His Father in heaven doing, and we are only to do the same though listening to the Holy Spirit.

Ah, now having added this Charismatic element I have nearly absolved myself as a white man from all responsibility to the oppressed!  Surely this is evil!  But it is only evil inasmuch as God Himself does not immediately come down from heaven and set all aright.  He tarries, not because He has wicked motives, nor because He is ambivalent about the suffering of His innocents (notice again whose innocents they are!) but because He desires that all should come to repentance.

To those of us who become too focussed on injustice rather than God’s sovereignty this will always be a difficulty.  We must always rightly understand the motive to justice coming as a consequence of regeneration, and accept full responsibility for doing justice, in response to the Holy Spirit, as an act of worship to God, not as service to the oppressed.

Present Lives vs. Future Lives

So, there’s a lot more oil than we thought there might have been just a few years ago.  This is a surprise to some.  Others of us have a certain irrational faith in innovation, or the capacity of humans to find substitutes when the supply of certain resources starts to diminish, or when demand expands.

That is, we think prices are effective signalling mechanisms.  When the price of oil gets high enough, entrepreneurs will go looking for alternatives.  The rise in prices of oil can be driven either by decreasing supply or expanding demand.  It appears that the US with its reserves of natural gas might be the next Saudi Arabia.

But none of this addresses a certain set of objections: environmental concerns.

Some claim that the use of more natural resources today, or in the short run, will both hurt the environment and use up existing natural resource stocks.  Both claims appear to be pointing at a tradeoff between quality of life for people today, and quality of life for people tomorrow.  The usual position implies that expanding use of natural resources today is bad because it hurts people tomorrow.

My question is: what is the appropriate price of lives tomorrow in terms of lives today?

Whoa! that’s an ugly question!  We don’t like to think about trading of these lives for those.  But this is what many controversial policy questions boil down to.  Healthcare, environmentalism, war, crime, abortion, immigration, development, and many other issues have at the root of them some unspoken tradeoff of some lives for others.

How could we model such a thing?  Not just mathematically, but ethically, how can it be right to attempt to build a mathematical model to answer such a question!  The truth is, in whatever decisions we make, we are answering the question indirectly.  When we take out a second mortgage on our house to keep grandma alive for another three years, we forego the opportunity to spend that money on prep school for Jane and Johnny.  When we set immigration quotas we say “these people’s lives are worth improving, but those people’s lives are not, because they would wind up costing me something (which may not be true).”  Life might be one of the most fundamental units of measure, but we don’t like to think about having to exchange some of one life for another, apart from altruistic action.

In terms of lives today vs. lives tomorrow, the most extreme position is that which suggests there is some number of human lives which the planet is capable of sustaining.  If more humans than this come to inhabit the earth, it is at the cost of future lives, or possible the length of the future.  Perhaps if there 100 billion people alive on the earth it would impose such a burden on the planet that all life would die off in two or three generations.  Extremists might say that the earth can really only sustain 4 or 5 billion people.  Some number fewer than what we currently have.

Suppose they are right.  Then they need to quantify their results, if we are going to set policy.  Suppose for every person above the 5 billion sustainable mark the earth has one hour less to exist.  Suppose the earth at 5 billion people can exist forever.  Then what is forever minus one hour?  Can we know?  Let’s toss out a number.  100 years.  Let’s go all doom-and-gloom.

In this case the 5 billion and first person’s first hour of life costs 5 billion people 100 years from now 1 hour of each of their lives.  That’s expensive.  So suppose we can do some Coasian bargaining.  How much would those 5 billion people be willing to pay to prevent that extra person from coming into existence?  At least one hour of their lives.

How much is one hour, 100 years from now, worth to us today?

How much is 5 billion hours, 100 years from now, worth to us today?

Let’s assume an interest rate of 10% annually.  Then one hour next year is worth 1/1.1 = .909090… hours today.  Raise that to the 100th power, and 1 hour, 100 years from now is worth 0.00007257 hours today.  Times 5 billion = 362,828.6 hours.  Huh.  One might imagine that a time machine has been invented 100 years from now and some character out of the movies jumps out and kills the 5 billion and 1st baby, saving the earth and the lives of all 5 billion future inhabitants.

That’s 15,117 days, or 42.5 years.  A little less than the average lifespan for most Americans, but maybe a good average lifespan globally.  Now, this number is just a happy accident of the 5 billion, 10%, and 100 years figures I chose arbitrarily.  If the real threat is actually 235 years, then the 362,828 number turns into 0.936 hours.  That is, the hour of life today for one person is more valuable than one hour of life for 5 billion people 235 years from now.  Holy moley!  Can I say that?!?  With a lower interest rate the time is extended, or future lives become more valuable relative to present lives.  The higher the number of lives the earth is capable of sustaining, the more valuable present lives become relative to future lives.

What some are claiming is that the interest rate should be really low, and that the number of lives the earth is capable of sustaining is also very low, and finally, that the threat is very imminent.  This results in a value of present lives which is very low relative to that of future lives.

It seems a little religious to me.

Among the claims, however, which can be tested for consistency within these arguments is the interest rate.  If environmentalists really do have a low interest rate we also ought to see them seldom going into debt.  In fact, if they think the interest rate is 5%, then they should never borrow at a rate above 5%.  If ever they violate this rule they are signalling that they don’t really believe their rhetoric.  The rest of us then should discount their other arguments regarding the imminency of the earth’s demise and the number of lives the earth can sustain.

Maybe some of these figures can be discovered scientifically.  I’m skeptical.  Frankly, I think the earth can safely sustain a great many more people than are alive today.  There’s a lot of empty space in the world.  A lot more food can be grown, and a great deal more efficiently.  Among the houses sitting empty most of the day in Northern Virginia I perceive there’s plenty of room for more people, particularly when the cost of building up is much less than building out.  National Georgaphic reported last year that all 7 billion of us standing shoulder to shoulder could fit within the city of Los Angeles.

We’ve had oil reserve scares before.  100 years ago we started running out of whales, or at least easy to catch whales.  If we were to run low on oil today we’d find something else.  If 5 billion people 100 years from now were facing imminent demise, maybe they’d each consume fewer resources.  There are many margins on which this tradeoff can take place.

So, the extremists make me chuckle.  Mostly because they haven’t thought through their arguments very carefully.  Applying a more optimistic (reasonable?) long run outlook takes away a great deal of their bite.

Review of a Review

My humble opinion on the Hausmann Hidalgo thesis as presented by Plummer’s review in the Washington Post.
Which is to say, I have not read Hausmann or Hidalgo myself, and they may be operating at a plane which is beyond what I have learned.  But here goes…
The Obvious
Institutional analysis has failed to provide the promised explanation of cross country differences in economic growth.  There are economists, some of whom I have been reading a bit of late, such as Douglas North, Daren Acemoglu, and others, whom have tried to work out the influence of institutions on economic systems.  My own professor, John Nye, who studied with North for many years, has pointed out that Great Britain, the case study many try to isolate as the origin of modern economic growth, entered into that growth at the same time they expanded the role of centralized government, reassigned a great many property rights (which is to say they renegged on older sets of rights in favor of their preferred sets of rights), and spent a great deal of money on building a standign military force.  They did everything libertarians claim hurts free markets, all the while growing like crazy, and improving individual liberties!
So, it seems that governance systems cannot play a defining role in the way economies grow, though no one claims they are entirely unimportant.  Bill Easterly, among libertarian development economists, and Dani Rodrik on the other end of the spectrum both claim that there’s no “one size fits all” recipie for growth.  It seems that the primary believers in simplistic answers remain bureaucrats and those employed by state-funded aid agencies, and other true-believer sorts.
No, development is complex, indeed, and perhaps entirely accidental!  It should fit well with a Christian perspective of Providence to believe that the rain may fall on the unjust as well as upon the just according to God’s decrees.  However, we must keep place for natural consequences, and this is the domain of economics.
Further, the insight regarding dispersed knowledge is at least as old as Leonard Read’s “I Pencil,” though that can easily be traced to Smith’s description of a tin factory.  That Plummer does not make the connection is either sloppy or slow, I can’t decide.
The Novel
However, it is perhaps not so surprising that economists have forgotten Read’s monograph, despite Milton Friedman’s recitation of it on the “Free to Choose” video series.  Instead, what Hausmann and Hidalgo may be capturing is a move relatively recent in the trade literature.  That is, countries don’t seem to matter nearly as much as we once thought.  Firms, instead, are the important unit of analysis, and indeed I would not be surprised if investigating even smaller units within firms would be further illuminating.
But this is too difficult.  One cannot draw intersecting supply and demand curves for each sub-managed office in order to make predictions about larger macroeconomic trends.  What is desired is a simplifying theory sufficient to make “close-enough” predictions about short term moves in the economy.  Presumably these are the desires of politicians and market movers who want to preserve security and get rich.  Too bad.  The economy is not some set of smooth infinitely differentiable functions.  It is lumpy.  What good economic theory gets right is first pointing out the tendency of markets to move toward equilibrium, and perhaps more importantly the ability to show how littel we really know about our subject of interest.  I might even say how little we can hope to know.  We are primarily engaged in moving items out of the bin “stuff we don’t know we don’t know” into the bin “stuff we know we don’t know” and only occasionally can we move one of these bits into the bin “stuff we know.”
What I find useful, then, and novel in this tidbit of a review, is the idea that we need to focus on the novelty of goods produced by a country.  Again, I think we ought to look beyond the country as a unit of analysis in general.  A novel good is demonstration of innovation in attempt to capture a share of the market.  That is, it is customer focussed.  A successful novel good, one that survives, usually is successful because it replaces some less preferred good, many of which are *also novel*.  This is Schumpeter’s Creative Destruction.  However, sometimes a less preferred good can win.  This happens when an inferior good enjoys state protection or subsidies of some sort.  In such cases, institutions matter, not because of the good they do, but because of the harm to the global economy induced by their interventions.
Novel, new, unique goods capture rents.  That is, they earn profits above the market average.  Singapore may be richer because the Singaporese produce more novel products.  (Note that Singapore per se does not produce anything.  People make things, and make the decisions about what it is that will be made, and in what quantites.  Falling into the nation as unit of analysis happens again and again.)  Of course formal education plays a limited role in the development of novel products.  Formal education can include precisely that sort of schooling which encourages conformity and discourages creative thinking and entrepreneurial vision.  Schooling is what fish sometimes do, and formal schooling is very good at producing people who can queue properly, but quite poor at developing well-motivated free thinkers.  On the other hand learning technical tools is very important to implementing fresh ideas, or even for identifying fresh vs. already been tried ideas.
I’m currently reading up on the literature which identifies firms which export as being better on many margins than firms which do not export.  This seems to fit well with Hausmann and Hidalgo’s discussion of big vs. small businesses.  Again, the older trade theory, from Smith to Ricardo to Hecksher-Ohlin to Krugman then Krugman and Helpman always does its analysis at the country level.  Bradford and Jensen hit off a literature which has begun to look for firm-level data when analyzing trade patterns.  What I expect to find in the long run is that succesful entrepreneurs are the real unit which endows some firms with global comparative advantages.  In the past it has been easy to imaginge that natural resource endowments were imperitive to development, or that the relative ratios of inputs was crucial.  But as transportation costs have fallen, largely thanks to the invention of the container ship (an underappreciated phenomenon), and as trade barriers have diminished, it is clear that there are few relevant unique elements to nations.  Among the most important elemnts that does impact national comparative advantage is migration policy.  With open borders I have a hard time imagining what comparative advantages beyond climate remain relevant for development trends.
I don’t know if this all boils down to a “relatively limp” future for the United States.  I mostly don’t care.  Of course developing economies are going to experience greater growth than the US in the near future.  They are playing catch-up.  The average Chinese worker now earns only 1/10 of the average US worker.  And that’s a dramatic improvement over a few years ago.  I hope the Chinese do catch up, nevermind China.  I hope the Indians catch up nevermind India.  It is the nationalistic mindset captured in Plummer’s language which poses the real greatest obstacle to development.  The idea that other people’s lives improving in some way harms our own is pure envious thinking, a true zero-some-game, fixed size of the pie perspective which only motivates protectionism and dehumanizes the other.
On the other hand, I think it is silly to claim that the US has few opportunities to move further up, whatever that can mean.  Americans are constantly moving up.  The TV I paid $400 for a year ago now sells for $200 (at least on buy-nothing Friday).  We afford greater comfort with less.  And this fits well with Cowen’s earlier work in “Create Your Own Economy.”  Further, as the rest of the world develops, we will experience the same kind of beneficial spillover effects that the rest of the world has been enjoying from us!  Positive externalities flow both ways.  US growth may appear limp in comparison to other economies, to which I say: finally!
I often wonder how much of the innovation we have benefitted from has occurred too rapidly.  It has been incentivized through artificial means for too long and with too much market intervention.  Perhaps we have got 4G wireless networks for our smartphones at the expense of improvements in fuel economy, or architectural improvements, or who-knows-what.  And who-knows-what is precisely the problem.  No one knows what and no one knows who.  Subsidizing innovation in industry “x” presupposes that the most important new innovation ought to come out of industry “x”.  But that would be impossible to know.  We have had a lot of such subsidization, and in my estimation, a lot of bad investments.
But there have been real innovations! one would be quick to point out.  Ah, the seen and the unseen, as Bastiat and Hazlitt pointed out.  We don’t know, can’t know, at what expense we have got the innovations we have got.
And this is precisely where Hausmann and Hidalgo strike me as problematic.  It would seem their argument will motivate policymakers to further subsidize innovation in industries that their own country seems to have a comparative advantage in.  But those comparative advantages will merely be artifacts of past subsidies.  And we will wind up throwing good money after bad.
Ask yourself, what can it really mean for one country to have a comparative advantage over another in producing a given product.  There are a very small range, primarily of agricultural goods, which it seems to me any geographic region might have a legitimate comparative advantage in.
I may have the chance to read this book sometime later.  Particularly if it becomes relevant to my research.  For now, I’m skeptical, and I’ll wait to see how the profession receives their work.

Jordan asked me what I thought, so here you go:

My humble opinion on the Hausmann Hidalgo thesis as presented by Plummer’s review in the Washington Post.

Which is to say, I have not read Hausmann or Hidalgo myself, and they may be operating at a plane which is beyond what I have learned.  But here goes…

The Obvious

Institutional analysis has failed to provide the promised explanation of cross country differences in economic growth.  There are economists, some of whom I have been reading a bit of late, such as Douglas North, Daren Acemoglu, and others, whom have tried to work out the influence of institutions on economic systems.  My own professor, John Nye, who studied with North for many years, has pointed out that Great Britain, the case study many try to isolate as the origin of modern economic growth, entered into that growth at the same time they expanded the role of centralized government, reassigned a great many property rights (which is to say they renegged on older sets of rights in favor of their preferred sets of rights), and spent a great deal of money on building a standign military force.  They did everything libertarians claim hurts free markets, all the while growing like crazy, and improving individual liberties!

So, it seems that governance systems cannot play a defining role in the way economies grow, though no one claims they are entirely unimportant.  Bill Easterly, among libertarian development economists, and Dani Rodrik on the other end of the spectrum both claim that there’s no “one size fits all” recipie for growth.  It seems that the primary believers in simplistic answers remain bureaucrats and those employed by state-funded aid agencies, and other true-believer sorts.

No, development is complex, indeed, and perhaps entirely accidental!  It should fit well with a Christian perspective of Providence to believe that the rain may fall on the unjust as well as upon the just according to God’s decrees.  However, we must keep place for natural consequences, and this is the domain of economics.

Further, the insight regarding dispersed knowledge is at least as old as Leonard Read’s “I Pencil,” though that can easily be traced to Smith’s description of a tin factory.  That Plummer does not make the connection is either sloppy or slow, I can’t decide.

The Novel

However, it is perhaps not so surprising that economists have forgotten Read’s monograph, despite Milton Friedman’s recitation of it on the “Free to Choose” video series.  Instead, what Hausmann and Hidalgo may be capturing is a move relatively recent in the trade literature.  That is, countries don’t seem to matter nearly as much as we once thought.  Firms, instead, are the important unit of analysis, and indeed I would not be surprised if investigating even smaller units within firms would be further illuminating.

But this is too difficult.  One cannot draw intersecting supply and demand curves for each sub-managed office in order to make predictions about larger macroeconomic trends.  What is desired is a simplifying theory sufficient to make “close-enough” predictions about short term moves in the economy.  Presumably these are the desires of politicians and market movers who want to preserve security and get rich.  Too bad.  The economy is not some set of smooth infinitely differentiable functions.  It is lumpy.  What good economic theory gets right is first pointing out the tendency of markets to move toward equilibrium, and perhaps more importantly the ability to show how littel we really know about our subject of interest.  I might even say how little we can hope to know.  We are primarily engaged in moving items out of the bin “stuff we don’t know we don’t know” into the bin “stuff we know we don’t know” and only occasionally can we move one of these bits into the bin “stuff we know.”

What I find useful, then, and novel in this tidbit of a review, is the idea that we need to focus on the novelty of goods produced by a country.  Again, I think we ought to look beyond the country as a unit of analysis in general.  A novel good is demonstration of innovation in attempt to capture a share of the market.  That is, it is customer focussed.  A successful novel good, one that survives, usually is successful because it replaces some less preferred good, many of which are *also novel*.  This is Schumpeter’s Creative Destruction.  However, sometimes a less preferred good can win.  This happens when an inferior good enjoys state protection or subsidies of some sort.  In such cases, institutions matter, not because of the good they do, but because of the harm to the global economy induced by their interventions.

Novel, new, unique goods capture rents.  That is, they earn profits above the market average.  Singapore may be richer because the Singaporese produce more novel products.  (Note that Singapore per se does not produce anything.  People make things, and make the decisions about what it is that will be made, and in what quantites.  Falling into the nation as unit of analysis happens again and again.)  Of course formal education plays a limited role in the development of novel products.  Formal education can include precisely that sort of schooling which encourages conformity and discourages creative thinking and entrepreneurial vision.  Schooling is what fish sometimes do, and formal schooling is very good at producing people who can queue properly, but quite poor at developing well-motivated free thinkers.  On the other hand learning technical tools is very important to implementing fresh ideas, or even for identifying fresh vs. already been tried ideas.

I’m currently reading up on the literature which identifies firms which export as being better on many margins than firms which do not export.  This seems to fit well with Hausmann and Hidalgo’s discussion of big vs. small businesses.  Again, the older trade theory, from Smith to Ricardo to Hecksher-Ohlin to Krugman then Krugman and Helpman always does its analysis at the country level.  Bradford and Jensen hit off a literature which has begun to look for firm-level data when analyzing trade patterns.  What I expect to find in the long run is that succesful entrepreneurs are the real unit which endows some firms with global comparative advantages.  In the past it has been easy to imaginge that natural resource endowments were imperitive to development, or that the relative ratios of inputs was crucial.  But as transportation costs have fallen, largely thanks to the invention of the container ship (an underappreciated phenomenon), and as trade barriers have diminished, it is clear that there are few relevant unique elements to nations.  Among the most important elemnts that does impact national comparative advantage is migration policy.  With open borders I have a hard time imagining what comparative advantages beyond climate remain relevant for development trends.

I don’t know if this all boils down to a “relatively limp” future for the United States.  I mostly don’t care.  Of course developing economies are going to experience greater growth than the US in the near future.  They are playing catch-up.  The average Chinese worker now earns only 1/10 of the average US worker.  And that’s a dramatic improvement over a few years ago.  I hope the Chinese do catch up, nevermind China.  I hope the Indians catch up nevermind India.  It is the nationalistic mindset captured in Plummer’s language which poses the real greatest obstacle to development.  The idea that other people’s lives improving in some way harms our own is pure envious thinking, a true zero-some-game, fixed size of the pie perspective which only motivates protectionism and dehumanizes the other.

On the other hand, I think it is silly to claim that the US has few opportunities to move further up, whatever that can mean.  Americans are constantly moving up.  The TV I paid $400 for a year ago now sells for $200 (at least on buy-nothing Friday).  We afford greater comfort with less.  And this fits well with Cowen’s earlier work in “Create Your Own Economy.”  Further, as the rest of the world develops, we will experience the same kind of beneficial spillover effects that the rest of the world has been enjoying from us!  Positive externalities flow both ways.  US growth may appear limp in comparison to other economies, to which I say: finally!

I often wonder how much of the innovation we have benefitted from has occurred too rapidly.  It has been incentivized through artificial means for too long and with too much market intervention.  Perhaps we have got 4G wireless networks for our smartphones at the expense of improvements in fuel economy, or architectural improvements, or who-knows-what.  And who-knows-what is precisely the problem.  No one knows what and no one knows who.  Subsidizing innovation in industry “x” presupposes that the most important new innovation ought to come out of industry “x”.  But that would be impossible to know.  We have had a lot of such subsidization, and in my estimation, a lot of bad investments.

But there have been real innovations! one would be quick to point out.  Ah, the seen and the unseen, as Bastiat and Hazlitt pointed out.  We don’t know, can’t know, at what expense we have got the innovations we have got.

And this is precisely where Hausmann and Hidalgo strike me as problematic.  It would seem their argument will motivate policymakers to further subsidize innovation in industries that their own country seems to have a comparative advantage in.  But those comparative advantages will merely be artifacts of past subsidies.  And we will wind up throwing good money after bad.

Ask yourself, what can it really mean for one country to have a comparative advantage over another in producing a given product.  There are a very small range, primarily of agricultural goods, which it seems to me any geographic region might have a legitimate comparative advantage in.

I may have the chance to read this book sometime later.  Particularly if it becomes relevant to my research.  For now, I’m skeptical, and I’ll wait to see how the profession receives their work.

McClaren gets to Zionism

Brian,
I think one route to resolving the impass surrounding Zionism is to concentrate on the locus of power. Between modern Israel and its neighbors there is an animosity which has many sources and few diffusers. But the central problem is the question of whom shall have power over whom.
In Christ, however, we have a renewed perspective in which we all empty ourselves of whatever power we have been endowed with for the sake of others, fully in imitation of Christ.
What this means is that Christians can be supporters of Palestinians and Israelis without supporting the nation-state of Israel or the nation-state of Palestine (or the nation-state of the United States of America for that matter), and without supporting the agendas of Israelis or Palestinians which involve the use of power-over.
That conflation of nation with state is central to the problem is easily evidenced in the following quotation from the response, “The land belongs to many nations—Arabs as well as Israelis. Both Israel and Palestine have the human right to a state of their own, without occupation, and without violent attacks.” The land belongs to the nations, not the nation-states. Which state you live under merely implies which group of goons you pay taxes to. Choosing sides among groups of goons is a fruitless activity, yet it is precisely where most American Christians spend their energies. In the case of Zionist debates, they are not even choosing their own goons, but goons for others. The hubris required to believe one is qualified to make such a decision for others is awful.
The correct solution to the Zionist problem requires a deeper investigation into God’s original intentions for Israel, and the origins of the nation-state in Israel. I Samuel 8 is the appropriate starting place for such discussions. It should be clear that God prefers all of us to operate as princes in His Kingdom to the appointment of a human-king agent. Pushing further we can look to the provision of the Levites as sub-optimal in God’s eyes. He preferred that each first-born son be dedicated to the priesthood. Also, God invited all of Israel up the mountain, but they preferred one Prophet. In Christ we are to reaffirm universal priesthood, kingship, and prohetic mantle.
God appointed Judges, apart from nation-states, and gave a law which could not be manipulated and was sufficient. If Christians can

Penny Wars

The office is having a penny war fundraiser.

The obvious way to win such a contest is to only contribute pennies, and only to one’s own pool, since any defensive actions, other coins to other pools, must necessarily be divided among the other pools.

If there are five pools, the expected contribution to one’s own pool is +100 points.

But a dollar in any other pool, or a quarter in each other pool, has only the effect of +25 points for one’s team.

Now, if we observe other coins in any pools, and we assume all players are rational, then we have a puzzle to explain.

I suggest two related reasons we might observe other coins:

1.  Pennies are cumbersome.

2.  People give what they’ve got.

Now, transforming non-pennies into pennies takes time and energy and can be a hassle.

So: value of transforming non-pennies into pennies = points from pennies – transactions costs of transformation.

V(~F) = F-c

Where F=face value of penny or non-penny, and c = transaction cost.

V(~F) = F(1/(n-1))

Where n= # of pools.

Substituting and rearranging:

c=F[(n-2)/(n-1)]

We should then be able to extract the transactions costs of transforming non-pennies into pennies.

Let’s assume there are five pools.

So, if I have a dollar in my pocket, and I’m trying to decide whether to plunk it into the opponent’s bucket or to transform it into pennies, I’m really asking if it is worth 75 cents to make the transformation.  If going to a bank to get pennies requires more than 75 cents of effort, people will just drop the dollar.

If I have $100, and I want to contribute it, the trip to the bank will have to be more costly than $75.

Guessing, I’d say it is roughly worth $10 to go to a bank.  Therefore, I do not expect to see an bills greater than $10/.75, or $13.33

The nearest bill is a $20.

I expect to find no $20, and yet an occasional $10.

Anarchism

My mom wants me to deal with Romans 13. Okay mom!
She asked me to look at Matthew Henry’s take on the passage. It’s online here.
And here’s the passage in question:

Let every soul be subject unto the higher powers. For there is no power but of God: the powers that be are ordained [1] of God. 2 Whosoever therefore resisteth the power, resisteth the ordinance of God: and they that resist shall receive to themselves damnation. 3 For rulers are not a terror to good works, but to the evil. Wilt thou then not be afraid of the power? do that which is good, and thou shalt have praise of the same: 4 For he is the minister of God to thee for good. But if thou do that which is evil, be afraid; for he beareth not the sword in vain: for he is the minister of God, a revenger to execute wrath upon him that doeth evil. 5 Wherefore ye must needs be subject, not only for wrath, but also for conscience sake. 6 For for this cause pay ye tribute also: for they are God’s ministers, attending continually upon this very thing.

7 Render therefore to all their dues: tribute to whom tribute is due; custom to whom custom; fear to whom fear; honour to whom honour.

Smart people, like Greg Boyd, have recommended reading this Romans 13 passage within the context of Romans 12:

I beseech you therefore, brethren, by the mercies of God, that ye present your bodies a living sacrifice, holy, acceptable unto God, which is your reasonable service. 2 And be not conformed to this world: but be ye transformed by the renewing of your mind, that ye may prove what is that good, and acceptable, and perfect, will of God. 3 For I say, through the grace given unto me, to every man that is among you, not to think of himself more highly than he ought to think; but to think soberly, [1] according as God hath dealt to every man the measure of faith. 4 For as we have many members in one body, and all members have not the same office: 5 So we, being many, are one body in Christ, and every one members one of another. 6 Having then gifts differing according to the grace that is given to us, whether prophecy, let us prophesy according to the proportion of faith; 7 Or ministry, let us wait on our ministering: or he that teacheth, on teaching; 8 Or he that exhorteth, on exhortation: he that giveth, [2] let him do it with simplicity; he that ruleth, with diligence; he that sheweth mercy, with cheerfulness. 9 Let love be without dissimulation. Abhor that which is evil; cleave to that which is good. 10 Be kindly affectioned one to another with brotherly love; in honour preferring one another; 11 Not slothful in business; fervent in spirit; serving the Lord; 12 Rejoicing in hope; patient in tribulation; continuing instant in prayer; 13 Distributing to the necessity of saints; given to hospitality. 14 Bless them which persecute you: bless, and curse not. 15 Rejoice with them that do rejoice, and weep with them that weep. 16 Be of the same mind one toward another. Mind not high things, but condescend [3] to men of low estate. Be not wise in your own conceits. 17 Recompense to no man evil for evil. Provide things honest in the sight of all men. 18 If it be possible, as much as lieth in you, live peaceably with all men. 19 Dearly beloved, avenge not yourselves, but rather give place unto wrath: for it is written, Vengeance is mine; I will repay, saith the Lord. 20 Therefore if thine enemy hunger, feed him; if he thirst, give him drink: for in so doing thou shalt heap coals of fire on his head. 21 Be not overcome of evil, but overcome evil with good.

Henry’s commentary basically says to be peaceable towards the government, and not to cheat, in particular he speaks against smuggling and evasion of tariffs, which I find a bit interesting as an aspiring economist.

But the implication overall is that the state holds some sort of legitimacy since God is sovereign and He allows the state to exist.

Granted.  God is sovereign and He does indeed allow the state to exist.  He allows all sorts of evils to exist.  He allows wickedness, and people who hurt others, and all manner of things which are harmful.  But Romans 13 says that the state is God’s minister to us for our good, and that it bears not the sword in vain.

Whoa.

So, I can’t really argue with that.  The state is a minister for our good.  Sometimes it goes terribly awry, well of course, this is a fallen world.  Yet we are not to resist or rebel against the state, even then.

And I agree.

My anarchism is not a rebellious one.

Instead, it is subversive.  That’s why I look to Romans 12.

There’s a long list of things that we as believers should do.  And inasmuch as we do them, we relieve the need for the state to bear the sword.  Inasmuch as we do those things we decrease the demand for the state to do those things.  Inasmuch as we offer ourselves as sacrifices for the sake of others, we decrease the need for the state to wield the sword.  This is what I think believers ought to do.  I believe we ought to be fully engaged in working hard and sharing with others.  If we shared more with others there would be no need for welfare.  If we shared with women who are considering abortion, offering to pay them to carry their child to term, and keep it, or offering adoption, then there would be far less abortion.  If we offered to sponsor immigrants as they come into America, offering to post a bond, let’s say, for the amount they might consume in tax dollars, then they could come in more.  If we offered refuge in our own homes to innocents in other countries, then the need for our government to go to war on humanitarian purposes would be reduced.  But all of this requires sacrifice.

And that is how I resist the state.

It is easy for me to point out government failures using economic tools, but it is necessary that there be an alternative.  I am that alternative.  My sacrifices make way for other routes to peace.  If I do not demonstrate willingness to sacrifice, then I have no right to speak out against problems.

Anyway, those are my thoughts.

Love you, Mom!

Zizek

Sam send a link to the transcript of this speech by Zizek at OWS. http://t.co/2MicRSvu
I’ve been following Zizek tangentially for a while. Ever since my former colleague Creston Davis started writing about his work with Zizek. Davis and I worked together at Agape Corner mission in Durham, NC while he was at Duke Divinity. He had an influence on my following Stanley Hauerwas.
As for Zizek, I’ve brought him up in class multiple times. Usually the response is just “he’s crazy.” I don’t know if there is a good thorough libertarian economic response to Zizek out there. Maybe I’m the guy to write it, someday.
What Zizek says in this speech is good stuff. There is a presumption that free markets might lead to the sort of crony-capitalism (which I prefer to call mercantilism) of today.
The simple fact is that people close to political power were allowed to behave badly in the market without having to face the normal market-disciplinary consequences.
My usual contention is that the market is not at fault here, but the vulnerability of the political mechanism is.
Zizek hopes for a greater solidarity within which people help each other and overcome some of the problems not addressed by mercantilism, and I will grant, real capitalism as well.
Real capitalism does not do a good job of caring for the least of these.
But I wonder how crucial to Zizek’s theory is a fundamental change in the nature of humanity. Is it even possible for people to be more good? There is in his theory an implication that a sort of moral formation occurs within mercantilism which short-circuits the capacity for people to act in solidarity. This is a difficult argument. It does not seem self-evident to me. If anything, it sounds like an excuse from personal responsibility. Can people act morally within the current structures? Yes. Why don’t they? It’s not in their personal interest. When will they? When they adopt a more long-run perspective. Who in today’s society adopts a long-run perspective? People who buy and hold blue chip stocks. People who put money into savings. People who invest in education which has practical applications.
In short: capitalists.
The cheaters, the bankers and others who hide under the wing of the state, are more prone to looking for short-run gains. These people are not capitalists! they are opportunists! They are crooks!
But these are the ones OWS is calling “capitalists.”
There is so much confusion, and it has been fostered by the monstrosity that is Congress, which has mixed the guardian ethic with the commercial ethic, as Jane Jacobs discusses.
The market is not a created institution. It does not exist for the benefit of some at the expense of others. It simply emerges when people are allowed to make voluntary transactions. It is the nexus which forms from repeated interactions of people trading and improving their lives through voluntary exchange.
The state is an artificial construct. It exists to protect some at the expense of others. Even in Democracy, even in a republic, the result of the presence of a state, particularly a redistributive or regulatory state, is unfair rules to the game. It is an intervention of voluntary action. It limits who when and how people may engage with each other. Each limitation has the unintended consequence of generating a privilege and an advantage for some other players. Smart people will find out how to capture these advantages for themselves, and such are the cheaters of today.
They captured the ratings agencies, the auditing houses, the patenting system, the environmental rules, the welfare programs. All of it.
My prescription is just as radical as Zizek’s: end these privileges. But I go a step further: pay for them. Buy out the bankers and the cheaters. Pay them to leave. This is heinous to anyone attaching a moral criticism to the cheaters. But I identify the state as the source of the corruption, and so I have mercy for the cheaters. they were merely responding to incentives after all. Sometimes they lobbied for the creation of those incentives, but it should have been the responsibility of the state to say “no.”
If anyone wants to attach a paternalistic mode to the state it can be this: when the child asks for something which is bad for him, or which may hurt his sister, or which may put the parent in a bind later, say no.
This has not happened. The state has grown.
All the things Zizek wants out of solidarity can be achieved outside the confines of the state. People can form free associations to accomplish healthcare, etc. use of the state seemed like a good idea when we held an angelic notion of the state, but now we should be wiser. We should know that the state is a monster. Let’s not feed it.

Why are the rich doing well in the recession?

Sam points out that while median incomes are falling, not everyone’s incomes are falling. This leads to righteous anger at those wealthy who profit from economic suffering.
First, there are those who profit from economic downturns due to protection or privilege gained by currying favor from the state. This is heinous. I’m indignant, angry, and grieved by this.
So out goes the bathwater, but let’s keep hold of the baby.
In economic downturns resources get shuffled around, people have to change jobs, if they can find one, and most people have to cut back on spending. A general equilibrium consequence of this is that the prices of many goods will fall. Those who still have money to spend can get more for less. But what if they didn’t? What if they just left those resources idle, or in whatever position they were in? The very fact that the purchase was made indicates that the buyer believed they knew of some higher valued use of those resources than the seller. If they were prohibited from buying then those resources would continue to be allocated to a less highly valued use. Production would plateau. Efficient gains which were possible will not be realized. It will take longer to get everyone out of the recession.
Now, if Sam is just complaining about wages given to CEOs, there’s a full literature debating how management gets compensated, and it’s complicated. Which is to say, there is a limited consensus. But who decides how much those people get paid? Is it a fair process? Is it voluntary? Does he complain about how much Steve Jobs got paid, or Alex Rodriguez, or Harrison Ford?
Which is interesting, because each of these guys enjoys(ed) some sort of favor or protection or monopoly power. That is, Jobs had patents protecting Apple from competition. A-Rod is in an industry dominated by a cartel. Ford is in an industry gated by IP copyright protection. Others have primarily gotten wealthy by satisfying customers from within highly competitive industries with little protection or favors. We ought to celebrate when people get rich this way. We ought to let them keep their wealth and use it however they want in order to motivate other people to find ways to satisfy customers.
The neo-classical to libertarian portion of the political-economic spectrum focuses too much on their heroic entrepreneurs and complains too little about the corporate leeches. The progressive and interventionist end of the spectrum focuses too much on the favoritism, corruption, and inequality generated within the market without understanding that these are distortions of the marketplace whose origins lie in regulation and political favoritism. The Public Choice perspective has the opportunity to fully identify the flaws in regulation leading to regulatory capture, to cry foul at political favoritism, and to advocate a market where competitive forces act as effective discipline on firms and consumers.
For those who have suffered most acutely from the current recession, I am grieved. If there is anyone in need let me know, and I will do what I can to help. It is a time for austerity. People need to move back in with their parents. They need to sell one of their cars, and turn off the TV to save on electricity bills. They need to eat beans and rice.
And so do I.
Because if I adopt a more frugal life I will have more to share with others. I have a spare room in my house which I am seeking to let out. The tenant must be okay with sharing a bathroom with two little girls and okay with living in a house with a big dog. But I have the room.
And maybe you have room in your house. Letting it out may provide a significant savings to someone in need, and may reduce your burdens. Of course, we often value our privacy more highly than the needs of others, or are willing to pay for the luxury of a mostly empty room in a house that is mostly empty during most of the day.
Now, the libertarians have a decision to make. They can either join me in frugality and sacrifice for those who are in need, or they have to say: fuck ‘em.
That is, pure rational individualistic thinking has to say: I don’t care if the poor die in the streets.
Unless you believe in God or some other moral standard I don’t know how one can argue with that position. It seems quite consistent with social evolution theories. Of course there are the elements of sympathy I discussed before, but when considering those whom we have no reasonable expectation to gain from in the future there is no reason to give a damn about them. To say that I ought to care about them does not explain why.

What can’t be said on Twitter

I’ve started this post a few times, trying to get at some questions Sam has been poking at me with. I love Sam. I met him at an IHS conference where he one of the few non-libertarians in attendance. Actually we started chatting through facebook a few weeks before the conference. He really gets pissed at stupid politicians, particularly Republicans, but I don’t think he is idealistic about the Democrats. He aims at Libertarians often, too. We’re easy targets, and there’s a lot of people out there with just a little bit of knowledge each. It’s messy.
But I guess I’ve struggled to get to his points recently because my position is strung together in large part by my faith, which I usually want to leave out of intellectual discussions. But the bottom line is, I don’t know why anyone who doesn’t understand my position on theology would hold anything like my position.
I’m a Christian, pacifist, libertarian, anarcho-capitalist, anti-corporatist (in the current form), amillenial, voluntarist, employee of the Federal government. Heh.
The current discussion started over something about the increase in size of the wealth gap and a question about the effectiveness of welfare programs. Now, the wealth gap *per se* is not a problem to me. If the wealthy are my-kind-of-Christian and they are not sharing significantly of their wealth I don’t understand. By significantly I suppose I mean 20-50% of income. I also don’t understand if they are only sharing with Americans. Why should I care more about an American kid who only eats twice a day that a foreign kid who only eats once a day?
Sometimes people get rich by making other people’s lives better. That is, they invent something or provide a good or a service which people voluntarily pay for and get some satisfaction from. To whatever degree their satisfaction is above what they paid they enjoy “surplus”. There’s a lot of surplus out there. And people get rich by providing it.
Other times people get rich by getting some sort of privilege from the government. A lot of the anti-corporatist sentiment is directed against this sort of thing. I’m against that, too. I’m easily against all government privilege, because I’m against the state altogether.
But sometimes the Ayn Rand types get all defensive of corporations when talking to the anti-corporatists. In today’s climate it might be the case that every corporation in existence has to play the dirty game of politics just to stay in business. It’s quite likely I think. But there are a great many people who want to earn an honest buck by just helping people who get lost in the whole corporatist thing because there isn’t any other way. They go along with the system, and before they know it they can’t get along without it.
This is part of the reason why “corporate welfare” is an apt phrase.
Now, welfare sucks. I mean, it sucks if you have to be on welfare. We had medicaid for our kids when they were born. I’m not proud of that. But I’ve sucked at the teet of government healthcare. We stayed off WIC, but I have Federal Student Loans now. I get handouts.
I probably shouldn’t. I maybe shouldn’t work for the government. I have a hard time with it sometimes.
I’m rambling.
Oh yeah, wealth and corporations. One thing that happens when people get lots of wealth is that they like to spend some of it. Most of it gets invested back into corporations which do some good things. But some of it goes to pure foolishness. Extravagance and displays of excess and whatever are just ridiculous to me. If God wanted us to be peacocks He’d have given us feathers. Other money gets spent on politics. And there’s a real problem. If the wealthy have more money to spend on politics, they can steer policy in such a way that favors them and helps them to get more rich.
I agree completely that this is bad, and that it is a lot of what happens in politics today, and that a lot of people get rich this way, and that a lot of people try to get rich by using the government to get special privileges for themselves. And none of this is particularly new.
Sam usually suggests that some sort of regulation might help with these problems. Some regulations might. But regulations often get twisted around so that they are used by those who already have some power to get more. Libertarians talk about “regulatory capture.” If we could avoid regulatory capture and somehow use regulations to prevent corruption of politics, I’d be all for it. But I see regulation as mostly just making the beast stronger. I have yet to hear of a regulation that didn’t wind up being manipulated, often by the very people it was meant to curtail.
This is the point where Sam and I usually part ways then on regulatory issues.
And I understand a sense of urgency that says, “we need to do something, and a regulation is better than nothing.” I agree that something needs to be done, but I think that I’m the one who needs to do it. I’m not saying that you shouldn’t do anything about it, too, but only if you want to.
But I don’t understand why anyone would want to.
What I have in mind is me taking some of my money and giving it directly to a person who needs it. Or me inviting illegal aliens to live in my home if they are facing deportation. Or me offering to pay a young woman to carry her child to term, and offering to adopt it, or to help support her if she wants to keep it. Or me volunteering to teach a class for free. Or me driving someone to the doctors. Or whatever. I’m talking about making sacrifices. I don’t know why people willingly make sacrifices for each other.
Now, I can understand some sacrifices. I understand sympathy. I understand that someone might care for someone else if they can see themselves in that other person’s shoes. Adam Smith talks a lot about sympathy, and I get it. I understand how a mother, brother, lover or friend can place their futures in another person until they are willing to die for them.
What I have a hard time understanding is willingness to sacrifice for total strangers, or for one’s enemies. But Jesus did that.
And I claim to know Jesus, and to have been changed by Him, so I want to imitate Him.
And I can understand if other people think that’s stupid or crazy or sentimental, but that’s where I am.
And I would never expect the same of you or anyone else. So if you want to take care of other people that’s great, but I don’t know why you would want to apart from sympathy. And I really think sympathy is just a sort of second order of selfishness. That is, sympathy is effective mostly when we put ourselves into another person’s shoes. Adam Smith says this happens when we become impartial spectators of others. We judge what is occurring to them as if it were happening to us, and experience a common-feeling with them: sympathy. And we don’t like to see others hurting or suffering or uncomfortable because when we sympathize with them it brings us pain and discomfort, and we don’t like to feel those ways. So, out of selfishness, to relieve our discomfort, we behave somewhat altruistically to care for others.
But you see, anyone can do this. We do it a lot, too, but not quite enough, because there are still a lot of needy people around.
What I want to live out is more than sympathy, though. I want to live sacrificially. That is, sympathy has its limits. Sympathy might motivate me to put some part of my life or limb at risk, but at some point I will say “it’s not worth it.” This indicates a rational calculation going on in my mind. What I am saying is that at some point the cost to me of altruism is greater than the sympathetic feeling I have for the other person. At that point I turn my head while they go on suffering.
It is precisely at that point, just past what is humanly rationally altruistic, where I feel like the divine has to rise up within me. When it is no longer worth it to me it is often still worth it to God. And so I make a real sacrifice. Not a trade-off “this for that” but “this for nothing”. This sort of thing is irrational. I wouldn’t expect it of anyone. But I expect it of myself. And if enough people who claim to know Jesus adopted this ethic, welfare would be over in a jiffy. Abortion wouldn’t be a profitable option if Christians offered to pay women to keep their babies. Inequality wouldn’t be an issue.
But these things are problems. I don’t blame the big corporations first. I blame me first, and others who claim to believe like I do but do nothing about it.
And when Christians spend an enormous amount of time and money on politics, I see it all as a waste. I see attempts to manipulate the political mechanism as a form of idolatry. The only thing good to do with an idol is to break it. I’d like the entire political machinery to be broken. I see politics as the source of power-over actions.
Now, corporations get money which they use to buy power-over privileges. But if there were no government, or perhaps a teensie weensie government not vulnerable to bribes, then the problem of corporations would go away. Indeed, a lot of corporations would go away. All those which in one way or another depend upon a privilege granted to them by the state would disappear. Maybe the average size of a firm would get smaller. Maybe it would get bigger. Maybe profits would go up or down. We can’t know really. The market, devoid of power influences, would reward people who make or do things other people like and those other people would pay.
I see “the market mechanism” as a pure process which devoid of political influence has myriad good consequences. The market has no mechanism for caring for people whom it has no use for. I need to sacrifice to care for them. I see the political mechanism as the way people try to free ride on other people, or basically try to enforce morality on others, or attempts to get power over other people. This is what the political process means to me.
I can’t see democracy as a better political process, one of discussion or otherwise. It is majority rule. It just says “this is how we will decide to use power.” It fails to say, “we will not use power at all.” Only the latter is acceptable to me.
I don’t like republicanism, either. Factions form, favors get granted. Power is implicit.
I’m not naive, though. I know we will never have an anarchist society. There will always be people using power against others. My fight will always be to destroy those institutions which create power, to sacrifice to free those that power oppresses, and to argue for this peculiar ethic.
The cry goes up, but people will be suffering in the meantime!
Ah, this is the hardest part I think:
Yes, people are suffering. It’s nothing new. I think that most attempts to help the suffering through political means lead to more suffering.
For example, some people think its a good idea to tax citizens and use the pooled money to pay for health care. I think this is a bad idea. People will use more health care than they need. Taxing one person to give it to another who needs it is like saying, “You have to care about that person.” “You have to love them.”
My response is: no. I need to love them. I need to care about them. I need to sacrifice to pay for what they need. But I can never tell anyone else that they need to sacrifice for the person who is in need.
But again, not all of those who are in need will be cared for, then.
Right.
If you read the Bible, Jesus will piss you off. He had the power to heal people, but he walked past many sick, hurt, and dying without healing them.
Why would He do that?
Why would He allow suffering?
Maybe because its not the end of the story. Maybe He will give those who suffered on earth a better place in heaven. Maybe the trade-off will be worth it. If He is God, and He is sovereign, then the sick and hurting and oppressed of the world have hope in the next life.
And if you don’t believe in a next life, what I have just said is offensive.
Thank God. At least I didn’t offend you by saying that I hate gays, or that pregnant girls shouldn’t be allowed to get abortions, but should have to keep their babies and “pay for their mistakes.” At least I haven’t offended you by promoting a conservative or progressive agenda. These are the ways Christians are usually offensive. And its because they are engaged in something that is not very Christ-like. They are manipulating power to try to make the world the way they think it should be. But power is not manipulated without consequence. It strips the virtue from the intended action, and leaves only force, violation, and evil.
I see the only appropriate action for a Christian as sacrifice. Now Christians should get jobs and go to work and make money. Then they should give a good portion of that money away. Then they should make more money to give away. Making honest money only happens when we help people meet their wants and needs. So making honest money to give away to others helps two sets of people.
But I don’t blame the people who find themselves having to compromise. People like me, who work for the government. I don’t think I could ever serve in the military, but I find my position currently useful. At my job in an independent agency I help to provide neutral research to policymakers. Just the facts and the science and analysis. I think that helps the government not to do worse things. Maybe I’m just justifying myself, though. I need others to criticize this for me, I’m too close to it.
And I have my federal loans. I’m more sheepish about that. I had a scholarship to school but I blew it by getting a bad grade in econometrics my first year. I see this as my fault.
Oh, Sam had been talking about how the wages for the wealthy are going up, but the wages for the poor are going down.
This might be true. If it is, it is not because of markets, but because of politics. Elites who have favors from those in power are protected while others suffer.
But I’m optimistic. That’s because I’ve seen the numbers about growth over the long run. I’ve seen major innovations. I know that trade is becoming more free everyday, and that more open borders is an inevitability. When people can move more freely governments will have to behave better and wealth will grow rapidly. In general I have seen everyone get richer, only the rich more so. This only can bother me because of the problem of influencing government, my solution for which was to further constrain government, not markets.
But I don’t mind people getting rich honestly. And I don’t believe all the poor need to be rescued. I believe I need to rescue those God calls me to.
Oh yeah, that’s an offensive part, too. I believe God talks to me. Through His Holy Spirit, He directs me when to perform acts of mercy. That’s pretty wacky. But its what I believe Jesus was doing. I believe He only did what He saw His Father in Heaven doing, and He did those things through the power of the Holy Spirit, the same Holy Spirit I have in me. And Jesus didn’t heal or save everyone, so neither do I feel like I have to. But if I am living a life of selfishness, and pure luxury, or even relative comfort, then I am not really sacrificing, which is easy enough evidence that I have not been paying attention to God. And that’s on me.
Now, if sympathetic people want to get together to form clubs to take care of each other, or even form insurance co-ops, well that makes sense to me. And if somehow everyone decides to get together and join the same insurance co-op I’d think that was great. But it has to be a voluntary sign-up, not compulsory. The same goes for all sorts of other kinds of public goods. Schools, protective services, courts, fire departments, etc. The anarcho-capitalists have written about all of these things. They have good ideas. But usually they leave out the catalyst which makes the ideas of their world possible, those sacrificial altruists which generate the first spark of trust.
And that’s where get arrogant again. I really do think that it is those few good people who make sacrifices which sustain all of society to the extent to which society is sustained. Fewer good people, worse society. I want to be one of the good people, but I won’t force anyone else to be.

A New Blog Post? Not in My Backyard!

So, it’s been 10 months since I posted on this blog. Not to worry, I write all over the web, and oyu can find that stuff by google searching me.
But today, I want to talk about a new NIMBY case.
Yesterday I heard a rumor that Wal-Mart is building a new Supercenter about 200 yards away from my house.
Okay, maybe it’s more like .5 miles, but it is close by, and it will be at the edge of a quaint town, the atmosphere of which could be quite changed by the presence of a big box store.
Which is what most people don’t like about the idea, that the character of the town could be changed.
Or, maybe they are more concerned about their homes losing value, a legitimate concern.
What are the legitimate approaches to dealing with a NIMBY situation of this sort? How viable are Coasian exchanges? How serious is the free-rider problem? How expensive could a political battle be?
We could expect people to be willing to expend up to the value they anticipate they could lose in their homes, plus any psychic value, in trying to prevent Wal-Mart from building here. But they won’t because they know it won’t be enough.
And it seems unlikely that anyone would put together an association dedicated to bargaining. People could say they would pay, and then back out. It might be possible to make payment a condition for joining, and then to hold the funds in escrow to be returned if bargaining fails. This is an interesting option, but it still suffers from the free-rider problem where some people will not opt in supposing that others will.
What most likely will happen is that there will be a big political fuss and tons of time will be spent complaining and tons of newsprint will be bled.
And then Wal-Mart will be built anyway.
Which will be nice because then I could ride my bike to go buy paper towels, but it will suck because it will be noisy, and there will be lots of lights on late at night, and traffic will get worse.
But maybe my taxes will go down. Haha!