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I once said that distributism is the only economic philosophy that makes a serious attempt to conform economic theory to Catholic social doctrine. That isn't quite true. There are others, such as Catholic "corporatism", a movement that seems to emphasize both the authority of, and cooperation between, various groups in society - akin to the medieval guild system so far as I can tell.
There is also the social credit movement, which I am just now learning something about. The idea here is that, as efficiency in production increases, fewer workers are required to produce the essential goods of society. The workers and entrepreneurs who would otherwise be involved in the production of essential goods are then diverted, in a capitalist economy, to wasteful and frivolous "work" for the sake of making money - money needed to buy essential goods, along with the wasteful and frivolous output of their own "work". One social credit writer noted that society would be better off paying 50% of American workers to stay home so as to minimize the damage they are doing. I can easily see this as being not too far-fetched: a great deal of work in the modern economy, including much of the best paid work, is parasitical from a social perspective.
Therefore, social credit theory proposes that it is better to pay all citizens a "social dividend" - a guaranteed income without any strings that is deemed to be a natural surplus, the rightful inheritance of everyone. Work would then be entered into with more care toward its actual value rather than its mere price in the form of wages. Under the present rule of capital, in which wages are of paramount importance, lots of valuable and important things that need doing are not done at all, or not done well. Which is the obvious consequence of too many people doing too many things that they shouldn't be doing. Presently it is the wage that allocates labor: price conquers value. And so we have become a nation of wage-earners and consumers who know the price of everything and the value of nothing.
No, I don't make posts like this just to annoy Lydia, Jeff S., and Mike T., although it's kind of fun to rattle their cages. I would remind them that Milton Friedman proposed something very similar with his negative income tax, so the concept shouldn't be anathema to the champions of capitalism. In any case, our present system is so radically broken and dysfunctional that we ought to be thinking a little beyond the ideological status quo about solutions.
There is a Catholic magazine called "Michael" that is partially devoted to the social credit movement, and you will find many relevant articles on the site. For a taste of these, you might start with "The Social Dividend to All" by Louis Even, written in the form of frequently asked questions, from which the following excerpts are taken:
There is also the social credit movement, which I am just now learning something about. The idea here is that, as efficiency in production increases, fewer workers are required to produce the essential goods of society. The workers and entrepreneurs who would otherwise be involved in the production of essential goods are then diverted, in a capitalist economy, to wasteful and frivolous "work" for the sake of making money - money needed to buy essential goods, along with the wasteful and frivolous output of their own "work". One social credit writer noted that society would be better off paying 50% of American workers to stay home so as to minimize the damage they are doing. I can easily see this as being not too far-fetched: a great deal of work in the modern economy, including much of the best paid work, is parasitical from a social perspective.
Therefore, social credit theory proposes that it is better to pay all citizens a "social dividend" - a guaranteed income without any strings that is deemed to be a natural surplus, the rightful inheritance of everyone. Work would then be entered into with more care toward its actual value rather than its mere price in the form of wages. Under the present rule of capital, in which wages are of paramount importance, lots of valuable and important things that need doing are not done at all, or not done well. Which is the obvious consequence of too many people doing too many things that they shouldn't be doing. Presently it is the wage that allocates labor: price conquers value. And so we have become a nation of wage-earners and consumers who know the price of everything and the value of nothing.
No, I don't make posts like this just to annoy Lydia, Jeff S., and Mike T., although it's kind of fun to rattle their cages. I would remind them that Milton Friedman proposed something very similar with his negative income tax, so the concept shouldn't be anathema to the champions of capitalism. In any case, our present system is so radically broken and dysfunctional that we ought to be thinking a little beyond the ideological status quo about solutions.
There is a Catholic magazine called "Michael" that is partially devoted to the social credit movement, and you will find many relevant articles on the site. For a taste of these, you might start with "The Social Dividend to All" by Louis Even, written in the form of frequently asked questions, from which the following excerpts are taken:
— But would not this be giving something for nothing to individuals? Well, just go and tell a capitalist that he is getting something for nothing, when he is paid a dividend on his invested capital! On the contrary, he will call it an injustice, if he is refused his dividend.
The same is true for each member of society, who is a co-capitalist, a co-heir of a real capital, as we have just explained above — a capital which is more essential than dollars or other monetary signs which have only a representative value.
Then, a strict exchange economy cannot be a human economy, given that more than half of the population has nothing to exchange: it is the case for children, for women and girls at home, the disabled, the sick, the unemployed, the old people turned away by industry, the able-bodied men replaced by machines, etc. A strict exchange economy, an economy of “nothing for nothing” can only be a barbarous economy today. Such an economy sacrifices the individual to regulations set up for money, instead of being set up for the individual.
Treating of the distribution of goods in a socio-economic system which would set up according to the priority due to the individual, French Thomist philosopher Jacques Maritain reaches similar conclusions:
“It is an axiom for the «bourgeois» economy and the mercenary civilization that one has nothing for nothing; an axiom linked to the individualistic conception of ownership. We think that in a system where the conception of ownership outlined here above (with its social function) would be in force, this axiom could not survive. On the contrary, the law of usus communis would lead to lay down that, at least and above all for what concerns the basic, material and spiritual needs of the human being, it is right to get for nothing as many things as possible...
“For the human person to be thus served in his basic necessities is, after all, only the first condition of an economy that does not deserve to be labelled barbarous. The principles of such an economy would lead to a better grasp of the profound sense and the essentially human roots of the idea of heritage in such a way that every human, upon coming into the world, may be able to effectively enjoy, in some way, the condition of being a heir of the past generations.” (Humanisme integral, pp. 205-206)
— But it would mean giving more to those who do not work than to those who work. It would encourage laziness! Do not jump to conclusions which, besides, are unfounded.
First, it is wrong to say that the individual not required by production to work would get more money then he who is employed in production: both would have the same dividend, but the emp1oyee would have his wage or salary on top of the dividend.
Therefore, there would still be the same difference as before between the both of them: the amount of the wage or salary. But instead of being a difference between zero and the wage or salary, it would be the difference between the dividend, on the one hand, and the dividend plus the wage or salary, on the other hand. The stimulation of a wage or salary would therefore still be there. And in addition to this, there would be the stimulation of a dividend to all, of which the importance would increase as the social sense of the wage earners would develop.
A dividend based on the dominant part that the real community capital occupies as a modern production factor, would therefore be a generous amount.
One can understand that the transition from a diet of exhaustion to a vigorous diet requires a certain measuring out. One does not go from an unhealthy diet to a healthy diet without going through a recovery diet.
Therefore, wisdom can recommend a graduation in the amount of the periodical dividend to all.
However, from the outset, the principle must be put into application. One must come straight to the spirit of a plentiful economy and dividends to all, instead of the spirit of a rationing economy and income restricted to employment.
— How would this monthly social dividend be distributed to each and every one of the members of society? In the way which would be considered more practical: the one requiring the least bureaucracy, the one which would necessitate the least addition to the present transfer mechanisms of the means of payment.
For example, Old Age Security pensions and the various allowances (for the blind, disabled, etc.) are paid by a cheque sent monthly to each eligible party. The same thing can be done for the monthly dividend to all.
We can also, there again, use the channel of the commercial banks, each citizen having to register with a bank in one's locality. Each month, the commercial bank would simply credit each of these accounts with the amount decreed for the monthly dividend. In this case, as in the case of the operations which we spoke about to cover the production costs by interest-free credits, the commercial bank would get from the Central Bank, upon request and without costs, the necessary amounts for the monthly dividends that it thus would have put into the accounts within its jurisdiction. And for the costs of these services, the commercial bank would be paid by the Central Bank in accordance with suitable agreements.
The monthly dividend could also very well be an accounting operation using the service of the post office. It is even the method that Douglas advocated in his scheme for Scotland: “The dividend shall be paid monthly by a draft on the Scottish Government credit, through the post office.”
With the electronic computers and other ultramodern techniques which are introduced more and more into the large accounting offices, it would not be difficult to choose a method that is fast, sure, accurate, and effective as well, for the distribution of a monthly dividend to each person. It is something all the more easy, as the collaboration of the fellow capitalist would be much more eager than that of the fellow taxpayer.
— Would not this distribution of money to the consumers, through the dividends, be inflation, which everybody fears? It would be an increase of money in the consumers' wallets, and I do not think that such a thing ever made the one who benefits by it complain. It is not when your income is raised that it hurts you. Have you ever heard one complain about a raise in one's income? It is when prices rise that everybody complains.
— But would not this distribution of money through the dividends make, in fact, prices to go up?
Cost prices would not be affected by one cent. As the social dividends are not being paid by the producers, they would not go through industry, like the wages, salaries, and dividends to the greedy capitalists; therefore, they would not go into the cost price. They would come directly from the source of the financial credit, which is a good of the people.
In the present system, which puts restrictions where none are needed, and which do not put any where some are needed, the increase of consumer money could give rise to an unwarranted increase in the retail price. But in a Social Credit system, the cost price remains in keeping with the accounting expenses during production, and the retail price is kept in check by the methods of the adjusted and compensated price, established in keeping with the first of the three principles expressed by Douglas.
Comments (90)
You are not going to make any headway with an alternative economics when the conservatives take Invisible Hand as a truism.
So, the first step must be to challenge Adam Smith.
What was so novel and revolutionary in Invisible Hand in 18C?. It was the idea that a private vice (i.e. sustained pursuit of self-interest) leads to public good.
Unfortunately, Americans do not understand sustained pursuit of self-interest to be a vice in any way but rather a profound virtue of Enlightened Self-interest and regard it as enshrined in the Constitution as the pursuit of happiness.
This idea sits very uneasily with the freedom of movement, of immigration and would either elevate the central government futher or lead to local passports as each local government needs to tally and divide its social credits to claimants.
It's just astonishing to me the way people really do believe that something can be created from nothing.
It seems the idea is not per se absurd. It represents an attempt to recapture the value of non-productive goods. If I understand correctly, the system is predicated on the belief that activities such as homemaking and the creation of art provide real contributions to society but are undervalued in a purely capitalistic system. While there are funding sources for such activities, those (individual) sources tend to isolate those goods and diminish their capacity to work a positive influence on society as a whole.
The underlying thesis is correct. Whether the solution proffered will work is a different matter. I foresee several problems.
1. Gian is correct that the proponents certainly underestimate the size and complexity of a bureaucracy needed to administer such a system. Current government-distribution systems pay out millions of dollars annually to the dead, non-resident, and unqualified.
2. Simply writing everyone a check may provide those otherwise inclined with the means to pursue worthwhile but undervalued social endeavors. But by itself it does not provide any incentive to do so. The system thus appears on its face to replicate the economic error of communism by believing that people will always do the best job regardless of the incentives.
3. Without other controls or influences, there is little reason to believe today that even those who are inclined to use their dividend to pursue important but undervalued goods will actually render any benefit to society. Go into any museum housing contemporary art and tell me whether society needs to direct more resources to the promotion of artistic endeavors. What people produce today under the aegis of art is not beneficial.
But it is at least an interesting idea, and I think it deserves more of a discussion (or at least would be entertaining to discuss) than simply being dismissed as crazy.
Is that the gist of what I see here?
I think this would run counter to Catholic Social Teaching, rightly understood. And, it would have at least one prominent opponent in the form of Hilaire Belloc.
While not a precise fit, Belloc described in the introduction to his book "The Servile State":
"With this principle of compulsion applied against the non-owners there must also come a difference in their status; and in the eyes of society and of its positive law men will be divided into two sets: the first economically free and politically free, possessed of the means of production, and securely confirmed in that possession; the second economically unfree and politically unfree, but at first secured by their very lack of freedom in certain necessaries of life and in a minimum of well-being beneath which they shall not fall."
Pope John Paul II might add, from Laborem exercens:
"THROUGH WORK man must earn his daily bread and contribute to the continual advance of science and technology and, above all, to elevating unceasingly the cultural and moral level of the society within which he lives in community with those who belong to the same family. And work means any activity by man, whether manual or intellectual, whatever its nature or circumstances; it means any human activity that can and must be recognized as work, in the midst of all the many activities of which man is capable and to which he is predisposed by his very nature, by virtue of humanity itself. Man is made to be in the visible universe an image and likeness of God himself, and he is placed in it in order to subdue the earth. From the beginning therefore he is called to work. Work is one of the characteristics that distinguish man from the rest of creatures, whose activity for sustaining their lives cannot be called work. Only man is capable of work, and only man works, at the same time by work occupying his existence on earth. Thus work bears a particular mark of man and of humanity, the mark of a person operating within a community of persons. And this mark decides its interior characteristics; in a sense it constitutes its very nature."
1) the first part, which might be the more surprising and interesting part from Jeff's perspective, is my qualified agreement with the idea that we might want to give each and every citizen some sort of social dividend (in the form of a payment) to help them deal with the vagaries of life. Of course, I would want the payment to replace all or most of existing government programs as Paul suggests -- although unlike a guaranteed-income scheme, which I think discourages work I prefer the idea of a lump-sum payment (Charles Murray came up with the idea in a brilliant little book called In Our Hands: A Plan to Replace the Welfare State which you can read about here:
http://old.nationalreview.com/interrogatory/qa200603270732.asp
2) the second part, which did indeed rattle my cage and has me pulling my hair out, is the theory behind social credit, especially this:
and this:
These two paragraphs are so ridiculous I scarcely know where to begin. The first paragraph is the old lament of the paleos -- we should all pine for the good old days when we all struggled to eke out an subsistence living and didn't have time for our video games and TV and sports, etc. Of course, most of us didn't have much time for learning an instrument, or reading philosophy, or blogging -- but let's not pick nits shall we? The second paragraph was already dealt with by Titus -- it is laughable that folks will pursue the kinds of work you want them to pursue just because they have a guaranteed income. Welcome to the public housing projects Mr. Culbreath, I'm sure you find the residents here, who have all their needs provided for by the State, pursuing all that is true and good and noble.
Perhaps if we called it the "emancipation of greed and envy" it would look less attractive. For that is, undeniably, what it is.
By the way, I'm not the one who brought up price controls as the answer to the issue of inflation. Louis Even, the author of the nonsense Jeff C. quotes, is. Perhaps you chaps who say the issue wouldn't arise can help Even finesse his plan. He seems quite willing to accept the fact that simply issuing cash from the central bank to every breathing person in our borders _would_ increase prices but answers this by having the government do some fine magic to prevent this.
These are not promising economic ideas. Indeed, socialism, if not communism, pure and simple, is exactly what they look like. And we all know (or I would like to think we know) how well _that_ works out for everybody involved.
And there's the other elephant in the room--the immigration issue. "Come to America! Get money for breathing in and breathing out!" Since we seem so willing to give _present_ welfare benefits to illegals, presumably the "social dividend" would go that way as well.
Everybody who has referred to the housing projects has my hearty agreement on that, at least. Has Even not _looked_ at the behavior of a fair-sized swathe of welfare recipients in our present system? Or does he not care? Or is more magic supposed to be worked by the mere phrase "social dividend" turning the presently unsocial recipients into people doing important stuff for which they wouldn't otherwise be compensated rather than getting drunk or stoned and engaging in unsocial behaviors?
We replace all our current welfare payments, including Medicare and Medicaid, with a "social dividend" benefit given to all, calibrated so that it *costs no more than* and possibly less than the government is presently paying out.
The people who get the benefit find that they aren't able to pay all of their medical bills with it--that is, it doesn't offer as much as Medicare would have offered to them in the way of high-quality medical care at public expense.
The people presently on Medicare thus suffer some measure of hardship by the replacement.
(You can extend this to other things--if it doesn't give some recipients as much of a benefit as they presently receive from food stamps + WIC + Social Security or whatever.)
If that happened, there would of course be an outcry and a demand for more largesse, provided by the helpful Tooth Fairy or Santa Claus figure who drops off goods and services at countries that adopt socialist public policy. I haven't the slightest doubt that Louis Even & Co. would be among those making such demands if the poor, those who have been declared "disabled," and the elderly couldn't be *at least* as well cared for as they are given our present, deficit-monster, system.
If fatherhood is to mean anything at all, children without fathers must be allowed to suffer in some way. In this hypothetical world, where everyone is supported by the State and has (as Maritain put it) *more than his basic needs* met by the State, how will bastards and orphans suffer?
So much for respectful engagement with differing opinions, eh?
This isn't just an issue of some sort of "replacement of current welfare with a lump sum" proposal--which, as I've pointed out, would not be accepted unless it provided at least as much largesse to the current non-working as our present policies, which means it would cost _more_, net, and thus be more economically debilitating.
This is about Even's entire approach, which is blatantly socialistic, entitlement-minded, and opposed to any notion that something cannot be created from nothing. If that's not a basis for a certain amount of ridicule from at least one contributor at a putatively conservative blog site, I don't know what is.
The problem with this is the same as with most entitlement programs. People receive something for nothing and then they begin to regard it as a right. Once it becomes a right, society's interest is thrown out the window. Notice that there is no traction on Social Security means testing as a way of saving Social Security for those who truly need it because that would mean denying millions of people Social Security who just want it as an income supplement. That, Medicare and the redistribution of wealth to the banks to prop them and the stock market up until the Boomers can retire have worked together to create a situation which has pitted generation against generation in a war for America's future; the fight over entitlements writ very large.
There are more sensible proposals like a flat tax with hard percentage point tax breaks based on marriage and children. For example, a 20% income tax with a reduction to 15% if your wife stays at home and 2% per child to a maximum of 4 children (leaving a man with a wife and 4 kids paying 7% income tax). It would be far better to make any incentives, aid, etc. be based entirely on a particular need (temporary negative income tax for unemployed men) or contribution to the future of this country (such as investing in a family).
Simply handing out cash to everyone will not help. It will only exacerbate most of our problems.
You start to go after WalMart and the industrial revolution and Nice Marmot will be wondering what happened to "friendly" Jeff Singer that was commenting back at 10:42 AM!
(By the way, as much as I love WalMart, for those so inclined to occassionally chuckle at the crooked timber of humanity, this video is is good for a few laughs: http://www.youtube.com/watch?v=YvxNgdFeWqM)
Seriously though, I have to echo Lydia's recent comments and second her concern that any sort of welfare payment scheme is in danger of being abused, especially if those adopting such a scheme have "expressly encourage[d] and embrace[d] the socialist entitlement mindset (which Louis Even does) and are utterly, disastrously clueless about anything remotely like the principle of TANSTAAFL (which Even is)" then I agree with Lydia that such a scheme "won't just be [a] clever replacement, costing less than our present welfare system."
Conservatives must begin with a mindset that private property is noble and good, working hard is noble and good, we aren't entitled to any sort of special income or wage other than that which others are willing to pay us in the free market of exchange for our labor*, our neighbors and fellow citizens don't owe us anything in particular unless they decide democratically to redistrubute wealth via force from some people and give it to others, etc., etc. These are the basics, Nice Marmot, and most conservatives, at a conservative website don't have to argue over the basics.
*Obviously complicated by the Church's acceptance of the authority of unions and collective bargaining -- but you get the idea.
I would add, complementary to Mike T's comment that "People receive something for nothing and then they begin to regard it as a right," that in this case the proposal is that this *is* a right. Even is quite explicit about that.
charity
gratitude
responsibility
the deserving poor
These goods would best be served by moving back to a far more personal and private model of charity, given out on a carefully considered case-by-case basis, sometimes denied (tough love), the money used thriftily and sparingly and only for those who truly need it through no fault of their own. Families would come first and would provide for those truly in need and charity would come into play only when family did not exist or failed. Such a model would, however, involve contingencies (some people may be overlooked or left out), and contingency is exactly what a certain kind of mind cannot handle.
Charity becomes entitlement because of the assumption that we can guarantee charity if only we have sufficient good will and that we are obligated to guarantee it.
The proposal to give everyone continual, guaranteed money out of a common stock, perforce supplied by "greedy capitalists," whose work at producing wealth is arrogantly assumed to continue while we vilify them, coupled with the assumption that the economic consequences of such a plan can be prevented by further regulation, goes in exactly the opposite direction. It encourages or openly embraces instead what we already have far too much of:
--envy
--covetousness
--hatred of the productive
--irresponsibility
--presumptuousness and a sense of entitlement
--a tacit belief that government creates goods and services ex nihilo by offering to hand them out (or require others to hand them out) "for free"
--government as the All-Provider, a substitute for God, family, friends, and kindly strangers
1. Allow me to make clear that I am neither endorsing nor rejecting the idea at present. Just trying to flesh it out a bit with your help.
2. Lydia, reflexively characterizing the social dividend as "socialism" or "communism" is just delusional. That is the point at which I stop reading. You, of all people, are not ignorant when it comes to economic theories, so delusion is the most charitable interpretation I can think of.
3. Obviously, this is not a comprehensive program of social reform. Other policy incentives and disincentives would need to complement the social dividend.
4. Jeff Singer, you mention the housing projects. I saw that one coming. Are you of the opinion that revoking the tenants' welfare payments would improve the situation? Hardly. I'm willing to bet that criminality in this population would actually increase without welfare. No, the problem is not that the tenant-barbarians receive free money: the problem is that they are allowed to raise children without fathers, that their children are not educated strictly in compulsory religious schools, that the men are not compelled to learn a trade, that punishment for crimes from fornication to petty theft is not swift and severe, that they have literally zero in the way of positive influences, in short, that they are not subject to martial law and compulsory religious education for at least a couple of generations. Sorry, liberals and neo-cons, but the solution for this demographic is not "more freedom!" or "more democracy!" - or even "more poverty!" as the libertarian-minded would have it - but rather more authority, and only authority of the right kind.
5. With respect to mobility and citizenship, yes, I concede the difficulty and the potential negative impact on liberty. That's definitely one of the cons. But it may not be a deal-killer. I expect that some sensible rules could be enacted that minimize the problem. And being "more suited to small homogeneous countries that are or would prefer to be insulated from the rest of the world" is not altogether a bad thing.
6. We have all received, and will continue to receive, "something for nothing" in this life. We are all heirs: that's one of the themes of social credit theory and it should resonate deeply with anyone who cares about Christian civilization. There's no sin in that. The sin is in repudiating the inheritance and denying it to others. Of course there are many ways to acknowledge this, and the social dividend may or may not be a reasonable extension of the idea. But to rail against people receiving "something for nothing" is merely to expose one's blindness and in some cases hypocrisy. Capitalism is also built on the premise of "something for nothing", as mere ownership can hardly be counted as effort, and yet I don't see our apologists for capitalism complaining about that.
7. The strongest criticism of the social dividend is that it would remove the incentive for some few people to work at anything. Yes, I think that's true, if implemented apart from other incentives. But in that sense nothing would change from the present system. What would change, however, is that the overwhelming majority who do work and want to work, and who will still need to work to satisfy their desires, could re-direct their work in the direction of objective value in accordance with their God-given aptitudes.
I know it probably horrifies Lydia, but I can't help but be charmed when your reactionary side comes out in full-force:
I mean, I'm not sure Moldbug could keep up with you in full King Culbreath mode. While this vision has its appeal, I think on a more practical level, to preserve (or restore) the Constitutional republic we live in we need more poverty and more local control with Lydia's comments from 3:48 PM guiding our efforts.
These ideas of yours are completely unhinged from reality. You should listen to Lydia and reconsider them. In fact, you should probably stop thinking about economics all together. It's obviously not working for you.
No, that's explicitly not the basis of Christian capital theories: ownership is initiated by creative WORK. Capital profit springboards new wealth off of prior ownership of surplus. The "something" is a delayed fruit of work. Admittedly, it needs a bountiful nature as well as human effort, so God's input is present as well, but the two go hand in hand. The Christian entrepreneur is a co-creator with God in producing new wealth.
I feel that it is probably wrong-headed in terms of natural law and religious humility to pose SC in order to kind of short-circuit the state of inequality that God designed into the universe. One man is born the son of rich parents, another is born the son of destitute parents. There is nothing in either man by themselves that gives the first the right to live a care-free and blissful childhood, and the second a daily trial. But nothing about our social obligations makes it a right of the second to live without effort and trial either. Even though we can often ameliorate this kind of exterior inequality (that of mere wealth) by social effort, the sheer capability to do so does not make it a good idea all across the board. The only way I can (at the moment) explain that sense is by pointing to other forms of inequality: John has an IQ of 140, Bill has one of 80. Do we allocate to Bill social credit of 60% more because he is and will forever be unable to contribute high-quality thought to productive labor? Mary is born with a melancholic-choleric temperament, with high intelligence, Rose is born a phlegmatic. Do we allocate Rose more social credit because Mary will always be driven to create and perfect a product, while Rose is "driven" nowhere but the couch? Or even more simply: Talbot is born with lung problems, severe allergies and asthma, Ryan is born with robust health. Do we simply ASSUME, without careful consideration, that Talbot should be "made equal" in outward goods (including medical goods that make his daily life stable and calm) that are not granted to Ryan because Ryan doesn't "need" them as grants, he (she?) can get them by work?
My point is that we don't think it is either necessary nor necessarily wise and prudent to assume that we can just blot out natural inequalities by social largess, and that this would not have potentially damaging side effects both socially and in individual hearts and souls.
As for ownership being established by creative work, that just is not how capitalism works at all. Ownership is established by writing a check. Or, perhaps, by receiving a gift. The financial benefits of that ownership may or may not involve the creative work of the owner, but usually they do not.
Wow, talk about leading with your head so that religion-hating libertarians/conservatives could knock it off with ease. Your condescension doesn't help, either. I've always wondered why there are so many socialists in the Catholic Church. I mean, they're on the right side of history in so many things and, yet, economics seem to be their blind spot. Yes, I'm aware of Jay Richards and others. But they seem to be drowned out by Culbreath and his ilk.
One other thing; why does Culbreath think all the time wasted on useless work (which I agree with) will be used doing useful work after they get their free money. Is there something magical about this particular money that compels them to shift to useful work? As for all the social pathologies he describes, if he thinks taking away welfare won't help, what makes him think increasing it will? It just makes him as much a reductionist as the libertarians he's attacking.
There is no way you can introduce social credit into a (current) system of greed without doing it by allocating at LEAST a portion of the credit directly toward some of the basic necessities themselves, instead of toward the money with which one can buy necessities: food and clothing, if not shelter. The idiot half will squander the month's money on drugs, booze or porn, and in one week be just as badly off as before (actually, worse). But once you start saying that a portion of the credit will be available to you at the grocery store instead of at the bank, you immediately have to face the fact that Ms. Ijiru of Japanese descent, who weighs 98 pounds, needs 1400 calories per day and Andre the Giant, at 450 pounds, needs 7000 calories a day. To allocate each of them 2000 calories of food per day (not the money to buy the food, but the food itself) is sheer silliness, you HAVE to adjust it for individual differences: you have to even out the natural distinctions for the social credit to even begin to make sense.
I don't believe that increasing welfare will help these people either. Where did you get that idea? The social dividend would replace public assistance, not add to it.
I think, though I may need correction, that some of these countries are properly called "social network" countries, and that is probably loosely and glibly shortened to "socialist" by those who are not careful. There really is little difference between the strong social network arrangement and the social credit arrangement, except that the social network is usually means-tested and so it looks at actual poverty and fixes it (well, tries to) where it exists, whereas social credit ignores the actual condition and pre-empts poverty by flowing for everyone. Some of those countries do in fact (or did historically) had state ownership of industry: BBC and British Petroleum, for instance. Airbus is another. The trains used to be all state-owned in some of those countries. Phone and electricity service.
It is my opinion that the root problem with both formal socialism and with SC and others in the same genus is that they ignore the real nature of (and origins of) wealth: it comes about in first instance by the combination of pure forces of nature and human effort to DO something with nature. This human effort is always the effort of human individuals. The state, or other community, is NOT a root source of any specific piece of wealth. As a consequence, whenever the state allocates or assigns a specific item of wealth, it does so only by re-assigning it away from an individual who is more responsible for it than the state is. This is in fact justifiable, but it is not justified except by reason of a higher claim than that of the individual's claim - i.e. for a specific common good. But all of the socialist and cognate theories simply ASSUME the wealth away from the individual for a GENERAL claim of the common good, not for a specific claim. In effect, the state is claiming that this portion of the wealth is, simply, better in the hands of the state (hopefully, ideally to re-allocate) even without a specific state claim than in the hands of the individual responsible for it. There is no moral justification for this. And it violates subsidiarity in every way possible.
Damn right. And to help solidify that mindset I suggest you dig out your undoubtedly dusty copy of Weaver's Ideas Have Consequences, if in fact you have one at all, and read the chapter entitled "The Last Metaphysical Right," wherein Weaver not only blasts statism in no uncertain terms, but also dismisses corporate/finance capitalism for its deep-seated abuse of the notion of private property.
Anyone who thinks that Monsanto or WalMart or Bank of America "owns" "property" in the same way that I own my house or my dad owned his small business needs to proceed hastily to a gastro-enterologist and have his cranium removed from his descending colon. Private property is a right of men, not of shadowy conglomerates who use abstraction and sheer size to avoid ethical behavior and to deflect moral criticism.
I couldn't disagree more. There are many more people who like farming than there are who can actually afford to farm. Just ask any of the thousands of "hobby farmers", myself included, who would give their right arms to work in farming full-time!
I honestly don't follow you here. No one goes hungry under a social credit regime. Can you connect the dots for me?
Indeed. But I fully expected this, NM, and that's one reason posts like this are worthwhile: they expose the quasi-fanaticism with which some conservatives cling to their economic pieties. And that's why we never seem to make much progress in this area. I'm all in favor of dismissing actual heresies out of hand without a moment's reflection, but for Christians economics is - or ought to be - a discipline of prudential judgments rather than a cauldron of orthodoxies.
Which is not to say that economic policy should not be guided by moral and even theological principles.
You may propose and speculate that we CAN, eventually, in the long run, come up with a new model of agriculture in which people actually get by only with the production of small-scale farming, either because lots and lots of people take it up or because it (somehow, currently unexplained) becomes intensely more efficient. This is speculative only, we don't know that it can be done. The only thing we know for sure is that the population took off in a huge expansion of people only when agriculture went mechanized and large-scale. We don't really know that if people who don't like large-scale farming stop doing it, we can actually produce the same amount of food, or even close.
Maybe we just don't recognize genius when we see it.
Can't see the oikonomia for the chrematistic trees, more like.
Very true. That's one of the things that irks me about many conservatives' appoach to economics. They spend an inordinate amount of time crunching numbers, without paying much attention at all to the philosophies behind all the number-crunching. It's as if we tried to assess the health of a family by looking primarily at its checkbook.
I'll second that heartily. And Louis Even, in the above quotations, makes it clear that not only does he not understand this, he denies it.
Ah, well, there I go, being a fanatic again.
"Oops"?
And in reality the only possible way to give it any legs, any meaning, is _precisely_ to give the state the power to make the things happen that the advocates say should happen--in other words, to treat this stuff that allegedly "belongs to the people" as belonging to the state to dole out in this "juster" fashion.
I mean, this is all basic. This is elementary. This is the sort of thing that has been going on for centuries, that any conservative should sniff out in two seconds flat.
The state's interest in solving poverty comes about by reason of the prior failure of individuals to solve their own poverty, and of other individuals and intermediate institutions (charities) to solve it. Subsidiarity says that the state's proper role is to promote, support, and better enable individuals and institutions to accomplish their OWN proper functions. When the state takes over "solving" poverty by largess before the individual tries to solve it within his own proper sphere, the state undermines subsidiarity and interferes with the capacity of the individual to operate in his proper sphere successfully.
Jeff, what is to prevent the market to react to an annual distribution of money at (just to pick a number) $15,000 per individual by making it so that the new $25,000 is the old $10,000? Costs rise in proportion, so that the usable wealth of the guy who NOW makes $10,000 over and above his $15,000 dividend is no better off than he was before. He is still just barely scraping by with nothing to spare for medical emergencies.
What then do you do with the family? Is it just a small aggregate of individuals, in the same way that the state or the corporation is a larger aggregate of individuals?
No, sorry, but individualism understood in this sense is part of the problem not the solution. Community is, in a very literal sense, a given. Not something libertarians and libertarian-addled conservatives like to hear, but there you go.
http://pjmedia.com/instapundit/131134/
Only someone way too hung up on the nuts and bolts would call such questions "abstractions."
Nice, I am not a libertarian nor a stark individualist: I strongly uphold the natural law principle that man is made to live in society, giving himself in love to his spouse and their children, and secondarily to his neighbor. "Let us make man in our own image...it is not good for man to be alone."
When a man plows a field and raises a crop, the crop may "belong" to his family but his family belongs to him - they are his own, his flesh and blood. But even within the family, not all goods are owned in common: the father is perfectly within his rights to order and delegate that some goods are special to one or to another. Though he SHOULD not do so for reasons of charity and good example, this farmer father can, without injustice to the others, take the best portion for himself: it is more his than it is anyone else's of natural right. And it is his right to assign: the children do not simply take what they want as "their portion" without his consent.
When we find out that there is a previously unknown commandment 4.1: honor your corporate chairman and chairwoman; and 4.2: honor your political leader, is when I will begin to think that inter-relations within the family pose as a close analogy or paradigm of how we ought to think of relations within the polity.
Within the genus of economic philosophies that uphold private property, some elevate the private sphere to the heavens and beyond (libertarianism), and others don't. More qualifiedly, holding that private property merely has a presumptive stance in favor of the individual leaves lots and lots of room for society to make claims on him and his. I support an economic model in which the state (and other communities) make claims within a web of duties and opportunities that go upwards, downwards, and sideways, all the while respecting subsidiarity. Claims of several orders, I might add: both of justice and of charity. This is only the beginning of a description of a "model", because I don't have a whole model worked out. But that model isn't Capitalism as currently practiced. It does have a free market of some nature because that is implied by private property, but that free market isn't one in which large-scale financiers receive social network support for their downside risk but pocket the profits.
Which doesn't prove that a social dividend is a great idea, but the farm catastrophe argument against it is a non-starter.
The fear on the part of some conservatives is probably a fear that, in a social credit system, the class of voluntary non-laborers would become a problem - at best a drain on the treasury, at worst a hotbed of criminality. If nothing else were to change, I would agree, although it would be no worse than our present system. But if social credit policy were implemented alongside other needed reforms - in particular, an authoritarian approach to elevating the underclass - I have a hard time seeing the downside.
Incidentally, I see the problem of the underclass as the backdrop of most opposition to some otherwise worthwhile social reforms. We have got to recognize something here: we don't presently have a poliical system or philosophy capable of dealing with the underclass problem. If we're going to be "good Americans" and extend traditional American liberties and privileges to everyone, then the underclass will continue to grow and we have no right to complain. However, the problem is not insoluable. Members of the underclass are human beings. They respond to the same things we all respond to, but at another level of existence. Meeting them where they are means giving them what they need, and what they need isn't provided for in the Constitution.
Agreed, Tony. The fact that a "free market of some nature" is implied by private property is not lost on conservative critics of corporate/finance capitalism. A simple reading of Kirk or Weaver demonstrates this explicitly, and it is why Medaille titles his book Toward a Truly Free Market. In fact Weaver argues in Ideas Have Consequences that corporate capitalism is actually a threat to the notion of private property as traditionally understood. See the chapter titled "The Last Metaphysical Right."
We have evidence of this all around us: I have known two people now, young men, completely healthy, with very little money. One had a wife and newborn child. Both needed money pretty badly. Both were academic types. Both refused my offer of extra money doing yard work because they could manage to get along (in one case, on unemployment compensation) without having to do this. One said to me in so many words, "I dislike physical labor."
These are not bad people. They're in some ways great guys. But if they can scrape along without doing something even as "unfulfilling" as mowing a lawn for an extra $30 per week, they will.
(By the way, I didn't mean to imply that mowing my lawn is necessary to make the world go 'round, only that the preference of people for a bare living "for free" with no surplus--such as the money I was willing to pay--without having to do physical labor such as mowing a lawn is evidence about people's attitudes on this general subject.)
Certainly there is room for public and private assistance to help them, but that carrot must come with a stick to give them incentive to accept the carrot. I think that stick need only be in the form of a constitutional right to self-defense that makes it quite clear that the law-abiding shall be under no obligation to suffer the criminality of the underclass, especially when it is violent.
We already have this, the EITC. It's very effective and should be expanded.
Tell me, please, what sorts of jobs "need to get done" that are not "valuable in themselves"? I have hard time believing that we have come this far in the conversation and you still don't understand that the latter category includes the former.
I think you are profoundly mistaken. Evidence?
Lydia, with all due respect that is not evidence. I wouldn't have mowed your lawn for $30 per week either: I would have mowed it free of charge as a favor to you. I don't know about your city, but in California $30 hardly puts gas in the lawnmower. Besides, what were these gentlemen doing instead of mowing your lawn? Maybe their time was better spent sending out resumes, filling out job applications, taking care of family things, studying their law books, changing diapers, or what have you. Even if you could find no one to mow your lawn for $30, that doesn't mean there isn't someone in the neighborhood who would do the job for $40.
In any case, the social dividend is only partly intended as relief for the otherwise destitute, which we already have. The larger picture is the freedom it affords those capable of working and making decent money - money that far exceeds the dividend - to choose to work at better things.
On the lawn--of course the gas and mower were provided. This was take-it-with-you pay.
Whether for more money I could have gotten one of them to do it is an interesting question. I doubt it very much, myself. My strong impression was that my offering $40 would have made no difference. Nor, from what they told me, was it a matter of their having no time because of doing other and more intrinsically valuable things. Again, the reasons given were _expressly_ a dislike of physical labor and, in the other case, the ability to get along instead on unemployment compensation.
But the "they were doing something more valuable" argument is, in any event, a switch of subject back to the original claim that we should pay people to do "more valuable" things rather than economically viable things. My claim is that the many people who prefer not to do things they find even minimally unpleasant and who will prefer to scrape by on a bare living from the government rather than taking money for doing those things is evidence for serious economic downturn and lack in important areas (which are unpleasant to do) if such a plan is put into effect. Even if every single person thus paid goes off and does brilliant analytic philosophy or produces great art, the "physical labor" and other only-instrumentally-valuable tasks aren't going to get done if they don't want to take money to do them.
More evidence for this is to be found among the many people--I'm sure you've known them just as I have known them--who are on unemployment compensation and try to find ways not actually to get a job, hope they won't be offered a job, and so forth, because they are scraping by well enough without it and don't feel sufficiently attracted to the jobs they are applying for (forced to apply for them by the unemployment office). You can say until the cows come home that what they are doing at home is intrinsically valuable, or has more intrinsic value, or what-have-you, than what they could do on the job. But that doesn't mean we could just do without all those jobs they hope they don't get hired for!
Incidentally, I think the fact that social credit theory is explicitly structured around individuals rather than families is a serious and probably fatal weakness.
Likewise, I think you can establish targeted programs that strictly benefit the children. I have no quarrel with a welfare program that provides universal state-level health care for children born out of wedlock. I have no problem with free school lunch programs to make sure they have food. What I object to is giving their parents any care unless the pregnancy was caused by a case of rape that resulted in an actual conviction.
To his credit, Al is quite correct that we already have it in the form of the EITC. It's also a monumental failure for the taxpayers because it is badly abused; probably about as badly as Medicare is defrauded (proportional to budgets).
I think the best approach to helping the poor would be a restructuring of our monetary and regulatory policies in ways that strengthen the dollar and that make it easy for workers to work for themselves. We need to abolish virtually all of the professional licensing laws and business regulations that prevent the working class and underclass from turning whatever skills they have into money-making opportunities.
If anyone believes this country has a free market, I would submit the fact that working class women who are good at hair braiding need a professional state license in many jurisdictions as a counter-example.
Ah, so we are using different definitions. I see all of your examples as intrinsically good, meaningful, and valuable work. I thought we had this conversation many months ago. See: http://www.whatswrongwiththeworld.net/2010/06/men_at_work.html
Okay, so getting on the same page, you would use the notion of work that's "valuable for its own sake" or "valuable" to cover all sorts of things that, let's face it, lots of people aren't going to enjoy doing very much but that are needed in America to keep people housed, fed, etc.
I just flatly disagree that the economy can be kept going sustainably _at all_ if we give everyone a "social dividend" that means that nobody has to do these valuable but unpleasant or unrewarding tasks. I think it's a recipe for a huge crash.
And I would add, though perhaps this is a bullet you are willing to bite: There are plenty of things in society that aren't intrinsically evil but that I regard (and I'm sure you would too) as petty and trivial and a waste of time. I dunno--Farmville on Facebook. But anyone who wants a large-scale social welfare state as in this "social dividend" theory has to cope with the loss of tax revenue from cutting out the trivia, which, directly or indirectly, is presently contributing to government revenue. Farmville increases Facebook's users which in turn increases Facebook's profits (and the profits of its advertisers) on which taxes are paid. Indirectly, Farmville is helping to fund the _current_ social welfare state we already have.
A huge part of what makes Louis Even's approach here just so jaw-dropping to me is his utter failure to deal with such problems. Indeed, he actually seems to _deny_ that the social dividend comes, even indirectly, from the wealth created by economically viable activities in society. And if we charitably assume that that's not what he means (very charitably) when he says that the social dividend would come from the central bank *rather than* from the "greedy capitalists," he still doesn't in any way whatsoever deal with the huge downturn in government revenues brought about by a large-scale downturn in economically profitable, hence taxable, activities.
The marginal utility of a dollar is not the same *at all* for different levels of need.
I think the reason I resent the heck out of a lot of Americans who cop that kind of attitude and feel ambivalence toward them hitting poverty is that my wife and I try to live below our means. We do that so as to not be a burden on others and to be able to actually have the ability to help others we meet who need help. Instead, most of what we see are our peers living way beyond their means and then copping the most pathetic temper tantrum you've ever seen grown men and women have when the gravy train reaches the end of the line.
I'd go a step further than Jeff in saying that not only is one of the fatal flaws is it not being given to families as opposed to individuals, but also that it is not tied to some justifiable contribution to society.
This flies in the face of scripture where God curses man with the fate of not even eating regularly except by the sweat of his brow. That does not water down our obligation to care for one another, but it certainly should serve as a reminder that nothing-for-nothing is actually a manifestation of a curse for original sin; something for nothing being what we once had.
I think there is something unsaid here. If I have a moral obligation as part of the "53%" to help the "47%," where is their reciprocal obligation to be socially responsible? You may recognize it, but most people in favor of wealth redistribution do not.
In my opinion, this is much like how many churches today will preach long and hard on the duties of men to their wives and children, but are either silent on the duties of women to their husbands and children or openly deny that the duties even exist.
This cannot continue. It's turning into a sucker's game for those who are responsible.
Once again, we already do this. It's called the War on [some people who use some] Drugs. The United States (in general) and California (specifically) way over-incarcerates; it hasn't worked and is damaging whole communities while busting budgets.
Instead of worrying about motes you all might want to consider why it occurred to Jeff to post this: If all income groups had grown at about the same rate over the last thirty years (i.e. closer to the post WWII - 1979 circumstances) we would likely be occupied with other matters. (Ahh, ummm, golly, I was going to make a point but I seem to be having a Rick Perry moment - something about thirty years ago - somebody, maybe Paul, help me out.)
http://motherjones.com/kevin-drum/2011/10/price-plutocracy-0
This is interesting,
http://www.people.hbs.edu/mnorton/norton%20ariely%20in%20press.pdf
Mike, basing social policy on anecdotal information is unwise. Also any system, including private medical insurance is subject to fraud. The real problem with health care, public and private, is the rate of cost increase and Medicare actually does better here. The ACA has the potential to make a difference in the curve but you want to repeal it, I guess.
That might have something to do with the fact that there is no actual free market for health care. What we have is a cesspool of corruption that is regulated cradle to grave by the state and corporations complicated by absolutely no price transparency for most customers, the ability to openly discriminate against customers and the fact that most consumers (including ones with insurance) aren't the actual payer.
I just don't think that's true, even apart from the inflationary result pushing people's effective spending money back to the same levels as before. Even if people really didn't have to work for the bare minimum necessities of life, they would have to work if they want anything better than the bare necessities. Unfortunately, so few people think of "better" things as those things which are the more noble, instead thinking merely of more, better quality, and fancier versions of the basic necessities: champagne and brie instead of bear and bread. The people who already want junk from a sex shop will still want it, and just get more of it. The people who currently spend $ 0.5 million on lawyers to locate $2 million in shady tax savings aren't going to change. The people who think that paying $300,000 for a late Matisse now won't think differently then, though the price will go up. The social dividend isn't going to induce one single shred of a movement toward a more sane attitude toward what products and services are worth paying for.
Do you mean that the wage allocates labor to the exclusion of supply and demand? That's just not true. Whatever else we have found about economics that Adam Smith left out of the picture, we have not displaced supply and demand as inherent drivers in the market. As long as people think that a product or service is desirable now, they will find it desirable then, and this demand will feed into the existing market to set its own price.
I have a much better idea: require that everyone put in one 10-hour day each month or 2 on physical labor jobs that the state needs done: mowing lawns, painting rails, cutting bushes, scrubbing pots, etc. All jobs at the lowest end of the pool, no supervisory or sitting down "figuring" type jobs. And have the state pay them minimum wage (no SS or benefits) for the 10 hours. The wealthy don't get out of it, and work right alongside the poor. I sometimes think that the reason rich people are stupid enough to pay $300,000 for idiot art is that they simply don't know what a day of labor really is, and what it pays (to the poor).
Sure a lot of people would vote for free money especially those who need it. Not me though What's an extra $1.000 a month going to make when I already run several profitable local businesses.
Individuals like myself may want this social credit (which could be hundreds of billions a month) to go into investing in their communities; their schools, the environment, hospitals, roads or even as loans to small businesess. I remember the good old days where pharmacies were ran by local people, families and even college grads. who gave a damn about customer service... What do we have now...
One last thing I want to say; reading through the comments I saw a lot of interesting critiques/debate but also some sickening responses with people going at extreme lengths to post repeatedly, often attempting to invalidate this theory then resorting to either an insult or fear mongering. How un-American/un-democratic/un-civilized.
And for the record (I know that some of you will be shocked and most likely attack me rather than try to question the fact) if you asked me to define my ideology I would have to say I am a democratic socialist. So be an American and accept that. I do believe there are some fundamental flaws in capitalism just as there are in communism but you did not see a single verbal attack by me or deny the freedom of speech/debate of any individual.
God bless America.
It involves no "re-distribution" of wealth, because it involves distributing it correctly in the first place.
Two, it's not inflationary. In fact, the "accounting system" proposed by social credit involves making total purchasing power exactly equal to the actual value of goods, because the "price rebate" takes place AT THE POINT OF SALE. Therefore, savings do not throw it off, and neither do goods that are valueless.
The dividend is just to insure that everyone has their share of the credit, but it doesn't "create something from nothing." If there aren't enough goods produced in a given year, the dividend will be lower (either through the accounting, or through inflation) and this will push more people back into the work-force to supplement their dividend with wages in an equilibrium. Social Credit doesn't get rid of the market.
The basic premise of social credit is that credit is a social rather than a private good. Private creation of credit at-debt by a cabal of bankers is the problem, and is usury. A country shouldn't have to pawn its own goods in order to buy them.
There is no redistribution. The owners of the capital still own the produce, and still receive the price of it. However, purchasing power for buying that produce (and for investing in capital) is more distributed, because instead of going into debt to buy their own produce, the population is enabled to buy it through the dividend and the price rebate (which is a simple accounting tool to make purchasing power able to meet prices).
Social credit doesn't imagine that everyone could just not work (though technology is making less and less employment necessary). If fewer people worked, the total "pie" would be smaller, and so everyone's share would be worth less, and this would push some people back into the labor market. It's easy.
Money creation is NOT necessarily inflationary if the new money is keeping pace with the new creation of wealth. Indeed, the money supply increases each year anyway! It just needs to be increased debt-free. Hyper-inflation resulting from printing money is never just because of increasing the money supply, but rather is a cycle caused by increasing it BECAUSE OF DEBT. Hyper-inflationary cycles result from a government trying to pay of its debts by printing money. Under social credit, there is no debt like that, in fact that's the whole point.
1. Money supply is created out of thin air today by the banking system as bank credit. Any qualified economist will acknowledge that. Notes and coins are only a tiny fraction of the total money supply. The question is whether there is any difference between what economists see as bank credit being distributed through the banking system based on customers deposits and what SC supporters see as "debt money" being created by banks and building a never diminishing pile of debt owed by the nation to the banking system.
2. unless you really believe that people should be left to starve and to die of malnutrition and disease in the streets of New York, Chicago and Dallas then you have already acknowledged that in certain circumstances its ok to give goods & services or money to people who didn't earn it. So the debate is not whether money for nothing is right or wrong - the debate is whose money is it and who should get it? social creditors seem to believe the money supply is owned by the people and that all citizens should receive the national dividend. The mainstream economists say the money belongs to the depositors and banks are simply leveraging those deposits (liabilities) and using them to create loans or credit (assets for the bank).
3. I am still examining the evidence on this question but lets not be brow beaten by those clowns who try to stifle free debate by labelling views as "socialist". Oh, and if G North is the only worthwhile critic of social credit then the credibility of SC has just increased.
A man walks up to a food vendor stall and asks for a sandwich. The man tries to pay with social credit dollars. The sandwich vendors says that he won't take social credit dollars. The man asks, "well then how can I pay for my sandwich?".
The food vendor says "clean my boots". The man replies "I have no cloth to clean your boots!".
The food vendor says "with your teeth".
What’s Wrong with the World
Dispatches from the 10th Crusade