Economic Woes

Spring Break is coming up and I’ll throw a couple more posts out there.  Until then, here is a lengthy essay by none other than that thinker who idadvertantly dominates this blog; Rowan Williams.  I think that the fact that the Archbishop does not act like the two polar sides in Anglicanism want him to act shows that Cantaur is a preacher in the true sense, a man who speaks the Word of God indescriminately.  And George, he chides “protectionism” just as much as he does an “unregulated market.”  So I think even you’ll like it.

“The principles outlined a moment ago require a context not only of geopolitical and social analysis, not even of pragmatic recognitions of the limits of material resources or the opportunity costs of certain financial decisions, but of a comprehensive sense of belonging in a world – and a world that is neither self-explanatory nor self-sufficient, but is transparent to a deeper level of agency or liberty, that level that is called God by the religious traditions of humanity. In Christian belief, the world exists because of a free act of generous love by the creator. God has made a world in which, by working with the limitations of a material order declared by God to be ‘very good’, humans may reflect the liberty and generosity of God. And our salvation is the restoration of a broken relationship with this whole created order, through the death and resurrection of Jesus Christ and the establishing by the power of his Spirit a community in which mutual service and attention are the basic elements through which the human world becomes transparent to its maker.”

Advertisements

4 Comments

  1. Tony:

    Thanks for the link!

    Rowan Williams is many things–a clear writer on matters economic unfortunately not being one of them.

    In the first third of the essay, Williams refers repeatedly to “unregulated” markets, whether local or global. No such thing exists, either in fact or in the wildest dreams of capitalists. Markets are regulated–some heavily, some not so heavily. The basic regulation is the prevention of force or fraud in economic transactions. Even the libertarians at the Cato Institute acknowledge as much. The upshot of my comment on the nonexistence of “unregulated” markets is that the start of Williams’ argument is an exercise in straw-mannery.

    Later in the essay, he shifts his vocabulary and speaks of “badly regulated” markets. Of course, there is all the difference in the world between unregulated markets simpliciter and badly regulated markets. I’m not sure whether Williams is aware he has made the shift, but it throws the question from whether markets should be regulated to how. And that gets at the heart of a dispute between capitalists, socialists, and third-wayers.

    Broadly speaking, capitalists believe governments and other authoritative bodies should regulate market means, not market ends. In ideal capitalism–say, of Von Mises–government should prevent force and fraud in market transactions but should leave well enough alone when it comes to what transactions take place. If a consumer wants a 65-inch high-def plasma TV, then as long as he’s not stealing (force) or being snookered into a purchase (fraud), a retailer is free to sell such a TV and a buyer to purchase it.

    Socialists believe government should control both market means and ends. Under socialism, government owns the means of production. This means it determines what to produce, in what amounts, on what timetable, for what price, and at what salary. Socialism is pretty much an unmitigated disaster, so few governments practice it anymore, although there are still a number of theologians who sing its praises–mostly from cushy perches at cathedrals or endowed chairs of major universities.

    Third-wayers advocate partial government control of means and partial government control of ends. They typically favor certain industries over others (“green” industries over “fossil fuel” industries, for example). They believe government should regulate more than force and fraud; they believe it should set prices and wages to some degree. (Think of utility price caps, for example, and minimum wage laws.) Third-wayers are bully pulpiteers–constantly hectoring citizens about their weight, their health issues, their slavish devotion to SUVs and air conditioning, etc. Mostly they hector business. (Has anyone ever noticed, by the way, that bully pulpits are occupied by bullies?) For the life of me, I can’t figure out what consistent principle helps third-wayers determine whether to intervene or whether to leave well enough alone. Capitalists can appeal to the night-watchmen concept of the state, socialists to totalitarian control in the name of the people. Third-wayers are stuck with satisfying the greatest number of political demands without absolutely making hash of the economy and otherwise getting voted out of office. Third-wayers are triangulators.

    What Williams seems to me to be critiquing is not capitalism but third-wayism. I think he knows this, since he distinguihses “early” capitalism from its more contemporary permutation.

    Notice his comments on protectionism. Protectionism, I should point out, is a mercantilist idea, not a capitalist one. Adam Smith’s Wealth of Nations argues for free trade and against protectionism precisely because the open exchange of goods across borders enriches both buyer and seller. This was the gravamen of Richard Cobden’s argument against the Corn Laws. Third-wayers are often (not always) protectionists because they must satisfy the demands of the domestic industries whose workers elected them to office. (Clinton, by the way, was unusual for a third-way Democrat in his support of NAFTA.)

    But doesn’t Williams’ critique of protectionism sit uneasily with his call for the regulation of off-shoring low-wage jobs to foreign markets? Isn’t a low-wage precisely what a developing-nation worker has to offer open markets–the ability to produce the same good at a lower price? Aren’t raising wages off-shore simply a way of protecting labor on-shore (in effect, if not necessarily in intent)? Furthermore, is Williams so impatient that he doesn’t realize that a low-wage job in a developing nation is better than no job at all?

    Which brings us to patience. Williams makes much of this virtue at the outset of the essay. But building the wealth of nations and raising standard wages and quality of living in developing nations takes time. It didn’t happen overnight in Britain, which suffered a wrenching Industrial Revolution. It didn’t happen in America either. Nor in Taiwan, South Korean, or any of the other Asian markets. But Williams wants standard wages and quality of living to rise right now, dammit, and somebody should do something to make it happen.

    Of course, that’s what markets are for. They favor producers who provide goods to consumers at low prices through brokers who are able to facilitate the exchange for a profit.

    Unfortunately, Williams wants to rig the exchange. He thinks we need greater regulation of fossil fuels. Fine, but by driving up the cost of the world’s most abundant energy source, we price developing nations out of the ability to manufacture goods at cheap prices, and manufacturing is typically the engine of growth in those countries. There’s a trade-off I don’t see Williams wrestling with. Is Williams more concerned with air quality or with helping China raise its masses out of poverty. Unfortunately, no one’s figured out the way to do both.

    An environmental aside… The EU bans the importation of genetically modified crops from Africa. Africans genetically modify their crops in order to render them impervious to locusts and other pests. Thus, Africans–if they want to sell to Europe–must grow crops that are less resistant to pests and are thus at a greater risk of destruction.

    Here’s another one: There’s a lot of talk about malaria. Various international organizations hand out millions of chemically treated mosquito nets to prevent people from getting bitten by malaria-bearing mosquitoes. Of course, the judicious use of DDT (which was not judiciously used in the middle of the last century) could wipe out the disease almost instantly. But because of environmental scare tactics (Rachel Carson’s Silent Spring and whatnot), the developing nations suffer because of developed nations’ scruples. Is that an example of an environmentally conscious regulation Williams thinks governments should impose?

    Is he aware that all these choices involve tradeoffs?

    Williams is a smart guy, so I’m sure he’s aware of it. He’s also a third-wayer, cognizant of the benefits of market economies but still wanting to direct their outcomes. To me, that’s not a coherent position. Or rather, to the extent that it’s coherent, it’s coherent only because it’s directed by the political desires of whoever happens to be in power at the time. If Republicans rule, they favor Big Corporations (which is not the same thing as favoring market capitalism, on which subject, see the aforementioned libertarians at the Cato Institute). If Democrats rule, they favor Big Labor and Big Green.

    Republicans favor management and Democrats labor. Consumers end up getting screwed either way. I guess that too is a form of triangulation.

    George

    Reply

  2. George,

    Welcome back! Was this your “splurge” for Lent? Or perhaps a moral equivalent to “Fish on Fridays” or “Meat on Sundays?” ha! Anyway, you are in full form.

    Interestingly enough, even some of ++Williams supporters and friends have said something similar to what you yourself said. That is, for all his incredible theological acumen, his critique of economic systems seems to lack the same attention to detail. So you are not the first person to notice this!

    I have not read widely in economics, or politics for that matter. So I cannot enter into any informed discussion on systems etc… What I can say is that I doubt that in the beginning he meant to imply *absolutely* un-regulated markets. As the rest of the essay seems to imply he had in mind “badly” regulated markets.

    Critics have sometimes said to Hauerwas on his pacifism: “Fine! Then give us some other kind of foreign policy.” His reaction is (loosely) “I don’t have to offer an alternative, I just believe that Christians should rather die than kill”

    I imagine ++Williams is somewhat similar in regards to economic systems and situations. Cheap labor might help “jump start” some economies, but there is an inherent injustice to “cheap labor” (and perhaps child labor) being used to make me a new sweater for $15 instead of $25. “Cheap labor” is different than “inadequate” or “unfair” labor, and that is probably what he is getting at. Indeed patience is exactly what is required of us as we contemplate helping poor countries get off their feet. Rather than using sub-standard wages for my new __________ now, we might try to get less __________ and pay a bit more for what we do get.

    One of the problems for me with the global economy is that it is rare that I can know “where my product came from.” In that way I support one of several options in economic decisions made by individuals. 1) purchase local stuff 2) purchase stuff known to be “fair trade” or whatever 3) buy less stuff.

    In the end I did not find Williams’ critique of the systems all to convincing – though I’m not sure that is completely what he was trying to do – but I do agree with his mandate that however we try to fix our current problems, that the justice of the whole situation be taken into account.

    Tony

    Reply

  3. Tony:

    There’s a book called “The White Man’s Burden” (the title is ironic) which details the failures of international aid to the poorest countries. It’s not like the international community hasn’t been trying to raise people out of poverty for decades. The problem is that it has failed miserably for decades. The desire of theologians to “help” the poor countries is commendable, but unless they are willing to come up with actual economic solutions that work, they really need to shut up.

    George

    Reply

  4. On a more positive note, I’d highly recommend the “Toward a Free and Virtuous Society” conference sponsored by the Acton Institute. It’s an ecumenical institute committed to training future religious leaders in the classically liberal tradition. It’s free, plus you get a lot of good free books. Check it out here: http://www.acton.org/tfavs/faq/index.php

    Reply

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s