Wednesday, May 9, 2012

Say after me, Money doesn't grow on trees

Looking on the right hand side of this blog you will note that one of the blogs around the world which I follow is Paul "world famous Novel Prize winning economist" Krugman's blog on economics. Along with that I read widely each day on the political travails and turmoils of the world. Even if you do not read widely on these matters, you probably know that at the weekend both France and Greece held elections which has resulted in voters choosing new economic directions for their respective countries, less clearcut as to implication, voters in Britain in local council elections may have signalled their displeasure at the current coalition government's economic direction, and over in the States the endless electioneering for the next president will almost certainly turn in November on economics. Ignore headlines about Romney's Mormonism being a factor in the election.

In all such countries, as well as in my own, the big picture economic problem is the relentless expectation most citizens share that the government and its funds will support us when we need it, paying for schooling, hospitals, unemployment and sickness benefits, pensions, as well as a military force to defend us, and, possibly, an airline, bus service and railway to transport us on networks created with government money. From country to country the list of such services varies a little, but the situation is essentially the same: most of us have expectations about financial support through the whole of life that assume money grows on trees in a hidden government orchard. In my experience those expectations presuppose 'government' means some kind of endless supply of money rather than defining 'government' as we the people as wealth creators who pay tax. A fixation on the latter conception of government would assist in drawing the conclusion that there is no endless supply of money, just a finite source of funds belonging to us all, which need careful governance lest they run out.

One of the difficulties I have with Paul Krugman's approach to the global economy and its many problems is that, when all is said and done about the complexities of high finance (often superbly graphed and simply explained by him), including certain kinds of magic tricks which economists can play so that "spend now, pay later" is slightly different for governments compared to individaul citizens (e.g. governments can "quantitatively ease" new money into the world, but you and I cannot do that to pay for our credit card bills), the idea that government funds might run out does not occur to him.

Locally, I applaud our NZ government for its prudence in seeking to govern our economy as though we have a finite supply of money rather than an infinite supply. My heart sinks when I hear some of the naff criticisms of the opposition parties (e.g. to a recent proposal to pay for long-term contraception to reduce the years a parent might spend on the benefit) which presuppose the hidden orchard of money trees. But no one is perfect and I loath our government's cosying up to Sky City re a deal to build a national convention centre out of the profiteering from the human misery which is gambling.

Our world, then, may be in a precarious state which we cannot fully comprehend because of the fog our expectations and misconceived understanding of government have created. Around the corner could be the most dire of depressions, a new rise of fascism (Neo Nazis were elected in Greece!) and Stalinist communism (he still has his admirers in Russia!). The first half of the twentieth century was dominated by wars which erupted out of economic convulsions. There are no guarantees that we will not repeat the disasters of the twentieth century.

A question for Anglicans in the West could be this: are we theologically, missionally, and politically ready for the onslaught to come in the twenty-first century?

I do not ask this question of Anglicans in Africa and Asia: they face day to day crises we in the West know nothing of.

The first part of answering the question I suggest is very simple. Say after me, Money doesn't grow on trees.

4 comments:

Shawn said...

"A question for Anglicans in the West could be this: are we theologically, missionally, and politically ready for the onslaught to come in the twenty-first century?"

Not even close. Especially politically. The problem is that the political voice of the Church has been largely highjacked by those who think money does grow on trees. Apparently any proposal is justified, no matter how financially unsustainable, so long as you tack 'Social Justice' on to it. This is not a good position for the Church to be in.

I am not remotely a fan of Krugman myself. Months ago his advice to Greece was to borrow and spend more! I strongly suspect he got the Nobel more for being a very vocal hater of George Bush than for his economic work.

The Austrian School has predicted every boom and bust cycle accurately since the 1930's, including the current one, and they have the only critique of the current problems that seem credible to me. For those who do not mind reading books in PDF form they have a very large free library of works spanning the last hundred years or more.
I especially recommend 'An Introduction to Economic Reasoning' and 'Economics for Real People' both of which are basic intros to the Austrian School. Also on the current crisis Thomas Wood's book 'Meltdown' is very good.

http://mises.org/

Anonymous said...

"There are no guarantees that we will not repeat the disasters of the twentieth century."

Indeed not. Even Krugman is beginning to fear a return of the Thirties. But into this witch's brew we must add three other ingredients: the aging of Europe, secularization/re-paganization of the indigenous population, and a growing presence of immigrant Islam. Oh, and the emergence of China. The repetition of history will not be history followed by farce.
Martin

Father Ron Smith said...

Today's gospel reading (John 15:12-17) offers us our only hope:

"This is my Commanmdent: 'Love one another as I have loved you...I commissioned you to go out and bear fruit; fruit that will last; and THEN the Father will give you anything you ask in my name. WHAT I COMMAND YOU IS TO LOVE ONE ANOTHER"

I guess when we fail to love - even in pursuit of the Gospel - we fail to 'bear the fruit' expected of us.

Shawn said...

Mark Steyn has been one of the few brave journalists to voice concern for the future of Europe with regards to its demographic, political and moral decline, combined with the long term threat posed by a rapid and very large influx of Muslim immigrants. All of this is a result, in large part, of the cancer of the Liberal Left which hs, in its various political forms and institutional dominance, managed to erode the Christian soul of the West and label any concern for the presevation of the Christian West and its peoples as "racism", "imperialism" and "religious arrogance".

The Church should be at the forefront of opposing this trend, but it has in large part become captive to the same forces of decline, and its ability to accurately discern the signs of the times shackled by the imposition of un-Biblical ideolgies such as multiculturalism, post-colonialism, inter-faith "dialogue", and political Marxism.

Mtaphorically speaking, we are living in apocalyptic times, and the Church is ill-prepared to say the least.