The realist in me these days easily suppresses the romantic. So I am capitalist rather than Marxist. The socialization of the means of production is a disastrous way to ensure distribution of wealth. In reality it is likely to produce less than capitalist ownership and so the poor still suffer. The standard of living for the poorest still rises in capitalist economies, but governments do need to raise a dollar or two through taxes to assist the process. One of the great questions of our day is what a 'fair' tax rate might be, where 'fair' is both about how much one might take from the wealthy and how much the government might take in total without wrecking the 'production' of wealth. It is a question which is tearing American politics apart.
Marx in my view is an important thinker because, whether we love him or loathe him, he reminds us that the material conditions of life are integral to life itself. We are not pure spirits. Our bodies matter and thus where we find (say) food cannot be disconnected from where we find (say) spiritual nourishment. Theology is economic theory! Any theologian worth her salt should be able to spell out the material difference her arguments make to the world.
Thus two articles catch my eye this morning. One is an analysis of the actuality of Obamacare re cost of medical insurance for Americans, an analysis which includes this intriguing line:
"Who's right? At some level, this is a theological debate, not a technical analysis. I am going to argue that rate shock does matter, for a number of reasons. Then you can decide for yourself which aspect matters more."
In fact Megan McArdle doesn't mean anything like what I have been saying in the previous paragraphs. By 'theological debate' she means 'debate about principles, values, and commitments of protaganists and antagonists in that debate'. For readers here, for whom many debates exhibit high degrees of 'technical analysis', I suggest McArdle poses both a false alternative and a poor understanding of true 'theological debate'.
The other article, much more to the taste of a theological interest in economics, is Paul Krugman saying something I find myself, surprisingly, in great agreement with. His post is about a Ben Benanke speech which addresses economic theory in society. Here are the (bad pun) money paragraphs:
"OK, this is, whether BB realizes it or not (he probably does) basically a Rawlsian view of the world, in which you think of life as a kind of lottery in which you draw a ticket that includes things like your genetic endowment as well as the wealth of your parents. And what you’re supposed to do, ethically, is support the economic and social system you would choose if you had to enter that lottery not knowing what ticket you were going to draw — if you were making political choices behind the “veil of ignorance”.
As soon as you portray the choice that way, you’ve introduced a strong presumption in favor of redistribution. After all, if you should happen to end up as a member of the top 1 percent, an extra dollar at the margin won’t mean a lot to you; but if you should happen to end up as a member of, say, the bottom quintile, an extra dollar could make a lot of difference. So you should, other things equal, favor a system of progressive taxation and generous aid to the poor and unlucky.
So why not favor complete leveling, America as Cuba? Because for many reasons, both economic and political, we favor a market economy in which people make decentralized decisions about working, saving, and so on. And this means that incentive effects become important; you can’t levy 100 percent taxation on the rich, or completely insulate the poor from any consequences of low income, without destroying the incentives you need to make the economy work.
The question then becomes one of numbers. In particular, how high should we set the top tax rate?"
You will need to read the whole post to find out what that rate should be. I note the neat way in which he deals with the possible Marxist (i.e. Cuban) implications of where his argument leads.
Meantime my body needs breakfast and my family needs me to earn a dollar or two ... tomorrow, hopefully, it is back to some Anglican theological concerns. Should we say, "Stuff tradition"?
PS I agree with paying the top rate proposed in the Krugman post in the sense that, if I am ever paid that much, I am happy to be taxed at that rate :)
I join Peter in committing myself to paying 73% taxation in the unlikely event of joining the top 0.1%.
ReplyDeleteMeanwhile, I consider the greatest service the wealthy can do is to fund opportunities for work for great numbers of young people languishing in unemployment. The widening disparities of wealth and the deepening despair among the young and long-term unemployed are great evils in our day.
Martin
Martin
ReplyDeleteIf you want the wealthy to fund opportunities for employment, you can't have marginal tax rates as high as 73%.
carl
The youth unemployment rates nowadays in Spain and Greece are phenomenal! Around 55% in the former and 64% latter. How on earth did it reach such catastrophic levels? And to what extent does this scream a resounding failure for N Europe in relation to Mediterranean Europe? Then there's Ireland and Italy to add to the equation, followed by pockets of UK.
ReplyDeleteIdeally/theoretically, Marx should be rubbing his hands with glee: the Proletariat Revolution must surely be around the corner! Yeah right ...?!
Yes, definitely agree that theology is economic theory. Not sure yet which economic theory. I think it's important to remember that there were never meant to be poor in Israel. Each tribe had land allotted which was passed down between generations, and if under some circumstances the land was sold, it was to be returned to its ancestral owners at Jubilee (Lev 25:10). Interest in loans was forbidden (Lev 25:36-37). Excess was not sold for profit (as under capitalist society) but given to the poor, which they worked for! (Lev 23:22). So too the prophets, and Jesus in the prophetic tradition, were concerned about divergences from this! The Church held everything in common, which shows continuation under the new covenant (Acts 2:44-45). Similar ideas of ownership and provision for all are prevalent in indigenous societies. Regardless of what economic system is in place, these principles should be the priority, above individualist competition for excess resources. Capitalism rests on the exploitation of others' labour to build excess for a small minority. Maybe part of the Church's job is to be a prophetic voice against such as this!
ReplyDeleteI wonder Peter, even granting your delightful penchant for the provocative, in both content and in title making (which makes your blog often nicely more interesting than some others!) - I wonder if this time you have overreached ....
ReplyDelete“The philosophers have only interpreted the world, in various ways; the point is to change it.” - Marx, Theses on Feuerbach (1845). It is this “union of theory and practice” that makes Marx still interesting, if severely dated. For George Lichtheim observes in his stunning work, Marxism: An Historical and Critical Study (1961/64), two crucial things (among many others).
Firstly, Marxian analysis’s actual historical and practical course necessarily and inevitably concluded in the Russian Revolution and the subsequent totalitarianism of Stalin and the USSR, such are its well-springs and trajectory. And there is absolutely NOTHING at all Romantic about any of that! Then secondly, Marxian analysis and praxis is necessarily a fascinating and important assessment of industrial society in the 19th C, which properly terminates with the Russian revolution. The post World War I realities, social, political and economic, proved once more that “Marxism ... confronts the dilemma experienced by philosophy from its beginning: it too becomes the repository of ideals and values not attained in actuality, and perhaps not capable of attainment ... —terminating in the discovery that after the most strenuous exertions the gulf between reality and ideal remains as unbridgeable as ever.”
It is little wonder that we are reduced nowadays to the ‘pragmatism’ of Rawlsian liberal principles of justice, currently being played out “most strenuously” between Red and Blue in the US - though NOT of the Socialist vs. Capitalist kind, rather between Republicans and Democrats, both of whose members seem to have lost the vision for what truly “sustains freedom” according to the principles of the Founding Fathers - or so Oz Guinness would suggest: A Free People’s Suicide: sustainable freedom and the American future (2012).
All of which suggests any grappling with our current economic woes needs to drill down to the core issue of the Enlightenment, human autonomy. And that is properly a profound theological matter!
Carl,
ReplyDeleteI suspect Krugman is following the familiar routine of demanding the sun in order to get making getting the moon sound reasonable. Obama would dearly love to bump US tax rates if he could, and Krugman is Obama's number-crunching cheerleader.
Meanwhile, student debt explodes without an equal growth in graduate-level jobs, the relative price of housing to income remains very high compared to a generation ago, globalization exports jobs to the cheaper parts of the world, while immigration further drives down wages. Marx couldn't have foreseen any of this.
Southern Europe in particular is producing a lost and discouraged generation, and this could have violent consequences. In Ireland, the Celtic tiger has stopped growling and the country has gone back to its old ways of exporting its young. Not all a bad thing, since Ireland's boom of recent years was fairly fraudulent.
When you add to all this the collapse of 'indigenous' birth rates in Europe and the growth of the Muslim community, you have interesting times ahead.
Martin
The trouble with Marx and all other utopians is that they fail to understand / know / appreciate that we are all sinners.
ReplyDeleteThose interested in alleviating poverty should read Why Nations Fail by Daron Acemoglu and James Robinson. It's a lot more difficult than it looks to the bleeding-heart do-gooders of the "social justice" set, so many of whom seem to make a nice living while emoting over the objects of their pity and wallowing in their own moral vanity.
I gave up on "charities" after doing some work for one and discovering how much the state and federal CEOs paid themselves.
ReplyDelete“The widening disparities of wealth and the deepening despair among the young and long-term unemployed are great evils in our day.”—Martin
Right on, Martin! I Agree 100 percent!
Kurt Hill
Brooklyn, NY
Hi again Peter,
ReplyDeleteYes indeed. Marx was correct in highlighting the problems of a system which favours the interests of those with capital. Investors and workers certainly do not love each other as they love themselves.
Looking to revolutions and governments to redress matters has been shown to fail. We need free markets, responsibility for providing for ourselves and our families (if you don't work, you don't eat), incentives...
We also need companies operating in this free market, in which investors and workers are indeed in a 'love your neighbour as you love yourself' relationship. Company law and structure is where the change is needed. Most of our problems, including with our banks, come from people working with the clear aim of maximising profit for shareholders / investors. Our companies are fundamentally based in this aim. Introducing ethical codes etc. is only decoration. The foundation needs changing to one which expresses 'love your neighbour as you love yourself.'
I have worked on how such a company, called a Christian Equitable Company, might be structured, and set up a small company to prove the model is acceptable to UK Companies House. What is now needed is a partnership of Christian entrepreneurs and investors to trial the model to prove it is workable and beneficial. If you or anyone would like to know more please email me at lad1@laddermedia.co.uk
Bringing Jesus' Great Command into the foundation of commercial companies is not unrealistic. Standard German companies already do it. The Overseeing Board has to, by law, comprise half investors and half workers. German companies end up fairer, more resilient, more productive, more successful, certainly than UK companies.
Christian Equitable Companies may not be at all what Marx had in mind, but they address the problems which he saw clearly.
Roger Harper
Yes!
ReplyDelete(Actually, many businesses I know, with or without explicit Christian commitment on the part of board/management, take great care of their employees, contribute to the community and share concerns for the environment).
Excellent post Roger, and fascinating work your doing. I agree wholeheartedly with the business/corporate model your proposing.
ReplyDeleteThanks Peter and Shawn,
ReplyDeleteIf you come across anyone who might want to use the model, maybe with adaptations, let me know.