Category: Economics

Allan Carlson The Family Centered Economy

Alexander Chayanov?s emphasis on a farm?s sexual division of labor ?turns marriage into a necessary condition of fully-fledged peasantship.? The family itself is a ?work unit,? with family members fundamentally bonded to each other: husband and wife need each other to survive and prosper; and they, in turn, need children to prosper and survive. Shared labor in a common enterprise binds the family together. Mark Harrison summarizes: Peasant economy reproduces itself through the family. The family is the progenitor of the family life-cycle and of population growth. It is the owner of property. As such, it expresses the fact that the aim of production is household consumption.

Quoting Pitirim Sorokin

Now families are small, and their members are soon scattered?. The result is that the family home turns into a mere ?overnight parking place’.

Quoting Wendell Berry

“We are going to have to gather up the fragments of knowledge and responsibility? that have been turned over to governments and corporations during the 20th Century and ?put those fragments back together again in our own minds and in our families and households and neighborhoods.?

Over the last century governments have believed it to be their job to promote economic efficiency. Efficiency is achieved by reducing costs, the chief of which is salaries and pensions, so we attempt to reduce the number of people we employ. But whether the nation is served well solely by efficiency of labour, with the resulting concentration of economic power, is an interesting question. The concentration of power is precisely the effect of every government intervention in industry. Reducing costs tends to mean externalising them, so that they are not borne by that industry itself, but by someone else, such as the nation as a whole at some later time. It may that alongside efficiency, a nation also needs a certain level of economic resilience for too much efficiency may leave us exposed as global economic conditions change.
Continue reading “Earning A Crust”

The British Government is right to make the austerity effort ? even if it is hopeless. But accepting the relatively generous debt forgiveness that might eventually attract, the gaping hole in Camerlot?s plans still remains the same as that of Tory economic strategy since Thatcher: no creativity in terms of marketing, diversification and self-sufficiency is being applied to the problem. With Conservative ministers, the problem as always is, they simply don?t get out enough.

The Cabinet watches an appalling traffic accident taking place in the eurozone, and continues to trot out drivel about our future being ?inextricably linked? to that disaster area. Is that the best they can offer? It looks on as banks spit in the face of entrepreneurial business risk, too scared to so much as mention the word regulation, when the rest of us are thinking more in terms of castration. It presides over a farming community on its uppers, when a major part of our problem is the enormous mountain of food we import?and a major part of our EU contribution involves the obscene feather-bedding of French agriculture. And above all, it fails to grasp the obvious reality of Britain?s plight: that our current economic balance and structure stands zero chance of ever employing, on a full-time basis, the citizens we have to support in this tiny island. (Disgracefully, it is backing away from immigration pledges, and bowing meekly to potty Leftist and CBI arguments about needing to import ?trained? labour while we have 2.4 million unemployed).
Since the latter part of the Victorian era, occupations in Britain have been wiped out one by one: domestic service, skilled tradesmen, miners, factory workers, farming, independent shopkeepers, roadsweepers, clerks, secretaries, soldiers, policemen, and a thousand other jobs: all have been sacrificed on the altar of mechanisation, multiple supermarkets, shareholder demands, DIY sheds, IT and ? the worst cancer of all ? the ridiculous aim that everyone must have a University degree, however useless.
Exacerbating this job shrinkage is the staggering trend towards full-time working women, nil-time working benefit cheats, and a tiny, electronically-driven banking community of some 50,000 adults driving over 60% of the economy. Who but a congenital idiot would imagine that Britain could support an adult population of a hundred times that number with an economy more suited to a ritzy suburb of Zurich?

John Ward Where Are The Ideas?

I have six children. I sat with them, read with them, worked with them, encouraged them, imparted wisdom to them, nurtured their intellects, fed their ambitions, opened their minds, instructed them in life, all its failures and successes. I conversed with them, poured over dictionaries with them, pointed and showed them the world around them, explained their rights and their responsibilities to them. I cared for them because I am their father, it is my job. If the State wants to assume all of the above, then 500,000 Fabians are the very WORST people to do it. All they have been taught is dependency, entitlement, compliancy, uniformity and slavery, the very WORST education a child can receive. My children deserved better. So I made sure they received it. They thrived in spite of the State, something we all need to learn. But don?t expect to be taught it by anyone employed by the State.

Old Holborn

There was a short but brutal drought in the East of England this year. It is over now, but from March to May, there was no rain, at all. But the problem is not so much that there wasn?t any rain, but that the condition of the soil means that it cannot hold onto winter rain and make it available to crops through dry months. This spring was particularly bad because we had had a dry winter, and this after last year?s dry spring. We will have to dig the field drains up, so that less winter rainfall runs into the ditches. Our field is protected only by its own hedges, so there is little shelter from the wind that blows across the much larger fields all around. The wind draws what moisture there is out of the soil, and the water level drops faster than our crops can grow roots to find it. We have planted a belt of trees round the whole field, but not many survived the drought.
Continue reading “Drought and collectivisation”

There are many pacts of mutual dependency, some good, some not so. Let’s have a look a couple that are not so good, and which are vaguely related. We’ll start with the global, then look at the local.
The Middle East supplies us with cheap oil. There is oil elsewhere in world, but it hasn?t come onto the market yet because it is too expensive for us to extract. Over many happy decades our industry, and our societies, have got used to this cheap oil. So used to it that it is now a question whether we could convert to the more expensive stuff, which is soon to be the only oil there is. Without oil, we are capable of no economic activity at all. The West is on a petroleum dole, which the Arabs (and Russians and Venezuelans) are kind enough to supply. So far, we do not resent being on this dole, and they do not resent supplying it.
Continue reading “Two Doles and some forgiveness”

Credit at very low rates of interest is treated as ?free money,? for that?s what it is in essence. Recipients of free money quickly become dependent on that flow of credit to pay their expenses, which magically rise in tandem with the access to free money. Thus when access to free money is suddenly withdrawn, the recipient experiences the same painful withdrawal symptoms as a drug addict who goes cold turkey.
Free money soon flows to malinvestments as fiscally sound investments are quickly cornered by State-cartel partnerships and favored quasi-monopolies. The misallocation of capital is masked by the asset bubble which inevitably results from massive quantities of free money seeking a speculative return… credit-poor economies are suddenly offered unlimited credit at very low or even negative interest rates. It is ?an offer that?s too good to refuse? and the resultant explosion of private credit feeds what appears to be a ?virtuous cycle? of rampant consumption and rapidly rising assets such as equities, land and housing…everyone and his sister can suddenly afford to speculate in housing, stocks, commodities, etc., and to live a consumption-based lifestyle that was once the exclusive preserve of State Elites… the addictive substance is credit and the speculative and consumerist fever it fosters.
The ?too big to fail? Eurozone banks … could loan virtually unlimited sums to the weaker sovereign states or their proxies. This led to over-consumption by the importing States and staggering profits for the TBTF Eurozone banks. And all the while, the citizens enjoyed the consumerist paradise of borrow and spend today, and pay the debts tomorrow.
Tomorrow arrived, and now the capital foundation – housing and the crippled budgets of post-bubble Member States -has eroded to the point of mass insolvency.

Charles Hugh Smith Why the EU is doomed

Forthcoming at the Saint Augustine Institute

THE FUTURE OF MONEY

May 12th 2011

Edward Hadas Re-Setting Money

Edward Hadas is Associate Editor of the Financial Times Lex column. His Human Goods and Economic Evils: A Moral Approach to the Dismal Science is published by ISI. Here is a snippet from his Economics, Finance and the Good

The genius of the modern financial system is that it relies on and develops the human desire to work together for the common good but takes the human inability to be perfectly generous into account. For the system to work well, the rewards for sharing must be neither too small to entice or so large that greed is encouraged to grow. Further, unless those who labour within the financial system are carefully supervised, the large sums of money (representing large claims on resources) which pass through their hands will nourish the noxious forces of greed and recklessness.

I do not think the current financial crisis will destroy industrial economies. They are built on too firm a foundation of trust for that. The reconstruction of the financial economy can, however, be an opportunity for economists to make more room in their discipline for a pearl of great price ? the good.

June 9th 2011

Paul Mills Time to give Gold a Chance? ? What the Bible really says about money and debt

Paul Mills works as an economist for the IMF and is on the board of the Cambridge Papers, published by Jubilee Centre. His Should Christians support the Euro? is here and you can see him on video here and here

Both at 6.15pm on Thursdays at St Margaret Lothbury (map)

Despite daily streams of data and calculation showing that banks are undercapitalised and overlent, the stock markets are ludicrously overvalued and gold undervalued, nobody in authority has any new ideas at all ? and those out of favour are dismissed and/or smeared ? the choo-choo train of it is alright it is alright it is alright chuffs along on its journey across the detonating bridge…
Which brings me to the final reason: culture. Just about every cultural fault that could get in the way of reform is present at every level of this unholy mess. A banking culture driven by selfish greed and testosterone. An economic culture with so few ideas, it invented the jobless recovery. A consumer culture ready and willing to accept the irresponsible credit sold to it in return for material benefits. A media culture more interested in bread and circuses than issues, and too lazy to look beyond the spin of briefing packs. An energy exploration culture devoid of ethics, and prepared to do any deal with any rogue on behalf of the shareholders. And a political culture in every one of the States involved that long ago stopped listening to the complaints, needs and aspirations of its citizens.
John Ward The Slog

Other financial commentators I am reading are Jesse, Automatic Earth, Zero Hedge, Mish Shedlock, Gonzalo Lira, Charles Hugh Smith, Naked Capitalism, and Alasdair Macleod

Here’s the gist of Saving Time – the Economic Consequences of Hurry

Bad theology comes from the bad conscience of one generation in the West which has determined to separate itself from its own sources in its inherited culture, and to grasp the present so that no unknown or new thing may ever interrupt it. This bad theology generates the agendas which control an increasing proportion of our national economic product. The fear that as individuals we cannot cope with the responsibility for our own public action and economic relationships, and contrive agendas that delegate this responsibility onto the state institutions from which a large proportion of the population receives their identity and income. This secularist theology can load new burdens on the economy, and it can pay for them for a while by asset-stripping that culture, but it cannot support an open public square or healthy economy for its has no resources of its own.
Good, Christian, theology creates a culture in which we are open to other people and to new encounters with what we cannot control or know in advance, in which we concede our own transience, identify ourselves with those who will come after us and we get on with making the investments that will give them the same hope of prosperity we had.
A healthy economy is embedded within and driven by a healthy culture with a healthy public square. A society is healthy when the current generation acknowledges its obligations to its own progenitors and its duty to its successors and so recognises its place in the transmission of life and does not attempt to out-live its welcome.
Christianity creates secularity (wide tolerance) and cultural confidence. Left to itself, secularity tends to become ideological secularism (tolerance narrowing towards conformity and centralisation). Secularity remains secular only when the public square can receive the contribution of Christianity

The full version is at Scribd and there is more at the Saint Augustine Institute

Next Economy Working Group Events

March 10th Edward Hadas Re-Setting Money
May 5th
June 6th Paul Mills Give Gold a Chance? ? What the Bible really says about money and debt

‘Economy’ means management and nothing more; and it is generally applied to the affairs of a house and family, which affairs are an object of the greatest importance, whether as relating to individuals or to a nation. A nation is made powerful and to be honoured in the world not so much by the number of its people as by the ability and characteristics of that people; and the ability and character of a people depend, in great measure, upon the economy of the several families, which, all taken together, make up the nation.
The man who by his own and his family?s labour, can provide a sufficiency of food and raiment, and a comfortable dwelling-place, is not a poor man?.
But it is necessary to the very existence of a people, that nine out of ten should live wholly by the sweat of their brow; and is it not degrading to human nature, that all nine-tenths should be called ‘poor’; and what is worse, call themselves poor and be contented in that degraded state? The laws, the economy or management, of a state may be such as to render it impossible for the labourer, however skilful and industrious, to maintain his family in health and decency; and such has, for many years past, been the management of the affairs of this once truly great and happy land.

William Cobbett Cottage Economy