My wife grew up in what Western experts, not without condescension, call a “developing” country. The social life of her village revolved largely around a tree...
In the real world, public goods include clean air, clean water, street lights, emergency call service, disaster relief, food and drug safety, public parks and beaches, education, and dozens more, all of which citizens make use of every day and enjoy unthinkingly. Over 90 percent of U S citizens who deny ever receiving benefits from a government program actually participated in one or more government programs (Social Security, college loans, the child care tax credit and the like), as admirably documented by Suzanne Mettler of Cornell in her research on “the submerged state”.
Awareness of public goods, and their utility and value, is sorely lacking in public discourse. Instead, we hear about “free markets”, “free enterprise” and “free trade” and are told that “government is the problem, not the solution,” or that “government should be run like a business”. Such neoliberal vocabulary, derived from neoclassical economics, dominates public dialog and policy-making, suppresses the recognition of the ubiquity and value of public goods, undermines effective governance and ultimately reduces the supply of public goods.
Public goods are produced in a non-market environment, an environment inadequately addressed by mainstream economics. In the neoclassical model there is essentially no vocabulary for talking about the production of public goods, no theory of effective or efficient non-market production.
We need to revive and reframe the concept of public goods. This issue is not merely rhetorical. A concept of public goods is immensely important.
- The absence of a widely-held, constructive idea of public goods in public discourse denies citizens the ability to have an informed conversation, or to make informed decisions, about things that matter mightily to the quality of their lives and their communities.
- Its absence robs public policy makers, leaders and managers of the concept that is most central to their reason for being.
...even in an economy that gives and receives interest as a matter of course we can at times distinguish what might be legitimate interest from what is probably usury. Although the praxis of the Church for the past two hundred years has been not to disturb consciences on the subject, that does not mean that there is anything wrong with discussion of the matter and with attempts to identify usury where it is present. An increased consciousness of the evil and the ubiquity of usury today (cf. Rerum novarum) cannot but help to make Christians more aware of what to our ancestors was one of the greatest of sins.Is Usury Still a Sin, The Distributionist Review
We have now reached the point that Kohr warned about over half a century ago: the point where "instead of growth serving life, life must now serve growth, perverting the very purpose of existence". Kohr's "crisis of bigness" is upon us and, true to form, we are scrabbling to tackle it with more of the same: closer fiscal unions, tighter global governance, geoengineering schemes, more economic growth. Big, it seems, is as beautiful as ever to those who have the unenviable task of keeping the growth machine going.
Think about what they’re saying here – basically: that a bunch of Neolithic farmers in a village somewhere, or Native Americans or whatever, will be engaging in transactions only through the spot trade. So, if your neighbor doesn’t have what you want right now, no big deal. Obviously what would really happen, and this is what anthropologists observe when neighbors do engage in something like exchange with each other, if you want your neighbor’s cow, you’d say, “wow, nice cow” and he’d say “you like it? Take it!” – and now you owe him one. Quite often people don’t even engage in exchange at all – if they were real Iroquois or other Native Americans, for example, all such things would probably be allocated by women’s councils.
So the real question is not how does barter generate some sort of medium of exchange, that then becomes money, but rather, how does that broad sense of ‘I owe you one’ turn into a precise system of measurement – that is: money as a unit of account?
This was the great social evil of antiquity – families would have to start pawning off their flocks, fields and before long, their wives and children would be taken off into debt peonage. Often people would start abandoning the cities entirely, joining semi-nomadic bands, threatening to come back in force and overturn the existing order entirely. Rulers would regularly conclude the only way to prevent complete social breakdown was to declare a clean slate or ‘washing of the tablets,’ they’d cancel all consumer debt and just start over.In Sanskrit, Hebrew, Aramaic, ‘debt,’ ‘guilt,’ and ‘sin’ are actually the same word.
In the past, periods dominated by virtual credit money have also been periods where there have been social protections for debtors. Once you recognize that money is just a social construct, a credit, an IOU, then first of all what is to stop people from generating it endlessly? And how do you prevent the poor from falling into debt traps and becoming effectively enslaved to the rich? That’s why you had Mesopotamian clean slates, Biblical Jubilees, Medieval laws against usury in both Christianity and Islam and so on and so forth.
Since antiquity the worst-case scenario that everyone felt would lead to total social breakdown was a major debt crisis; ordinary people would become so indebted to the top one or two percent of the population that they would start selling family members into slavery, or eventually, even themselves.
Well, what happened this time around? Instead of creating some sort of overarching institution to protect debtors, they create these grandiose, world-scale institutions like the IMF or S&P to protect creditors. They essentially declare (in defiance of all traditional economic logic) that no debtor should ever be allowed to default. Needless to say the result is catastrophic. We are experiencing something that to me, at least, looks exactly like what the ancients were most afraid of: a population of debtors skating at the edge of disaster.Although governments and banks are behaving differently at the moment, if we recognize debt as a social agreement, we can change and negotiate the terms.
The UK takes the even weirder position that this is true even of debts the government owes to banks that have been nationalized – that is, technically, that they owe to themselves! If that means that disabled pensioners are no longer able to use public transit or youth centers have to be closed down, well that’s simply the ‘reality of the situation,’ as they put it.
These ‘realities’ are being increasingly revealed to simply be ones of power. Clearly any pretence that markets maintain themselves, that debts always have to be honored, went by the boards in 2008...
When thousands of people begin assembling in squares in Greece and Spain calling for real democracy what they are effectively saying is: “Look, in 2008 you let the cat out of the bag. If money really is just a social construct now, a promise, a set of IOUs and even trillions of debts can be made to vanish if sufficiently powerful players demand it then, if democracy is to mean anything, it means that everyone gets to weigh in on the process of how these promises are made and renegotiated.” I find this extraordinarily hopeful.
Paradoxically, as the share of the population that receives benefits in a given area rises, support for welfare in the area falls. A new NBER paper finds evidence for an even more intriguing and provocative hypothesis. Its authors note that those near but not at the bottom of the income distribution are often deeply ambivalent about greater redistribution.
Economists have usually explained poor people’s counter-intuitive disdain for something that might make them better off by invoking income mobility. Joe the Plumber might not be making enough to be affected by proposed hikes in tax rates on those making more than $250,000 a year, they argue, but he hopes some day to be one of them. This theory explains some cross-country differences, but it would also predict increased support for redistribution as income inequality widens. Yet the opposite has happened in America, Britain and other rich countries where inequality has risen over the past 30 years.
Instead of opposing redistribution because people expect to make it to the top of the economic ladder, the authors of the new paper argue that people don’t like to be at the bottom. One paradoxical consequence of this “last-place aversion” is that some poor people may be vociferously opposed to the kinds of policies that would actually raise their own income a bit but that might also push those who are poorer than them into comparable or higher positions. The authors ran a series of experiments where students were randomly allotted sums of money, separated by $1, and informed about the “income distribution” that resulted. They were then given another $2, which they could give either to the person directly above or below them in the distribution.
In keeping with the notion of “last-place aversion”, the people who were a spot away from the bottom were the most likely to give the money to the person above them: rewarding the “rich” but ensuring that someone remained poorer than themselves. Those not at risk of becoming the poorest did not seem to mind falling a notch in the distribution of income nearly as much. This idea is backed up by survey data from America collected by Pew, a polling company: those who earned just a bit more than the minimum wage were the most resistant to increasing it.
Poverty may be miserable. But being able to feel a bit better-off than someone else makes it a bit more bearable.
There are 78,000 tax filers with incomes of $211,000 to $533,000 who will pay no federal income taxes this year. Even more amazingly, there are 24,000 households with incomes of $533,000 to $2.2 million with zero income tax liability, and 3,000 tax filers with incomes above $2.2 million with the same federal income tax liability as most of those with incomes barely above the poverty level.
...something that's been bugging me for a while now, a sense that our fundamental terms of discussion on economic issues are missing the point, over and over.
First, the use of "jobs" to mean "earned income." We're used to wage employment being the primary source of sustenance for most American families, but this is pretty new, globally speaking. The move by more and more friends and acquaintances to grow at least some of their own food is striking, and I think points to a broadening sense that wage labor is not the only way to go in terms of providing for oneself. When we say "we want everyone to have a job" what we ought to be saying is "we want everyone to work such that they can sustain themselves and have time and energy for the pleasures and joy of life"
Second, the sense that money is the fundamental unit of economic measure. It is certainly the most easily quantifiable measure—maybe the only easily quantifiable measure. But in the end, it is a measure, not the thing itself. A dollar is a unit of exchange. As has been pointed out countless times, you can't eat gold. The focus on money also means we ignore non-monetized parts of the economy...
The core economic question is not "how much money do we get for our work?" but "how should we spend ourselves?" because whatever we earn in cash, when we work we are spending time out of our lives. The product, whether it is fungible or not, is what we should pay attention to. Not everything needs to be exchangeable on the open market.
Austerity comes from the Greek verb "to dry." It is sour and astringent. Self-flagellation is the order of the day...Austerity is all about cutting back the public sector in an attempt to reinvigorate the private sector.
Frugality is about shifting our attention, and our income, away from restless consumption and toward long-term saving. Spending less, yes, but investing more -- both in the public and the private sphere. And in our rush to rebuild financial markets, we need to pause long enough to make them fit for the purpose...
Frugality comes from the Latin. It speaks of bearing fruit. Of our ability to flourish, not through relentless material profligacy, but through a due attention to season and cycle and the processes of maturation. Austerity presents us with an arid world, stripped bare of meaning, devoid of hope. Frugality offers us a way to re-enchant the future.
A survey conducted in Niger in 2002 by the Office of the Prime Minister asked the poor of that country to describe poverty. Their answers provided the following:
* Dependence was mentioned by 40 percent of the respondents, with some noting that a poor person always had to “seek out others” or to “work for somebody else.”
* Marginalization was noted by 37 percent, who defined a poor person as one who was “alone,” had “no support,” did “not feel involved in anything,” or was “never consulted.”
* Scarcity was included in the poverty definitions of 36 percent, who used statements such as having “nothing to eat,” a “lack of means to meet clothing and financial needs,” a “lack of food, livestock and money,” and “having nothing to sell.”
* Restrictions on rights and freedoms were associated with poverty by 26 percent of the respondents, who stated that “a poor person is someone who does not have the right to speak out” or “someone who will never win a case or litigation against someone else.”
* Incapacity was mentioned in connection with poverty by 21 percent, including the incapacity to make decision, to feed or clothe oneself, or to act on one’s own initiative.
Only 36 percent of the poor in this survey described poverty in terms of material lack [scarcity]. Here, the poor described the experience of poverty primarily in terms of suffering relationships and lack of belonging, dignity and freedom. Similar descriptions were found in a major World Bank study published in 2000, Voices of the poor: Can anyone hear us?
The poor describe poverty in terms of suffering relationships. Relationships are central to a person’s belonging, identity, affirmation and other socio-emotional needs.
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