Money, Greed, and Five Favorite Fallacies

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As you may have noticed, my passion against Schneider has burned out a bit, since I finished reading him almost two weeks ago, though I will still do my best to blog through the rest of the book.  I read John Medaille’s Toward a Truly Free Market and it was a fantastic breath of fresh air–I reiterate the recommendation I made before I read it: everyone should go read it.  More about it in due course.  For now, though, I’m afraid I have another very unhappy review to share, Jay Richards’ Money, Greed, and God.  (I will admit up front that I did not finish this book.  I made it to the halfway point, and then determined that to continue, with no promise that I would ever be offered a coherent argument, was merely an act of self-flagellation.  I should also point out, lest I seem to be unfairly singling out really lame books to critique, like a scrawny third-grader beating up on kindergarteners in order to feel important, that the back cover of this book is bedecked with laurels like “the definitive case for capitalism,” bestowed by none other than George Gilder, and is rated very highly on both Amazon and Goodreads.  If this is the definitive case for capitalism, then I’m afraid capitalism had better give up and pack its bags.)

This book is laced with unflattering ironies.  The author repeatedly adopts the stance, so attractive to American audiences, as the champion of common-sense over against the obfuscations of intellectuals, who spin webs of fantasy and idealism out of touch with reality.  But he does this while remaining consistently at the realm of abstraction, hypotheticals, and straw men, never deigning to come down and engage economic realities.  Sometimes this equals blatant falsehood, like where Richards asserts that “government spending as a portion of GNP has grown exponentially in recent decades.”  The actual growth?  12% (from 18.4% to 20.6%) over fifty years, and actually a decline in the last twenty.  (You can see all the details here.)

On a larger scale, it means that Richards never actually touches down to earth and tells us what he is talking about.  What is “capitalism”?  Since he never tells us, he can simply duck and hide from opponents as needed–whenever their attacks hit home, he can conveniently claim that as “not-capitalism,” and whenever there is something good that the modern world has given us, he can claim it for capitalism.  This is common enough in books of this genre, as is the tendency to camp out in abstractions and hypotheticals.  We find here almost no real grappling with modern economic realities, but rather platitudes about how an ideal free market functions in principle, and how wealth need not be a zero-sum game.  

Throughout, though, he writes in homely and down-to-earth style, in order to strengthen the impression of common sense over against the distorting sophistications of the academics.  If he used such rhetoric as an aid to clear and cogent logic, it might work, but when it is used to mask the absence of logic, it just makes him look like a demagogue.  Here’s a case in point: “The Ten Commandments–a sort of summary of all God’s laws–take private property for granted.  For instance, the eighth commandment, the one against stealing, implies that we may have property.  Otherwise, there would be nothing to steal, and the commandment would make no more sense than an order not to fraternize with four-headed Jube Jube monsters.  (No, I don’t know what they are, either.  I just know they don’t exist.)”  As I’ve pointed out before, the eighth commandment taken alone merely implies the existence of fixed property relations of some kind–it says nothing about what form those should take–capitalist, distributist, communitarian, or even socialist!  Perhaps Richards hopes that his readers will be so distracted by Jube Jube monsters that they won’t notice the logical lacuna.  

The same complaint can be made against Richards’s extensive use, early on, of a first-person narrative.  He was once an idealistic socialist, he confides in us, back when he was a teenager and it was cool to be radical.  He used to be convinced of all this rubbish, but then when he started looking at real facts, he learned better, and grew to embrace capitalism.  This, presumably, is to help his case, by conveying to the reader that this is not some ideologue, but someone who knows the other side inside and out, and has rejected it for sound intellectual reasons.  However, given that he never deigns to share any of these sound intellectual reasons with us, but resorts to all kinds of straw men and logical loop-de-loops to make his case, this personal testimony just makes him look naive and impressionable.  

Despite the promises of the title and the back cover, Richards does not really attempt in this book to argue positively for capitalism, and certainly not to offer a theological argument for it (inasmuch as Scripture appears, it is generally only as something that Richards defends himself against).  All he really attempts to do is to show that capitalism “is not the problem,” by means of refuting eight “myths” about why capitalism is bad. Rather than deal with Richards’s responses to these as such, I wanted to respond by pointing out five fallacies that pervade his argument through the first few chapter.  The first three are primarily methodological, the latter two primarily substantial.  I will call them The Dystopia Fallacy, The Tweaking Fallacy, The Not-Necessarily Fallacy, The Coercion Fallacy, and The Theft Fallacy.  In a later post, I will discuss the issue of Private Property and Inequality (non-)Problem, which relates closely to the reasons I researched the book in the first place.

 

1) The Dystopia Fallacy

In this fallacy, Richards picks the worst possible example of an alternative to capitalism, and uses it as a bogeyman to scare people away from imagining that there could be alternatives.  The first chapter does this on a grand scale, and in the most fantastically cliched fashion: Look at the massive evils done by countries that were professedly Marxist!  Ergo, capitalism is better than all the alternatives.

For this argument to work, it would require at least these four assumptions:

1) Marxism is the only alternative to capitalism.

2) The countries in question practiced Marxism effectively.

3) The evils that these countries wrought were directly due to their Marxism.

4) Similar evils have not been wrought by countries trying to impose capitalism on unwilling populations.

In fact, I think, all four of these assumptions are invalid.  The first is so baseless that it bewilders me how otherwise intelligent people manage to persist in repeating it.  Richards’ book takes no account of phenomena like European democratic socialism, not to mention of course alternative economic visions like distributism.  The second is eminently disputable.  Leninism, Maoism, etc., have their roots in Marxism, but differ in profound ways from what Marx argued for and envisioned.  One massive and crucial difference is the fact, which Richards notes in passing but pays little attention to, that communism took root in agrarian and Third World countries, rather than in developed Western industrial nations, the context in which Marx developed his ideas.  Unsurprising, then, that it failed so abysmally.  The third fails also, for related reasons.  Again, Richards notes that “revolutions never sprang up in advanced industrial societies where there was a strong rule of law, but rather in poor agrarian cultures with career tracks for despots.”  So Cambodia to the United States should not be an apples-to-apples comparison in determining the relative merit of an economic system.  Many of these evils have been due to despotism in general, and communism is just the particular form it has taken for some countries in this century.  Brutal despotisms on a massive scale have been pretty common historically in places like Russia, China, and Cambodia.  The technology of the twentieth century has merely made it far easier for this brutality to occur efficiently on a massive scale.  This then relates to the fourth assumption.  It would be fair to ask whether, in “agrarian cultures with career tracks for despots,” capitalist regimes of some form or another have practiced terrible brutality and tyranny in the twentieth century.  The recent history of Latin America, unfortunately, answers that question in a resounding affirmative.  

 This sort of fallacy continues throughout the book so far as I have read, using, for instance, examples of a really poorly-conceived and poorly-executed government policy to “prove” that government intervention in the “free market” is always bad; or quoting out-of-context and poorly-worded complaints against capitalism to prove that all forms of opposition to capitalism result from fuzzy thinking.  Meanwhile, he routinely chalks up all the marvels of modern life to free-market capitalism without any argument. This is nothing but post hoc, ergo propter hoc–we had capitalism, now we have the microwave; clearly the latter must come only from the former.  

He is correct, in short, to claim that modern capitalism need not be perfect, only that it needs to be better than any viable alternatives.  But to demonstrate that it, at its best, is better than one particular alternative at its worst, doesn’t get him very far to proving it better than the alternatives.  To be fair, he either needs to compare really bad examples of anti-capitalism with really bad examples of capitalism, or really good examples of anti-capitalism with really good examples of capitalism.  Otherwise, it’s nothing but propaganda.

 

2) The Tweaking Fallacy

This is a common approach among free-marketeers.  What they do is they set up some idealized scenario of a well-functioning market, and then hypothesize one particular change in policy that is intended to make things work better.  Unsurprisingly, the change upsets the system, and ends up doing more harm than good.  But most intelligent people agitating for change don’t just want to make one little change in the system; they want to make a lot of changes, building on one another.  Or they want to change the assumptions inherent in the system.  

An example of Richards’ use of this fallacy (again, quite cliched) is with respect to minimum wage.  If you raise the minimum wage in a well-functioning market, argues Richards, you will increase unemployment, and thus make things worse off on the whole.  Fair enough.  But any responsible initiative to raise the minimum wage would gauge the possible impact of a wage hike on employment (which, depending on the current wage level, might not actually be much at all), and would take steps to avert ill effects.  Or a distributist might propose ways to remodel the entire system so as to both raise wages and employment levels (as quite persuasively argued by John Medaille in Toward a Truly Free Market).

The tweaking fallacy can be conveniently combined with the dystopian fallacy, as Richards illustrates with the minimum wage issue.  He imagines a scenario in which the minimum wage was raised to $1,000 an hour and shows us how bad the effects would be.  Presumably, then, we are to assume that the effects of a smaller raise would be bad too, in the same way, only to a lesser extent.  But logic does not support such an assumption, and the “argument” thus serves only the purpose of alarmist rhetoric.

 

3) The Not-Necessarily Fallacy

In this, another favorite tactic of Richards’s, the logic of the argument runs like this: Opponents of capitalism say that capitalism makes the rich richer at the poor’s expense.  This complaint assumes a zero-sum game–that wealth is never created, only transferred.  But this is not always the case.  Let me show you some examples of how free exchange can make both parties wealthier.  

Ergo, capitalism is not a zero-sum game, ergo, the rich do not get rich at the poor’s expense.  The problem here of course is that almost no critic of capitalism is so daft as to complain that it is always a zero-sum game.  Everyone recognizes that of course it is quite possible for business to actually add net value to everyone concerned, and that this happens all the time, and is much of the reason for the prosperity of the world today.  But do all resources work that way?  Well, no.  Some resources, like land, are fixed and cannot be created.  Some markets–many financial markets, for instance–are essentially zero-sum markets.  

Now, if some significant parts of the system are zero-sum, then it is quite possible, indeed likely, that many people do get wealthy at the expense of others.  It is not always win-win.  And in general, those already most powerful will succeed in entrenching their position at the expense of those less powerful.  The only way Richards could refute the zero-sum complaint would be by demonstrating that all transactions in a capitalist system end up benefiting both parties, and that is manifestly false.  Instead, he confines himself to showing that it is not necessarily true that someone gets rich at another’s expense, and therefore concludes that it is necessarily untrue, which is about as straightforward an inversion of logic as you can get. 

 

4) The Coercion Fallacy

I have written on this before at great length, so hopefully I can be brief.  Richards frequently makes his case by indulging in a sense of moral outrage at the coercion of government coercing people to do stuff, even for good ends, and of course he repeatedly defends the free market by insisting that it is, of course, free.  Whatever you don’t like about it, at least it doesn’t force people to do stuff, but lets everyone meet on an equal level, and exchange what they want less of for what they want more of.  Everything is completely voluntary.  

In a modern world that has exalted freedom as the highest virtue, this sort of argument is taken to settle the question–better for people to do bad things freely than good things under compulsion, seems to be the idea.  Of course, once closely examined, this popular moral presupposition breaks down, but we’ll leave that issue aside.  The more immediate objection is of course that it is not really accurate to speak of all government policies as “coercion” unless one presumes radical individualism.  There is a such thing as corporate decision-making, the public will, and all that.  Or there used to be, at any rate; perhaps there isn’t anymore in the United States.  A corporate decision is only coercive to the extent that the recalcitrant make it so.  But let’s even leave that issue aside.  

The most immediate objection, one that is so obvious that only the most propagandist ideology can ignore it, is that it is absurd to talk about perfectly “free” contracts and agreements in a marketplace constrained by inequality and scarcity.  In a contract between an employer who lives in a mansion with security guards, and is making a 20% profit margin, and 1,000 job applicants who are facing starvation if they can’t find some kind of employment, it would be absurd to speak of the two parties as being equally “free,” or even to speak of the job applicants as free at all in any meaningful sense of the word.

Rather than face up to such real-world realities, Richards insists on making his argument in terms of idealized test scenarios and hypotheses–like the “trading game” that his sixth-grade teacher made his class play once upon a time, swapping toys until everyone ended up with something better than they started with.  “An exchange that is free on both sides, in which no one is forced or tricked into participating, is a win-win game.  It’s a positive-sum game.” But this hypothetical marketplace is one without exploitation (preying on someone’s physical needs to get them to do something you want), manipulation (preying on someone’s emotional needs to get them to do something you want), or deception (ensuring that the other party does not know the relevant facts of the transaction), all of which are institutionalized in many modern capitalist markets.  

In short, I continue to insist that if the defenders of capitalism are to rest the vast majority of their case for the goodness of the market and the wickedness of state intervention on the “freedom” in the former and the “coercion” in the latter, they must provide some meaningful definition of these terms that actually fits the real world.  Otherwise, why should we listen to them?

 

5) The Theft Fallacy

Related to the “Coercion” fallacy is of course the “Theft” fallacy–the repeated rhetorical assertion that any redistribution or contro of private resources by the government is “confiscation” or “theft.”  I’m sure you know the sort of thing I am talking about, but here’s a sample quote:

“Every government has to collect taxes to fund services beneficial to all–to maintain courts, protect citizens from domestic and foreign predators, enforce traffic law and contracts, and so forth.  We have a right to protect ourselves from aggressors, for instance, so we can delegate that right to government. We don’t have the right to take the property of one person and give it to another.  Therefore, we can’t rightfully delegate that function to the state.  Delegated theft is still theft.”  

As I’ve argued before, this argument collapses on its own terms.  Almost any “legitimate” government function breaks down when pressed.  Some citizens have enough mobile capital that if an enemy should attack the US, they could easily pack up and move to London with few adverse consequences, so why is it worth their while to pay tax dollars to defend less affluent citizens.  Maybe they are staunchly pacifist or at least feel that America’s enemies have been stirred up by acts of aggression that such citizens have bitterly opposed.  They didn’t support the actions that created the enemies, so why should they have to pay for the cost of restraining those enemies.  Or what about those of us who live in inner cities and walk everywhere.  Why should we have to pay for the maintenance of the roads and traffic laws?  If societies cannot enact policies that benefit some people more directly than others, then they can’t enact any policies.  Such a reductio ad absurdum suggests that there is a fundamental philosophical flaw in the assumptions behind this “theft” accusation.  

 And sure enough, there is.  The assumption is that private property somehow exists in a vacuum–it is sacrosanct, unconditioned, absolute, timeless.  It pre-exists any society and therefore society has no claims on it.  This assumption turns out to be utterly incoherent once held up to the light of day (and Richards himself discards it in a later chapter when it suits his argument to articulate property differently).  On the contrary, property is, if not a product of society (which I would suggest it ultimately must be from an ethical standpoint), at the very least always conditioned by society.  To say that society has no claims on private property is about as coherent as saying that parents have no claims upon their children.  

Now one can argue that there are limits upon these claims–limits of justice and limits of prudence.  If there were no rules restraining society’s claims on private property, private property would be meaningless.  But conversely, if there were no rules at all regarding society’s claims on private property, then private property would be meaningless.  The relationship is a subtle and dynamic one, not one that is easily defined by throwing around terms like “theft” whenever it is rhetorically convenient.

 

And that last criticism could sum up my critique of the whole book.  Richards acts as if this is a debate between ignorant idealists and people who take economic realities seriously.  But in saying this, it feels like he is critiquing himself.  Economies are subtle and dynamic, and the real world that we operate in is quite different than the fantasy one that Richards has constructed for us with the aid of fuzzy logic and empty rhetoric.


Making All Things New (Good of Affluence #2)

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In his first chapter, Schneider sets out to explain why it is that modern capitalism is not in fact open to the kind of objections routinely leveled against it by modern theologians, and why modern affluence is a good thing, free from the condemnations that have been typical of the Christian ethical tradition.  Believe it or not, I actually have some positive things to say about Schneider’s approach, and, to keep these reviews from having too negative a tone, I’m actually going to organize this post around three things that Schneider does right (under each, though, I will discuss the weaknesses and shortcomings that relate to each of these strengths).

First, briefly, the basic structure of the chapter: Schneider’s main argument consists of claiming that modern capitalism represents a fundamentally new achievement in human history.  As something “new,” he will suggest that older critiques of wealth and acquisition do not necessarily apply to capitalism anymore; as an “achievement,” he will argue that, far from being critiqued, capitalism should be celebrated for the enormous good it has done in the world.  Then he will address moral critiques of capitalism–that it is founded on injustice–followed by spiritual objections–that it leads to materialistic vices.  All this being done in just the space of 27 pages, one should not expect him to do any of these things very thoroughly–the purpose is merely to clear the ground somewhat, attempting to establish a predisposition in favor of capitalism and affluence before embarking on his theological vindication.

Of course, this does pose rather a problem for the rest of his book.  For Schneider is honest enough to acknowledge that many of the objections he canvasses, if true, would thoroughly undermine his case and necessitate a very different evaluation of capitalism and affluence, and a very different use of the biblical material he is going to look at.  So to the extent that most of these objections are left relatively unaddressed, he embarks on the remaining seven chapters with a very shaky foundation indeed.  More on that below.


What is Capitalism?

Now, the first thing that Schneider deserves compliment on here is his relative restraint in praising capitalism’s accomplishments over the past couple centuries.  Of course, the key word here is “relative”–there is a real tendency to idolatry in some literature on this subject, even among Christians, hailing capitalism as the savior of the human race in terms that seem appropriate only for Christ himself, and suggesting that it has transformed the world for good more than any other development in history–surpassing, it would seem, even the preaching of the Gospel and the birth of the Church.  Schneider generally avoids that sort of rhetoric, though he does make fairly dramatic economic claims for capitalism’s success in liberating the human race from poverty. 

And of course, this leads to a potential objection: what exactly do we mean by “capitalism”? As I feared in the introduction, there simply is no real attempt to answer this question.  Schneider appears to mean something like “the advance in technology and economic development originating in the late 18th-century,” but if that’s what’s meant, then one might ask whether or not we should credit the Industrial Revolution, rather than capitalism per se, with all these accomplishments.  (Presumably Schneider would reply that the Industrial Revolution depended upon capitalism, but that merely continues to beg the definitional question.)  Adam Smith is, as usual, identified as being somehow or other at the root of all this, but there is no real engagement with his work or analysis of what, if anything, he did to create “capitalism.”  At one point Schneider says that, prior to the nineteenth century, “Except in Adam Smiths’ book, the concept of [economic] development did not exist” (20).  But that is manifestly false, ignoring the fact that Smith’s work stands at the end of a long discussion among eighteenth-century proto-economists on the rapid economic development they were witnessing.  Schneider, thankfully, does not use the term capitalism in the vacuous sense so often employed by its right-wing defenders–“respect for private property,” “economic freedom” or something like that (although at one point he does say that capitalism stands for fundamentally Christian ideas like “the validity of private property, the primacy of the individual, the importance and dignity of work, and the basic character of freedom”).  Indeed, in his emphasis on the newness of capitalism (see below), Schneider stands at the opposite end of the spectrum from co-belligerents like David Hall, who sees “capitalism” beginning with the Reformers, or Rodney Stark, who sees it as the legacy of the Christian Middle Ages.  I appreciate Schneider’s honesty at this point, but in the absence of clearer definition, it leaves us with the impression that “capitalism” might mean merely “modern technology and industry,” in which case its accomplishments might be achievable under a more just system of production.  

But the problem with this lack of clarity is that Schneider apparently has something very specific in mind, even though he never tells us what it is.  For he is confident enough of what capitalism is that he can inform us that, whereas in 1941, there were only two capitalist countries in the world, the US and the UK (huh?), there are now precisely twenty-five, no more, no less (though he doesn’t say which twenty-five).  This is, to say the least, mildly maddening.    

Moreover, when he credits capitalism with enriching not merely the rich, but also the poor, it is important for us to understand exactly what it is he is talking about.  For it may be plausibly argued that the dramatic decline of real poverty in the US and Britain in the twentieth century, which Schneider makes much of, is actually the result of governmental restrictions upon industry, protections of labor, and redistributive programs–otherwise, we would have a few Rockefellers and a bunch of paupers.  Schneider himself seems to confess as much when, after describing how well off the “poor” are in modern America, explains that this is due to “welfare, food stamps, unemployment provision, and rent subsidies, all of which supplement the earned income of the poor.”  If all this may be described as an achievement of capitalism, then Schneider’s capitalism is clearly not the government-free free-marketeerism that most Christian capitalist literature endorses.  

 

Nothing New Under the Sun?

Second, I appreciated Schneider’s emphasis (already mentioned) on the newness of modern capitalism.  This means (as I mentioned in the introduction) that he does not ignore the fact that the Christian ethical tradition is against him on most of his core arguments, nor does he try to argue that the Bible gives us a model of a capitalistic system, as is the rule in similar literature.  On the contrary, he maintains that since we now have to do with a fundamentally new phenomenon, the concerns voiced by Scripture and tradition, while they should be listened to respectfully, may be set aside as antiquated–they just don’t really apply to current economic realities.  Whatever you think of this, it is better than distorting Scripture to fit your script.  Of course, at this point, it might be easy to score cheap rhetorical points by labeling this as a kind of liberal relativism, but I won’t do that–Schneider’s argument here is in fact potentially legitimate.  It follows the same logic by which we might argue, for instance, that I no longer have a duty to marry my brother’s wife and “raise up seed to him” if he should die childless.  But Schneider will have to demonstrate that the relevant changes have, in fact, occurred.  And here, I think, is one of the weakest points in his argument.  

Essentially, this is the change that Schneider identifies: in the ancient world, wealth was all based on land, and hence static.  The only way to increase one’s wealth, then, was (according to Schneider) by means of war, taxation, or outright theft.  Nowadays, however, the rich do not make their fortunes at the expense of the poor, says Schneider, but by wealth creation.  So when Augustine said that the rich had a duty to give all their surplus to cover the necessities of the poor, he was quite correct, since there was no way to create wealth for the poor, and the rich had probably come by their gains by injustice.  But today, things are quite different, and we can safely disregard these concerns.  There is actually perhaps something to this, and I found some of what Schneider said here helpful in understanding the shocking rhetoric of the early Church Fathers.  

Unfortunately, it would seem that Schneider has to give both an unjustifiably negative portrait of ancient economic realities and an unjustifiably positive portrait of modern economic realities in order to make his dichotomy hold.  For it is simply not true that in the ancient world, the only way you could get rich was by outright forcible annexation.  Of course, that was common enough, but often, I expect, it worked something like this.  Your neighbor has a small farm, and you, by fortune, inheritance, whatever, have a somewhat bigger and better one.  Your neighbor has a stroke of bad fortune–say, his milk cow dies–and so you decide to take advantage of your superior position and offer to sell him milk at a very high price.  You thus grow somewhat richer and he somewhat poorer.  Similar things happen from time to time, and gradually you increase your competitive advantage over him, which enables you to make better connections, sell more produce than him, etc.  Finally, he falls on such hard times that he offers to sell his farm to you and work on your land in order to make ends meet.  So he becames a day-laborer and you a landlord, and you pay him minimal wages, thus growing richer and going through the same process toward other small farmers.  

In other words, a process not very different from how many modern rich people and large corporations got to be so prosperous.  

But of course, it’s also rather worse than that, for Schneider is frightfully naive if he really thinks that the modern West’s affluence doesn’t come at the expense of anyone else.  Modern technology and industry does allow for wealth-creation, to be sure, but except in industries like finance (which has its own perils), this has to be primarily based on underlying natural resources, just like in the old days.  And unfortunately, these resources did not simply land in the grateful lap of the US, or the UK before it.  Does Schneider really think it is a coincidence that the US’s vast economic expansion has occurred over a century in which it has been almost constantly at war and has deployed its military all over the world (in over 150 countries as of current count)?  Or that the nineteenth century expansion of British GDP that he raves about occurred at the same time that it was conquering India and South Africa (to name just two of the colonies with the most extensive natural resources)?  One gets the feeling that Schneider doesn’t know the first thing about modern geopolitics.

On this point, it’s also worth noting that Schneider’s attribution of the whole Christian tradition’s stance on wealth to “ancient economic realities” is rather difficult to sustain.  After all, he himself notes that this tradition includes Aquinas (13th century), John Calvin (16th century), and John Wesley (18th century).  As Rodney Stark notes in The Victory of Reason, trade, commerce, and technology (in short, the instruments of Schneider’s “wealth creation”) were advancing rapidly already in the time of Aquinas, and it’s a joke to pretend that an ancient Near Eastern models dominated the economy of John Wesley’s England.  The fact is that Aquinas, Calvin, and Wesley were all well aware that it was possible to get wealthy without directly stealing or killing.  But, however one became wealthy, they were very concerned about the moral implications of remaining wealthy, especially while others were poor.

Of course, there is another dimension to Schneider’s “newness” claim, though it is much less clear than the first part: that the capitalism we face today is fundamentally new even compared to nineteenth-century capitalism, so that Marx and Weber’s assessments really don’t apply anymore.  Unfortunately, though he makes a great deal of this point, it really isn’t clear what he means by it–all it seems to boil down to is that now we are even richer by far than the nineteenth century was.  But why that makes older objections to capitalism outdated is not clear.  For myself, I am largely convinced by Benjamin Barber’s thesis that modern capitalism is fundamentally different from that of Weber’s day–but in ways that make it much worse.  Barber argues that capitalism is no longer about producing necessary and highly useful tools and resources, and making basic necessaries more obtainable, as it was in the nineteenth century, but instead about trying to persuade people (through a constant and overwhelming barrage of marketing) to buy things they don’t really need.  Interestingly, Schneider actually appears to concur–what we are now witnessing is the rise, he says, not of a middle class but of an “overclass”–a group of phenomenally wealthy people who spend almost all of their income on luxury items.  And this, he seems to think, is a great thing.

 

This, then, is my third compliment to Schneider.  He does not beat around the bush, and pretend that what he is arguing for is an obvious good–like the end of poverty, or minimal prosperity.  No, it is not capitalism’s ability to produce these that he is out to defend (although he does give it credit for this as well).  He is out to defend affluence–the existence of multi-millionaires and billionaires, of Mercedes and jacuzzis, and of an economy ever more geared toward such people and such products.  This is courageous of him, I think, but it also of course raises the bar enormously of what his theological argument will have to demonstrate.  But this will have to be discussed at more length in a follow-up post.


Documentary Round-Up Pt. 2: Down with Wal-Mart and McDonalds!

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Whereas the documentary in the first post, Inside Job, took on the behemoths of the American banking industry, and did it very effectively, these next two documentaries likewise sought to expose the dark underbelly of American corporate giants–two of the most iconic: Wal-Mart and McDonalds–but were less effective in their execution.

The High Cost of Low Price
Message: 4.5/5
Content/Compellingness of Argument: 2.5/5
Cinematography: 1/5

This film is an attack on Wal-Mart’s business practices, pointing out, essentially, that the wonderful benefits to American society of being able to buy $10 cardigans and $5 earbuds do not come without a price.  Obvious, perhaps, yet it is stunning how many ardent defenders Wal-Mart still has.  The movie covers the obvious bases–running small businesses into the ground and destroying downtowns, appalling Third World labor conditions, barely liveable pay for First World Wal-Mart employees–along with some less obvious ones–poor security at Wal-Mart parking lots leading to high crime rates, very poor environmental standards, for instance.  All of this is very much a story that needs to be told.

Unfortunately, it was clearly told on a very low budget by a very under-competent director.  The film quality is quite poor and worst of all is the sound mixing–there are many points where you simply cannot hear what the interviewees are saying because of over-loud background noise or music.  Of course, that’s no great loss, because they often don’t have anything very interesting or intelligent to say, generally offering little more than subjective personal experiences, which, although readily believable, doesn’t carry much weight in a company with 2 million employees.  That is, of course, the line of defense that anyone inclined to contest this film’s premise could easily take: yes, abuses have happened–bad labor practices, bad environmental practices, etc., but Wal-Mart is just so enormous that of course there will be instances of such–that doesn’t mean they are systemic or intentional.  The movie offers some evidence and statistics to prove that they are in many cases, but it might not be compelling to people otherwise inclined to trust Wal-Mart.  To really prove his point, the director would have needed to secure interview with more highly-placed people who could bring damning evidence against the company on a macro level.  

The other line that Wal-Mart defenders might take is, “Well, sure, Wal-Mart doesn’t pay its employees much, sure it cuts some corners, sure it drives small retailers out of business, but that’s what’s necessary in order to supply its customers with really cheap products, and that helps so many struggling people make ends meet.”  A distributist would be appalled at the absurdity of this defence, but it is the common one among right-wing defenders of Wal-Mart.  The director undercuts this line of defence, however, near the very end of the film when he looks at how much money the Wal-Mart executives make, and how fantastically rich the Walton family is.  It turns out that Wal-Mart could keep its prices just as low and still afford to pay its workers a much more livable wage, if the lucky few on top weren’t trying to live like emperors.  A deeper way of refuting this objection (and perhaps this is beyond the scope of a documentary), though, would be to argue that getting the cheapest products is not the best thing for a society–that the whole business model of a Wal-Mart, convincing the consumer to substitute quantity for quality, is destructive to society.  But for that, perhaps we should all just go read The Human Condition.

Super Size Me
 Message: 4/5
Content/Compellingness of Argument: 3.5/5
Cinematography: 3.5/5

Yep, believe it or not, I’d never gotten around to seeing this before.  Since it was almost entirely first-person in focus, it was very fun and engaging, and did not require the first-class cinematography of an Inside Job in order to hold the viewer’s attention or make its argument.  It was also, unsurprisingly for anyone who knows the premise, nauseating almost the whole way through.

Just in case anyone doesn’t know the premise, here it is: A guy named Morgan Spurlock, curious about the lawsuits against McDonalds, decides to test out just how unhealthy McDonald’s food really is.  So, with thorough health monitoring throughout the process, he embarks on a month-long binge of eating only McDonalds food–breakfast, lunch, and dinner.  The result–a man in exemplary good health manages to run his body into the ground, putting himself at serious risk of liver failure by the end of the month–was to me at least hardly surprising.  I mean, what else would you expect from an exclusively McDonalds diet?  

What was surprising–and really disturbing–about the film was the fact that it was surprising–to the doctors involved.  At the beginning of the process, Spurlock asks his physicians what ill effects they expect.  Not much, they say–modest weight gain is about it.  By two-thirds of the way through, they’re begging him to stop for his own safety, and at the end, they confess they had no idea that fast food could do that much damage to a person, though in hindsight it makes sense.  This is a damning indictment of the vacuum of nutritional knowledge (or even common sense) among the medical professionals that we pay hundreds of thousands of dollars to educate.  

Of course, the film does not really do all that much to improve this situation.  There is very little discussion of just why it is that this food is so bad for him–his liver in particular.  Spurlock and the doctors vaguely chalk it up to a “high-fat diet,” but clearly fat per se is not the problem.  A bit is said about the degree of processing that fast food goes through, but not much.  I would’ve been interested to see a more thoroughgoing exposure of all of the things that go into making this food so unnatural and so unhealthy, instead of simply blaming it all on fat.  For this, Food, Inc. is a better starting point.   

The most interesting part of the movie, to me, were the interspersed bits of investigation into McDonalds’s marketing practices, and an interview with a spokesman for the lobbying firm that represents America’s food industry.  His defence, of course, and the standard line of defence for free marketeers that want to defend the American food industry, is to say that businesses’s responsibility is simply to make sure to get all the relevant “information” out there–to make sure that the public is well-informed about their products.  If consumers choose not to take advantage of this information, or, having consulted it, choose to buy their products, then they are solely responsible for the effects.  

This is hogwash on at least three levels, and yet it is utterly pervasive among free marketeers today.  First, it is simply not true that the food industry, particularly the fast food industry, wants to get all the relevant information out there to every consumer–on the contrary, it requires thorough and aggressive research, such as that underlying Food, Inc. to get to the bottom of many of its dirty secrets.  Second, it is absurd to say that as long as a company tells you that it is selling something it knows to be harmful, then there is no ethical problem with it continuing to sell it.  If that were so, then why prosecute drug dealers?  If we believe that we have any responsibilities for our neighbor’s good, then surely we must believe that it is wrong to knowingly help another person harm themselves (and make money off it!), even if they choose to do so.

Third, it is based upon the myth of the consumer as a rational, independent choosing agent, who requires only to be informed with relevant facts, so that he can make his purchases accordingly.  Of course, food companies know better than to act on the basis of this myth in their advertising!  They know that the way to win consumers is to bypass their rational faculties and play to their fears, their cravings, their addictions, their sentimental associations; and of course, they know that the best way of all to do this is to capture their consumers when they are only children.  Super Size Me gives some attention to the aggressiveness with which McDonalds seeks to rope in children and thus create brand loyalty for life.  If this is your marketing strategy, then it’s bald hypocrisy to wax on about how the key is supplying the consumer with all the relevant facts so they can make an informed purchasing decision.  

Super Size Me was fun and a good start, but a small budget and staff meant that it doesn’t dig nearly as deep as it ought to.

Red Tory Blues

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Concreteness and relevance are this book’s greatest strengths and its greatest weaknesses.

Allow me to explain.

Most books from Christian theologians these days (perhaps this term is a stretch in Blond’s case, but as John Milbank himself is rumored to have been the ghost-writer for the meatier core of the book, it is probably apropos) seeking to engage the problems of modern politics and economics with a “third way” that eschews both statism and free-marketism, reasserting a holistic, mutualist, communitarian and ethical kind of human society (and such books are perhaps a dime a dozen these days), suffer from a glaring lack of concreteness. It is effortless for critics to dismiss them, labeling them pie-in-the-sky fantasies that offer no substantive engagement with real-world political realities and no plausible and concrete policy solutions. Such criticisms, I should hasten to add, are more often than not quite unfair, because such concreteness is not always possible or even desirable, at least not the kind of concreteness the critics want. Nevertheless, the critics do have a point. 

Blond’s book, however, is ironclad against such criticism. It is nothing if not concrete. It is aimed squarely at the problems facing Britain in 2010, not “modern society” in general, and it backs up its diagnosis of the problems with an overwhelming dollop of statistics and examples on almost every page. Nor is Blond content (as are so many of the books in the aforementioned genre) with a single slim chapter at the end venturing some “practical solutions” or “blueprints for change”–the whole last half of the book is dedicated to outlining a thorough and specific policy agenda to remedy the problems described in the first half. This latter half is particularly concrete, delving into the minutia of British local-government policy and the inner workings of various bureaucracies and outlining new structures that could be created.

Needless to say, this kind of concreteness was at times rather tiresome even to an American as disenchanted with his homeland and enchanted with Britain as myself. I really had no idea how most of these branches of British bureaucracy worked, and I really couldn’t bring myself to care half the time, much as I tried. This is, of course, why the book took me eight months to read–the majority of that time was spent very slowly picking away at the latter half of the book, which often seemed only very indirectly relevant to Americans or “Red Tory” sympathizers more broadly. The first half of the book, on the other hand, contained (especially in the Introduction) some fascinating critiques of the symbiotic relationship between the ubiquitous state and the liberated free market, critiques of great interest to any citizens whose countries have been infected with the malaise of corporatocracy in the last three decades.  However, even this section was frustrating at times for the sheer volume of statistics that Blond kept pulling out of his hat. We all remember what Mark Twain said about statistics, and even if our society and our politicians are obsessed with them, I don’t see that we should cater to the obsession as obsequiously as Blond does. 

The other great strength of this book is “relevance.” Too many books in the aforementioned genre, for all their wonderful theologizing, are simply inaccessible to a world of politicians and economists that does not share the theological assumptions. Now, that’s no reason to stop doing the theology, or to dumb down our thinking to the secularists’ level, but we do need someone who can translate a diagnosis of the problems and a stab at some possible solutions into terms that the wider world can readily grasp and act on. Blond meets this need, and writes a book distilling many of the concerns and ideas of Radical Orthodoxy (a theological movement all about the need for explicitly theological language) into completely non-religious terms, terms accessible to average policy-makers and even average citizens. 

However, it should come as no surprise that a great deal is lost in such translation. The intentional absence of theological language or explicit Christian commitment in this volume (though it was readily discernible just beneath the surface at many points) gave the whole thing an air of studied vagueness, appealing to platitudinous terms like “community,” “character,” “empowerment,” “justice,” etc. Not only is that frustratingly vacuous at times, but it’s just stylistically annoying too. 

Of course, in the end, the gravest doubt one must express about Red Tory is whether, for all its concessions to be relevant and concrete, it achieves its goal of being realistic. Blond believes (or claims to believe) that there is still enough residual sense of virtue and longing for community in England’s green and pleasant land that, if only the government would stop carelessly trampling out its last vestiges, civic virtue and reciprocal community would spring up anew, bright and promising. But based on what I’ve seen in 15 months here, I am tempted to think that, from a worldly perspective at least, this country is too far gone. The state and the market’s ambition to atomise society into unprincipled, aimless, detached individuals has almost run its course and I’m not sure that course can be reversed, save by an act of God. Which is, of course, why theology, not politics or economics, will have to shoulder the burden.

No Middle Ground? The Epistemology of Economic Ethics

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A free market exchange always benefits both parties, and so thanks to markets, the world is getting richer and richer, income inequality is going down and down as the market extends its reach, our quality of life today is quantum leaps beyond the desperation and squalor that characterized the lives of our ancestors a mere two centuries ago, we have a more enlightened, free, and virtuous culture, the environment and the poor are actually better cared for than ever before, and the only obstacles to this are protectionist governments and reactionary moralists.  

Right?

Or is it rather:

Our western capitalism is built upon exploitation and manipulation, and so poverty is a grave and growing problem as the rich get richer and the poor get poorer; Western civilization is rapidly deteriorating as communities are destroyed and people alienated from themselves, one another, and the earth, public and private virtue are being undermined; the poor and the environment are trodden upon and ignored, and the only way we can redress this is by making use of the protections of government and by remoralizing the marketplace.  

Why is it that the discussion of economics and ethics seems so thoroughly dominated by two such drastically incommensurable paradigms, both of which seem to feel so secure in their assumptions that most of the above statements are generally asserted, rather than proved, and the contrary assumptions are never even engaged with?  

Presumably, if half the intellectuals are convinced that income equality is widening, and half are convinced that it is shrinking, there must be some way of adjudicating the matter?  Or at the very least each half ought to take the time to address the contrary claims, instead of merely pretending they don’t exist, right?  The first paradigm is often said to be that of the economists, and the latter that of the theologians, but I’ve read enough of both to know that there are some of each in either camp.  The first paradigm more often makes its point by appeals to statistics, the second by appeals to experience, but again, either appeal can be found in either camp.  For myself, I find both appeals often persuasive, often shockingly naive.  I know enough to say that the facts are clearly not all on one side, but I don’t know enough to confidently adjudicate on most of the disputed points.  When both sides are so radically at odds, so radically prone to careless assertion, and so determined, it seems, not to carefully engage with the claims and assumptions of the other side, then how is someone on the sidelines, unable to sufficiently sift every piece of relevant data for himself, to believe and act? 

 

More and more, I find myself forced to face this question–most recently yesterday afternoon.  Having chosen to dedicate my few days of Christmas break to some focused reading, both of old books long sitting around unfinished, and of new books received on Christmas, I found myself, in my typical ADD fashion, alternating between the first chapters of Shane Claiborne’s The Irresistible Revolution and the final chapters of the collection of essays Having: Property and Possession in Religious and Social Life.  The tension, needless to say, was dramatic–between Claiborne’s passionate commitment to abandon our comfortable conusmerism and embrace a life with and for the poor, and the utopian endorsement of market economics in Deidre McCloskey’s essay “Avarice, Prudence, and the Bourgeois Virtues.”   

Not that McCloskey’s essay was all bad.  Curiously, she had started off with promising balance and some intriguing ideas–suggesting, for instance, that Adam Smith’s famous line about the butcher and the baker was not an endorsement of minding only our own self-interest in economic transactions, but rather a recommendation that we act out of concern for the other party’s interests in our transactions–it is such other-regard that makes us human.  She went on to sketch a variety of ways in which market economics depends upon a whole nexus of virtues besides self-interest–trust, charity, etc.–and that the notion of homo economicus is simply a false portrait of human nature and modern society.  In other words, we need more virtues than merely prudence in our account of economic life.  Up to this point, her arguments were directed against typical economists (to whose number she belonged).  

But then she turned in the second half of her essay to address “the theologians,” who, she said, needed to hear the message that prudence was in fact a virtue.  What followed was a strikingly naive and carelessly assertive rendition of the arguments of the first paradigm, stated above.  She admitted at the end that it would take a long book, or indeed a library, to prove the assertions she had just made, but there was no time for that here.  This is a rather juvenile argumentative style– “Oh yeah?  Nuh-uh!”–“Actually, the complete opposite of what you think is true.  I don’t have time to tell you why now, but trust me, I’ve got the proof, and you’re dead wrong.”  After some initial gestures at bridging the chasm between the two paradigms at the outset of her essay, she suddenly started blasting away at the bridges and then stood there, triumphantly waving her bazooka on her own side of the huge chasm.  

 

This one-sidedness and non-engagement was particularly depressing, as the volume in which McCloskey’s essay appeared, edited by Charles Mathewes and William Schweiker, promised to offer just the sort of engagement between the paradigms that was so desperately needed.  However, although the book did feature a range of different perspectives on issues of economics and ethics (though, sadly, none as radical and passionate as Shane Claiborne’s), it did not bring them into any meaningful conversation or debate with one another; no one took the time to justify their position over against contrary ones that were stated in the other essays.  The second-to-last essay, Arjo Klamer on “The Moral Economy of Ownership,” finally drew attention to this lack of dialogue and proposed a route for reconciling the “economists’” and the “theologians’” paradigms.  

Klamer’s approach was similar to that of Ruskin and Polanyi (the two social economists who blew apart my paradigms last fall), arguing that while markets did undoubtedly create economic goods, such goods were only good insofar as they served valuable social and cultural ends–more money in itself is useless.  We must measure a wider range of phenomenon to determine what increases well-being in a society, enabling us to recognize that a large increase in wealth that comes at the cost of destroying community may in fact constitute a net loss of value.  Economic prosperity is a genuine good that must be weighed in the balance against other important goods.  A similar approach, put into very practical and concrete terms, is taken by Philip Blond in Red Tory, and I do think this represents the best way of attacking the economic-ethical issues that currently face us.  Of course, I have doubts as to whether economists like McCloskey will consider this genuine middle ground or just more theological drivel.  

 

And much of the problem still remains: when both paradigms make incommensurable empirical claims– “capitalistic markets generate freedom” vs. “capitalistic markets are based on exploitation”; “inequality is decreasing” vs. “inequality is increasing”–how is one to adjudicate?  The issues involved are too important to merely sit on the sidelines and take no action either way.  Nor is it possible to approach the question with a pure blank slate, objective and predisposed toward neither argument.  And so, amidst the clamour of conflicting economic claims, I have found it necessary to establish a starting-point of theological assumptions to prejudice the inquiry.  This is not to say that theological assumptions must prejudge the inquiry, deciding the economic facts in advance–“Money is the root of all evil, therefore capitalism must be wicked, exploitative, destructive, and all the rest”–we must always be ready to candidly assess the economic and social facts with a willingness to revise our theological assumptions (or at least our applications of them) if they simply do not fit.  But we should not accept the economists’ insistence that we leave all value judgments at the door and attempt to adjudicate the goods and bads of capitalism by an objective assessment of all the facts and statistics (a task quite impossible, in any case).  Some prejudice must govern the inquiry, and so I am happy for it to be a theological prejudice.  

And so then I must ask myself, “What prejudice do the Scriptures and the traditions of the Church suggest that I have to wealth and economic exchange?”  Over the past couple years, I have tried in vain to understand how the divine right capitalists (to coin a useful shorthand)–folks like David Hall, Rodney Stark, Jay Richards, John Schneider, and Doug Wilson–are able to draw a prejudice from Scripture and church tradition that blithely affirms the accumulation of wealth and the proliferation of exchange and that looks asquint at poverty.  There seems little way to ignore the overwhelming testimony of Scripture and church tradition that looks with suspicion on wealth, discerns the capacity for injustice and exploitation inherent in economic exchange, and that sides, more often than not, with the poor and their cry for justice.  Of course, notice here that I said “suspicion,” not “hostility.”  Whenever the divine right capitalists see a sentence like that, they assume that an anti-wealth gospel is being preached, but that’s just sloppy logic.  Most of these same Christians would be happy with the statement that Scripture teaches us to have a healthy suspicion of human sexuality, and to discern the capacity for immorality and lust that is inherent in sexual activity, and we would not thereby accuse them of being anti-sex and anti-marriage.  So it is in economics.  Our faith must teach us, it seems to me, to approach the economic sphere with a predisposition to side with the poor and be suspicious of the wealthy and powerful, and to look for the possibility of injustice in the operations of the market, but to be of course quite open to the possibility of a godly use of wealth, a godless life in poverty, and innocent and beneficial operations of the market.  

And so it is that when confronted with the two paradigms laid out at the beginning, I must treat the first with more suspicion than the second.  Both may be the tools of an ideological agenda, distorting the facts for selfish ends, but my theological framework must lead me to more readily suspect the former, as the wealthy and the powerful’s attempts to justify themselves and silence the cries of the poor and oppressed.  The second paradigm finds powerful echoes in the concerns of the Law, the prophets, and Jesus, whereas the former rings a discordant note when sounded alongside Scripture.  

 

Of course, this can only be a starting point.  We are subsequently called (or at least those of us who have rashly embraced the vocation of Christian ethicists) to sift the statistics and testimonies, to test the assumptions and arguments, to reexamine the theology and our attempts to apply it, in order to accurately diagnose the goods and evils of our economies and prescribe the appropriate remedies.  But even as we engage in this arduous task, we must resist the notion that we are dealing with objective scientific descriptions; rather, we are entering a battlefield filled with warring principalities and powers and the violent clashes of competing human desires.  On such a battlefield, Jesus will always be a surer guide than Marx or von Mises, and we must be unapologetic for this conviction.