RSSGot My Pitchfork: Or Caleb’s Populist RevoltW. H….
Got My Pitchfork: Or Caleb’s Populist Revolt
W. H. Chellis
Caleb Stegall has been busy of late. In a Sunday edition of the Dallas Morning News, Caleb published this excellent piece entitled Populism Now!
Caleb writes:
“When the oldest sources of order – which are at root religious – are abandoned along with their traditions and taboos, the resulting void of meaning is by necessity filled with some ideology promising one form or another of perfect happiness in the here and now. And these systems of self-salvation creep not toward liberation, but toward total control.
Populism in its progressive form is not immune from this utopian yearning, which must always end in disaster. So our neopopulist moment ought to be approached with sober awareness that an angry mob is probably worse than a corrupt bureaucrat. The same bureaucrat who has harnessed the anger of the mob with progressive dreams is far more terrible than both.
What is called for is an anti-progressive populism; an anti-movement movement; a return to what is near, known and particular. What is called for is what I think of as regional populism. Its first political task will be to rediscover the ways citizens of the old American republic used to think and talk.”
Do check it out and enjoy.
MarkPele
August 7th, 2006 at 3:12 pm
Give Capitalism a chance
Capitalism has always been an easy target. From the robber barons of yore to Sam Walton to Bill Gates, we will always point our figure at the “them” that keep us poor, destroy the middle class and influence the politicians.
I once took a class in System Dynamics - a very pessimistic study that basically says that people, when involved in a big loop with a small control knob, will generally pick the wrong direction to turn the knob. One great example is public education. The knob is money. Whenever schools fail, turn the knob. It makes intuitive sense to the person with the knob, but the problem just gets bigger.
I think of capitalism in the same way. The knob is government intervention. There will be business cycles. People will be hired, people will be layed off. People may be mistreated. The politicians in power see only one knob - increased government control. Minimum wage, OSHA, Unemployment, Welfare are all examples of government turning the knob towards more control to avoid problems seen in capitalism.
Another great analogy is plate tectonics. Pressures ebb and flow on the continental plates. Without interference, the plates merely slide against each other and there are no major problems. When there are a few rocks getting in the way, you may have some minor earthquakes. But, when two plates are really jammed up against each other with all of the rocks holding it up, the plates can’t slide, thus only a large earthquake is going to break the tension.
Government intervention is the pressure keeping the economic plates together. Corporations get all the blame for huge layoffs and going bankrupt and voiding thousands of contracts. What would happen, though, if they could lay off one worker here, one worker there, or better yet, renegotiate salaries when times were tough. Then the economic pressure is much better distributed - the plates slide.
What about when times are good? Well, the entrepreneur is somewhat stuck. He can’t start a restaurant in his house, or start a programming business. There are regulations, standards, many resulting in jail time if not followed to the letter. In the business school I went to, the first necessity in starting a company was finding the right lawyer.
So, government intervention typically makes recessions deeper and increases the time it takes to recover.
Caleb Stegall
August 8th, 2006 at 8:08 am
Who said anything about government intervention?
MarkPele
August 8th, 2006 at 11:02 am
Your basic thesis is that one of the prime forces of capitalism is worker mobility. In fact, that capitalism forces worker mobility. All else being equal, worker mobility is a benefit. However, community is something that can provide economic benefit as well.
My theory, however, is that the tectonic plates of the economy force worker mobility in an economic downturn due to government intervention.
A good movie to watch, despite itself is Michael Moore’s “Roger and Me”, which documents the closing of the Flint Buick plant and the subsequent economic downturn. First of all, the union mentality to “stick it to” GM forces GM to move its production to a Mexican facility to find cheaper labor rates. Then the local Keynesians start imposing their will. First, they blow millions in a failed attempt to turn Flint into a tourist town, and then they start aggressive enforcement on people trying to make a living (like a woman trying to sell rabbit furs and meat).
But to put a different perspective on it, Michael Moore is looking to the people in power to fix this. He lampoons the incompetent mayor for his failed attempts to save his city, and he lampoons Roger Smith because he closes a plant and won’t even tell his employees why.
Caleb Stegall
August 8th, 2006 at 12:24 pm
To the contrary, I argue against the destructive power of economic progressivism.
Other than to praise a vague and ill-defined “capitalism,” I’m not sure what your point is.
MarkPele
August 8th, 2006 at 3:51 pm
It’s easy to fault my “vague and ill-defined” definition of capitalism, since I didn’t define it. I guess, by definition something that is not defined is vague and ill-defined. If we want to talk about definitions, I’m sure that I could find just a few words in your original paper that are vague and/or ill-defined. Instead, I will point out my specific objections and the reason why I posted:
Caleb says: “In the mid-20th century, economist Joseph Schumpeter argued that capitalism – the acknowledged world-historical champion in terms of producing wealth and prosperity – would, by a process he called “creative destruction,” eventually undermine the very social institutions that gave it birth and guarded its existence.“
and
“There’s something profoundly unnatural, indeed fundamentally wrong with a consumer-driven system that alienates people from their land, their neighbors and their traditions for the sake of satisfying consumer desire.
So, the basis of your argumentation for some new, provincial system is finger-pointing at the capitalist system as one that is “profoundly unnatural, indeed fundamentally wrong.”
What I’m pointing to is the fact that you can’t merely point the finger at consumerism for societal breakdown. While monolithic agribusinesses are an easy target against the poor, mom and pop farmers who used to own the land. Capitalism is not the culprit. Much of that blame goes back to the Roosevelt New Deal where farm subsidies tended to benefit the large corporations much more than the smaller farmers. Then these monolithic corporations turn around with their lobbyists and petition for more government aid and handouts. I don’t see the consumerism here. What about the “plight” of the domestic automakers? When the late 70’s market shifted from gas-guzzlers to econoboxes, the big-three were caught on their heels. Instead of solving the problem in the market, the U.S. chose rather to prop up the local corporations through quotas and tariffs on foreign autos. Meanwhile, the U.S. manufacturers move jobs from one community or even nation, to another, solely based on the tax structure. Any state willing to forgo millions in tax revenue, pass right to work laws and sieze any requested property by eminent domain has a good chance of getting an auto manufacturing plant… tell me, which consumer is to blame for this? In fact, the result of rampant consumerism has been: better fuel efficiency, better reliability, less hours per vehicle, better designs, and this had very little to do with government intervention.
Caleb Stegall
August 8th, 2006 at 4:44 pm
Mark, I agree that central planning and federal meddling bears much if not most of the blame. That, in fact, was one of the primary points of the piece.
Do you disagree with either of the selected quotes? If so, how, specifically?
Bubba
August 8th, 2006 at 8:01 pm
Who said anything about government intervention?
I don’t think Mr. Stegall advocated anything specific enough to be tied inexorably to government intervention.
He did, however, write that the regional populism he forsees would “seek creative ways to open regional markets for regional goods.”
(I can’t currently buy goods produced locally?)
It would “provide incentives to keep cultural capital local,” and it would “encourage people to work, study and raise families close to where they grew up.”
I’m curious to see policies that are specific, that are effective in accomplishing these goals, and that DO NOT require government intervention.
MarkPele
August 8th, 2006 at 8:43 pm
Caleb, I think the jury is still out on the first paragraph, because we have yet to let capitalism try and solve social issues before we go running to the Messianic Government. When little kids burn themselves with fireplace lighters, the knee-jerk reaction is to petition the government to enact safety regulations.
I think it’s hard to read the second one and not think that it is blaming “consumerism” (i.e. capitalism) for “alienat[ing] people from their land, their neighbors and their traditions”. Based on my statement about the first quote, our implementation of capitalism is so constrained and distorted, that I can’t in good conscience say that somehow consumerism has failed. I think that big companies conspire with local governments (in a manner of speaking) to enact some scenario that is mutually beneficial. Who loses? The consumers and the employees. I hardly call that consumerism.
W.H. Chellis
August 8th, 2006 at 8:58 pm
Mark,
What interests me is how far Reformed Christians will go to defend an abstraction like the free market. Why are we so impressed by an metaphysical theory established by the “dismal science”.
Do you really want to celebrate the violations of the 10th Commandment upon which priesthood of Mammon establishes its unholy credentials?
MarkPele
August 9th, 2006 at 7:44 am
Mr. Chellis, I think that capitalism is a system that is designed to keep greed in check. The check on greed is information. The more informed a consumer is, the more able that consumer is to be fooled by greedy tactics. The problem is that the government destroys the flow of information by various means. The CPSC, although formed with the best intentions, only places an undue faith that every product is inherently safe to use. The Medical Board only places an undue trust in the medical system that every doctor is faithful, competent and has your best interests in heart. Capitalism doesn’t assume that, and thus knowledge and information become commodities that can be bought and sold. Consumer Reports and Underwriters Laboratories (UL) are good examples of this.
Now, I won’t say that capitalism is perfect. The problem is that there is a difference between desiring to make a good living and greed. A store proprietor trying to make a good living will treat his customers well, not try devious tactics to bring consumers in for sale items and then charge more for other items to make it up (remember this requires a lack of information to work). The greedy proprietor will try dishonest means (meaning Biblically dishonest, not necessarily illegal) to make a quick profit.
One example of how short-term greed doesn’t work in the long-term is at ski resorts. Ski resorts started out charging much less. A large family could afford to go skiing for a day. So, the kids enjoy skiing and go to the resorts. The resorts realized that they could charge much more to the people who enjoyed skiing (short-term greed), so they’ve jacked up the price. However, parents with two kids were coughing up $200 a day + ski rentals, which were about $150 additional for a day of skiing. What the ski resorts learned (the hard way) was that they had to have a way for children to learn to ski cheaply and love skiing before they paid huge amounts for a day of skiing later.
I’ve argued both ways on the stock market. I personally think that the stock market favors short-term gains, and thus the investment pressure on corporations is to focus on what they can do now. However, the theoretical value of a stock is really the net present value of the stream of dividends. That stream is perpetual, so a stock value of $100 at a 12% interest rate is assuming that the company will pay a $3 quarterly dividend in perpetuity. So, there is an extent to which the stock market is trading at a long-term value. So, greedy executives are trying to make a false impression of long-term benefits by favoring short-term gains (e.g. Enron).
But, even with that explanation, I think that it may still be best to explain capitalism as “the worst system, except all the others.”
W.H. Chellis
August 9th, 2006 at 8:46 am
Mark,
In this you may be correct, “But, even with that explanation, I think that it may still be best to explain capitalism as the worst system, except all the others.”
I am a Pastor not an economist. Thus, it is my job to call out sin where I see it. This does not mean that I reject economic freedom… quite to the contrary. I embrace it and want to see more of it. Yet, I do long to see it on a smaller more humane scale. Your examples of capitalism at their best are all examples of small proprieters. When you moved your aruement to the Stock Exchange your arguement grew a bit less adament.
All this is to say that “small is beautiful” and it allows the best of economic freedom to flourish.
On a related note, if the market is to be informed by Christian ethics, who should define those ethics? Sphere soverignty says the markets should be autonomous in theor application of God’s Word. Thus the corporations, unions, and guilds would be the primary interpretors of biblical ethics. While not denying responsibility to these various “collegium”, I do want to make the point that their work must be set within the context of the Church’s general stewardship over the Scriptures. CEO’s are liable to excommunication for the offical sins as well as their private ones.
Caleb Stegall
August 9th, 2006 at 8:59 am
mark, I think you are misunderstanding the argument. It is not anti-capitalist per se, it is simply a recognition of a historical fact many people smarter than I have pointed out: that any system left unbridled tends to undermine the structures and virtues which made it possible in the first place.
When it comes to economic matters, I believe there ought to be a return to that fine French and Jeffersonian concept: laissez-faire.
Of course most defenders of the free market and “capitalism” these days don’t really want that.
MarkPele
August 9th, 2006 at 1:02 pm
Caleb, you may indeed be correct. I was quite possibly reading too much into your paragraphs about consumerism and missing your larger point about the destruction of community brought about by all of these different forces as they have been implemented in our society.
Mr. Chellis, I agree with you to a point that I have only really targeted small companies as the example of “good” capitalism. I think this is somewhat an omission on my part, but I think that it is appropriate.
The larger the corporation, the larger the costs of management. This is because one human at the top has to understand and direct the strategy of the entire corporation. Thus the layers of management typically involve a dual function of reporting up and directing down. This competes with the economic benefits of economy of scope and scale.
So, there are inherent cost benefits to being large as well as being small.
Charley Fine, in his book Clockspeed comments about a similar tendency - vertical integration. His prime example is the computer industry. Initially, IBM had a virtual monopoly on computers. They vertically provided everything, from operating system to application software to hardware to maintenance and support. This tends to implode because you can’t be all things to all people, so Intel, a small, focused company came up with a better piece, right in the middle. The microprocessor. They used their expertise in micros to create a virtual monopoly in processors. That, in combination with Microsoft’s OS and application software destroyed IBM’s stranglehold on the industry. However, once you have a horizontal monopoly, the tendency is to go vertical. Intel uses its CPU’s to sell its chipsets, ethernet chips, video chips and more. Microsoft uses its OS monopoly to sell mice, keyboards, Xboxes and more. As these companies become unmanageable, smaller, more focused companies find niches to attack. Linux has chipped away at the server market, for example.
So, I believe pure capitalism tends to smaller, more focused companies that rely on each other. The companies that use their core competency to become fat, dumb and happy, create targets for the next generation of focused competitors.
The Austrian school says that monopolies are a creature of the state. I’m not sure that I disagree.
As far as sphere is concerned, I believe the corporation is an outgrowth of the family sphere. It operates based on agreements between members of different families. As such, it carries no special authority - the only authority it has is the authority that it is given by its employees, customers and stockholders. Generally, the worst punishment a company can offer is termination.