Friday, July 30, 2010

News from the Network, Vol. 3, No. 30

Not that it's in any way "news," but the monetary mavens and economic experts have been hedging their bets all week. GDP figures are due out this morning. In light of the "readjustments" in the official figures for the last three years, it turns out that the "recession" was a tiny bit deeper than those preparing and publishing the figures "suspected." Uh huh. When, for example, two unemployment rates are published, one "official," and the other, nearly or more than twice the "official" rate, "unofficial," Something Is Up. (But then, this writer has a nasty, suspicious mind.)

Consequently, it turns out that instead of the "modest" economic growth reported in 2008, it might have been zero. (Next quarter, of course, we'll probably find out that "growth" was actually negative.) This is causing some people to question whether the much-vaunted "end of the recession" (or, for the more conservative, "beginning of the recovery") in "June or July, 2009" actually happened, or if it was just another case of statistics that have yet to be adjusted.

Nevertheless, we've been making significant progress in laying the groundwork to present the Just Third Way as the solution to "What's Wrong with the World," as Chesterton put it, most immediately in the application of Capital Homesteading. The long-term solution, of course, is the restoration of the natural moral law based on the Intellect, not the Will, as the foundation of the system.

Until people have the means of generating an income "large enough to meet ordinary family needs adequately" (Quadragesimo Anno, § 71), however — whether from ownership of labor, of capital, or (preferably) both, you can talk all you want about getting people to act virtuously, but it's all just talk. Absent heroic virtue — and how many of us have that? — it's very difficult to buck the system and acquire and develop virtue when the institutions of the social order (the system) are poorly organized. Frankly, becoming virtuous is hard enough as it is without the system itself working against it. The whole point of social justice is to reform the system so that virtue becomes the optimal, or at least the rational choice.

The solution is not to use our institutions inappropriately to force people to be virtuous. The liberals are right in that: you can't legislate morality (which begs the question as to why, then, they keep trying to do it). Inevitably that leads to trying to use the State, a very specialized institution — social tool — in some extraordinarily inappropriate ways, leading to functional overload of the institution.

As a case in point, take the recent alleged reform of the financial services industry. Instead of looking at the financial system that is badly in need of reform at (duh) the systems level, the powers-that-be have tried to legislate morality (ethics . . . morality being ethical philosophy) by passing a whole raft of laws that will have no lasting effect. Why? Because the system is currently arranged in such a way as to make unethical (immoral) behavior much more profitable.

Possibly the most glaring example of this wrong-headed legislative bumbling is the refusal to put the provisions of the Banking Act of 1933 ("Glass-Steagall") back in place. Glass-Steagall and similar legislation made some of the more glaring of the unethical acts more difficult or impossible. (Vide Lydia Fisher, Cinderella of Wall Street) Instead, what they've done is insist that making more things illegal will reduce the number of illegal acts, at the same time that it remains extremely profitable and rather easy to carry out those same illegal acts. Talk about a Homer Simpson moment.

In spite of that, a number of advances have been made in the last week:
• Numero Uno: Supporting Life is now available on Amazon. It's not yet on Barnes and Noble, and Amazon as of this morning doesn't have the image of the book up (and it's terrific, the cover, I mean, designed by Rowland L. Brohawn . . . I am only admitting that the author of Cinderella of Wall Street is better looking than I, not that her book cover is better than mine), but you can purchase Supporting Life. AND leave adulatory reviews and testimonials.

• We had a couple of glitches with Dr. Harold G. Moulton's 1935 classic The Formation of Capital, but we should be able to start placing orders for it by next week. It's once again in "premedia," a printing term which has deep mystic significance requiring esoteric rituals before the book can be printed.

• We had some very good meetings this week, although "good" and "meeting" in the same sentence usually indicates an oxymoron. On Tuesday we met with a representative of the American Family Business Institute. She was very positive about the whole idea of a Pro-Life economic agenda, and (since we had received the first shipment of books the night before) received the first "regular print run" copy of Supporting Life. She was also interested in the possibilities of implementing "parts" of the Just Third Way — at least as far as possible within the current legal system — by introducing Justice-Based Management and ownership-transferring mechanisms into ethically run companies with a transition problem. For that, Equity Expansion International, Inc. offers the ethical entrepreneur some distinct possibilities . . . and offers a finder's fee to door openers who surface a viable prospect.

• Norman Kurland and Dawn Brohawn went up to Baltimore on Thursday for a seminar on new issues affecting the ESOP. As expected, most of the participants were focused on technical administrative and legal issues, but two people seemed very interested in the whole Just Third Way underpinning the ESOP. As every Kelsonian knows, the ESOP is simply one vehicle, and in some ways not the best, for expanding capital ownership. The ultimate idea is to make every person a direct owner of a significant capital stake. That's why it was so encouraging to discover that at least one lawyer there had actually read Louis Kelso's books (The Capitalist Manifesto and The New Capitalists) and realized that, important as the ESOP is today, it is not an end in itself. Instead, the ESOP should lead naturally into advocacy for broadened ownership through many vehicles, under the umbrella of the Capital Homestead Act, which is itself an application of the principles of the Just Third Way.

• In the "Academic Silliness Department," we were researching something-or-other last week and came across some Catholic theologian who had written a college text that he had put up on the web. The gist of the chapter that we stumbled across was that Father Ferree was "ebullient" about social justice and what it could accomplish, but the poor boob (i.e., Father Ferree) didn't know what he was talking about. The theologian clearly missed Father Ferree's point about a particular act of social justice (long story, read the book), and obviously assumed that Aristotle's general legal justice, and Aquinas's particular legal justice/Pius XI's social justice are just different names for the same thing. Wrong. This is the same mistake that Father Ferree noted that theologians and philosophers have been making for the past 800 years or so, and flatly contradicts what Aquinas rather clearly stated, "Legal justice alone directly looks to the common good." (Ia IIae q. 61 a. 5 4m) It didn't seem worth the effort to correct him, and the explanation is extremely complex, so we put him in the "ignore this one" file. Yesterday, while researching something complete different, we came across another chapter in the same book in which the author rather pompously declared that Leo XIII had innovated — i.e., changed Catholic teaching — by claiming that private property is a natural right and must be regarded as sacred (Rerum Novarum, § 46), and that Aquinas had never said that private property is a natural right. Really? Then who wrote Section IIa IIae q. 66 aa. 1-2 of the Summa Theologica in which somebody using Aquinas's name clearly stated that private property is a natural right? It became evident immediately why the author had disparaged Father Ferree's analysis of social justice and sneered at Leo XIII's defense of private property: he is clearly a "Will-based" natural law thinker instead of "Intellect-based," and was busily proving everybody else in the world wrong on his principles, not theirs. This is a shtick that always works, because — as Chesterton explained in The Dumb Ox — he is always right and everybody else necessarily wrong. As Heinrich Rommen pointed out in his book on the natural law, by basing things on your private interpretation of God's Will, you can have anything you want.

• As of this morning, we have had visitors from 39 different countries and 43 states and provinces in the United States and Canada to this blog over the past two months. Most visitors are from the United States, the UK, Brazil, Canada, and India (see below). People in France, Venezuela , the United States, Brazil, and Spain spent the most average time on the blog. The most popular posting is the posting on "the Right Way to Raise Wages," followed by "The Rich, Who Needs 'Em?" the piece on "No Double Dip" (Because we're still in the first dip), and two of the postings in the "Interest-Free Money" series, which seems to be generating significant interest in India.
Those are the happenings for this week, at least that we know about. If you have an accomplishment that you think should be listed, send us a note about it at mgreaney [at] cesj [dot] org, and we'll see that it gets into the next "issue." If you have a short (250-400 word) comment on a specific posting, please enter your comments in the blog — do not send them to us to post for you. All comments are moderated anyway, so we'll see it before it goes up.

#30#

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