Recently, as part of our informal "Mortimer Adler Revival," we started rereading How to Read a Book, one of Dr. Adler's earliest bestsellers. One of the points that the "Great Books" philosopher stressed early on is a lesson he learned the hard way: that picking up a book and gliding your eyes over the words — "reading" — doesn't mean that you've actually read the book; in fact, you cannot (in Adler's opinion) be said to have read a book until you've been through it at least three times. Even then, if you haven't read the book in the right way, you still cannot be said actually to have read it.
As a case in point, Adler highlighted the example of academics, even highly placed and influential academics, who — having opened a book once and run their eyes over the pages — are convinced they've read it. In this context, we recall an anecdote related by C. S. Lewis about his acquisition of some books from the library of a renowned scholar. Looking over the first few pages of one of the volumes, he saw that there was heavy annotation. He then settled in to enjoy, for him, the high treat of "conversing" with the scholar by reading the comments in a book he himself had read many times.
Lewis then made a startling discovery. The first few pages of the book contained many notes. The rest of the first chapter had fewer. The second chapter had even fewer, and the third chapter none at all. From the fourth chapter on, the book did not even appear to have been opened. Not surprisingly, Lewis concluded that the noted scholar had approached the book with his mind already made up. He had taken note of things that supported his preconceptions, decided he already knew what the book was about, and discarded it without getting into what Lewis regarded as the substance of the author's work. The other books that Lewis had obtained followed the same pattern.
Why raise this? Two reasons. One, academia is a "primary target" for the Just Third Way. Many of the problems we see around us are rooted in the attitudes and beliefs of academics who have transmitted their attitudes and beliefs, right or wrong, to our (alleged) leaders, who thereby surrender the difficult task of actually thinking, locking the system into whatever weird and wonderful paradigm got the academics their doctorates. As Aubrey de Selincourt quoted one (genuine) scholar, "In a field as well-ploughed as history, an original theory is almost guaranteed to be a perverse theory." — an observation we can apply to economics.
(Anent of that, we've found at least three versions of the quote about people preferring to die rather than think: "Ten percent of the people think; ten percent of the people think they think, and the remaining eighty percent would rather die than think," Mark Twain; "Two percent of the people think, three percent of the people think they think, and the other ninety-five percent would rather die than think," George Bernard Shaw; "Most people would rather die than think, in fact, they do," Bertrand Russell. Take your pick.)
The second reason is that, however often we've pointed out that the three mainstream schools of economic thought, the Keynesian, the Monetarist/Chicago, and the Austrian, all make the same erroneous assumption about money and credit (and thus finance), some people seem to think we're "picking on" the Keynesian "liberals," and ignoring the Keynesian, Monetarist/Chicago, and Austrian "conservatives" — as if there was any substantial disagreement between them on the basic principles, namely, who is sovereign in money matters, the State, or actual, flesh-and-blood people?
Let's be honest. There is no evidence that any of the powers-that-be, liberal or conservative, have a framework that will lead to a viable and sustainable solution. It's just more obvious with the liberals because they seem to have the upper hand at the moment, and thus the ability to have their mistakes affect more people's lives adversely. The question that remains unanswered, even unexamined is, "Who is in charge of the economy?"
Regardless which side of the political, even economic aisle anyone is on, the basic assumption that has determined the course of the investigation and thus the character of any proposed solutions, is that the State is in charge. The question then devolves not into whether the State should be in charge of the economy, but to what degree, e.g., "the government needs to spend more," v. "the government needs to spend less."
None of this takes into account the possibilities that the government should 1) spend only what it needs to spend to carry out its unique role, and 2) must live within its means if the natural rights of the citizens to life, liberty, property, and the pursuit of happiness are to have any effective meaning.
The problem the powers-that-be should be investigating, then, is not how much money the government should be creating through its misuse of the central bank. Rather, they should be asking whether the government should be creating money at all, or be limited by the internal controls of the system to what it can collect in taxes or borrow from existing accumulations of savings in the short term, not raise by monetizing an ever-burgeoning deficit.
From there, they would necessarily examine whether the government should create money by means of the quasi-legal "open market operations," or whether the Federal Reserve should fill the role for which it was designed. As stated in § 1 of the original 1913 Act, the Federal Reserve was to provide an adequate, "elastic" and stable currency for the private sector by rediscounting bills of exchange discounted by member banks, supplemented with limited open market operations in bills of exchange issued by private businesses and non-member banks. The Federal Reserve was only empowered to deal in government securities of any kind in order to replace the National Bank Notes backed by government debt, with Federal Reserve Notes backed by private sector hard assets.
We submit, therefore, that one possible solution that the powers-that-be should be investigating is "Capital Homesteading," a proposal based on the work of Louis O. Kelso and Mortimer J. Adler, and explained in their two collaborations, The Capitalist Manifesto (1958) and The New Capitalists (1961), which in turn expanded on the work of Dr. Harold G. Moulton, president of the Brookings Institution from 1916 to 1952, and presented, in relevant part, in his 1935 counter-Keynesian examination of the financial system, The Formation of Capital.
So, what are we doing to try and bring the potential inherent in the Just Third Way to the attention of the powers-that-be?
• On Sunday evening Mr. Chris O'Connor, a CESJ volunteer, took time out of his job search to accompany Michael D. Greaney, CESJ's Director of Research, to a reception hosted by the Catholic Radio Association at the Columbus School of Law on the campus of the Catholic University of America, to which CESJ representatives had been invited by Mr. Steve Gojdesik, president of the CRA. The reception was enjoyable both as a social event and as a way of connecting with a number of important people in the Pro-Life movement and the Catholic media. A number of fliers were passed out describing Norman Kurland as the chief spokesman for the Just Third Way as applied in CESJ's proposed "Capital Homestead Act." One Pro-Life "prime mover" expressed interest in discussing a special printing of Michael D. Greaney's book, Supporting Life: The Case for a Pro-Life Economic Agenda (2010), and gave CESJ some leads to others whom she thought should be reading the book.
• Following up on the CRA reception, packages were sent out to a number of people with whom we'd connected. The packages contained a copy of Supporting Life (not wanting to load people down, we carried a very limited number to the reception), along with material describing other publications and CESJ as an organization, notably CESJ's "accomplishments brochure."
• If you are a "media figure" — you don't have to be Catholic — send an e-mail to publications [at] cesj [dot] org, and we will send you a .pdf of the text of Supporting Life, and some of the other materials distributed at the reception and later included in the packages sent out.
• Also on Sunday, Norman and Marie Kurland, along with Dawn and Rowland Brohawn attended a lecture by Wilson Moran at the Smithsonian Anacostia Community Museum, accompanied by a documentary relating the efforts of Lorenzo Dow Turner to trace the origins of an obscure song once common among the Gullah communities in Georgia and the Carolinas. Mr. Moran is the grandson of one of the last people to learn the song, which was a ritual of mourning for the dead. Preserving the unique Gullah culture is one of the goals of the Harris Neck initiative, the prime movers of which have been investigating Capital Homesteading as a way of financing the redevelopment once the land is returned to its rightful owners.
• Norman Kurland traveled to Connecticut on Monday to meet with figures in local politics in Hartford as well as in the state university system. Norm reported that the meetings went well, and the role (and responsibility) of academia in causing many of the problems we face was highlighted.
• A letter to the Peter G. Peterson Foundation in response to the PGPF's initiative to surface possible solutions to the debt crisis that recommended they look at Capital Homesteading among the other alternatives received a polite "thank you" in response.
• Not a Just Third Way news item, but interesting in a twisted way is the announcement by the United States Justice Department that they are investigating various cost-cutting alternatives, among which is the idea of shortening prison sentences.
• As of this morning, we have had visitors from 55 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, Canada, the UK, Germany, and Brazil. People in Venezuela, South Africa, Poland, Indonesia and the United States spent the most average time on the blog. The most popular posting this past week has been "News from the Network III.52," followed by "Pure Credit for Student Loans," "The 'New' Slavery, Part V: Debt Slavery," "Thomas Hobbes on Private Property," and "The 'New' Slavery, Part III: Wage and Welfare Slavery."
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.