It’s John-Frum-America Day! This is the great holiday of the Cargo Cults of the South Pacific, anticipating the day when John Frum America will return, bringing cargos of Coke, Spam, and Hershey bars so that no one will ever have to work again.
The idea is to mimic the trappings of prosperity in order to induce prosperity to return. This is a post hoc, ergo propter hoc fallacy. During the Second World War, people saw the American military building airstrips, piers and warehouses, then the cargo ships and planes appeared, so. . . .
Coincidentally, President Obama earlier this week announced that he wanted to raise the minimum wage to $9 per hour. This is consistent with his demands for universal healthcare, universal education, and, apparently, universal everything-else.
The problem is that President Obama’s orientation is no different from that of the Cargo Cultists. Cargo Cultists believe that by building fake airstrips, control towers, piers, warehouses, even airplanes and cargo ships, and dressing up in imitation U.S. military uniforms — the magical “law of similarity” — they will bring prosperity. Consistent with the principles of Keynesian economics, President Obama and hosts of academics believe that mandating high wages, healthcare and education will bring prosperity.
Both the Cargo Cultists and the Keynesians forget that the things they do, whether it’s building landing strips in the jungle or mandating higher wages, are the result of prosperity; they do not bring prosperity. The actual effect is just the opposite. By wasting critical resources trying to force results, both Cargo Cultists and Keynesians undermine, even destroy the possibility of reestablishing prosperity by engaging in genuinely productive activity, e.g., broadly owned new capital formation financed with future profits instead of job “creation” that depletes savings and redistributes existing wealth.
Does this mean that there shouldn’t be any redistribution based on need? Of course not — but we need to keep in mind that we need to keep it in its proper place. Need is not the basis for distribution in civil society. It’s not a matter of justice (except in extreme cases), but of charity. Give to people on the basis of need when they have no other recourse, but (as Saint Paul reminded us in the Second Letter to the Thessalonians), “if any man will not work, neither let him eat” — a statement of Say’s Law of Markets. Nor did he exempt himself: “Neither did we eat any man's bread for nothing: but in labor and in toil we worked night and day, lest we should be chargeable to any of you.”
If there are people willing to work but there is no work, the answer in individual charity is to give them what they need to keep going — but (more importantly) the answer in social justice is to get organized to restructure the system so that people can once again take care of themselves — through capital ownership if they cannot support themselves with labor.
As Pope Leo XIII explained — and keep in mind that he used land as an example of a type of capital, not a limitation; he elsewhere specified that what he said applies to both “land [and] chattels” — chattels being non-landed property,
“[M]an not only should possess the fruits of the earth, but also the very soil, inasmuch as from the produce of the earth he has to lay by provision for the future. Man's needs do not die out, but forever recur; although satisfied today, they demand fresh supplies for tomorrow. Nature accordingly must have given to man a source that is stable and remaining always with him, from which he might look to draw continual supplies. And this stable condition of things he finds solely in the earth and its fruits. There is no need to bring in the State. Man precedes the State, and possesses, prior to the formation of any State, the right of providing for the substance of his body.” (Rerum Novarum, § 7.)
At least the damage that the Cargo Cultists do is usually limited only to themselves. The Keynesian program has the potential to destroy the global economy, and would seem to be well on its way to doing so. To counter this self-destructive program, here is what has been going on in the Just Third Way movement this past week:
• Arrangements for the annual Rally at the Federal Reserve on April 26, 2013 are starting to come together. Plan on being there. The idea this year is to meet at the Federal Reserve Board of Governors building in Washington, DC. While there, an effort will be made to present Federal Reserve Chairman Benjamin Bernanke with a copy of the “Declaration of Monetary Justice.” The goal is to reorient the Federal Reserve back to its original mission of providing an elastic, stable and asset-backed currency for private sector development. The Federal Reserve was never intended to finance government and, in fact, was carefully designed to preclude any such thing. From the Federal Reserve we will march to the Lincoln Memorial in honor of the 150th anniversary of the Emancipation Proclamation, and in anticipation of a Capital Homestead Act that would free the wage and welfare slaves the way Lincoln freed the chattel slaves. Some entertainment groups are planning on providing a variety of entertainment, and speakers are being recruited.
• Two letters have been sent to Bob Marshall of the Virginia House of Delegates (and a third is in preparation) in response to his recent proposal to study the possibility of instituting an alternative currency for the Commonwealth of Virginia. While we sympathize with Mr. Marshall’s goals and share his concerns, an effort to institute an all-gold currency is both unrealistic and potentially ruinous in its effects — as well as being prohibited by Article I, § 10 of the U.S. Constitution: “No State shall . . . Coin Money [or] emit Bills of Credit.” We have suggested that Mr. Marshall sponsor a bill that would promote the establishment of private sector capital credit insurance and reinsurance to collateralize new capital formation if financed in ways that broaden capital ownership — which would supply the Commonwealth with an asset-backed money supply without violating the Constitution. CESJ Counselor Dr. Norman Bailey pointed out that the Richmond Federal Reserve still has the power to rediscount bills of exchange from commercial banks, and that Mr. Marshall should lead the lobbying effort to open up the “discount window” to finance a program of expanded capital ownership. Combining rediscounting of bills with the tax-free status of a Subchapter S Corporation that is 100% owned by its workers through an ESOP trust with capital credit insurance and reinsurance would be about as close as we could come to a Capital Homesteading program within existing law. Consider sending Mr. Marshall an e-mail to that effect, suggesting that he talk to Dr. Norman Kurland, president of CESJ (Bob has the phone number). His address is “delegatebobmarshall [at] Hotmail.” Dave H. in Georgia has already sent his.
• CESJ friend Dr. Sam Nigro in Cleveland has published another book, Soul of the Earth. According to the announcement Sam sent us yesterday, the book “is an innovative development which is faithful to Thomistic and Traditional understanding but contrary to the atheism of contemporary science, contradictory to the virtueless moral nihilism of the new barbarism, but co-optive of secular humanism by the introduction of the Flag and Motto of Mankind.” Written from a Catholic perspective, the book is $34.99 in hardcover, $23.99 in softcover, and $3.99 in Kindle (these prices were taken from the Amazon website). You can order the book either from Amazon, or by calling 888-795-4274 ext. 7879.
• We note with sadness the recent death of Charlie Setlow. He was an activist in Ohio then in Connecticut, and was very active in trying to bring about social change. He came from a slightly “leftist” position, but understood the Just Third Way and tried to promote it. He was at last year’s Rally at the Federal Reserve, and was planning on doing more. We applaud his efforts to bring justice.
• Some time ago Geoff G. put Norman Kurland in touch with a lawyer with Catholic Charities in New York. On Monday of this week Norm and Michael D. Greaney met with the attorney and two others in key positions in the administration of the Catholic Church. We hope that the initiative will lead to meetings with various bishops in the U.S., as well as support or endorsements for various Just Third Way projects around the country.
• As of this morning, we have had visitors from 59 different countries and 50 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 United Kingdom, Canada, the Philippines, and Germany. People in Columbia, Morocco, Sweden, the United States, and the United Kingdom spent the most average time on the blog. The most popular postings this past week were “Thomas Hobbes on Private Property,” “Aristotle on Private Property,” “Who Owns Social Security,” “News from the Network, Vol. 6, No. 2,” and “The Death of Reason, II: The Plot Thickens.”
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.