We’ve been watching the progress of the Chinese offer for Smithfield Foods, Inc., with great interest. It does seem, after all, that it would be a perfect test case for a leveraged worker buyout financed by a consortium of banks with the loans rediscounted at the Richmond Federal Reserve. Ownership of the company would remain in American hands, and what amounts to an economic stimulus of billions of new dollars backed with private sector hard assets instead of government debt would show the way to finance growth and pay down the debt at the same time.
Still, it seems that the “experts” don’t see it that way. As we read in one news story this morning, “[A] Senate Agriculture Committee has set a hearing next week to review the proposed buyout of Smithfield Foods by China’s Shanghui International. Most observers don’t expect the deal to be blocked and Washington insiders say the hearing is mainly an opportunity for certain members of Congress to express their ‘concerns’ about the deal — and attempt to garner some campaign support from the Chinese. A legal shakedown, in other words.”
Of course, nothing says that even without a worker buyout of Smithfield Foods you can’t go forward with an economic stimulus package based on creating money backed by the present value of existing and future private sector hard assets instead of increasingly soft, even spongy government debt. We’ve been saying that for years. Any politician who had the courage to take the lead in such an effort would practically walk into the White House in 2016. To further that goal, here’s some of what we’ve been doing over the past week:
• Guy S. and Jeanna C., the project managers for CESJ’s Fulton Sheen project, have delivered the computer files for the first phase of the project. We haven’t had a chance yet to review the documents, but we should be able to get around to it next week. We are considering tying the projected publication of a Sheen book in with a book by another publisher on the fiction of Cardinal Wiseman, Cardinal Newman, and Robert Hugh Benson.
• The first draft of the first volume of a three-volume series on “what’s wrong with the world” is nearing completion. One unusual finding during our research was to discover that both supporters and critics have managed to misunderstand what Adam Smith, the author of The Wealth of Nations (1776) meant by “invisible hand.” From a Just Third Way perspective, it is obvious that Smith meant the system, not a mysterious pseudo deity that (in the words of one critic) moves people about like puppets. Given that the “invisible hand” is a metaphor for the system, it follows that when people act in accordance with the system with bad, even evil intentions, they end up benefiting society in spite of themselves. Conversely, when people try to circumvent the system, even with the best of intentions, they end up harming society. Smith never said that greed was good, or that self-interest precluded concern for others. We believe that Smith’s system is flawed, but not for the reasons many of his supporters and critics suppose.
• The first part of the revision of Capital Homesteading for Every Citizen, consisting of updating figures, additions to the glossary, and integrating some of the appendices into the main text is also almost completed, and ready to move on to the next stage.
• Two short works on common currencies and French monetary experiments are being updated for possible publication.
• We are discussing the possibility of a short book on Say’s Law of Markets and its application in the real bills doctrine, the basis of commercial and central banking theory: the “banking principle.” Such a book would show where the mainstream schools of economics went astray by following the “currency principle,” and demonstrate that Kelsonian binary economics is the only current school of economics based on the banking principle derived from Adam Smith’s commonsense observation that the purpose of production is consumption.
• As of this morning, we have had visitors from 51 different countries and 47 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, Italy, Canada, and Maldives. The most popular postings this past week were “Thomas Hobbes on Private Property,” “Aristotle on Private Property,” “Private Sector Money, I: Antebellum Bucks,” “The Dictatorship of Money, IX: Catholicism and America,” and “News from the Network, Vol. 6, No. 23.”
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.