Friday, July 19, 2013

News from the Network, Vol. 6, No. 29

The CESJ team has been preparing to go to Cleveland tomorrow for a retreat.  We’ll hopefully report on the retreat next week, but this week our time has been taken up with preparing for it.  A number of interesting sessions have been planned and a number of meetings scheduled that could result in significant advances — but we won’t know until the end of the retreat how well things went.  Unlike some reporters who see the future and it works, we have to wait until the events we’re reporting actually happen.

 So, what are the significant events from the Just Third Way network this week?  Here’s what we’ve come up with:

• Long time readers of this blog will recall that a few years ago we were working with some people in Detroit to stave off a potential bankruptcy.  We never got very high in the city administration, and the effort came to nothing in the end.  Now it appears that (once again) we’re in something of an “I told you so” position.  Detroit has declared bankruptcy.  Most of the analyses we’ve seen blame this on the absolute refusal of the government unions to come to terms with the fact that promises were made with no ability to keep them.

• The report from “The Subversive Forum” in Zagreb, Croatia, has an interesting twist on the European crisis.  According to the group’s report, it’s not the debt crisis per se.  Rather it’s the moral failure that has caused the disappearance of a sense of community.  We’re pretty certain that everybody joining hands and singing Kumbaya isn’t going to do anything, but the “Forum” does appear to have put its finger on the underlying problem: the loss of the fundamental moral principles (“common sense”) that necessarily underpin the social order.  We see this, for instance, in Keynesian economics, which assumes as a given that there is no necessary link between supply and demand; that the purpose of production is not necessarily consumption as Adam Smith claimed, but to create effective demand so that other goods can be consumed.  Goods that are produced for destruction instead of consumption are to be preferred in some cases because they do not add to the “glut” on the market for which no effective demand exists; waste is encouraged.  A restoration of Say’s Law of Markets, a “law” of economics based on fundamental moral principles, through an aggressive program of widespread capital ownership would solve the so-called market glut problem by reconnecting supply and demand.

• It probably doesn’t mean much to most Americans, but the bankruptcy of Spain’s giant multinational seafood company, Pescanova, SA, is a virtual “poster child” for what is wrong with “Modern Monetary Theory” (MMT) as applied in banking in general, and with the application of flawed principles of banking in the European Union in particular.  Over the past fifteen years, according to Manuel Fernández de Sousa, founding CEO of Pescanova, banks were practically throwing money at the company; there was a serious problem about what to do with it.  Consequently, the company overextended its credit so that when the crunch came in 2008, it found itself in serious trouble.  The monetary reforms of Capital Homesteading would have prevented this scenario from happening.  Instead of trying to figure out what the heck to do with piles of past savings and spending the cash on anything that crawled out of the woodwork, Capital Homesteading would require that no new money be created until and unless it was justified by a financially feasible capital project with a solid present value.

• As of this morning, we have had visitors from 47 different countries and 49 states and provinces in the United States and Canada to this blog over the past two months. Most visitors are from the United States, Italy, the United Kingdom, Australia, and Canada. The most popular postings this past week were Response to Professor Shakespeare, III: Shakespeare in His Own Words,” “News from the Network, Vol. 6, No. 27,” “The Dictatorship of Money, IX: Catholicism and America,” “Aristotle on Private Property,” and “The Dictatorship of Money, VIII: “New Things.”

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.


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