No, we’re not trying out a bad Yoda impression, although that might not be a bad idea if it brings in readers. Or maybe a Darth Vader as (apocryphally) done by Tony Curtis in The Black Shield of Falworth? “Luke, I am yer Fada.”
|Stagnation is very relaxing. . . .|
In any event, what we’re looking at today in somewhat amused or bemused wonder is a new book by Dietrich Vollrath, Fully Grown: Why a Stagnant Economy is a Sign of Success (Chicago, Illinois: University of Chicago Press, 2020, yesterday as a matter of fact). In what must have been the publishing coup of the century, the Wall Street Journal reviewed the book the very day of its official release.
They needn’t have bothered. The book may be learned and all that, and published by one of the most prestigious university presses in the world, but that’s about it. So what’s wrong with it?
Right off the bat we have a little bit of trouble with the title. Since when did stagnation become a good thing? Looking into the dictionary we see that stagnation is defined as,
· The state or condition of stagnating, or having stopped, as by ceasing to run or flow: Meteorologists forecast ozone and air stagnation.
· A foulness or staleness, as one emanating from a standing pool of water.
· A failure to develop, progress, or advance: periods of economic stagnation followed by bursts of growth.
· The state or quality of being or feeling sluggish and dull: Happily, they have been able to avoid stagnation in their ten-year marriage.
|Saint-Simon: Goodies for Everybody!|
Exactly how is any one of these definitions a good thing, much less even bearable when there is dire want and tremendous unmet needs even in the United States, presumably the greatest economy in the world? Is that how you define “success”? Calling any economy a success in which millions of people live below the poverty line and the level of general misery is high is more like a parody of the creaking socialist dictum first expressed by Henri de Saint-Simon that “[t]he whole of society ought to strive towards the amelioration of the moral and physical existence of the poorest class; society ought to organize itself in the way best adapted for attaining this end.” (“Saint-Simon,” Encyclopedia Britannica, 19: 14th Edition, 1956, Print.)
For the record, “society,” “the government,” “the economy,” and so on, aren’t supposed to “do” anything. They can’t. They’re abstractions, creations of the human mind and cannot exist without the minds that create them. Whenever somebody says, “The government should (or must) do something,” what he or she means is that somebody else should be forced to do whatever the individual or group demanding state action wants done. The danger, of course, is that using the specialized tool of the State to force others to do what you want when you are in control usually means that those others will use the State to force you to do what they want once they are in control. . . .
|Not exactly pretty, but neither is socialism. . . .|
The point about Vollrath’s new book, however, is not that society should be operated for the benefit of the few rich as he seems to think, or for the many poor as Saint-Simon & Co. thought and continue to think, but for everybody — and that means equality of opportunity and access to the means, not imposition of desired results. And that means when society is badly structured the goal should not be to restrict the benefits of economic growth or anything else to the favored few or the unfavored many, but to arrange matters so that everyone can participate equally and receive benefits commensurate with his or her participation. If someone still fails, yes, help them out, but do everything possible to ensure that everyone can take care of him- or herself as efficiently as possible.
And that brings in the real problem with Vollrath’s book. By having a little fun with statistics and some bad assumptions, Vollrath seems convinced that “low labor productivity” is a good thing, and the Wall Street Journal review does seem aware that something is not quite kosher, although they can’t seem to put their fingers on it. The economy seems strong, but only for a few. Many people in the prime working years can’t find jobs. How can this be right when things are wrong?
|Smith: the purpose of production is consumption.|
Perhaps it’s time to reconsider just what is being analyzed. Focusing on labor productivity rates and gauging economic growth that way misses the point: the whole reason for economic growth in the first place, actually the whole reason for economic activity at all: to meet human wants and needs. As Adam Smith said back in 1776 in The Wealth of Nations, “Consumption is the sole end and purpose of all production.”
Frankly, production doesn’t run an economy. Consumption does. If there is no one to consume what is produced, or people simply don’t want it, no rational producer will continue to produce it or produce it in the first place.
What this leads to is the conclusion that to focus on “labor productivity” is a blind alley for at least two reasons. One, labor isn’t what is producing the bulk of marketable goods and services these days. Technology and other capital is doing that. Labor is being replaced from production at an increasing rate.
Two, production doesn’t drive the economy. It’s consumption. Why produce something that people don’t want or can’t afford? That’s plain stupid.
The bottom line here is that instead of trying to figure out “real” productivity rates, the experts should be focusing on consumption rates. If people aren’t consuming all they need to support a good life of virtue, then the real task is to figure out how to increase consumption income in a just, ethical, and — yes — virtuous manner, without redistribution, theft, or coercion. And that will only result from an economic arrangement in which everyone can and does own the capital that is what is really producing. As Pope Leo XIII said almost 130 years ago in §47 of Rerum Novarum,
|Pope Leo XIII|
Many excellent results will follow from this; and, first of all, property will certainly become more equitably divided. For, the result of civil change and revolution has been to divide cities into two classes separated by a wide chasm. On the one side there is the party which holds power because it holds wealth; which has in its grasp the whole of labor and trade; which manipulates for its own benefit and its own purposes all the sources of supply, and which is not without influence even in the administration of the commonwealth. On the other side there is the needy and powerless multitude, sick and sore in spirit and ever ready for disturbance. If working people can be encouraged to look forward to obtaining a share in the land, the consequence will be that the gulf between vast wealth and sheer poverty will be bridged over, and the respective classes will be brought nearer to one another. A further consequence will result in the great abundance of the fruits of the earth. Men always work harder and more readily when they work on that which belongs to them; nay, they learn to love the very soil that yields in response to the labor of their hands, not only food to eat, but an abundance of good things for themselves and those that are dear to them. That such a spirit of willing labor would add to the produce of the earth and to the wealth of the community is self evident. And a third advantage would spring from this: men would cling to the country in which they were born, for no one would exchange his country for a foreign land if his own afforded him the means of living a decent and happy life. These three important benefits, however, can be reckoned on only provided that a man's means be not drained and exhausted by excessive taxation. The right to possess private property is derived from nature, not from man; and the State has the right to control its use in the interests of the public good alone, but by no means to absorb it altogether. The State would therefore be unjust and cruel if under the name of taxation it were to deprive the private owner of more than is fair.
One possibility for achieving this end (which the experts and the politicians they advise ought to look into) is the Capital Homesteading proposal of the interfaith Center for Economic and Social Justice (CESJ). A candidate for president who adopts the Just Third Way of Economic Personalism could walk into the White House this time next year.