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,
noun
·
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.
#30#
