It is extremely difficult, but we will try to confine our weekly news items to “Just Third Way-specific” matter. We realize it’s becoming increasingly popular to speak in despairing terms of “the New Normal” and moan about how bad things are going to be from now on, but that’s because people keep insisting on addressing the same old problems in the same old ways, instead of implementing the Just Third Way:
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| Deflation: a myth more fantastic than any manga. |
• Japanese Deflation Fears. Yes, we know that “inflation” and “deflation” are generally meaningless concepts in the Just Third Way. They only make sense when considering what Currency Principle economists call “cost-push inflation,” that is, the price of something starts to rise because the cost of producing it increases. From a Banking Principle perspective, however, that really can’t be called “inflation” as it is simply the normal operation of the laws of supply and demand. “True inflation” — which we define as “too much money ‘chasing’ too few goods and services” — is not a valid concept under the Banking Principle except for those relatively rare occasions when the backing of the currency becomes valueless, disappears, or never existed in the first place, i.e., when a presumably “real bill” turns out to be what used to be called a “fictitious bill.” This means that the money created backed by that bill is inflationary, creating demand without a concurrent creation of supply. When the opposite occurs, that is, when there is creation of supply (production) without a concurrent creation of money, you don’t have “deflation.” Yes, we know that deflation is defined as “a general decline in prices for goods and services, typically associated with a contraction in the supply of money and credit in the economy,” but that’s wrong. When your money buys more because more is produced and not because the amount of money is reduced (there’s a poem in there, somewhere), that is “currency appreciation,” NOT deflation. Anyway, according to the Wall Street Journal of 06/17/20 (“Japan Is Facing The Return of Old Foe, Deflation,” A-10), the economic and political mavens in the Land of the Rising Sun are convinced they’re facing Disaster with a Capital D unless they can inflate the currency. Of course, they might get wild and crazy and link money creation to existing inventories and future new capital, and ensure adequate demand by implementing an aggressive program of expanded capital ownership like Capital Homesteading . . . but where would the world be today if we actually implemented solutions that worked instead of burning more incense to the genius of Lord Keynes?
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| Apocalyptic Utopian Socialism |
• Pope John Paul II and Personalism. We found another “smoking gun” in the search for the roots of the current economic, political, social (etc., etc., etc.) insanity rife throughout the world today. It turns out that one of the influences that Pope John Paul II fought against in his native Poland was that of Ludwik Królikowski (1799-1879), a pivotal figure in the Polish Nationalist Movement in the nineteenth century (so far, so good) . . . who was a violent anti-Catholic (oops), a socialist (double oops), a modernist (square that), and who was involved in the Occult (time to sneak out a side door). At the start of the Polish “November Uprising” of 1831, Królikowski was in Paris, communing (and quarreling) with other New Christians, socialists, esotericists, and others, over how best to bring down the current economic, political, domestic, and religious institutions, and replace them with “the Democratic Religion” of socialism, modernism, and what became known as the New Age. The Uprising was initially a riot by malcontents who lynched Russians and Poles who sympathized with Russia as part of a failed attempt to assassinate Grand Duke Konstantin Pavlovich (1779-1831). The Russian engaged in reprisals that ended any pretense of Polish autonomy. When the Uprising began, Królikowski rushed back to Poland and began an intensive propaganda campaign intended to convince people that the coup was really the start of a revolution intended to abolish the Catholic Church and Czarist rule and establish what today we would call a “Socialist People’s Republic.” Pope Gregory XVI was convinced that Królikowski’s propaganda was the truth, and issued the first social encyclical, Mirari Vos condemning what he would two years later call “the new things” (rerum novarum), along with the Uprising (separately), thereby linking Polish Nationalism to anti-Catholic socialism. Królikowski ended up teaching at the Jagiellan University in Kraków, spreading socialism, modernism, and esotericism among the Polish intelligentsia and many Polish nationalists. One of John Paul II’s difficulties in promoting Polish nationalism against the Russians was to disassociate the cause from the new things and link it to Catholicism, or at least remove the anti-Catholic elements. This he did with his Thomistic personalism and the related concept of solidarity, which tied in to Pius XI’s social doctrine.
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| People and Things . . . |
• Economic Personalism. Yes, we are getting closer and closer to a publication date. We’ve gone through several title changes and a number of design and formatting efforts, but we may finally be on the home stretch. Hopefully, it won’t be as long as two months before you can read it — we’re planning on making the e-book version available for free — but it could be, if the crazy things keep happening.
• People and Things Video. All the people who have seen the “People and Things” video will be pleased to know that we are working on a Spanish language text version. This is a volunteer/intern project, so we don’t have a specific completion date, but it may not be too long. In the meantime, you can watch the video itself in English.
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| Panic of 1873 |
• A Long Recovery? The economic mavens seem to be generally pointing in the direction of gloom and doom for the chances of a recovery that benefits everyone, and how long it’s going to take to have any at all. They all seem to forget their history. The only reason the Great Depression of 1930 to 1940 dragged on twice as long as the two previous Great Depressions (1873-1878 and 1893 -1898) was that the New Deal policies followed the Keynesian prescription of manipulating the currency and trying to attain “full employment.” Both of the previous Great Depressions were triggered by problems with the financial system (ultimately, that is; certain specifics could be isolated, but not very easily from the badly structured system of finance), as was the Great Depression of the 1930s. What brought an end to all three Great Depressions was production for which there was demand. To oversimplify somewhat, the enormous demand for beef in the east stimulated the cattle industry in the west, while the opening up of the west with the Homestead Act created a market for eastern manufactured goods, bringing an end to the Great Depression of the 1870s. In 1897 and 1898 the American west had bumper crops of wheat while Europe experienced widespread crop failures, creating an instant market for American wheat and ending the Great Depression of the 1890s. The Great Depression of the 1930s was ended by the increased demand resulting from the need to prepare for World War II. To have a (relatively) quick recovery from the current “downturn,” three things are essential: 1) a reform of the money system to restore a stable and asset-backed currency to supply financing for private sector development, not government, 2) a reform of the tax system to restrict it to raising revenue for government expenditures and encourage private sector growth, not “social engineering,” and 3) an aggressive program of expanded capital ownership, such as Capital Homesteading. A crude estimate of how long recovery would take under these conditions would be 18-24 months to return to what passes for “normal” these days, and 3-7 years to reach “full employmen.t” “Why?” you ask? Simple: 18-24 months is a conservative estimate for how long it will take to get the most advanced capital instruments in place and up and running; 3-7 years is the typical “payback” period for most new capital, i.e., when the gross revenue equals the cost of the capital. (N.B.: “Payback” can also mean the time required for the net profit to equal the cost of the capital, but for our purposes the gross revenue is the figure to use.) With full payout of earnings as dividends that are tax-deductible at the corporate level, and ordinary income at the personal level, the increase in demand will stimulate economic growth to the point where production will equal income — if all new capital is financed in ways that create new owners, and government stops emitting bills of credit. As a bonus, as government expenditures go down and it stops monetizing deficits, the national debt can be paid off. A very conservative estimate for how long this could take is sixty years . . . but keep in mind that with an all-out national and patriotic effort, France was able to pay off an indemnity specifically intended to destroy the country economically in less than three years.
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| "Use Smile . . . It's excellent." |
• Shop online and support CESJ’s work! Did you know that by making your purchases through the Amazon Smile program, Amazon will make a contribution to CESJ? Here’s how: First, go to https://smile.amazon.com/. Next, sign in to your Amazon account. (If you don’t have an account with Amazon, you can create one by clicking on the tiny little link below the “Sign in using our secure server” button.) Once you have signed into your account, you need to select CESJ as your charity — and you have to be careful to do it exactly this way: in the space provided for “Or select your own charitable organization” type “Center for Economic and Social Justice Arlington.” If you type anything else, you will either get no results or more than you want to sift through. Once you’ve typed (or copied and pasted) “Center for Economic and Social Justice Arlington” into the space provided, hit “Select” — and you will be taken to the Amazon shopping site, all ready to go.
• Blog Readership. We have had visitors from 38 different countries and 51 states and provinces in the United States and Canada to this blog over the past week. Most visitors are from the United States, Canada, Australia, Spain, and India. The most popular postings this past week in descending order were “The War Against Fulton Sheen (Continued),” “JTW Podcast: The Challenge with Russell Williams,” “The War Against Fulton Sheen,” “News from the Network, Vol. 13, No. 24,” and “How Not to End Racism or Be Socially Just.”
Those are the happenings for this week, at least those 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.” Due to imprudent language on the part of some commentators, we removed temptation and disabled comments.
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