Income Inequality and Capital Homesteading

Two weeks ago in the Washington Post, Kathleen Parker asked for suggestions on terms to replace “income inequality” in her column (“Language Inequality,” 01/07/14, A17).  We suggested “Capital Homesteading.”  Capital Homesteading, after all, embodies “the four pillars of an economically just society,” and the income gap is generally framed as an issue of justice:

News from the Network, Vol. 7, No. 03

Things seem to be gaining momentum in the Just Third Way.  Those who are open to new ideas are starting to investigate with more seriousness, while those who are not seem to be “circling the wagons,” so to speak, and repeating disproved claims in an effort to discredit anything they don’t understand.

The Incredible Dollar, II: The Number One Rule for a Reserve Currency

As we noted yesterday, we got an e-mail a short time back expressing concern over the declining “credibility” of the dollar, and the refusal of a currency exchange in a remote area of Brazil to accept U.S. dollars any more.  The response by Norman Kurland, president of CESJ, was pretty good, but we thought it left out a few things, so here goes:

The Incredible Dollar, I: The Situation

A couple of weeks ago we got an e-mail from a correspondent in Brazil, an American clergyman who has retired there.  The clergyman (we’ll call him “HH”) made the following comments (anything in brackets is something we inserted for clarity):

Faith and Reason Again, II: The Thomist Just Third Way

Yesterday we looked at the respective roles of faith and reason, and how they are complementary.  We also emphasized the fact that, while faith and reason go together, neither one can substitute or fill in for the other.  Today we will apply the basic principles we looked at yesterday, with emphasis on the natural law basis of the Just Third Way.

This is because the current movement to eliminate “exchange” based on justice and base economic life on “gift” based on charity — the so-called “logic of gift” that rejects the gift of logic — is, ultimately, both wrong-headed and anti-human. It implicitly denies the humanity of those who do not have charity, making them less than human.  It also strokes the ego of the ones attempting to impose gift in place of exchange, for it turns them into a spiritual and material elite with gnostic knowledge not available to hoi polloi.

Faith and Reason Again, I: “What is Man?”

Right after the New Year another discussion popped up about the respective roles of faith and reason.  Both have their place.  It’s just not the same place.  As we might have mentioned once or twice on this blog with respect to how the Federal Reserve, the central bank of the United States, has been egregiously misused, you don’t use a tool designed for one thing to do another.

News from the Network, Vol. 7, No. 02

Confusion over the Affordable Care Act seems to be increasing.  Getting a straight story or response from anybody seems to be impossible.  This may be because of the imposition of political goals on what should be medical, ethical, and religious issues, a danger against which Dr. Leo Alexander warned in 1949 in his landmark article in the New England Journal of Medicine, “Medical Science Under Dictatorship.”

A Brief Course in Banking Theory, IIIb: Central Banks

At its most basic, a central bank does only two things.  One, it rediscounts bills of exchange originally discounted by its member commercial banks.  Two, it purchases mortgages and bills of exchange issued by non-member banks, businesses, and individuals on the “open market.”

A Brief Course in Banking Theory, IIIa: Central Banks

Yesterday we promised to take a look at central banks.  Today we’re keeping that promise.  This is singularly appropriate, because issue banking and central banking (a type of issue banking) run on promises.  If people don’t keep promises, banking, even money and credit, simply don’t and won’t work.

A Brief Course in Banking Theory, IIb: Banks of Issue

In the previous posting in this mercifully brief series, we described how, simply by making promises to deliver marketable goods and services in the future, people can start with absolutely nothing and end up with something they want.  The system we described, however, relies on everybody in the system knowing and trusting everybody else.  What happens when the system gets too big for everyone to know and trust everyone else?

A Brief Course in Banking Theory, IIa: Banks of Issue

In the previous posting in this short series we covered what money is, and how a bank of deposit operates.  As we promised, here’s a brief explanation of how a “bank of issue” operates.  Believe it or not, although “bank of deposit” is what most people think of as a bank, “banks of issue” (also called “banks of circulation”) are thousands of years older.

News from the Network, Vol. 7, No. 01

It’s the most chilling headline you could read if you know anything about defined benefit plans and the way the stock market really operates.  This morning’s Washington Post blithely declared “Corporate Pension Plans at Strongest Funding in Years” (Economy & Business, Friday, January 3, 2014, A11).  So how is this “chilling”?  Isn’t this a good thing?

A Brief Course in Banking Theory, I: Banks of Deposit

As 2014 is the centennial of the first year of operation of the Federal Reserve System, we thought it appropriate to start off the New Year with a brief dissertation on commercial and central banking, and how they are supposed to be used — as opposed to how such banks are being used or, more properly, misused these days.

Infallibility and Income

We had a discussion the week before last about how to understand what the pope is saying.  The problem is that it seems everyone from President Obama on up (cf. the inverted pyramid structure for JBM and JBL; the real leader is on the bottom, not the top) hears precisely whatever he or she wants desperately to hear, whether for good or for ill.

News from the Network, Vol. 6, No. 52

This week is a little week — three business days — as well as a little weak for news.  Major holidays tend to do that.  One thing that seems to be coming to the fore as the year draws to a close is that people are starting to get a clue that, perhaps, the State might not be the best way of meeting everybody’s material and spiritual needs.  Much of this is due to the confusion over the Affordable Care Act, and wondering whether it will survive its implementation.

The Past Savings Trap

The Just Third Way does not guarantee ownership by anyone.  The goal is equality of opportunity, not equality of results.  The idea that society should be arranged in such a way as to guarantee results is one of the deadliest traps of modern civilization.  It leads to worship of the State as the only body that can (allegedly) guarantee results just by ordering people around.

Mere Income

One of Anglican apologist C. S. Lewis’s favorite concepts (and snappy book title) was “Mere Christianity.”  Don’t worry.  This is not a “religious” posting.  It’s safe for everyone to read.

News from the Network, Vol. 6, No. 51

One of the things we’re finding out as we go through old newspaper files of the 1880s and 1890s is that “opinion journalism” is nothing new.  It’s probably older than the clay tablets passed around by the ancient Sumerians, letting people know you can’t trust old Mekiajgacer, Son of Uta, because he disagreed with Zamug, Son of Barsalnuna over whether the bills of exchange drawn by Balih, Son of Etana, were better than the promissory notes issued by Ur-Nungal, Son of Gilgamec.

A New Vision for America? What’s Wrong with the Old One?

We have a suspicion (meaning something we’d like to believe, but can’t prove and probably isn’t so, anyway) that William A. Galston of the Wall Street Journal has been reading this blog, or (at least) the CESJ website.  Maybe all those letters to the editor (of which we’ve lost count) are starting to sink in by osmosis.

A Guarantee of Nothing

Monday’s Wall Street Journal had an interesting opinion piece on “The Hidden Danger in Public Pension Funds” (12/16/13, A13).  The point was that, especially in light of Detroit’s bankruptcy and the decision of the court that public pensions are not sacrosanct, states and municipalities have to rethink the whole pension system.

“A Boon for Shareholders”?

In yesterday’s Washington Post, the main article on page 1 was “Companies Pour Cash Into Buybacks of Their Own Stock: A Boon for Shareholders, Executives.”  Not unexpectedly, the article did not exactly conform to the principles of the Just Third Way.  What was surprising, however (at least from the Just Third Way perspective), was the rather blithe assumption that allowing shareholders to make a one-time profit on selling their shares to the company they (formerly) owned is somehow a good thing.

Voluntary Taxation? Not in a Free Society

This past Thursday we were asked a question regarding the “voluntary tax” proposal of Luis Razo of California.  Fortunately, the questioner included a link to a presentation Mr. Razo gave on the proposal, for we had never heard of it before.  Specifically, the question was whether the plan was capitalist or socialist; the questioner couldn’t figure it out.

News from the Network, Vol. 6, No. 50

The Federal Reserve just announced that Americans are wealthier than ever before! We’re so relieved.  We thought the fact that our income keeps buying less and less, and our liquid assets seem to be evaporating like we wish the snow outside would (must be selective global warming that affects only assets, and not ice sets) meant that people as a whole are getting poorer, not richer.

The Magical, Mystical Multiplier

In Tuesday’s Wall Street Journal, the editorial, “How to Keep Workers Unemployed,” the editors pointed out that reducing purchasing power for one set of persons for the benefit of another set of persons does nothing to “create jobs.”

A Plea for Peasant Proprietors

The position of Charles Stewart Parnell and William O’Brien of the Irish National Land League was very close to that of William Thomas Thornton (1813-1880). Thornton suggested as much in 1874 in his revision of his most important work, A Plea for Peasant Proprietors (1848).

De Tocqueville on Church and State

The merging of the missions of Church and State, and the subsequent absorption of one into the other is, not surprisingly, something that Alexis de Tocqueville identified as one of the chief dangers to democracy in America — or anywhere else, for that matter. After describing the proper function of organized religion with respect to the State, i.e., to teach moral behavior and act as a guide to the acquisition and development of virtue, de Tocqueville presciently observed in Democracy in America,

"Distributive Justice"?, XXIX: A Masterpiece of Misdirection

We are now in a position to address the specific influence of Henry George on the thought of Monsignor Ryan.  This is not difficult, despite the fact that the first part of Ryan’s Distributive Justice focuses on allegedly refuting George’s theories of the natural right to property, particularly the legitimacy of title to land.

News from the Network, Vol. 6, No. 49

Obviously the big news this week is Nelson Mandela.  The media, of course, are full of comments by people who met with him, talked with him, saw him on TV, saw a move about him, or some such thing.  Everyone is saying what a great man he was, but no one seems to grasp the essence of his greatness: he was a man of principle.

"Distributive Justice"?, XXVIII: Monsignor Modernist

As we saw in the previous posting in this series, “modernism” is a form of religious positivism that developed in tandem with the legal positivism that infected American civil society in the latter half of the 19^th century.  Modernism and positivism are rooted in a rejection of the traditional understanding of the natural law based on human nature and discerned by reason.

"Distributive Justice"?, XXVII: The Modernist Threat

In 1907, the year after Monsignor John A. Ryan published his doctoral thesis, A Living Wage, Pope Pius X, whom the Catholic Church recognizes as a “saint,” issued Pascendi Dominici Gregis: “On the Doctrines of the Modernists.”  This was a follow-up to the issuance of Lamentabili Sane, the “Syllabus Condemning the Errors of the Modernists” published a few months previously.

"Distributive Justice"?, XXVI: The Act of Social Justice

In the previous posting in this series, we looked at how social justice differs from other types of justice: where commutative and distributive justice look directly to individual goods, and indirectly to the common good, social justice looks directly to the common good, and indirectly to individual goods.

"Distributive Justice"?, XXV: The Common Sense of Social Justice

As we noted in the previous posting in this series, social justice — often cited by today’s Chestertonians to justify the very redistribution to meet individual needs that Chesterton opposed — is not, in reality, directed to individual goods at all.  Rather, social justice is directed to the common good, a specifically social thing.

News from the Network, Vol. 6, No. 48

The “Big News” this week is the release of Pope Francis’s “Apostolic Exhortation,” Evangelii Gaudium, “The Joy of the Gospel.”  Right off the bat we’ve seen four problems with the document.  Before you go ballistic and start gathering cordwood to stack around the stake you’re preparing, however, read the problems:

"Distributive Justice"?, XXIV: The Common Sense of Distributive Justice

As we saw in the previous posting in this series, Msgr. John A. Ryan seemed to have some significant problems with the teaching authority of the Catholic Church, in whose name he was presumably speaking.  This inserts a degree of ambiguity, possibly even psychosis or schizophrenia into Ryan’s analysis of Catholic social teaching, even the natural law on which Catholic social teaching claims to be based.

"Distributive Justice"?, XXIII: The Rise of Ryanism

We come at last to where we can understand specifically how the common sense thought of G. K. Chesterton fell victim to the uncommon nonsense of socialism.  We have seen how socialism began creeping into Catholic social thought through the popularity of the proposals of the agrarian socialist Henry George, and how in Rerum Novarum Leo XIII carefully refuted not only George’s theories, but the whole of socialism.

"Distributive Justice"?, XXII: Savings and Economic Justice

As we saw in the previous posting in this series, by the late 1880s it had become critical that the Catholic Church respond to the rapid spread of socialism in general, and georgism in particular, especially in the United States.  Civilization itself seemed to be in danger of falling into the trap prepared by the change in understanding of the natural law that was undermining the foundation of the social order.

News from the Network, Vol. 6, No. 47

Yes, the stock market is soaring.  No, we don’t know why.  What we do know, however, is that there have been a number of developments over this past week that bode well for the Just Third Way.  These range from the unexpected popularity of some “Just Third Way fiction,” to the even more unexpected discovery of some “long lost” papers relating to the complementarity of solidarism and the Just Third Way:

"Distributive Justice"?, XXI: A Confusing Mess

What today’s Aristotelian-Thomist finds astounding in the modern interpretation of Catholic social teaching — quite apart from what seems to be the virtual complete abandonment of, even full-blown attack on reason deprecated by G. K. Chesterton, of course — is a claim that I have come across a number of times.  This is that Leo XIII (contrary to the claims of the Catholic Church that it has never changed a substantial teaching) inserted a “new” understanding of private property into Rerum Novarum.

"Distributive Justice"?, XX: “On Capital and Labor”

Investigating how so many Catholics today became convinced that the Catholic Church has somehow changed its position on the natural law in general, and the natural right of private property in particular — and thus that G. K. Chesterton meant the exact opposite of virtually everything he said — I’m tempted to exclaim with the late, great Anna Russell, “I’m not making this up, you know!”  The facts are clear and speak for themselves.

"Distributive Justice"?, XIX: Henry George and the Catholic Church

In 1886, agrarian socialist Henry George, author of Progress and Poverty (1879), ran for mayor of New York City on the socialist United Labor Party ticket.  Father Edward McGlynn, a priest of the New York Archdiocese, strongly supported George’s candidacy.

"Distributive Justice"?, XVIII: The Rise of Socialism

As we saw in the previous posting in this series, following the Civil War the supply of funds available for the “small” man — homesteaders and small businessmen — shrank dramatically.  This was the result of an at first official, and later unofficial policy of deflating the paper Greenback currency backed with government debt to restore parity with the gold reserve currency.

News from the Network, Vol. 6, No. 46

We’re not going to get into issues like why the stock market is soaring at a time when the economy is so bad, or the ins and outs of the reform of healthcare reform, or how increasing the minimum wage is supposed to create jobs and put people back to work.  We’d rather stick with easy subjects like the meaning of life and trying to figure out why so many people prefer the contradictions of Keynesian economics over the common sense of binary economics.

"Distributive Justice"?, XVII: The Enemy Within

We have been examining what both G. K. Chesterton and Fulton J. Sheen characterized as the great conflict of the modern age: the abandonment of sound reason, and its replacement with false faith.  As Chesterton said in his introduction to Sheen’s first book, God and Intelligence,

"Distributive Justice"?, XVI: “Solemn Nonsense”

In what is generally considered one of his best books, Communism and the Conscience of the West (1948), Fulton J. Sheen noted that the greatest danger to America — to civilization itself — is the loss of reason.  Reason has been “liquidated” and replaced either with a false faith in material progress, or no faith at all.  (Fulton J. Sheen, Communism and the Conscience of the West.  New York: The Bobbs-Merrill Company, 1948, 18.)  As Sheen stated,

"Distributive Justice"?, XV: Reason Under Siege

One of the many ways in which the late Fulton J. Sheen upset and irritated a great many people was to claim that only the Catholic Church could save America.  When mentioned at all, this opinion (and it was opinion, not knowledge), is used to illustrate what a number of people have decided are Sheen’s unfortunate lapses into arrogance and vanity.

"Distributive Justice"?, XIV: The Roots of Unreason

In the previous posting in this series we asked how things could have gotten so confused with respect to how the Chestertonian Establishment of today understands essential principles of the natural law.  After all, Chesterton spent so much time and effort promoting common sense that it defies logic how the Professional Chestertonians and neo-distributists could have gotten things so wrong as to be promoting so much that defies common sense and that is the opposite of much of what Chesterton advocated.

News from the Network, Vol. 6, No. 45

Believe it or not, the Euro, the poster child of Keynesian “managed” currencies, is “suddenly” taking criticism for being “the world’s worst currency.”  Why?  Because “investors” (i.e., currency speculators) are having a hard time making enough money fast enough when the European Central Bank refuses to take their wants and needs into consideration.

"Distributive Justice"?, XIII: Economic Justice

In the previous posting in this series we (very briefly) traced the recent development of reason-based social thought since Leo XIII’s Rerum Novarum, a development that took place within the Aristotelian-Thomist philosophical framework.  It is clear that G. K. Chesterton, along with Fulton Sheen, the popes, and others, based his social thought solidly on the natural law based on God’s Nature self-realized in His Intellect, that is, reason (lex ratio), not the Will, that is, faith (lex voluntas).

"Distributive Justice"?, XII: Will or Intellect?

In his analysis of the rise of the philosophy that ultimately led to the Nazi tyranny, The Natural Law: A Study in Legal and Social History and Philosophy (1936, German; 1947, English), the solidarist political scientist and jurist Dr. Heinrich Rommen traced the foundation of the modern totalitarian State and socialism to the abandonment of reason (intellect) as the basis of the natural law (lex ratio), and acceptance of the will (lex voluntas).

"Distributive Justice"?, XI: The First Principle of Reason, Continued

“No thesis in the philosophy of St. Thomas is clearer than that which asserts that all knowledge rests upon a single first principle.  To it all other principles of thought may be reduced.  Upon it all depend for their validity.  Without it there can be no certitude, but only opinion.(1)  Whether we choose to express this absolute, first principle in the form of an affirmation — the principle of identity — or in the form of a negation — the principle of contradiction — it matters not.  The point is, that unless our knowledge hangs upon this basic principle, it is devoid of certainty.  Wherefore, causality — efficient, formal, material or final — must attach itself in some manner to the principle of identity.  In the Thomistic view, the connection is immediate.  Its very immediateness gives to the notion of causality the absolute necessity and complete universality of the ultimate principle.

"Distributive Justice"?, X: The First Principle of Reason

In the previous posting in this series we saw that, in orthodox Christian belief, the “grant” of the natural rights of life, liberty, and property is not, and could never be separated from the act of creation or existence itself.  To argue otherwise is to claim that natural rights are not, in fact, part of nature at all — a contradiction in terms.  They would be, rather, a later “add-on” that is not, strictly speaking, essential for human beings to be able to conform themselves to their own human nature.

News from the Network, Vol. 6, No. 44

Every day it becomes more and more obvious that only the Just Third Way holds the promise of a solution for the unabated stream (call it a river) of crises afflicting the world that never seems to end.