[The following is a repost from 2011]
In her post Video Games, Home Education, and the U.S. Supreme Court, Brandy discusses what is being called the third wave of home school persecution, and has encouraging things to say.
In the course of her post she mentions the earlier days when “socialization” was the big issue that home schoolers had to deal with, but then explains that this newer form of persecution is based on the fact that when a parent educates his own children at home, he is passing his own ideas down to his children, and those ideas might be dangerous or unacceptable.
But I’ve come to believe that this is what the whole socialization argument was about – not that home schooled children won’t know how to interact politely with other people on an individual basis, but that they won’t know how to fit into Society at large, meaning, they won’t grow up to be good contributors to the national economy.
The other night we were at Home Depot looking at new flooring for our kitchen and the young woman who was helping us, mentioned the installation fee a couple of times. After a while, when we’d finished picking out what we wanted, she said something about calling to schedule installation, but I said, “Oh, I have a son – he does all my installation.”
She responded with mock horror at the idea of us not paying someone to do our work, and I said, laughing, “I know – our family is so bad for the economy.”
And this is the point: As soon as you figure out that you can raise your own kids from infancy to adulthood without needing a paid professional to do it for you, you figure out that there are scads of things you can do yourself, and those kids grow up assuming that doing things as frugally and as independently as possible is the way Normal people function. They pay for fewer and fewer services, and in a service economy, if everybody did that, where would we be? This, I believe, is what so many fear about parents educating their own children at home.
One of the first times we visited George Washington’s birthplace, one of the blacksmiths was telling visitors about how economically independent from Britain the Virginians strove to be, refining their own iron ore, for example, and forging it into the necessary items, instead of sending the ore the England to be refined and forged there, as Parliament wished. In fact, Parliament wanted all raw materials to be sent to England for processing, and then bought back (as value-added products, in today’s speech) by the colonists. So the colonists were supposed to raise sheep and harvest the wool, but send it straight to England for carding, spinning, and weaving into cloth which would then be purchased by the colonists to make their clothes from. The same with timber, which the colonists were expected to harvest and ship to England, to be turned into the lumber and shingles they would buy to build their houses and barns with.
But at the Pope’s Creek Plantation, where George Washington was born, all of the family’s basic needs were provided by the farm. The plantation functioned like a village, with a blacksmith shop, a spin shop (for spinning, dying, and weaving wool and flax). Cobblers and carpenters had their shops, too. Most of the Virginia plantations worked this way, and allowed their craftsmen, who were nearly all indentured servants and slaves, to hire themselves out to locals who needed their labor. In this way, local communities provided for all of their basic needs. Wealthy families bought luxuries from Britain when they shipped their tobacco harvest to London, but not the daily necessities Parliament wanted them to buy, such as cloth for everyday clothes, lumber, and hardware.
Well, this blacksmith, in giving us this history lesson, remarked that, “When a people have gained economic freedom, political freedom won’t be far behind.”
That’s something to keep in mind this weekend, as we celebrate our political independence from Great Britain.
Showing posts with label economics. Show all posts
Showing posts with label economics. Show all posts
Friday, July 4, 2014
Wednesday, September 11, 2013
Wednesday with Words: "House and wife and an ox for the plough"
This semester I’m taking a seven week-long class from Coursera on The Ancient Greeks. Check out the syllabus – it’s brutal.
This quote is from one of my assigned readings this week, a selection from Aristotle’s Politics, on the polis. I’ve deleted a longish section because I wanted to focus on Aristotle’s description of the oikos, the household or family.
He who thus considers things in their first growth and origin, whether a state or anything else, will obtain the clearest view of them. In the first place there must be a union of those who cannot exist without each other; namely, of male and female, that the race may continue (and this is a union which is formed, not of deliberate purpose, but because, in common with other animals and with plants, mankind have a natural desire to leave behind them an image of themselves), and of natural ruler and subject, that both may be preserved….
Out of these two relationships between man and woman, master and slave, the first thing to arise is the family, and Hesiod is right when he says,
‘First house and wife and an ox for the plough,’
for the ox is the poor man’s slave. The family is the association established by nature for the supply of men’s everyday wants, and the members of it are called by Charondas ‘companions of the cupboard,’ and by Epimenides the Cretan, ‘companions of the manger.’
Saturday, July 2, 2011
Happy Independence Day!
In her post Video Games, Home Education, and the U.S. Supreme Court, Brandy discusses what is being called the third wave of home school persecution, and has encouraging things to say.
In the course of her post she mentions the earlier days when “socialization” was the big issue that home schoolers had to deal with, but then explains that this newer form of persecution is based on the fact that when a parent educates his own children at home, he is passing his own ideas down to his children, and those ideas might be dangerous or unacceptable.
But I’ve come to believe that this is what the whole socialization argument was about – not that home schooled children won’t know how to interact politely with other people on an individual basis, but that they won’t know how to fit into Society at large, meaning, they won’t grow up to be good contributors to the national economy.
The other night we were at Home Depot looking at new flooring for our kitchen and the young woman who was helping us, mentioned the installation fee a couple of times. After a while, when we’d finished picking out what we wanted, she said something about calling to schedule installation, but I said, “Oh, I have a son – he does all my installation.”
She responded with mock horror at the idea of us not paying someone to do our work, and I said, laughing, “I know – our family is so bad for the economy.”
And this is the point: As soon as you figure out that you can raise your own kids from infancy to adulthood without needing a paid professional to do it for you, you figure out that there are scads of things you can do yourself, and those kids grow up assuming that doing things as frugally and as independently as possible is the way Normal people function. They pay for fewer and fewer services, and in a service economy, if everybody did that, where would we be? This, I believe, is what so many fear about parents educating their own children at home.
One of the first times we visited George Washington’s birthplace, one of the blacksmiths was telling visitors about how economically independent from Britain the Virginians strove to be, refining their own iron ore, for example, and forging it into the necessary items, instead of sending the ore the England to be refined and forged there, as Parliament wished. In fact, Parliament wanted all raw materials to be sent to England for processing, and then bought back (as value-added products, in today’s speech) by the colonists. So the colonists were supposed to raise sheep and harvest the wool, but send it straight to England for carding, spinning, and weaving into cloth which would then be purchased by the colonists to make their clothes from. The same with timber, which the colonists were expected to harvest and ship to England, to be turned into the lumber and shingles they would buy to build their houses and barns with.
But at the Pope’s Creek Plantation, where George Washington was born, all of the family’s basic needs were provided by the farm. The plantation functioned like a village, with a blacksmith shop, a spin shop (for spinning, dying, and weaving wool and flax). Cobblers and carpenters had their shops, too. Most of the Virginia plantations worked this way, and allowed their craftsmen, who were nearly all indentured servants and slaves, to hire themselves out to locals who needed their labor. In this way, local communities provided for all of their basic needs. Wealthy families bought luxuries from Britain when they shipped their tobacco harvest to London, but not the daily necessities Parliament wanted them to buy, such as cloth for everyday clothes, lumber, and hardware.
Well, this blacksmith, in giving us this history lesson, remarked that, “When a people have gained economic freedom, political freedom won’t be far behind.”
That’s something to keep in mind this weekend, as we celebrate our political independence from Great Britain.
In the course of her post she mentions the earlier days when “socialization” was the big issue that home schoolers had to deal with, but then explains that this newer form of persecution is based on the fact that when a parent educates his own children at home, he is passing his own ideas down to his children, and those ideas might be dangerous or unacceptable.
But I’ve come to believe that this is what the whole socialization argument was about – not that home schooled children won’t know how to interact politely with other people on an individual basis, but that they won’t know how to fit into Society at large, meaning, they won’t grow up to be good contributors to the national economy.
The other night we were at Home Depot looking at new flooring for our kitchen and the young woman who was helping us, mentioned the installation fee a couple of times. After a while, when we’d finished picking out what we wanted, she said something about calling to schedule installation, but I said, “Oh, I have a son – he does all my installation.”
She responded with mock horror at the idea of us not paying someone to do our work, and I said, laughing, “I know – our family is so bad for the economy.”
And this is the point: As soon as you figure out that you can raise your own kids from infancy to adulthood without needing a paid professional to do it for you, you figure out that there are scads of things you can do yourself, and those kids grow up assuming that doing things as frugally and as independently as possible is the way Normal people function. They pay for fewer and fewer services, and in a service economy, if everybody did that, where would we be? This, I believe, is what so many fear about parents educating their own children at home.
One of the first times we visited George Washington’s birthplace, one of the blacksmiths was telling visitors about how economically independent from Britain the Virginians strove to be, refining their own iron ore, for example, and forging it into the necessary items, instead of sending the ore the England to be refined and forged there, as Parliament wished. In fact, Parliament wanted all raw materials to be sent to England for processing, and then bought back (as value-added products, in today’s speech) by the colonists. So the colonists were supposed to raise sheep and harvest the wool, but send it straight to England for carding, spinning, and weaving into cloth which would then be purchased by the colonists to make their clothes from. The same with timber, which the colonists were expected to harvest and ship to England, to be turned into the lumber and shingles they would buy to build their houses and barns with.
But at the Pope’s Creek Plantation, where George Washington was born, all of the family’s basic needs were provided by the farm. The plantation functioned like a village, with a blacksmith shop, a spin shop (for spinning, dying, and weaving wool and flax). Cobblers and carpenters had their shops, too. Most of the Virginia plantations worked this way, and allowed their craftsmen, who were nearly all indentured servants and slaves, to hire themselves out to locals who needed their labor. In this way, local communities provided for all of their basic needs. Wealthy families bought luxuries from Britain when they shipped their tobacco harvest to London, but not the daily necessities Parliament wanted them to buy, such as cloth for everyday clothes, lumber, and hardware.
Well, this blacksmith, in giving us this history lesson, remarked that, “When a people have gained economic freedom, political freedom won’t be far behind.”
That’s something to keep in mind this weekend, as we celebrate our political independence from Great Britain.
Tuesday, May 10, 2011
Cogito cogito, ergo cogito sum*
Yesterday I spent the day outside trying to tame this jungle we live in. I’ll tell you what’s real – honeysuckle is real and it’ll take over the world if we give it half a chance. I’m all for reducing carbon emissions if it’ll keep all this plant growth in check – they’ll take over the planet otherwise. But somehow I don’t think that’s what the greenies have in mind with their environmental proposals.
I’m glad to have a slightly better understanding of what Descartes was about. I remember in high school having classmates who were what can only be called skeptics. They doubted whether existence was real. Maybe everything we think we see and know is an illusion. I couldn’t tell whether they’d been educated beyond their level of intelligence or had had too much pot over the weekend. After reading this chapter I’m guessing they were taking a philosophy class and trying on existentialism for size.
Prior to Descartes, there were certain “givens” that were universally recognized by philosophers – that the physical world is real, for instance, and that it can be truly known through the senses. A broad experience of the physical world lays the foundation for further knowledge, so that, eventually one can reason his way to knowledge. I can’t find the quote now, but I think Copernicus said that he came up with the idea of a heliocentric universe by means of philosophy, not science.
Decartes, however, begins with reason. He then applies the scientific method of breaking a thing down to the smallest possible parts and analysing them. This, he claims, is the only place where experience has any value – experiments are made to prove or disprove each particle of information in an effort to build up a factual knowledge of the thing being studied. Interestingly, by starting with reason, by starting with his own thoughts, Descartes removes the possibility of learning anything simply by thinking.
This idea is developed in Dewey’s philosophy, which “neglects the innate powers of the knower to know prior to experiment.” His goal was completely utilitarian: to adapt the student to meet the needs of the community, those needs being political and economic.
Sadly, since most American Christians have been educated this way, it even affects the way we approach the Faith. We either put too much faith in Reason, or we expect to be led by direct revelation.
Taylor doesn’t make this connection himself, but I think this section where he quotes Jacques Maritain describes the over reliance on Reason nicely:
Therefore, some expressions of American Christianity tend “to displace from reality, if not remove altogether, the order of knowing that includes the valid role of the sensory-emotional response, integrated with the will and the intellect.”
At first glance, it seems like a contradiction for me to say that the mystical kind of experience relied upon by another branch of Christianity has the same root, but consider this (quoting Maritain again):
Taylor continues:
This is actually a splitting apart of Descartes’ method, which insists “that all knowledge, after an exercise in the rigor of mathematical method, be angelically intuitive,” but it makes sense, as his method itself “causes a disintegration of the natural unity of the knower to know.”
(Follow the discussion of Poetic Knowledge: The Recovery of Education, by James S. Taylor at Mystie's blog)
~*~ ~*~ ~*~
*I can’t take credit for the clever title – a forum friend uses it for his signature line.
I’m glad to have a slightly better understanding of what Descartes was about. I remember in high school having classmates who were what can only be called skeptics. They doubted whether existence was real. Maybe everything we think we see and know is an illusion. I couldn’t tell whether they’d been educated beyond their level of intelligence or had had too much pot over the weekend. After reading this chapter I’m guessing they were taking a philosophy class and trying on existentialism for size.
Prior to Descartes, there were certain “givens” that were universally recognized by philosophers – that the physical world is real, for instance, and that it can be truly known through the senses. A broad experience of the physical world lays the foundation for further knowledge, so that, eventually one can reason his way to knowledge. I can’t find the quote now, but I think Copernicus said that he came up with the idea of a heliocentric universe by means of philosophy, not science.
Decartes, however, begins with reason. He then applies the scientific method of breaking a thing down to the smallest possible parts and analysing them. This, he claims, is the only place where experience has any value – experiments are made to prove or disprove each particle of information in an effort to build up a factual knowledge of the thing being studied. Interestingly, by starting with reason, by starting with his own thoughts, Descartes removes the possibility of learning anything simply by thinking.
This idea is developed in Dewey’s philosophy, which “neglects the innate powers of the knower to know prior to experiment.” His goal was completely utilitarian: to adapt the student to meet the needs of the community, those needs being political and economic.
Dewey’s so-called pragmatism, as it filtered down to the masses who largely never read a word he wrote, fit neatly into the American view of education for the good life. It was perfect, in its popular versions, for the American oligarchic man, that is, the practical businessman seeking to not only retain, but to increase his property and profits. Ideas were important to these descendants of the European industrial revolutions and the new notions of the wealth of nations, insofar as they worked toward increasing the common wealth of the country and the personal wealth of those practical and clever enough to succeed….
Interestingly, Dewey’s scientific and practical philosophy with its emphasis on dealing with the conflicts of social change was also attractive to some Marxists, although this fact is not surprising, for both systems of economics, industrial capitalism and communism, inevitably in the first case and absolutely in the second, are materialistic and have little or nothing to do with eternal truths, or beauty, or goodness in any transcendent way…. Sooner or later, the education for a student under either way of progressive, materialist life will be informed by the dominance of the practical ends of the state.
Sadly, since most American Christians have been educated this way, it even affects the way we approach the Faith. We either put too much faith in Reason, or we expect to be led by direct revelation.
Taylor doesn’t make this connection himself, but I think this section where he quotes Jacques Maritain describes the over reliance on Reason nicely:
In Descartes the result is the most radical leveling of the things of the spirit: one same single type of certitude, rigid as Law, is imposed on thought; everything which cannot be brought under it must be rejected; absolute exclusion of everything that is not mathematically evident, or deemed so. It is inhuman cognition, because it would be superhuman!
Therefore, some expressions of American Christianity tend “to displace from reality, if not remove altogether, the order of knowing that includes the valid role of the sensory-emotional response, integrated with the will and the intellect.”
At first glance, it seems like a contradiction for me to say that the mystical kind of experience relied upon by another branch of Christianity has the same root, but consider this (quoting Maritain again):
The angel neither reasons, nor proceeds by reasoning; he has but one intellectual act, which is at once perceiving and judging: he sees consequences not successively from the principle, but immediately in the principle.
Taylor continues:
Maritain sees this angelism as the greatest error of Descartes’ philosophy; that is, he begins with the proposition that man is essentially a thinking substance, a definition hitherto reserved for angels whose intellect is “always in act with regard to its intelligible objects [and] does not derive its ideas from things, as does ours, but has them direct from God.”
This is actually a splitting apart of Descartes’ method, which insists “that all knowledge, after an exercise in the rigor of mathematical method, be angelically intuitive,” but it makes sense, as his method itself “causes a disintegration of the natural unity of the knower to know.”
(Follow the discussion of Poetic Knowledge: The Recovery of Education, by James S. Taylor at Mystie's blog)*I can’t take credit for the clever title – a forum friend uses it for his signature line.
Wednesday, April 22, 2009
Economics: changing definitions
It’s interesting to note how word meanings have changed over time. Here are some definitions of capitalist and capitalism (I’m putting each of the entries in reverse alphabetical order since one of the definitions of capitalism includes the word capitalist):
From dictionary.reference.com comes the modern usage:
From the American College Encyclopedic Dictionary, 1955, we have:
Here’s another older set of definitions from Webster’s Collegiate Dictionary, Fifth Edition, date unknown as the relevant page is missing, but the latest population information in the back of the book is from 1941:
It’s packed up now, but my circa 1970s World Book Encyclopedia defines it in the modern sense — that is, by focusing on free trade and private ownership and contrasting it with socialism.
I don’t know how important it is to the economic debate overall, but it’s important to remember changing definitions when reading works from previous generations. Belloc and Chesterton both use the word in its older sense — here’s the opening paragraph on the chapter on the capitalist state in Belloc’s Economics for Helen:
["Rent" is a technical term referring to one of the three divisions of wealth produced, the other two being Subsistence and Interest (or Profit).]
It seems that the current definition has arisen in reaction to the rise of socialism (which, I want to reiterate so there’s no misunderstanding, Chesterton and Belloc were both emphatically against), but it also seems to me that the older one reflects our current situation well. Even though statistics show modern Americans to be homeowners at unprecedented rates, it makes it easy to miss the fact that most “homeowners” don’t own the place free and clear, but have a mortgage. And most of us don’t use the property we do own (mortgaged or otherwise) to produce wealth, so it can’t properly be called “Land” or “Capital” in the economic sense of the words.
From dictionary.reference.com comes the modern usage:
capitalist
–noun
1. a person who has capital, esp. extensive capital, invested in business enterprises.
2. an advocate of capitalism.
3. a very wealthy person.
Origin:
1785–95; capital + -ist
capitalism
–noun
an economic system in which investment in and ownership of the means of production, distribution, and exchange of wealth is made and maintained chiefly by private individuals or corporations, esp. as contrasted to cooperatively or state-owned means of wealth.
Origin:
1850–55; capital + -ism
From the American College Encyclopedic Dictionary, 1955, we have:
capitalist, n. one who has capital, esp. extensive capital employed in business enterprises.
capitalism, n.
1. a system under which the means of production, distribution, and exchange are in large measure privately owned and directed.
2. the concentration of capital in the hands of a few, or the resulting power or influence.
3. a system favoring such concentration of wealth.
Here’s another older set of definitions from Webster’s Collegiate Dictionary, Fifth Edition, date unknown as the relevant page is missing, but the latest population information in the back of the book is from 1941:
capitalist, n. One who has capital; esp., a person of large property which is or may be employed in business
capitalism, n.
1. The state of having capital; the position of a capitalist.
2. An economic system in which capital and capitalists play the principal part; specif., the system of modern countries in which the ownership of land and natural wealth, the operation of the system itself, are effected by private enterprise and control under competitive conditions.
It’s packed up now, but my circa 1970s World Book Encyclopedia defines it in the modern sense — that is, by focusing on free trade and private ownership and contrasting it with socialism.
I don’t know how important it is to the economic debate overall, but it’s important to remember changing definitions when reading works from previous generations. Belloc and Chesterton both use the word in its older sense — here’s the opening paragraph on the chapter on the capitalist state in Belloc’s Economics for Helen:
The Capitalist State is that one in which though all men are free (that is, though no one is compelled to work for another by law, nor anyone compelled to support another), yet a few owners of the land and capital have working for them the great mass of the people who own little or nothing and receive a wage to keep them alive: that is, a part only of the wealth they produce, the rest going as rent and profit to the owners. (p. 96)
["Rent" is a technical term referring to one of the three divisions of wealth produced, the other two being Subsistence and Interest (or Profit).]
It seems that the current definition has arisen in reaction to the rise of socialism (which, I want to reiterate so there’s no misunderstanding, Chesterton and Belloc were both emphatically against), but it also seems to me that the older one reflects our current situation well. Even though statistics show modern Americans to be homeowners at unprecedented rates, it makes it easy to miss the fact that most “homeowners” don’t own the place free and clear, but have a mortgage. And most of us don’t use the property we do own (mortgaged or otherwise) to produce wealth, so it can’t properly be called “Land” or “Capital” in the economic sense of the words.
Monday, April 20, 2009
Reading about economics
Last week I read Hillaire Belloc’s Economics for Helen which was a big help to me. I’m going to read it again with my big kids as soon as we’re finished with Chesterton’s What’s Wrong with the World, so we can discuss it. I learn things much better when I can discuss what I’m reading, so since I haven’t talked through the book much yet, I may not be able to write well about it, but I’ll give it a shot while some things are fresh on my mind.
Belloc covers all the basics, defining wealth, explaining land, labor, and capital, and the process of production, and introduces a new-to-me concept, the fact that there are three kinds of wealth: subistance, rent, and interest. He discusses exchange (both domestic and international), free trade and protection, money, banking, and national debts and taxation. He also describes the three economies that have been pretty widely practiced in history: the servile (that is, slave-holding) state, the capitalist state, and the distributist state, frankly discussing the strengths and weaknesses of each. He discusses socialism briefly, mainly because in his time (the book was written in 1923) it hadn’t been successfully practiced anywhere and he said he thought it wasn’t possible for it to succeed. Of course we’ve had time to see that the only place it ever “succeeds” is at the end of a gun.
Something I really appreciated about the book was that at the beginning where he defined economic wealth, and at the end in his summary, he differentiated it from other kinds of very good things, like a beautiful painting or a good book or any of those intangibles that makes life pleasant. So many articles on the economy completely ignore this part of life and make it sound like economic wealth is the only kind of wealth, and make the mistake of thinking that if a nation has greater economic wealth at one point in their history, then they must necessarily be better off.
Another thing was that after a few chapters he pointed out that what he was talking about in the first half of the book was economic law, not moral law — i.e. the way things work, not whether it’s good or bad. He then made this astute observation: “Some people are so shocked by the fact that Economic Law is different from Moral Law that they try to deny Economic Law. Others are so annoyed by this lack of logic that they fall into the other error of thinking that Economic Law can override Moral Law (p. 47).” The moral law aspect came up in the second half of the book when he started talking about political applications.
The last chapter, Economic Imaginaries, is a brief look at what Belloc calls a new subject in Economics, and is terribly important in helping me see what’s going wrong and how it’s going wrong in our own time. An economic imaginary is “a value which appears on paper but has no real existance (p. 164).” He gives several examples of what causes this sort of thing to happen, the funniest of which is worth quoting in full:
Belloc admits that this example is “an extreme and ludicrous case,” but goes on to show how that sort of transaction actually makes up a pretty good portion of our economic activity. He also mentions three other types of economic imaginaries, and I’ll bet modern readers can come up with several others.
I’d definitely recommend that anyone interested in the study of economics read this — both relative beginners like me, but also more knowledgeable people who might benefit from Belloc’s perspective, which is rather different from free-market capitalism.
Belloc covers all the basics, defining wealth, explaining land, labor, and capital, and the process of production, and introduces a new-to-me concept, the fact that there are three kinds of wealth: subistance, rent, and interest. He discusses exchange (both domestic and international), free trade and protection, money, banking, and national debts and taxation. He also describes the three economies that have been pretty widely practiced in history: the servile (that is, slave-holding) state, the capitalist state, and the distributist state, frankly discussing the strengths and weaknesses of each. He discusses socialism briefly, mainly because in his time (the book was written in 1923) it hadn’t been successfully practiced anywhere and he said he thought it wasn’t possible for it to succeed. Of course we’ve had time to see that the only place it ever “succeeds” is at the end of a gun.
Something I really appreciated about the book was that at the beginning where he defined economic wealth, and at the end in his summary, he differentiated it from other kinds of very good things, like a beautiful painting or a good book or any of those intangibles that makes life pleasant. So many articles on the economy completely ignore this part of life and make it sound like economic wealth is the only kind of wealth, and make the mistake of thinking that if a nation has greater economic wealth at one point in their history, then they must necessarily be better off.
People confuse the word “Wealth” with the idea of well-being….
It is not so. Economic Wealth is a separate thing from well-being. Economic Wealth may well be increasing though the general well-being of the people is going down. It may increase though the general well-being of the people around it is stationary.
(p.35)
Another thing was that after a few chapters he pointed out that what he was talking about in the first half of the book was economic law, not moral law — i.e. the way things work, not whether it’s good or bad. He then made this astute observation: “Some people are so shocked by the fact that Economic Law is different from Moral Law that they try to deny Economic Law. Others are so annoyed by this lack of logic that they fall into the other error of thinking that Economic Law can override Moral Law (p. 47).” The moral law aspect came up in the second half of the book when he started talking about political applications.
The last chapter, Economic Imaginaries, is a brief look at what Belloc calls a new subject in Economics, and is terribly important in helping me see what’s going wrong and how it’s going wrong in our own time. An economic imaginary is “a value which appears on paper but has no real existance (p. 164).” He gives several examples of what causes this sort of thing to happen, the funniest of which is worth quoting in full:
Supposing two men, one of whom, Smith, has a loaf of bread, and the other of whom, Brown, has nothing. Smith says to Brown: “If you will sing me a song I will give you my loaf of bread.” Brown sings his song and Smith hands over the bread. A little later Brown wants to hear Smigh sing and he says to him: “If you will sing me a song I will give you this loaf of bread.” A little later Smith again wants to have a song from Brown. Brown sings his song (let us hope a new one!) and the loaf of bread again changes hands and so on all day.
Supposing each of these transactions to be recorded in a book of accounts. There will appear in Smith’s book: “Paid to Brown for singing songs two hundred loaves of bread,” and in Brown’s book: “Paid to Smith for singing songs two hundred loaves of bread.” The official who has to assess the national income will laboriously copy these figures into his book and will put down: “Daily income of Smith, 200 loaves of bread. Daily income of Brown, 200 loaves of bread. Total 400 loaves of bread.” Yet there is only one real loaf of bread there all the time! The other 399 are imaginary.
Belloc admits that this example is “an extreme and ludicrous case,” but goes on to show how that sort of transaction actually makes up a pretty good portion of our economic activity. He also mentions three other types of economic imaginaries, and I’ll bet modern readers can come up with several others.
I’d definitely recommend that anyone interested in the study of economics read this — both relative beginners like me, but also more knowledgeable people who might benefit from Belloc’s perspective, which is rather different from free-market capitalism.
Sunday, October 26, 2008
Next money question
We have a collection of Canadian coins that have been given to us over the years as change from MacBurger’s, the Stuff Mart, yard sales, and various other places. Being the honest citizens we are, when we notice we have them we put them away rather than try to use them in hopes no one else will notice getting them any more than we did at the time. Now, I’m not really interested in collecting Canadian money, but the only legitimate way I know of to get rid of them, besides giving them away or selling them to a collector, is to go to Canada and buy something with them. And that’s not going to happen, so I’m stuck with useless Canadian money.
I understand that something similar happens on the international scene — if we buy a million dollars worth of stuff from China, then China has a million US dollars that they have to do something with, and ultimately this money comes back to us in the form of someone somewhere buying American goods or services.
This would make sense if we were dealing with hard currency, but I’m pretty sure it’s virtual money.
Here’s how I imagine it happens: When Stuff Mart buys a shipload of Chinese doodads to put on the shelves in its stores, there isn’t really a guy with $1 million in Federal Reserve Notes handing it over to a guy at the Chinese factory. No, Stuff Mart’s bank debits one million credits, converts it to yen, and then those credits are applied to the factory’s bank account.
So this is a mechanical question — how does this really work?
There’s a philosophical question underlying it, but I’ll get to that later.
I understand that something similar happens on the international scene — if we buy a million dollars worth of stuff from China, then China has a million US dollars that they have to do something with, and ultimately this money comes back to us in the form of someone somewhere buying American goods or services.
This would make sense if we were dealing with hard currency, but I’m pretty sure it’s virtual money.
Here’s how I imagine it happens: When Stuff Mart buys a shipload of Chinese doodads to put on the shelves in its stores, there isn’t really a guy with $1 million in Federal Reserve Notes handing it over to a guy at the Chinese factory. No, Stuff Mart’s bank debits one million credits, converts it to yen, and then those credits are applied to the factory’s bank account.
So this is a mechanical question — how does this really work?
There’s a philosophical question underlying it, but I’ll get to that later.
Saturday, October 18, 2008
Money questions
Yesterday while reading Plutarch’s biography of Poplicola (d. 503 BC), we came across this interesting tidbit:
My Webster’s Collegiate Dictionary (fifth edition, don’t know what year, but the population information in the back is taken from the 1940 census) lists the first definition of the word peculiar as “belonging to an individual; privately owned; not common.” This dictionary also lists the word peculium, saying that it’s a term from Roman law and means “The private property of a wife, child, or slave.” Our word pecuniary, “relating to money,” comes from the same root.
The word capital comes from the Latin caput for “head.” Caput is also the root of the word cattle, from which we get our word chattel, and as Plutarch points out, our ancient ancestors measured their wealth in cattle.
This all makes sense to me. My question is, “How did we get from land and cattle to money?”
I’ve read a few accounts of how it happened, including RC Sproul, Jr’s in his Biblical Economics, all of which posit a kind of evolution from barter to tally sticks to pretty shells to hunks of gold to gold coins minted by a governing body. But none of these accounts offers historical evidence for this narrative so I’m wondering if that’s the way it actually happened.
Yesterday, after looking up the roots of the word peculiar, the kids and I looked up money. We had speculated that it would have something to do with manus, “hand,” meaning it’s wealth you can carry about in your hand. Boy, were we wrong! Money comes from the Latin word Moneta, one of Juno’s names. It was at the temple of Juno Moneta that money was coined, or minted.
This of course raises the question of what the money was for. Why were coins needed such that they were made at the temple of a Roman goddess?
Whatever the answer to that is, Juno’s money wasn’t the first. The temple of Juno Moneta was built in the year 344 BC, but money is first mentioned in the Bible during Abraham’s lifetime, more than 700 years earlier.
[T]he use of money was then infrequent amongst the Romans, but their wealth in cattle great; even now pieces of property are called peculia from pecus, cattle; and they had stamped upon thier most ancient money an ox, a sheep, or a hog…
My Webster’s Collegiate Dictionary (fifth edition, don’t know what year, but the population information in the back is taken from the 1940 census) lists the first definition of the word peculiar as “belonging to an individual; privately owned; not common.” This dictionary also lists the word peculium, saying that it’s a term from Roman law and means “The private property of a wife, child, or slave.” Our word pecuniary, “relating to money,” comes from the same root.
The word capital comes from the Latin caput for “head.” Caput is also the root of the word cattle, from which we get our word chattel, and as Plutarch points out, our ancient ancestors measured their wealth in cattle.
This all makes sense to me. My question is, “How did we get from land and cattle to money?”
I’ve read a few accounts of how it happened, including RC Sproul, Jr’s in his Biblical Economics, all of which posit a kind of evolution from barter to tally sticks to pretty shells to hunks of gold to gold coins minted by a governing body. But none of these accounts offers historical evidence for this narrative so I’m wondering if that’s the way it actually happened.
Yesterday, after looking up the roots of the word peculiar, the kids and I looked up money. We had speculated that it would have something to do with manus, “hand,” meaning it’s wealth you can carry about in your hand. Boy, were we wrong! Money comes from the Latin word Moneta, one of Juno’s names. It was at the temple of Juno Moneta that money was coined, or minted.
This of course raises the question of what the money was for. Why were coins needed such that they were made at the temple of a Roman goddess?
Whatever the answer to that is, Juno’s money wasn’t the first. The temple of Juno Moneta was built in the year 344 BC, but money is first mentioned in the Bible during Abraham’s lifetime, more than 700 years earlier.
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