Male-Male Relationships, Gay and Straight

If there is any word that might accurately describe the vast majority of human relationships, it is "dysfunctional."  This is all the more true when describing males' relationships with other males.  Recent studies show that young men are more emotionally damaged and prone to destructive behavior than young women when experiencing difficult romantic relationships.  As the article states, it is partially because men tend to rely on their romantic relationships for all forms of intimacy, where women tend to have one or more close friendships from whence they gain non-sexual emotional intimacy.  

In our continuing discussion of masculinity, I wanted to write a brief piece on male-male relationships, both gay and straight, and identify how men in our current age have become extremely isolated, with fewer and fewer emotional ties to the rest of society, and how in the absence of such, have turned to alcohol, drugs, and promiscuous sexual behavior as substitutes for real intimacy.  

Masculine intimacy is taboo in Western culture.  The people that might be expected to advocate it generally reject the value and benefits of masculinity itself, while the more primitive advocates of masculinity tend to view male intimacy (especially with other males) with great suspicion, if not motivated by outright homophobia.  It is true that men are less social creatures, than women, but they are not a-social, and the lack of a proper balance of healthy interactions with other people can lead to anti-social behavior (something men are far more prone to, on average, than women).  

There are few modern examples of intimate male friendships that are not the subject of the rumor mills, hoping to out some celebrity or public figure as being gay because of the friendships they keep (think Matt Damon and Ben Affleck).  Notwithstanding the minor pop-cultural craze over "bromances," real society sees very little intimacy in male relationships with one another.  There are no fond exchanges of letters between modern Thomas Jeffersons and John Adams.  I have in fact witnessed the toll of the intimacy deficit on straight men I know--the lack of having a trusted confidant with whom one can be transparent and open without fear of judgment.  Perhaps, as we have seen, the cause of this is the failure of society to provide appropriate forums for ceremonial combat between males and this leads men to view their intimate private lives as their realm of superiority over their fellow male.  

Because most of my friends are straight men, I am acutely aware of these issues.  Gay men, though, are not substantially better off.  In one sense, they are not afraid of male intimacy, which perhaps makes the remedy more accessible, but they nevertheless suffer from the same lack of examples of positive male intimacy as straight men.  Gay men in fact turn to sex (frequently very promiscuous sex) as a substitute for genuine intimacy, and this behavior is accepted--even celebrated--by the gay clubbing/hookup culture.  This is perhaps why gay male relationships are on average shorter than straight relationships and lesbian relationships--once the sex (that is, the intimacy substitute) is gone, there is nothing left binding the relationship together (especially since raising children is not yet widespread amongst gay men, particularly younger ones).  

If the stereotype of the gay man being "more in touch with his feelings" were true, one would expect longer-lasting gay relationships.  The absence of such, however shows both a lack of emotional maturity and a lack of broad understanding of how to relate to another male in a fundamental way.  It is much easier for men to ignore the emotional aspect of relationships in favor of sex in any context, but this is amplified when the relationships is with another man.  Similarly, male friends (straight or gay) that are characterized by the presence of more intimacy than would otherwise be expected are prone to "breakups" since men are not well-equipped (nor taught) to healthfully handle conflicts that are inevitable in intimate relationships (be they sexual relationships or platonic ones).  

The embrace and understanding of masculine intimacy is essential to the continued progress and development of society.  Stable, healthy gay partnerships will be a boon to the culture, while intimate friendships will help rescue straight men from their atomized isolation, reducing substance abuse, crime, and other anti-social behavior.  Simultaneously, it will aid society in moving away from its casual attitude toward sex (which has emerged precisely because of the lack of genuine intimacy of the old regime combined with the post-modern stripping away of the old regime's social norms and mores), helping solve the public health crisis surrounding sexually transmitted diseases and encouraging people to move away from their consumerist attitudes toward sex and relationships that has destabilized families and perpetuated the cycle of poor socialization of the young.  

Posted via email from The Mulling Stone

The Beginning of Men (Part II)

Virtually all of society's contemporary problems can be traced to a failure in the socialization of the young.  The nihilism of the 1960s counter-culture, in one generation, wiped away centuries of understood social norms and the expectation that children (at least in respectable society) are to be reared in such a manner that they grow up to behave within a particular set of constraints.  The entire notion of "self government" upon which the United States was supposedly founded can only exist in a context in which the young are socialized to behave in a self-governing manner (drive at reasonable speeds, do what you say you will do, don't steal, don't cheat people, tell the truth, etc.).  Because of the advent of post-modernity (which is not altogether a bad development), socializing the young has become stigmatized.  There seems to be a desire (whether active or simply motivated by laziness) that children should be raised as "blank slates" and encouraged to come up with their own set of values as they interact with the world.  Folly does not even begin to describe this approach.  

"Foolishness is bound in the heart of a child; but the rod of correction shall drive it far from him." (Proverbs 22:15)

Our experience with post-modernity has been necessary for social progress, and it has broken down many social norms that needed to be discarded.  The culmination of the Enlightenment and the Age of Reason into a nearly 75 year period of questioning and rejecting almost everything has allowed for the emancipation of women, the inclusion of openly gay people in mainstream society, the Civil Rights movement and a dramatic reduction in systemic racism, the rejection of the Church's anti-reason claims (6,000 year old earth, etc.), and many other things that have been net-positive.  But, as Chesterton said, "the whole point of opening one's mind, as one's mouth, is to eventually close it around something solid."  

We can no longer afford to ignore the issue of socialization in our public discourse.  The almighty supremacy of the State in contemporary society has emerged because there are no other arbiters of right and wrong in the post-modern world.  The arbitrary nature of the State and its claims to legitimacy strike at the core of the history of human existence.  When we had a King, we longed for the "rule of law," and now we have no rules but the law, nor could we bear them if we did, as the law has transformed from a check on the tyrant to the tool of tyranny for the political class and the bureaucracy. 

All of this is a proper preface for our discussion of the destruction of masculinity and the "end of men," for we must understand the decline of the male in the context of the failure of socialization of the young and the elevation of the State as the most important (perhaps the only) institution in society.  Men have been socialized in a classroom environment in the public schools (at least in America) where the vast majority of their teachers are females, and where now the vast majority of school administrators (particularly in the lower grade levels) are also females.  The feminization of schools means that young men are excoriated for their "bad" behavior while girls are rewarded for being conformist rule-followers.  The feminized school system is heavy on rules and short on meaningful discipline.  Male children, as a result, rebel against the rules knowing they will not be punished in any meaningful way.  

As Alastair pointed out in his post, the school system has come to lack any competitive features that encourage males' ceremonial combat, other than athletics.  Because the contemporary distortions of masculinity consider bookishness to be a feminine trait, and in-class competitiveness has been discouraged by the ill-considered notion that "everybody is a winner," the last haven of "masculinity" is in sports, not academics, and 40 years of this crisis has led to the logical end--the middle-aged man whose life revolves around drinking beer and watching sporting events.  

Consequently, we must reconsider how we educate and socialize young men, from the time they are infants all the way through college graduation.  Coeducational schooling must be abandoned en masse.  Here I argue not for single-sex schools, but merely for single-sex classrooms.  The learning environment should be free from the learning style conflicts that necessarily arise from one's gender.  Young boys should have predominantly, but not exclusively, male teachers, while young girls should have predominantly, but not exclusively female teachers.  As they progress toward high school, these numbers can gradually move toward an even split.  

The coeducational classroom environment is far more destructive to boys than girls.  Boys engage in their ceremonial combat in inappropriate ways in the presence of females in order to impress them, even from a very young age.  In the classroom setting, this often means they do say through acting out, engaging in an attempt to prove their dominance over the ultimate authority figure, the teacher.  Perhaps this is one reason I, as a gay male, was able to excel over my other male classmates as a child--I did not have the biological, psychological, or sociological drive to dominate my teachers in order to impress the females.  Gay male courtship also follows far different patterns (and within the gay population, far more diversity as well, depending on the roots of one's homosexuality, be they primarily genetic, biological, or psychological), so there was also no corresponding need to impress the other young males.  This helps offer an alternate explanation of why gay males have excelled generally in education in the last 20 years other than the fact that they "fit in" the feminized educational environment.  

Within the male classroom environment, grading standards must be manifestly different than the grading standards used for females.  Throughout the school year, the male grading system should be based on a strict bell curve, with publicly posted grades and a greater emphasis on oral evaluation with the other students present.  Where this might be intimidating and damaging to the female student, it causes adrenaline-driven learning, stimulating the natural biological disposition of the competitive young male.  Boys and young men, motivated by the desire to avoid public embarrassment and underperformance, will finally have a reason to seek out assistance from their instructors for material with which they are struggling.  A system of secret grading that allows a boy to hide his underperformance only compounds the problem, and seeking assistance would be perceived to be an admission of their failure.  In the competitive, public setting of the classroom, the embarrassment of asking for help after class would be considered by the young student to be the lesser evil when juxtaposed with the prospect of public excoriation.

Given only one year of implementing different teaching styles with males, standardized test scores would equalize between the genders.  Male students should be encouraged to defeat their classmates on exams, while female students should be encouraged to "do their best."  These differing approaches would exact optimal performance out of young men.  We have stigmatized male success and their drive to "be the best", and that is why they have become lazy an unproductive. 

If we want to look to the areas where men are still wildly successful in life, we need look only to the Forbes List, where males continue to dominate, even in the younger generation.  What we find should disturb us--nearly all successful self-made billionaires are college dropouts.  Where the contemporary collegiate environment has discouraged the exhibition of the biological traits that make men excel, those who managed to maintain their passion to be the best and destroy the competition simply excluded themselves from the academic setting and went off on their own.    The academic setting must be reformed to encourage these traits within the context of formal education so that our successful men also possess knowledge of history, the arts, languages, and civics.  Instead, they have become atomized and isolated, without proper socialization.  There are positive exceptions to this--Bill Gates is surely an example of the well-rounded person who has a competent understanding of society and how to interact properly with it.  But all too often, mis-socialization leads to people who commit heinous frauds in their quest to "get ahead."  The consumerist culture that has emerged in the last few decades is in fact one of the symptoms of our failure to properly socialize young men and instill in them the notion that civic duty, honor, and trust are more admirable traits than owning and possessing luxury goods.  If men cannot be super wealthy, they have no self-worth.  The dangers of this cannot be understated.

Furthermore, proper socialization of young men must be altered to de-stigmatized what have become "feminine" pursuits.  Theatre, art, music (real music, not the guitar), competitive debate, academic competitions, etc., must be encouraged.  Modern women complain that they cannot find acceptable males who are refined and cultured precisely because straight males are discouraged from participating in artistic activities by the stigma attached to it.  Simultaneously, gay men should be highly encouraged to participate in sports and to develop themselves physically from a young age, and to take active part in the more "alpha" male competitive pursuits.  Well-rounded "renaissance" men are a great gift to society.  The versatility once associated with male talent has disappeared due to the feminization of education and the stigmatization of artistic pursuits.  The straight males who do participate in the arts became a special subculture like the "hipsters" since they are not accepted by their football-playing counterparts.  

Our schools are not the only venue in which this proper socialization must take place.  The Church and the Home are equally as important.  In the Church setting, great care must be taken to show the masculinity of Biblical examples without the chauvinism that accompanies the narrative amongst modern conservative commentators.  We must show boys and young men that Jesus exhibited traits of righteous anger as well as great compassion. At times he cried, at others he yelled, at still others he refrained from showing emotion at all.  The Church should be a training ground for the Christ-like leadership traits of young men.  

At home, fathers must take an active role in the cultivation of this new masculinity as well.  Fathers must abandon their own entertainment pursuits to encourage their sons not only in athletics, but in academics and the arts as well.  Fathers must accompany their sons to the symphony and the theatre.  They must teach their sons about poetry and languages.  They must encourage these things alongside competitiveness.  Fathers, taking a more active parenting role, must allow "boys to be boys" and rather than discouraging sibling rivalry for the sake of "peace" (the mother's eternal pursuit with more than one male child present).  Sibling rivalries should be channeled into healthy competitions between brothers, and in the absence of a second male child, the father must play the role of the rival, sometimes winning their ceremonial combats and sometimes allowing the child to win.  The workaholic father who outsources his parenting duties solely to his wife and the schools is among the chief causes of the mis-socialization of our young men, and the more this takes place, the more difficult it is to rescue society's circumstances, since the cycle means fewer and fewer well-socialized men to serve as examples for the youth.

By synthesizing the recent degenerated view of masculinity with the historic aristocratic view of masculinity, we will simultaneously encourage a man that is both more masculine and more sensitive.  Encouraging oral argumentation and verbal sparring (where understanding the opposing viewpoint is essential) in the academic setting will lead to men who can better communicate with their female partners in a relationship setting.  By encouraging young men to participate in athletics and forms of academic competition, we will create men who know how to bond with each other in the absence of beer and televised football.  By de-stigmatizing young men's participation in the arts, we will find men more culturally adept, restore them to their historically prodigious production of refined music, art, and literature.  Like the Gentlemen of old Europe (and old America), they will be well-groomed and well-dressed, and yet ready at any moment to spar with an opponent on the "battlefield" whether in a match of physical or intellectual prowess.  These are men who can be proud of themselves, with clear aspirations that are not rooted merely in the accumulation of material possessions or an escape from the pain of failing to do so (which leads to alcoholism, sports addictions, and heavy use of recreational drugs).  

I am confident that we can redefine masculinity in the contemporary context to encourage all of the positive traits of historic aristocratic masculinity but in a way that recognizes the equality and value of women in society and avoids the chauvinism that has become the ersatz masculinity of the American male who has not succumb to feminization.  I am equally confident that this new masculinity will yield great benefits to young gay men, primarily in the form of more healthy and stable long-term domestic partnerships (that is a topic I will consider in the future in greater depth).  

The one element that is notably absent from my proposed solution set is the State.  The State is impotent to effect a new masculinity.  Not only that, its interests are diametrically opposed to such an effort.  The paternalistic Welfare State benefits greatly from emasculated men. Society, especially single women and single mothers, turn to the State in the absence of healthy masculinity in society.  The State promises to protect us from terrorists, from economic turmoil, instability, and all of the other risks of life.  The State of course cannot deliver any of these things, but the illusion, in the absence of an alternative, is sufficient.  This is why women in the modern age tend to support the paternalistic State in far higher numbers than men.  The numbers become even more disparate amongst unmarried women.  The feminist movement's discouragement of marriage and "relying on men" has led to a dramatic rise in State intervention in everyday life.  State socialism and feminism have had a symbiotic relationship over the last 40 years.  The return of healthy, non-chauvinistic, masculinity can serve as a bulwark against the further advances of the State, and this is one reason we can rest assured that public schools will never implement the recommendations I have made in this essay.  The educrats will claim that my recommendations fly in the face of egalitarianism, and would create a "separate but equal" scenario where women will receive an inadequate and inferior education (such claims would have no basis in fact, but it does not reduce their rhetorical value).  

Churches and private associations, in conjunction with strengthened nuclear and extended families must then pick up the slack, voluntarily, out of a desire to rescue society from its coming fate (remember the dangers of bored and unmotivated men?).  This is something we cannot legislate in the halls of Congress or the houses of Parliament.  Rather it is something that can only be legislated in the hearts and minds of people who want to put an end to society's rapid deterioration and have decided that they will turn off the television, log out of facebook, and do the necessary work to build a society where everybody is valued, where young men and young women are socialized in a  a way that encourages their best traits and talents in their own unique ways, and where everybody contributes to the creation of a rich new culture that is not rooted around base consumption.  Let us hope there are more than a few people interested in doing so.

Posted via email from The Mulling Stone

The Beginning of Men (Part I)

Alastair's post in response to the Atlantic article declaring the End of Men was both lucid and prescient.  He is particularly right in condemning the article for its expansive use of anecdote and speculation, particularly when it comes to claims that men are simply not suited for the modern economy.  On the issue of the competitiveness of men and the destructiveness of the modern classroom environment, which has become highly feminized, Alastair's analysis could not be more on-point.  Because I find myself in almost universal agreement with his conclusions, over and against those of the article in question, I will confine the rest of my comments to the slight areas of disagreement and, more importantly, I shall attempt to add a further dimension to the discussion of "masculinity," since as a gay male, I have a perspective that may be useful to consider in the context of this broader discussion of the roles of men and women in society.

If we have now seen the end of men as they once were, we must decide what the new beginnings will be if we are to avoid being subsumed by the feminization of society and the accompanying isolation of men from its leadership and economic benefits.

The entertainment media are wont to portray men either as egomaniacal chauvinists (military officers are a perfect example) or as lazy slobs, un-attentive to the needs of women, completely out of touch, and most often as alcoholics, marijuana users, etc.  Certainly this is not universally the case, but it is more common than not.  The exceptions are the with-it, sensitive gay men who understand women, are "in touch with their feminine side" and who are sophisticated, refined, well-dressed, and hold down a stable professional job (Will, of Will & Grace is the archetype).  I contend that these various characterizations have distorted, if not decimated a reasonable cultural sense of what masculinity is and what it isn't.  The rise of the "metrosexual" during the last decade (excellently caricatured by South Park in Episode #104 "South Park Is Gay!") further complicates and confuses what is expected by society when it comes to masculinity.  

Much of this confusion is derived from the feminist movement, the gay rights movement, and the political correctness gestapo.  But I would contend there is another culprit, one that is even more politically incorrect to identify, and that is the drive toward egalitarianism in the United States and Europe.  For hundreds of years, aristocratic society had a clear understanding of masculinity.  The idea of what comprised the ideal man may have varied from Spain to France to England to America (which was always a bit more egalitarian anyway), but at the root, the masculine man was basically the same: well-dressed, well-educated, competitive (but not aggressive), cultured, religious, and possessing a strong sense of honor.  

The last hundred years has all but obliterated the respect of aristocratic culture, and with it, the historically Western sense of masculinity.  Egalitarianism, no doubt, has been among the weapons of the feminist movement, a movement I am sympathetic to, and applaud for many of its successes.  But it is guilty of causing serious collateral damage that must now be repaired if society is to be saved from a further regression to primeval man and his antics.  For an unemployed, disenfranchised male population with no purpose in life is not just a drain on society, it poses a clear and present danger to public safety and political stability.  The causes may be different, but the disenfranchised Arab male should be our cautionary tale.  Bored, and with no purpose, the Arab male has created an ersatz vocation that  (combined with incendiary interventionism in their home region by the United States and its allies) has brewed into a toxic and explosive mix that is economically destructive and threatens lives both there and abroad).

The trouble of course is that we are now nearly too late to fix this problem by traditional means of cultural transfusion.  The World War II generation, perhaps the last of the old guard aristocracy, is dying off and is in no position to set an example for today's youngsters.  The men of today's governing generation are split between the cultural and ethical nihilism of the 1960s and the ignorant chauvinists that tend to comprise the traditionalist camp, who do not have the refined sense of existence that the older aristocracy possessed.  The advocates of virile masculinity in the United States are primarily those who might align themselves with such movements as "Promise Keepers" and other organizations of the right-wing evangelical community.  Numerous books have been published on the subject by these people who argue for "traditional gender roles" without even understanding what those roles have traditionally been, but have rather contrived a sense of "masculinity" that is offensive in almost all regards, demanding a reversal of the genuine progress of women and homosexuals in gaining legitimate status in society. 

This view generally advocates a "traditional family" with a strong male leader, a domestic housewife, etc.  They have come up with such preposterous ideas as the "ex gay" movement and "sexual orientation therapy" because they view gays (especially gay men) as a threat to masculinity.  The scapegoating of gay men when it comes to the feminization of culture is rampant in conservative America, nowhere more evident than in the debate over the repeal of the ban on open homosexuals from active service in the US military.

I contend that gay men have actually been among the chief victims of the feminization of culture, rather than its beneficiaries.  Contemporary "gay culture" is, like the beer-drinking-football-watching-lazy-sloven-straight male culture, an escape from masculinity.  Because the feminist movement, and women in general, have been the leading advocates of gay rights in society, it has been easier for gay men to associate with women and their political causes, than might otherwise naturally be the case, in the absence of rejection and derision by their straight counterparts.  The overt discrimination against openly gay men in collegiate and professional athletics has either kept them in the closet, or pushed them into other endeavors (such as the arts) where they are more accepted by their peers.  

And yet, gay men idealize and adore straight masculinity, with gay men frequently wishing that attractive straight celebrities "played for our team."  Indeed, one of the most puzzling things for me as a gay man is to examine the overt disconnect between idealized masculinity and the "culture" of most gays.  I am painting with broad strokes here, but I do not think it is off the mark to say that most gay men find the muscular, athletic male physique, the "greek god" look, to be the idealized male physical form.  As easy as it may be to scapegoat gay rights and the acceptance of gays into mainstream culture for the feminization of society and the death of masculinity, I would contend that nothing could be more off-base.

How, then, can men, gay and straight, be called away from their escapes from masculinity to redefine what maleness means and how it is to be practiced in the contemporary cultural milieu?

This will be the subject of my next post, but in the meantime, I look forward to any thoughts, comments, or questions on this topic.

Posted via email from The Mulling Stone

Is Communitarian Capitalism Possible?

The Christian in the 21st Century who takes his faith seriously must at some point struggle with the ethical side of our global economic system.  Generally speaking the world operates under capitalist principles, that is, property ownership is recognized and protected by law, and the means of production are in private hands.  Most economies operate with a major caveat, which is that the State maintains the ability to confiscate large percentages of the revenues derived from capital in the form of corporate income tax, which could arguably call into question whether the system is capitalist or not.  For the sake of argument, we will stipulate for the time being that this is a non-issue.  

The capitalist system, which has been in operation on a global scale only really since the Second World War (and for much of the world, even more recently).  Generally speaking, the colonial systems of the European Empires were mercantilist by nature, and not capitalist.  However, the domestic industrial revolutions in America and Britain birthed modern capitalism, and it is their legacy that has brought us to our present state of affairs: relatively free trade, open international markets, globalization, free movement of capital & goods.  This system has brought more wealth into the world in the last 60 years than has existed in all of the eras of history combined.  

Yet, we look around ourselves and we see people living in abject poverty in all corners of the globe, even in the so-called "developed countries."  Poverty and hunger are ubiquitous in places like Africa and Asia, and 40 years of foreign aid has done little to alleviate that pain.  We look to other corners of the world and see wealthy bankers making billions of dollars on complex financial instruments that the average person doesn't understand (and likely never will), and it it certainly enough to make a thinking, compassionate Christian alert to the fact that something is horribly wrong.

The liberal wing of the mainline Churches in the United States have seized on the issue of poverty and inequality as an ersatz theology to fill a void left by their abandonment of the scriptures and 2,000 years of tradition.  Their concern for the poor may be genuine, and it is undoubtedly appealing to those of us who believe Christianity is about binding ourselves to the person of Christ, who himself showed great love and empathy for the outcasts and downtrodden of society.  But to paraphrase G.K. Chesterton, they may be right about what is wrong, but they are wrong about what is right.

For they would have us believe that capitalism is the great satan, the creator of inequality, the depersonalization of humanity, run by robber barons and plunderers.  They are quick to advocate State intervention to remedy these perceived social injustices through punitive taxation and the creation of entitlement programs to "help the less fortunate" (the Radical Orthodoxy crowd being a notable exception).  But they rely on appeals to emotion, and not on facts and evidence to support their claims.  They ignore (quite to their own peril, and everybody else's) the reality of incentives and economizing behavior in the creation and distribution of goods and services.   And they continue to ignore the longterm consequences of entitlement programs, both to the people they are designed to help, and to the economic health and stability of the world at large.  The economies of the developing world are now going to suffer global economic instability because of the licentious fiscal behavior of the Western countries over the last 50 years.  Surely a system predicated on theft, debt, and default does not fit into the ethical framework of the New Testament.

One alternative, as I alluded to in the previous paragraph, is that provided by the Radical Orthodoxy movement, which favors what I would call Left-Libertarian / Anarcho-Socialist solutions to these problems.  The followers tend to oppose globalization, prefer localism (especially consumption of things produced locally), and favor the use of cooperatives in lieu of corporations.  They extol the virtues of the democratic governance of cooperatives in making decisions about production and consumption--a veritable utopia of workers united in solidarity with one another making choices for the common good.  

Although the longterm fiscal implications of wealth transfer programs contemplated under State Socialism are not present in this anarcho-socialist vision, neither are the proper incentives of economizing behavior given to us by capitalism.  Until the other side of this debate can provide a comprehensive, cogent argument that switching to such a system of exchange would not cause a collapse in the division of labor (the increase of which is the sine qua non of economic growth), then we cannot begin to take seriously their claims, no matter how theoretically appealing they may be.  

 For those of us who see the immense benefits capitalism has bestowed upon society in the last 200 years (at least in America), the question should not be "with what do we replace capitalism?" but rather, "how do we make capitalism a more ethical system?"  If we want to achieve the permanent alleviation of poverty, we will be forced to make the pie bigger, not merely cut it into ever-smaller slices.  My contention is that there is no system, other than capitalism, that provides the proper set of incentives to accomplish this end.  

Capitalism's opponents contend that the system impersonalizes exchange, and robs our economic behavior of any sort of humanity.  This is why, they argue, that we buy clothing made in Chinese sweatshops by laborers paid pennies an hour, working in horrendous working conditions.  We do not see them, and thus we cannot appreciate the harm we are supposedly causing them.  But I would argue that unless we were to go back to an agrarian society with a very low division of labor (and therefore far less wealth in total), we are never going to know the people who make and supply us with the goods and services we use in everyday life, and indeed this would be quite inefficient.  

(It is worth noting that when we talk about "total wealth" this includes modern medical technology, modern communication & access to information, rapid transportation, and countless other conveniences of the modern age that free us to engage in untold quantities of leisurely pursuits utterly unknown to our ancestors.)

Certainly the idea of the impersonalized world, and the detachment of the post-industrial age should be grievous unto all of us.  One of the collects in the Order for Compline in the Episcopal Book of Common Prayer calls us to be mindful of this reality,

"O God, your unfailing providence sustains the world we live in and the life we live: Watch over those, both night and day, who work while others sleep, and grant that we may never forget that our common life depends upon each other's toil; through Jesus Christ our Lord.  Amen."

So the question we should pose is this: how do we repair capitalism?  How do we transform it from a two-edged sword into a purer force for good in the world?  Is it possible to combine the ethos of communitarianism and the systematic incentives of capitalism to maximize growth while eliminating poverty and hunger?  

I hope to explore these questions in future posts, but would love to hear others' thoughts on the subject in the meantime.

Posted via email from The Mulling Stone

What the EuroPact Doesn't Accomplish

"Revolutions can be neither made nor stopped.  The only thing that can be done is for one of several of its children to give it a direction by a dint of victories." -Napoleon

The Bond Vigilantes and the other Gods of the Marketplace may have been temporarily mollified by the weekend's emergency EU accord, in spite of the fact that none of the agreements can be certain with a constitutional challenge to the entire notion of sovereign bailouts looming in the Bundesverfassungsgerict (the German Supreme Court).  Angela Merkel's party was obliterated in local elections in the Rhine-Westphalia region because of the governing coalition's support of the bailouts--so the bailout itself is far from a certainty, and it is all based on the nebulous concept of "loan guarantees" whereby one bankrupt state whose credit rating hasn't been junked (e.g. Germany) promises to back the debts of another bankrupt state whose credit rating has been junked (e.g. Greece).  So what the markets are cheering here is the idea that things are going to be ok, and certainly not any reality of that.

But that doesn't get us past the real issue.  The markets seem happy today, but the Greeks are still rioting.  If the bailout does in fact happen, they are going to riot even more, what with the myriad of unreasonable conditions accompanying the bailout--telling government employees they can't get paid for 14 months of work in each 12 month calendar year, advising people that they have to work until they are at least 55, or, god forbid, 65.  Europe is in a veritable double-bind.  If the bailouts don't happen, the markets will decimate the Euro, and turn the PIIGS into Argentina circa 2001.  If the bailouts do happen, the Greeks will burn Athens to the ground.  Whatever happens, I don't expect the Greeks will be contributing any actual work to their own recovery.  

Greece's sovereign debt is $405 Billion, about 125% of GDP.  That is about $35,000 per man, woman, and child in the small mediterranean republic. The rescue package for Greece totals out to about $140 billion, which is about what was ultimately spent on the bailout of AIG after Lehman Brothers collapsed. Spain's public debt is approximately $650 Billion.  Portugal is another $200 Billion.  Italy, the behemoth, is more than $2 Trillion.  The sort of financial austerity necessary to get these numbers under control will inflame the latin passions of the Spanish, Portugese, and Italian people, and Rome, Madrid, and Lisbon will soon look like Athens does today.  

There is no bailout that fixes this fundamental problem.  The welfare state is like a drug addiction, and there are a lot of junkies about to be forced to quit cold turkey.  What may please the bond vigilantes today will turn the masses into mobs tomorrow.  There is simply too much debt and not enough equity (real, tangible, underlying assets) in the world.  All of this will pale in comparison to the effect of a downgrade of US or UK sovereign debt--that chapter is yet to come.

In the meantime, I wonder what will happen when the next German general election rolls around and these unpopular bailouts are put to the ballot box test.  Or, perhaps more titillating is the thought of an enterprising Tea Party candidate putting 2 and 2 together and realizing that when the IMF is putting up half of this mammoth rescue package, most of that money is coming directly or indirectly from the American taxpayer.  

As I pointed out more than a year ago--if you borrow from Peter to pay Paul for long enough, eventually Peter will be broke.  

For now, I wouldn't be planning any vacations to Europe. The worst is yet to come.

Posted via email from The Invisible Sand

The Question of Vocation

I have spent much of my life answering the questions "what am I here for?" and "what am I called to do?" In many respects, I think these are actually the most central questions to Christian Ethics. Most people allow their lives to be governed, from the day they achieve memorable consciousness until the day they lose it, by the force of inertia. This, I think, is the concrete manifestation of "original sin," and I think all other sinful behaviour stems from it. The man who is unhappy with his marriage and cheats on his wife does so because it is easier to find a mistress than repair a marriage. It was easier for Bernie Madoff to run a ponzi scheme than to make good investment decisions for his clients. Genuine success in business is a lot of hard work. Inertia, and its human personality trait, laziness, tell us there is an easier way. Addiction to drugs and alcohol are another clear example of inert sin, as they provide an ersatz solution to every one of life's problems, all wrapped up in one simple little substance. Vocation, quite literally, means "a calling." It is the thing that we were born to be doing. But vocation is not just a calling, but a calling away. Rarely are we born into the circumstances in which we are to perform our calling. Rarely do we grow into it as a natural process. This mode of living and thinking is perhaps the most grave manifestation of our original sin. After all, what could be more offensive to our Creator than to let the gifts He gave us rust and decay? Our tendency in life is to grow wildly, like a tree, with a branch shooting out here and another there, weeds growing at the base of our trunks. Our lives instead should be like a bonzai tree, carefully twisted and turned in well-planned detail, and responding to the unexpected curves as they come about, constantly uprooting any of the weeds that may inhibit our growth, and cutting off branches that are bound to die or have died already. Such intentionality has been the hallmark of greatness throughout history, but it is among the rarest of all humanity's deeds. Responding to our respective vocations, then, requires an intentional confrontation with our own laziness. We must consciously eschew the easy path, we must each day fight the natural tendency of regressing to the mean, and as a result bear and endure a tremendous level of legitimate suffering. In most cases, we must make the decision to leave our families and friends, the comfort of our childhood circumstances, and in many cases, we must even leave our homeland itself. We tend to have two unique problems when it comes to responding to our vocation. The first is that often our vocation is for many years unclear to us. We may have inclinations at various points in time, and sometimes we are even presented with a sort of "divine hint." But the process of discerning our true vocation can be long and arduous. For the lucky few, the brilliant physicist, the prodigy violinist, the magnificent artist, vocation is clear. For the rest of us, it rarely is so simple. Sometimes, too, we look for a vocation that fits neatly into a job description. But we are born with so many talents that such a narrow focus will not do our calling justice. It is for those of us who seem to be pulled in many directions at once that the discernment of vocation can be most difficult. Then, we are likely to suffer a long process of trial and error, of fine tuning, and in some cases making wholesale changes, abandoning a path that we once thought was ours, and diverting completely anew.

The other problem is that so often we know what our vocation is, and yet we ignore it. Too many painful decisions, too much risk, too much worry, "what will people say?" and all of the other excuses our inert innerself makes for not striking out on our own personal life journey. Common also is the unpleasant truth that pursuing our vocation means a lot of unfulfilled dreams in life. When we set our hopes and expectations on what we are supposed to do, there is virtually no chance it will be achieved in our lifetime, and we do not see the benefit of what comes after. Moses did not live to see the promised land. King Solomon described the vocational problem thusly,

"Concerning the condition of the sons of men, God tests them, that they may see that they themselves are like animals." For what happens to the sons of men also happens to animals; one thing befalls them: as one dies, so dies the other. Surely, they all have one breath; man has no advantage over animals, for all is vanity. All go to one place: all are from the dust, and all return to dust. Who knows the spirit of the sons of men, which goes upward, and the spirit of the animal, which goes down to the earth? So I perceived that nothing is better than that a man should rejoice in his own works, for that is his heritage. For who can bring him to see what will happen after him?

We have only a finite period of time on the planet, and it is well that we are kept unaware of how much time it is. Parkinson's law tells us that "work expands so as to fill the time available for its completion." By not knowing how much time we have left, we are forced to assume (if we are rational) that it could come to an end at any time. As such, we must behave as if our vocation must be pursued with the greatest urgency. Urgency requires us then to prioritize our activities and behave strategically. When building a house, most people are constrained to operate within a budget during construction. Since in most cases, many of the resources used for completion are purchased on credit, the person is also constrained by time as well is finance. Our lives operate in much the same way if we desire to pursue our calling. Each idle minute that ticks away without our focus and dedication to that thing which we are meant to do is a moment of sin, of giving in to our nature of inertia. This does not mean that we are not to enjoy any leisure at all. We must orient ourselves to a proper balance of focus and relief. The Judaic notion of the Sabbath (which Christians have all but come to ignore, and which Jews tend to ignore the purpose of in giving in to a legalistic view of it) recognizes that we cannot work without rest. "Sabbath" indeed shares a root with the word "sabbatical" and we all need short intermissions each week combined with more infrequent periods where we disconnect, reflect, and refresh ourselves. But I fear that in the current era, we have forgotten how to work as well as rest. We never dedicate our attention to anything. We are constantly divided, our minds running in many directions at once. What with email, facebook, twitter, text messaging, phone calls, the 24 hour news cycle, and the crisis of the day in our jobs and families, what time is there for real focus on our calling? And how little time is left for true rest? In the Anglican liturgy, all of the various forms of the penitential order include a request for forgiveness for the things we have left undone. Most people probably read this and think about specific interactions where they perhaps could have been more helpful, or other micro-instances of the sin of omission. Rarely do I think we really consider the meta-context of our life and calling, in that every day we allow inertia to prevent us from doing the things necessary to respond to our calling. "The burden" of this, as the prayer goes "is intolerable." Or at least it should be.

The beauty of responding to one's calling is that there is no "freeloader" problem. In many aspects of life, people refrain from doing certain things because they are afraid somebody else might get a free ride. But in this case, there is no such problem. The world assuredly is enriched when one of its inhabitants follows his or her dream, but nobody will enjoy the unique blessing of living life with a purpose unless he himself is pursuing his own calling. There are approximately 7 billion people living in the world today. That is more people than have lived in the entirety of human history combined. How many of us pursue each day our vocation in life? How might the world be radically changed if but 1% of us did? And how would each of our lives be more fulfilled if we did so?

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How the Mainline Churches Can Grow Again

Lewis Rothschild: People want leadership, Mr President, and in the absence of genuine leadership, they'll listen to anyone who steps up to the microphone.  They want leadership.  They're so thirsty for it they'll crawl through the desert toward a mirage, and when they discover there's no water, they'll drink the sand.

President Andrew Shepherd: Lewis, we've had presidents who were beloved, who couldn't find a coherent sentence with two hands and a flashlight.  People don't drink the sand because they're thirsty.  They drink the sand because they don't know the difference.

-The American President

This week I read two interesting articles, one a Christian Science Monitor article about the resurgence of Calvinism which juxtaposes with a blog by Walter Russell Mead about the decline of the Mainline denominations in America.  Both articles cause me more than just a bit of grief.  As a "recovering Calvinist" (which I think, much like alcoholism, one is never a fully recovered Calvinist) and an Anglican, they hit home in their own respective ways.  

Mead makes a point that is rarely, if ever, addressed from the pulpits of the mainline churches,

The great question for fundamentalist and evangelical religion is the relationship of revelation to modern science.  The great question for modernist and mainline religion is the ’so what’ question.  If members are not sinners being saved from the flames of Hell, if Christianity is not the one path of salvation offered by a merciful God to a perishing world, if a relationship with God is not the only means to surmount the challenges of each day much less to meet the great tests of life — why go to church?  Why pledge?  Why have the kids go to Sunday school rather than soccer practice?

This is something readily grasped by the Neo-Calvinists.  They answer that we are indeed Sinners in the hands of an angry God, damned to hell, and hanging by a thread if not for the unknowable grace of God.  Undoubtedly, we always know where the Calvinists stand, and that is much of their appeal when faced with the Spiritual and Theological vacuum not only from the mainline churches, but from Stadium Church America and the likes of Joel Olstein and the other counterfeits who are just happy clappy motivational speakers thinly veiled by the rhetoric of pseudo-New Testament Christianity.  

I contend that the resurgence of Calvinism is the direct result of a lack of alternatives.  People would rather be told that they are damned to hell than that life will be better if only they think positively and pray to God to make them rich.  The Calvinist claim is at least more believable, and the harshness of it leads people to the belief that it must be true, because it sure isn't a good marketing tactic.  

Yet that is precisely what makes it a good marketing tactic.  People are seeking truth, they want to hear from somebody who will level with them and be honest, rather than somebody who tries to play bait & switch with them.  The Calvinists, as wrong and backward as they may be, at least appear to be telling hard truths, hence their appeal.

The mainline churches, on the other hand, assuming they choose to abandon their current raison d'etre, which is to attempt to provide theological cover for a radical left-wing political ideology, have the unique opportunity to reopen a dialogue with the unchurched, and with many people who have been drawn to Calvinism by its harsh message.  That dialogue goes something like this (and it will work in growing the Church not because it is a clever marketing tool, but because it is manifestly true):

The world is a tough place.  We are born, and then before we know it, we are on our deathbeds, wondering what more we could have made of our lives, wishing we had done this or that better or just differently.  Our lives, as much as they last, are filled with physical ailment, broken hearts, financial worries, and unfulfilled dreams.  No matter how smart we are, no matter how hard we work, most of these things are unavoidable.  We don't know why it is, we just know that it is.  Yes, life is difficult.  No, there aren't any easy answers.  St. Paul tells us that we are each to "work out our faith with fear and trembling."  With life the way that it is, the uncertainty of what happens to us at our death, and our attempt to find meaning while we're here, we know there is a lot of fear and a lot of trembling out there.  

But the good news is that you don't have to do any of it alone.  We won't insult your intelligence by claiming to have the answers, because we don't.  We aren't any different than you are in that sense.  But we have decided that the unexamined life isn't worth living, and so we gather every week, sometimes more, to examine life, to live in community with each other, sharing each other's struggles, bearing each other's burdens.  Nobody deserves to go through life alone, and that is why Jesus told us that we should be known as his followers in the way that we love one another.  And that is what you will find when you come to see us--we truly love one another.  There are no contrived handshakes and pointless mechanical greetings.  We know each other and we want to get to know you too.  We have our chaos, we have our times of depression and emptiness, and none of that will ever go away.  But we have each other to lean on, and we have a remarkable example to follow in the life and sacrifice of Jesus.  And that is something you won't find anywhere else.  

Community through communion, shared struggles and common purpose.  That is the Shepherding of the Flock, the Feeding of the Sheep, the task that Jesus laid at the feet of St Peter, and the task that is at the feet of the Church today, woefully left undone.  The Gospel (Good News) is not that we are saved from the incomprehensible abstraction of Hell, but rather the Gospel of Jesus is "Come unto me, all you who labour and are heavy laden, and you will find rest for your weary souls."  

Posted via email from The Invisible Sand

Thought of the Day - 16 April 2010

If voters suddenly stopped fighting cultural wars at the ballot box, politicians would be stripped down to those who support the productive members of society and those who are just shameless thieves.

Posted via email from The Invisible Sand

The Fall of Rome

by W.H. Auden

The piers are pummelled by the waves; In a lonely field the rain Lashes an abandoned train; Outlaws fill the mountain caves. Fantastic grow the evening gowns; Agents of the Fisc pursue Absconding tax-defaulters through The sewers of provincial towns. Private rites of magic send The temple prostitutes to sleep; All the literati keep An imaginary friend. Cerebrotonic Cato may Extol the Ancient Disciplines, But the muscle-bound Marines Mutiny for food and pay. Caesar's double-bed is warm As an unimportant clerk Writes

I DO NOT LIKE MY WORK On a pink official form. Unendowed with wealth or pity, Little birds with scarlet legs, Sitting on their speckled eggs, Eye each flu-infected city. Altogether elsewhere, vast Herds of reindeer move across Miles and miles of golden moss, Silently and very fast.

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Friedman's Fools and Krugman's Kronies

“A foolish consistency is the hobgoblin of little minds.” -Ralph Waldo Emerson

Since the earthquake struck Chile a little over a week ago, the opinion press in the United States has run rampant with polarised ideological pieces lauding Milton Friedman and Augusto Pinochet on one side and condemning him in favour of Marxist Salvadore Allende on the other.  The Wall Street Journal and the triage of Krugman, the Huffington Post, and Salon have battled each other with useless rants based on a tenuous grasp of the facts. 

Life and economics are messy businesses, and economic theory (on either side of the spectrum) rarely accommodates reality. Chile, like all macroeconomic success stories, lacks a history that falls neatly along any ideological lines.  

Massive privatizations of state-owned enterprises, the strict protection of private property, deregulation, and free trade have driven the country’s prosperity, attracted tens of billions in foreign investment, and have made Chile the most developed country in Latin America.  Simultaneously, strict building codes, the surpluses from state-owned copper giant Codelco, and the state-funded nascence of the salmon farming industry in the 1980s have made Chile the diversified and stable country with a resistance to the effects of earthquakes.

To call the country a mixed economy would be too obvious, as every economy in the world (save perhaps North Korea, Zimbabwe, Cuba and a few others) is in some way a mixed economy with some market mechanisms and some state control.  

What ultimately differentiates Chile from its neighbours in the region (and with countries like Haiti) is that ideology has actually played very little role in policymaking in the last 30+ years, and successive governments have eschewed most interventionist policies in the economy while maintaining those that seemed to work.  The right-wing dictatorship of Pinochet pursued both free market and statist economic policies, as has the centre-left Concertacion since the return to democracy.  And the new centre-right government of Sebastian Piñera will have more in common with Concertacion than not.

This no doubt frustrates both the Krugmanites and the Friedman sycophants who want to turn every disjointed bit of data in other countries into an indisputable case for their respective partisan ideological claims in the United States, a country with more than 17 times as many people as Chile, an economy 88 times larger, and with a radically different historical context.  

Chile has neither vindicated Keynes nor substantiated Friedman.  What it has proven, however, is that:

• People, when left alone in most matters, are more productive and more prosperous than people whose lives are subject to constant meddling. 
• Private property protection is a necessary prerequisite for foreign investment. 
• State encouragement of targeted new industries where the country has a competitive advantage can work.
• Saving rather than deficit spending promotes stability (even if it is achieved through a state-owned copper company).
• Litigious countries discourage economic growth (Chile is notoriously not litigious).
• Lack of government corruption and faith in institutions engenders an honest citizenry (How many other countries could convince looters to return stolen merchandise after a natural disaster?)
• Building codes in earthquake-prone countries prevent people from dying.
• Free trade, even if unilateral, creates unparalleled prosperity and discourages countries from militancy. 

If people wonder how Chile could have developed so differently from Argentina or Venezuela, for example, there is a clear historical answer: for some reason, throughout Chile’s recent history, the country has been run by mature people who more often than not put their country’s interests above their own political power and above their own political ideology.  Pinochet gave up power willingly after losing the plebiscite of 1988, the first president after the return to democracy refused to extend his term in spite of his immense popularity, and in 2010, the Concertacion has handed over power to the centre-right amicably, even after more than 20 years in power.  

Other countries in Latin America and the various emerging economies of the rest of the world would do well to imitate Chile in this basic premise--that ideology and personality cults do not bring nations to sustained prosperity: hard work, reason, and flexibility do.

Posted via email from The Invisible Sand

A Tale of Two Chiles

This past weekend's earthquake exposes a geographic and cultural rift in South America's strongest, most stable, and most resilient country that the incoming government must address if it desires to sustain the miraculous economic development that this country has enjoyed over the last two and a half decades.

Having recently returned from a trip to the South of Chile myself, and having been in Santiago for nearly the last two years, I am struck by the developmental disparities. In the more touristic city of Puerto Varas, one might find modern 4 star hotels, nice restaurants, clean streets, new buildings, and modern grocery stores. But the surrounding towns cause one a bit of a time warp, with old, unrenovated houses, small local markets, and deteriorating infrastructure. Compared to the steel and glass high rises and hypermarkets of Santiago's Las Condes or Vitacura comunas, one might think they had been transported to another country.

Growing up in rural northwest Arkansas has given me a reasonable perspective on the subject, however, for Chile's problems are little different from the same problems facing largely rural areas in the highly developed economies of the United States and Canada. The urban-rural divide is perhaps not a problem to be solved, but a reality to be dealt with over the course of time. However, my own home town of Bentonville is an excellent example of how a rural, small-town community can be transformed into a hotbed of commerce and innovation by the presence of entrepreneurship and market forces. Chile does not need another Santiago in the same way that the United States does not need another New York City. But Chile needs a Bentonville, a Redmond, a Cupertino, an Omaha, and a Research Triangle spread over its beautiful and diverse 2,600 mile corner of paradise, wedged between the mighty Andes mountains and the cold blue Pacific Ocean. The new government, personally led by entrepreneur and billionaire Sebastian Piñera (who also holds a PhD in Economics from Harvard) has this challenge ahead of it. His dynamic teams at both the Ministry of Economy and the Ministry of Planning and Development should work to design attractive market mechanisms to draw industry, culture, and entrepreneurs from all over the world, while encouraging the talents of its (by Latin American standards) highly educated population to be directed toward entrepreneurship as well.

So many developing economies have made the mistake of offering temporary gimmicks and short-term tax breaks to attract foreign investment, and for the most part Chile has avoided this temptation (and should continue to do so), but the country is reaching the limits of current policy and incentives. Santiago is bursting at the seams, and is sprawling into the valleys outside the city in search of lower-cost real estate. The further development of Santiago will undoubtedly come at costs, even while Chile is among the least densely populated countries in the world. The right permanent shifts in tax policy combined with a few strategic investments in infrastructure could transform the unipolar economy of Chile, centered around Santiago, into a bustling and diverse nation with several regional economic hubs that lift millions into the global middle class, eradicate poverty, and transform Chile into the Hong Kong or the Singapore of the Western Hemisphere. The 5th freest economy in the world already (according to the CATO institute), Chile is poised for this transformation, but political speeches and mere desire alone are insufficient to inaugurate the necessary legal and cultural changes.

If the cities of southern Chile were as well developed as Santiago, the human tragedy of this weekend's earthquake would have been substantially mitigated, and the impact in the South would have been closer to the minor impact it has had on the city of Santiago. The question is: does the new government have the the will and the creativity to aid in this transformation, or will it let inertia dictate its developmental agenda?

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Still Standing in Santiago

When I moved to Santiago, Chile nearly 2 years ago, I knew that at some point I would experience a massive earthquake. This weekend, that experience transpired, and I am happy to report that we escaped unscathed, and did not even sustain any property damage. Undoubtedly, we have been quite fortunate, as the people in other parts of Santiago have been harder hit, and the people in the South of Chile have been devastated.

However, if there is anything I have learned from this experience, witnessing first hand a major natural disaster in a foreign country, it is that the English-language media is not only comprised of wild-eyed hysterics, but they are abjectly irresponsible in the manner of their reporting to the point of crossing numerous ethical boundaries in their attempt to create sensational headlines and sell their news. Contrary to the headlines of widespread looting and panic, a drive around many parts of Santiago would reveal the diametric opposite. Traffic is flowing as normal, though slightly-longer-than-average lines at the gas stations might make one wonder if there is a long holiday weekend coming up. A few signs are crooked, or even downed, and a few buildings have glass panes that have been broken out. Other parts of Santiago have sustained more damage, to be sure, but there have been no gangs of marauders darting from house to house or business to business taking everything in sight. On the contrary, the subway in Santiago is already back online, and in this city of nearly 6 million, only 300,000 are still without electricity (though I happen to be among them).

The human tragedy in Concepcion, Talca, Constitution, and other cities in the South of Chile is unquestionable. Yet, what has happened here is nothing in comparison with the chaos and panic witnessed recently in Haiti, and the quake here was much stronger. Chile should be commended for its remarkable preparedness in both the quality of the construction of its buildings, in addition to the preparedness of its medical and law enforcement personnel, which have prevented any semblance of anarchy from emerging onto the scene.

Most grocery stores in the eastern part of Santiago are now re-opened, and I am typing from a stable WiFi connection in the restaurant of a hotel here, with the hopes that my power will be restored in the next few hours. We in Santiago are the lucky ones, and my prayers go out to the people in the South as they begin rebuilding their lives. One thing I can state confidently about the Chilean people, after my interactions with them over the last 2 years is that they will rebuild stronger than ever, recover faster than virtually any other group of people from a similar type of disaster, and they will be even better prepared for the next disaster than they were for this one. Such resilience is a rare find, but it is found in abundance is this sturdy Republic at the end of the world.

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Why I Support Ben Bernanke's Confirmation

The Federal Reserve is a broken institution predicated on inflationary, boom & bust principles, the intellectually and morally bankrupt concept of fractional reserve banking, and the concentration of the benefits of credit in the hands of government and a few privileged elites. The institution itself needs serious reform at the least, or else it needs to be disbanded altogether and replaced with a system of market-driven credit and interest rates. Ben Bernanke has by all accounts been a crafty Fed Chairman, though that is not necessarily a compliment. He is a dire inflationist, and spends too much time studying the wrong aspects of the Great Depression. I generally think he has engaged in and covered up massive and widespread fraud through the private Federal Reserve Bank of New York. But in spite all of this, I think he should be re-confirmed. Like everything in the politics of a democracy, we do not choose leaders in a vacuum; the choice is always between and amongst a variety of alternatives. So the real reason I support Ben Bernanke is that I am mortified of the alternative:

The Elephantine Ego that is Larry Summers.

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Paul Krugman, The Great Nobel Joke: Part I

Paul Krugman recently wrote a blatantly fallacious and purely political bit of nonsense (no surprise) entitled "Learning From Europe."

When I read it, I considered writing a response, but fortunately, these guys did it for me. Funny that France has a lower per capita GDP than Arkansas.  Ouch.

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When the Dust Settles, Leftists are all the Same

The Austrian School economists have long held that moderate government involvement in the economy always leads to total government, and that it is merely a matter of time.  It seems that there is a corollary: all Left/Centre-Left politicians are merely Marxists constrained by their political climate, and that given the chance, they would all become a Chavez or a Castro.

Our closeted Marxist of the day is none other than Gordon Brown, the bumbling buffoon who, thanks only to the fact that he was a necessary tool in the grander political designs of Lord Mandelson, continues to be the Prime Minister of the United Kingdom (or, in a post-Lisbon Treaty world, perhaps we should begin referring to it as the United Fiefdom).  

Anybody who follows the British press will know about the near-mass hysteria over Kraft's attempted buy-out of British candy maker Cadbury.  Much of the hysteria has simply been popular nostalgia over the continued loss of Britishness, but today, Gordon Brown has decided to insinuate himself in the matter, by warning Kraft not to make any money in its investment by trimming costs:

"We are determined that the levels of investment that take place in Cadbury in the United Kingdom are maintained and we are determined that, at a time when people are worried about their jobs, that jobs in Cadbury can be secure."

Such populist muddle should not be surprising from a beleaguered politician whose days at No. 10 are growing few, but what we should recognize is the remarkable parallels between Mr Brown and the recent actions of the glorious leader of that bastion of stability and prosperity euphemistically known as the "Bolivarian Republic of Venezuela."

Mr Chavez recently took steps to devalue the Venezuelan currency (which anybody with an elementary understanding of economics will know leads necessarily to inflation), and then declared that any companies, large or small, that dared raise their prices (a requirement, if they had any desire to stay financially viable) would be shut down and assets confiscated.  Nobody can possibly be permitted to thwart the political designs of the central planners, because the history of government-imposed industrial and pricing policy has such a record of success--like the 30 million people who died as a result of Mao's Great Leap Forward, or the catastrophic poverty in the Soviet Union.

So Mr Brown may not be dispatching Scotland Yard to shut down a Kraft-owned Cadbury in the event of some cost-trimming, but we shouldn't be surprised if he concocts a specialized bonus tax that only applies to American-owned subsidiaries of food conglomerates who acquired their British operation in the last 5 years.  Rather than a total confiscation, it would merely be a partial confiscation, in the form of tax.  Alas for Mr Brown, his central planning would be so much easier to implement if he were the dictator of an oil-rich country.  But, at least for now, the remnants of English law and the political will of the Britons will constrain him. 

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Chilean Stock Market Surges on Election Results

The Wall Street Journal reports that Chile's Blue Chip Index, IPSA, has surged 0.6% on the outcome of the second round in yesterday's presidential election. 

With the substantial bolstering of financial markets in Panama after the election of Ricardo Martinelli and now the same happening with the victory of Sebastian Piñera in Chile, other Latin countries with elections on the horizon (especially Peru and Colombia) will hopefully be following suit.  For a region that has suffered mightily under the hands of interventionist governments, the healing process is beginning, and the economic future of Latin America appears to be getting better by the day.

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Chilean Presidential Election News Articles

For those who want to read a bit more on the historic election in Chile:

The Telegraph

The Wall Street Journal

The Financial Times 

Reuters

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Chile Elects Free Market President

With about 60% of the votes counted, free market candidate (and billionaire businessman) Sebastian Piñera appears to have won Chile's presidential election, making him the first popularly elected centre-right president since 1958.  Center-left candidate and former President Eduardo Frei has conceded the race to Piñera.

http://www.elecciones.gov.cl/Sitio2009/index.html

Piñera joins Panama's Ricardo Martinelli amongst Latin America's entrepreneurial free market leaders, setting the stage for a renewed period of economic growth in Latin America's freest and most prosperous (per capita) country.

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Political Stability and Fiscal Discipline

Carl Delfeld in SeekingAlpha today, writes:

Chile offers global investors the opportunity of gains from a country that hasweathered the current global economic meltdown better than most countries. It is politically stable, resource rich and fiscally conservative and since 2003, I have been in and out of Chile several times. As a percentage of GDP, Chile is the most export-oriented country in the world and has growing trade ties to Asia. According to the Economist, the share of Chileans living in poverty fell from 38.6% in 1990 to 13.7% in 2006, and education, health care and pensions are now much more widely available...The national copper company, Codelco, controls more than 20% of the world's copper reserves. Chile’s national debt is only 4% of GDP, and its sovereign wealth fund tops $20 billion. In addition, Chile’s announced $4 billion economic stimulus package packs some punch, being equal to 3% of GDP. Chile is also a free trader with a quiver of free-trade agreements with countries such as the U.S., the European Union, China, Japan, Canada, and South Korea. Chile depends on exports for 43% of its GDP. 

Emerging markets (and developed markets) everywhere can learn from Chile's experience.  Manage your resources responsibly, keep your politicians' crooked fingers out of the treasury, open your economy to the world, and reduce regulation, and you can not only insulate yourself from massive financial shocks, but position yourself to attract foreign capital and entrepreneurship as well as inspire it from within.

I am proud to call Chile home.

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Paying for the Health Care Bill

I have an idea for Nancy and Harry--

25% VAT on attorneys' invoices. With the US legal industry raking in about $230 Billion per year, that would be $57 Billion in added revenue.

It would have the added benefit of raising legal costs on the end user and reducing the demand for legal services.

I would also propose a 50% "windfall" tax on attorneys fees derived from so-called "blockbuster" punitive damage awards. I couldn't readily find the statistics on that, but it seems like another good place to squeeze out some revenue that isn't shouldered by the productive class.

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Why Federalism Always Turns to Bullying

Writing in a Wall Street Journal blog, Ian Martin observed today that the veto by Iceland's president of a bill to compensate British and Dutch depositors for the $5.5 billion in losses sustained when the bank Icesave collapsed last year could scuttle Iceland's chances of admission to the European Union.  The bill will now be submitted to a popular referendum.  Martin notes:

"Here one suspects that the Icelanders are about to find out how the EU works.  If they dare vote no in a referendum, they can always be asked to vote again, and again and again.  Until they get the right answer."

Martin was of course alluding to the sham that was the second Irish referendum on the European Constitution Lisbon Treaty, where the Irish were bullied by the Brussels power elites and mammoth bureaucracy into going along to get along.  The people of France and the Netherlands had previously rejected the European Constitution, and it was renamed "Lisbon Treaty" and rammed through Europe's parliaments as a mere emendation to the Treaty of Rome thus avoiding the nastiness of democracy.  The Irish Constitution required a referendum for Ireland to ratify Lisbon, and as a result it was the only country to actually subject the document to a referendum.

Ireland rejected Lisbon in the first referendum, and a second one was held late last year, when it was at last ratified under heavy pressure from the European machinery.  

This situation, and something not dissimilar on the horizon for Iceland beg the question--does federalism really serve its stated purposes?

As somebody who has traditionally been a committed believer in federalism, I now must express serious doubts.  There is certainly great benefit to small, local government.  The massive success of the modern city states of Hong Kong, Macau, and Singapore attest to this, as does the relative success of the smaller Soviet successor states like Estonia compared to larger ones such as Ukraine.  This is not to say that smallness is an economic panacea, as there are plenty of examples of large successful countries and small poor ones.  

The United States was historically the shining example of federalism's success--a perfectly struck balance of power between the national government and its 50 constituent parts.  But Progressivism (especially with the advent of the Income Tax, the Direct Election of Senators, and the creation of the Federal Reserve) followed by the two World Wars and the New Deal substantially eroded this balance, and the subsequent decades only exacerbated this process, supported by a series of complicit Supreme Courts' universalist interpretation of the Commerce Clause.  

The U.S. Congress is now the embodiment of federalist bullying, with the representatives of the various states being bribed and threatened to support legislation or risk being excluded from the doling out of fiscal goodies, which self-serving members of Congress rely on to secure their own re-election.  

The justification behind federalism is a deluded belief that political union with other economically interested peoples is necessary to foster economic cooperation and coordinated security policy.  This was the reason the thirteen sovereign republics of Atlantic North America abandoned their confederation in favor of a federation.  This was the reason the culturally and economically diverse peoples of Europe originally began the process of integration.  But as soon as power began to flow from Paris, London, and Berlin into Brussels, the people controlling Brussels had a sudden interest in expanding the size and scope of the political union, and threatened those who dared oppose that expansion with "exclusion" in much the same way heretics were excommunicated by the Papacy as a method to eliminate threats to its political power.

If this is the ultimate reality of federalism, it is no wonder that small republics like Chile have outperformed larger federations like Argentina and Mexico. 

We should learn a distinct lesson from this as we make prescriptions for the world's economic ills:

"Cooperation" is all too often a political euphemism for coercion.

Posted via email from The Invisible Sand

The Anti-capitalist Mentality

From the Opinion section of the Wall Street Journal

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