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June 16, 2010

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Love this subject. Great post.

The understanding of economics with regards to human nature has the great feature of predictability. That is, people react to specific laws, regulation, taxes, spending, etc. in certain predictable ways (repeatable experiments). These reactions are, for the most part, unchanging and can be demonstrated throughout our history.

A story:

My mother-in-law was talking about how taxes were not high enough in general, for this and for that. She was talking about how taxes go to help provide vital services for citizens, etc. Thirty minutes later we were on to the subject of selling her house. She was talking about how she needed to be in her house at least another year before she sold so she didn’t have to pay capital gains taxes. Of course.

I have no point with that story other than to show that her human behavior speaks loudly.

You may find this surprising, but economics is actually a fascinating subject…
I don't find it surprising, but I see where you're coming from. Like many things, economics can be made dull and dreary in a classroom setting, but is actually very important and interesting.
"Our week will be focused on applying the Christian worldview to the field of economics. How do we create a just society? How do we best help the poor? How have other worldviews influenced current economic ideas, and what are/will be the consequences?"
From this, it sounds like the course will be approaching economics from a utilitarian perspective, rather than a rights perspective. This is interesting, especially in light of the recent discussion on this blog about utilitarian moral philosophy (of which, utilitarian economics is an extension). I wonder if you could clarify? If not now, then maybe after the course you will be in a better position to clarify.

Quantum physics is easier to understand than economics
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Have a fun time at the conference. Agreed on the recommendation of "Money, Greed, and God" by Jay Richards. It's an excellent book.

I look forward to more comments from the attendees about economics, since economics is my profession.

I would particularly be interested in anything you come up with about the theology of money. Scripture says that the love of money is the root of all evil. Evil existed before money did, but the essence of money--what makes money money--existed before money did. Money is basically a human promise. Public money (currency) is a public promise. Private money (checking accounts) are backed by promissory notes which are private promises. These human promises are substitutes for promises by God. A substitute for God competes with God and is a false god.

Eric:

A utilitarian perspective assumes a rights perspective at least in regard to markets, because to buy and sell in markets implies that property rights are well defined for the things being bought and sold.

Sam:

A quantum physicist once told me that there is a weak interaction in economics: a weak interaction between economics and reality.

Johnnie,

"A utilitarian perspective assumes a rights perspective at least in regard to markets, because to buy and sell in markets implies that property rights are well defined for the things being bought and sold."

As I see it, a utilitarian approach might conclude that markets are beneficial, and therefore, that some kind of property privileges (not rights) are beneficial. However, a pure communism could conceivably result* from a utilitarian approach, but it cannot conceivably result from a rights-based approach, because it rejects property rights. By beginning with utilitarian ends in mind (e.g. "How do we best help the poor?" and "How do we create a just society?"), we leave the door open to solutions that would deny property rights.

(* I'm not saying it is likely to result, but just that it is one of the conceivable possible results, while it is absolutely ruled out by a rights-based approach.)

Eric:

We cannot help the poor unless the poor can enjoy the fruits of the help that we give them. Property rights. We cannot create a just society unless the decisions of those who administer justice result in outcomes that establishes the claim of the winning party. Property rights.

Doesn't communism presume an individual's right to communal property?

"By beginning with utilitarian ends in mind (e.g. "How do we best help the poor?" and "How do we create a just society?"), we leave the door open to solutions that would deny property rights."

But that's not where I began. The explicit starting point in my post is a proper view of and value of the human person.

As I mentioned in my earlier post on Singer, utilitarianism is the opposite of putting the dignity of the human person at the center when creating a society. Utilitarianism weighs collective happiness (however they might determine that). Rather than beginning with the dignity of the person, the human person is a means to a collective end.

If one begins with a correct understanding and valuing of the human person, then within that framework, asking how to create a just society is not utilitarianism.

But regardless, just asking the question of how you can best help the poor--even if you're just looking at results--would not lead to an end of property rights because ending property rights does not help the poor. It makes things worse for everyone.

Daron:

Yes, communism recognizes property rights. Its basic tenet is that all made things of value are ultimately derived from labor and that labor is entitled to all of its product.

The basic political problem of communism is that in the countries that set it up, powers are given to the Communist Party without corresponding obligations laid out of the Party to the government or the people.

The basic operational problem of communism is that some sort of system has to be developed for attaching values to things and the flow of information necessary is done in an hierarchical system at each level of which the people who report to their superiors have incentive to report not the facts but what they think their superiors want to hear, so the further up you get in the hierarchy, the less reliable are the data. So any plan based on the data will be unreliable.

Johnnie,

"We cannot help the poor unless the poor can enjoy the fruits of the help that we give them. Property rights. We cannot create a just society unless the decisions of those who administer justice result in outcomes that establishes the claim of the winning party. Property rights."

I agree with that. I think we start with property rights, and go from there, rather than end with property rights. In your comment, you began with some other end and concluded that individual property rights are a means to that end. I think that even if someone were to show that individual property rights are an impediment to that end, then we should not discard the property rights. The rights come first.

I think we are agreeing on the conclusions. We may also agree on the reasoning, but I'm not sure of that yet. I think that property rights are not important because they get us closer to other goals. The property rights take priority over those other goals. This may be what you are saying in your comment I quoted above, but I'm not sure. Property rights are not important because they enable helping the poor (etc…), they are important regardless of whether they enable or impede helping the poor.

Amy,

"But that's not where I began. The explicit starting point in my post is a proper view of and value of the human person."

I'm not saying that's where you began. I'm asking about the course you will be taking. From your short description, it sounds like it may be a course based on a utilitarian approach to economics. I realize you may not know for sure yet, as you haven't had the course yet. If the goal is learning how to apply the Christian worldview to creating a just society and helping the poor, then it sounds a lot like utilitarianism.

Eric,

I wouldn’t think individual liberty would make the cut for a mission statement if this was utilitarianism. Do you?



Johnnie,

Yes, communism recognizes property rights
Not any form of communism I have heard of. Abolition of individual property rights is one of the primary characteristics of communism. This is the fundamental flaw with communism, and all of the other (often more apparent) flaws are consequences of this one.

Eric,
It's utilitarian only in the sense that humans ought to adibe by certain transcendent, spiritual principles. The application of those principles, however, are meaningless unless they are grounded in an objective morality such that 'helping the poor' is truly helpful.

KWM,

"I wouldn’t think individual liberty would make the cut for a mission statement if this was utilitarianism. Do you?"

Not if they are being careful. The thing is, not everyone is very careful, or very consistent. This is why I was asking for clarification on this, because some of the things in this post, and in the earlier Utilitarianism post, seem to be at odds with the section I quoted in my initial comment in the thread (about helping the poor , etc.).

Eric,

Some forms of property under the capitalist system are abolished under communism, or at least the run-up stage as outlined in the Communist Manifesto. But not all. Land rents are abolished, and inheritance, since they don't fit the labor theory of value. But not all personal property is abolished. The Manifesto lays out that the property of emigrants and rebels is to be taken. It doesn't say that the property of non-emigrant nonrebels is to be taken. There is a progressive income tax. Not a 100% tax on all income. Not all property rights have to be private.

I have already identified two flaws of communism in practice, neither of which implies total absence of property rights.

Any system will perform less well if property rights are poorly defined or not enforced.

So, because we're made in the image of God, we're not be concerned about the unsustainable consumption of resources.

Now there's a knockdown argument. Here's another:

Because we're made in the image of God, the more human beings the better.

Really, these guys are brilliant. And wait, I can think of one more:

Because we're made in the image of God, drill baby drill!


Gerstin, I really recommend that book by Richards. He goes into why it's the case that our creativity as human beings means that we're not in danger of running out of resources. In a nutshell, historically, when any one particular resource becomes scarce, we find new ways to use new resources--resources that weren't formerly considered valuable.

This is why, over the decades, energy has become more plentiful and more cheap--even when some people predicted disaster when a particular resource was running low. See the book for the facts behind this.

I encourage you to read this book, especially if you disagree with his conclusions and are interested in hearing an excellent, reasoned argument for the other side.

I don't know if I disagree with his conclusions or if I'm on the other side in this case but onto my 'Requested Items' list it goes at the library.

RonH

"Gerstin, I really recommend that book by Richards...See the book for the facts behind this."

Amy, if you've ever read any contemporary scholarly critiques of libertarian ideology, or if you ever read any scholarly defenses of liberal-egalitarian political philosophy, well, I'd be surprised.

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