Monday, December 22, 2008

Rebecca Sticks it to Neo-Liberal Economics

In response to being mentioned in my post Truth vs. Predilection, Rebecca wrote:
Please understand that I, too, want what's best for everyone, but I want people to deserve it. I want everyone to have a warm meal and a place to live, but only after they come home from work. People need to earn what they have, not only for the warm fuzzy feeling you get inside from working for your achievements, but also so that I don't have to give them what I have to make up for them not working for it. If someone has the money to pay the rent, but decides to buy some fly duds instead (okay, so maybe I am a poser wanna-be) then they don't deserve a place to live. Maybe that makes me a cold-hearted bi... ahem, person... but that is what's fair. I don't believe in being nice to people, I believe in being fair.
(Emphasis mine...) Which is, of course, exactly the point. In my opinion the success of "liberal" economics isn't primarily a result of "liberty," so much as ethics. It rewards productive behavior which satisfies consumer demand, and, well, doesn't reward laziness. Without this "economic justice" it doesn't perform properly. The "modern" economies of the world now practice what a lot of folks call "neo-liberal" economics. It is characterized by relatively open markets, but uses fiat currency under the direction of a central bank, heavy taxation and welfarism. Basically, the Keynesian welfare-state is more or less another word for neo-liberal economics. It is an attempt to get the benefits of liberalism, namely, material prosperity, without the "downside" of actually letting people fail when they screw up. This is done through "democratic theft" through mechanisms so dense and convoluted that most people don't see or understand them well enough to know what they are. So a lot of people celebrate its modern "triumph," glossing over its dark side. In a sense it is an attempt to square the circle, and, naturally, doesn't work all that well, as it weakens ethical cause and effect in the marketplace and reduces individual productivity and growth. It also breeds resentment. It does, however, work a lot better than totalitarianism, so for the time being Asia appears do be doing pretty well under it. But I suspect that without major changes, they will plateau shortly. Without ethical advancement, the economy will only get so productive. America and Europe are fine examples of this. And with America's accelerating ethical decline, we can expect more poverty here. I expect fascism within 10 years. Some would argue it has already happened. Once again, I am reminded of a famous thought advanced by the great C.S. Lewis. Put first things first, and we often find second things come along naturally. But put second things first, and we find ourselves losing both second and first things. America put ethics first back when she was founded. The colonists who came here did not do so seeking material prosperity. They came here to live in the way they thought most fit. They didn't get everything right, but they tried, and they took their ethics seriously. They had no intention of creating the wealthiest nation the world had ever seen; they had every intention to be right with God in the way they lived their lives. But in the end, material prosperity was the unintended result of their efforts. They got second things and first things. We put prosperity first, ethics second. We squandered both. This is not to say that there is no place for private charity in a liberal economy. Charity ought to be just that. Let's count the cost, and mark it up honestly for what it is: a loss, but hopefully for a good cause. Allowing people, and let's be honest, it is often ourselves, to pretend that we earn our keep through deceitful machinations of the state is dishonest and disgraceful. And the results are predictable.

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