Saturday, 21 January 2012

The feral rich

A major article by Peter Oborne, chief political commentator in the "right-wing" Daily Telegraph newspaper, appeared today under the title "The Rise of the Overclass". Oborne argues that the middle and working classes are now caught between an overclass and an underclass that are effectively out of control – on the one hand the class of super-rich who seem "immune from the restraints that govern the lives of ordinary people", and whose wealth and immunity has grown steadily for the past 30 years, and on the other a "dependent and sometimes criminal class of welfare claimants", among whom "the idea of responsibility, duty, patriotism and neighbourliness has been destroyed". The interesting point is that Oborne shows that these last comments (about lack of patriotism and so forth) apply just as much to the overclass as the underclass. "These feral rich pose, in their way, every bit as much of a danger to society as the rioters who stole and pillaged London streets last August." It is a significant addition to the ongoing debate about the future of capitalism.

Monday, 16 January 2012

Competitive Social Market?

The bishops' conferences of Europe (COMECE) have produced a brief analysis of the present economic crisis under the title "A European Community of Solidarity and Responsibility". It is a statement on the EU Treaty objective of a competitive social market economy. Among other things, it states that "it is of primary and utmost importance in the present European crisis to reaffirm the cultural bases of the concept of the social market economy. For it is much more than an economic model. It is based on the philosophical and juridical bases of Greco-Roman antiquity and grounded in Biblical theology."

Tuesday, 10 January 2012

The Corporation and the Market

In a recent series of articles on this site, Michael Black argued that the Corporation can only be understood theologically – further, that the modern economic crisis is a crisis of the Corporation. But what about the "Market", which is the other big player in the economic game, along with the State and the Corporation?

In economic theory the corporation is a monstrous, if only temporary, aberration. It stops the march of contractual transactions and therefore is by definition “inefficient”. And economic theory is quite correct: the corporation always costs more than a set of equivalent markets. The market, after all, has no overheads, no supervisory management, no administration. If this is all that we see, we can only bemoan the fact, as many managers as well as corporate critics do, that the corporation continues in existence at all. What ever the Corporation is for, it is not for providing lower-cost products and services. So what is it for, in economic terms?

The Corporation creates economic value. Markets establish prices, not value. The Corporation determines what constitutes value – speed, precision, beauty, harmony, or any of an infinite number of other criteria – and persuades the participants in the Market

Saturday, 7 January 2012

Chief Rabbi on European crisis

In his impressive address in Rome on the crisis in Europe, the Chief Rabbi praised the modern market economy and modern capitalism, which "emerged in Judeo-Christian Europe and not in other cultures like China that were more advanced in other ways," because our religious ethic was "one of the driving forces of this once new form of wealth creation." It "originated in Europe in the fertile environment of Judeo-Christian values sympathetic to hard work, industry, frugality, diligence, patience, discipline, and a sense of duty and obligation."
"The market’s 'invisible hand' turned the pursuit of self interest into the wealth of nations, and intellectual property fuelled the fires of invention. Capitalism has enhanced human dignity, leaving us with more choices and a longer-life expectancy than any generation of those who came before us."
But he adds that "his same ethic taught the limits of capitalism. It might be the best means we know of for generating wealth, but it is not a perfect system for distributing wealth. Some gain far more than others, and with wealth comes power over others. Unequal

Wednesday, 4 January 2012

The importance of crafts

An article by Sir Christopher Frayling in the prestigious RSA Journal ("Tools for Survival") claims that with the rise of the "maker movement" and the recognition of the importance of manufacturing in our economy, the crafts sector is back in the spotlight, only held back by an "outdated vocabulary". The crafts need to be "reclaimed and re-evaluated" – he has in mind the reinvention of guilds and apprenticeships and a new stress on the teaching of practical skills (in schools and colleges, but also to prisoners and young offenders to equip them with the skills they can use to rebuild their lives). Frayling doesn't say this, but I suppose one of the things Steve Jobs achieved with his obsessive emphasis on quality of design and attention to detail at Apple was to begin to blur the line between mass production and craftsmanship. Frayling even talks of the "potential for a second industrial revolution". His most recent book is called On Craftsmanship.

The illustration shows my brother-in-law working as a glassblower.

Tuesday, 3 January 2012

God will provide

St Pio of Pietrelcina (Padre Pio)
Veteran hagiologist ("specialist in human goodness") Patricia Treece, author of numerous books on the lives of the saints and the strange phenomena associated with sanctity, has produced a new book in response to the present world economic crisis that will both comfort and amaze. God Will Provide is subtitled (rather sensationally) "How God's Bounty Opened to Saints – and 9 Ways It Can Open for You, Too". It is full of well-researched examples of how God met the physical and financial needs of people who relied on him to do so, from Mother Teresa and Padre Pio to much more obscure people. And it encourages the reader to do likewise, proposing nine ways in which you and I can align ourselves with God's providence, overcoming our fear and anxiety about the economic situation: 1) surrender everything as much as you can, 2) make serious efforts to grow your faith, 3) avoid faith-killers like the plague, 4) cultivate gratitude, 5) retool your mind, 6) cultivate belief in divine providence, 7) do your part to meet your material needs, 8) don't block the flow of God's supply, and 9) pass on the wonderful news of God's providence. All of these are illustrated by vivid examples. The book is recommended by Robert Faricy SJ.