It’s the Stupid Economy

So the market shot up yesterday after a week or so of jagged decline. Why? The key word seems to be “confidence” — a very subjective thing upon which to pin ones hopes and dreams and pension fund. This only reaffirms my belief that The Economy is not a controllable machine like a well-designed steam engine, but a wild animal that can be poked and prodded with sticks or occasionally tempted by a carrot, but which most of the time does what it pleases. What rough beast slouches towards Wall Street? I think the 50s sci-fi Blob is probably as accurate a picture of The Economy as any.

For The Economy is far from a single unified entity, but a chaotic system built up, sad to say, from the very worst in human nature: primarily greed and fear. These primitive emotions are not limited to Wall Street, but are well established on Main Street too; they find a place in every home and heart.

Which brings me to John McCain’s beef with Barack Obama’s “redistribution of wealth” proposal, correctly (to a small extent) but disingenuously identified as “socialism.” Needless to say — or maybe not, since McCain has been surprisingly successful in his wool-over-the-eyes manoeuver — our economic system has been based on a redistribution of wealth model since the days we first introduced progressive income taxation, in which those with more give more proportionately. From an ethical position, Obama recognizes that generosity is a good thing, but that it can’t be counted on in a pinch. Those who have will for the most part, if left to themselves, try to keep what they have. It doesn’t trickle down, either; it stays in the deep pockets of those with custom-designed trousers, or it goes overseas, funneled off to places where workers are eager for whatever scraps fall from our abundantly provisioned tables, and are willing to work for less in places where that less is worth more than it would be here. Obama is calling on those with more to sacrifice a bit more, and includes himself in that category. This seems to be an ethical thing to do.

McCain, on the other hand, is not going to redistribute wealth, he claims he is going to create wealth. The problem is, I doubt universal wealth can be created, even if that is McCain’s real intention. If Obama is peddling socialism, McCain is peddling the snake-oil of a shadow version of communism, in which everyone will be happy and wealthy (but is really just more of the “let the rich keep their money to create jobs so everyone will benefit.”) It won’t work in part for the non-trickling reason cited above. But there is something more serious at work, which brings me back to my initial point.

Haller’s Theory of Universal Slight Dissatisfaction (one of my two Economic Theories) is that a state of pure equilibrium in which everyone is wealthy is impossible. It is even impossible to have a non-trivial society where everyone is satisfied. This is because of human nature, and the role that fear and greed and self-interest play in it. (Some might note the connection with Original Sin.) People for the most part want more than they have — and are only content when they have more than they need. Yet the wealth that exists, the Gross Value of Everything, is finite, though it can grow (it usually inflates more than actually growing). The end result is that the best you can do (if your value system would consider it “best”) is to have a society in which everyone had slightly less than they wanted. People might agree to this out of commitment to a cause: the East Germans prided themselves on their commitment to the solidarity of suffering, as did the early church (communism being a common notion for them both) but it is hard to see it catching on universally. Even these experiments by ideologically committed folks proved unsustainable. Entropy rules, though islands of order (in this context, read wealth) can arise in certain circumstances. But no-how, no-way, is it possible to have a sufficiently large society in which everyone is “wealthy” — for the very definition of wealth itself will slip away beyond your grasp even as you reach after it.

So McCain’s proposal is the same old tired promise of Rumpelstiltskin: give me your child and I’ll spin straw into gold. His proposal is, in every sense of the word, mean.

I pray this nation will have the good sense to reject McCain’s fairy tale magic, and empty promise. The next generation will indeed pay dearly if we fall prey to the seductive promise that wealth can be universal, and cost no one anything. Rather let us ask more of those who have more, and redistribute the wealth that actually exists. That, we know, can work. And it does have the imprimatur of the Gospel in its favor.

Tobias Haller BSG

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