Tuesday, February 17, 2009

Roots of the Economic Problem

As usual, Deneen writes something worth thinking about.

...Ancient philosophy and theology stressed the need for small communities as the best settings for achieving the full measure of virtue. Small settings encourage solidarity while discouraging belief in self-sufficiency. In such settings we see more clearly our bonds and obligations, understanding our place in the work of the community and our connection to past and future generations. At the same time, smaller communities make it far less likely that we pursue (or successfully achieve) worldly glory or wealth, those solvents that undermine solidarity and virtue. There is watchfulness against luxury, gluttony, greed, profligacy, and the pursuit of material plenty, and rather an imperative to live modestly, within limits, fully cultivating the virtues of thrift, frugality, and temperance. Seeking to liberate the individual from the restraints of such settings - restraints that were legally, culturally, and personally enforced - early modern philosophers understood that they faced a profound challenge: how to replace the hard-won achievement of social solidarity? What "glue" would hold together a people who were encouraged to indulge precisely in what had once been considered to be vices: self-interest, concupiscence, luxury, worldliness, the belief in self-sufficiency?

Cognizant that society was fragile and even easily destroyed - given the human propensity toward individual self-aggrandizement - early modern philosophers sought a kind of "replacement" for the cultivation of virtue in and through society. It was Locke and Smith, above all, who understood that economic growth could become a replacement for solidarity and virtue.

So how was that to be structured?

...Thus modern philosophy sought to liberate us from any conception of society comparable to that of a "body": revealingly, Adam Smith argued that the achievement of the functional equivalent of solidarity - the market, in which laws of supply and demand replaced conscious considerations of how our work contributed to the good of the whole - was to be conceived in terms of a part, namely an "invisible hand." There was to be no more "whole," only parts which themselves would be unconsciously contributory to a part. In our separation, we were to pursue our individual goods and thereby increase the overall wealth of society.

Most of the people we meet do not take the Smith/Locke philosophy seriously enough to preclude charity work, nor to preclude lending a helping hand to others--and that's not the argument made by Deneen.

The trouble lies in the 'vision' promulgated by those folks--

One more pertinent item:

According to Joseph Pearce in Small is Still Beautiful (who cites Angus Maddison's book Phases of Capitalist Development), "during the thousand years between AD 500 and 1500, gross domestic product (GDP) grew on average by only 0.1 percent a year. As such, the volume of economic activity in 1500 was between 2.5 and 3 percent higher as it had been a thousand years earlier. To put this in perspective, the Western economies grew as much in percentage terms in the twenty years between 1950 and 1970 as they had done between the thousand years between 500 and 1500.... Today the growth of world GDP regularly exceeds 3 percent per annum" (p. 11).

The numbers are instructive, not normative. The question is whether Big Numbers are better.

Maybe the answer is "no."

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