Notes on the Economy of Life: Laying Groundwork from the Air
Twenty-two hours ago I kissed Libbey goodbye in Denver. Now I’m on the verge of entering African airspace a couple hundred miles west of Alexandria. In another few hours, we’ll be on the ground in Addis Ababa, then on to Lusaka by mid-day.
Once there, I’ll converge with the other two North Americans, four Africans, three Asians, three Latin Americans, and two Europeans who were selected by the World Council of Churches (WCC) for the Ecumenical School for Governance, Economics, and Management (GEM) for an Economy of Life (quite a mouthful!).
So why am I spending two weeks in Zambia studying economics?
I’m here because for last eight years I’ve been trying to figure out why Terrance is stuck in poverty while I’m not.
Because I’ve bought into this grand story of shalom God’s been telling since first breathing creation into being. Because I think that story keeps going, that God is continuing to build a world where all have a place of communal justice and abundant peace, and that it’s our calling as followers to be co-creator of that world.
I’m going because the shape of our political economy determines how relationships across the world and down the block get established. And it’s the structuring of those connections —within larger social and ecological relationship contexts — that produce welfare or dispossession.
Because my deepest allegiance is to Jesus-Christ, not to any system or idea or nation or identity.
Because God cares more about justice for the poor than capitalism, so if the latter doesn't align with the former, it’s easy to give up.
I’ve been preaching systems and systemic change for a while now. These two weeks are an opportunity to get down in the weeds of globalized capitalism and finance, examine the effect these systems have on the community of creation, identify what more faithful options look like, and begin developing a plan to get there.
But enough about my motivations. I thought it would be worthwhile on this side of the course work to lay out a rough sketch of my understanding of the current economy’s shortcomings — partially so I can look back on what I’ve learned. Briefly as possible, I’ll lay out some of the assumptions in capitalism; how it was intensified under neoliberal rules; a few of theological deformities required by that value system; and weave in a smattering of its impacts.
Hail The Mighty Myths Of Plunder
GDP Growth: All bow to the beneficent idol! Capitalism is a story. That story, we’re told, looks like this: limitless GDP growth. Imprinted on our consciousness, we all know growth is good. When the DOW or NASDAQ go up, they’re happy green. When they go down, they turn scary red. Every element of our personal and political life is dependent on economic growth. Stop growing, drop out of the G20 and loose your geopolitical power. Stop growing, kiss retirement goodbye. Stop growing, shareholders will revolt. But grow and we all become healthy, wealthy, and wise! Or so the story goes.
If growth is the goal, free markets are the strategy. The second image we all associate with economics 101 is the supply/demand curve: proof that if left in holy isolation, the wisdom of the market will produce the greatest benefit for all. Through laissez fair policies the self-regulating capacity of markets will produce sustained growth, and growth is good.
Capitalism for Bleeding Hearts. Mainstream economists, politicians, and the media tell and retell a series of stories about the benevolent power of capitalism. It’s a force for the common good, they say, and commonly list four proofs:
"We have the highest standard of living ever.” Now, there’s some truth to this one. Growth can be good, to a point. This is the case with all dynamic systems. It is good for a tree, a baby, or a cumquat to grow. But eventually, the subject reaches maturity and growth levels off. Many poor nations do need some economic growth to better their quality of life, but not limitless growth. Perhaps more important, however, is the recognition that contemporary life expectancies, comforts and conveniences are the outcomes of technological advances which should not be collapsed into capitalism. In fact, the intense supremacy of private property and acquiring every service through the market in capitalism dramatically constrains who benefits from the fruits of modern achievements. Furthermore, the idea that the brute competition of capitalism is the best generator of innovation — a sub-myth of this saying — also doesn’t stand up to scrutiny. Finally, we must better differentiate what aspects of this hypermodern age actually make life more pleasant, joyous, worship filled, and meaningful. Much of our supposedly high standard of living simply devolves life to consumption and entertainment. We become homo economicus, an “econ,” a unit in a price theory equation (relatedly, please go pick up any Wendell Berry book if you haven’t).
"Look Ma, no inequality!” One of capitalism's best magic tricks is turning inequality into a good thing — or at least a passing phase on the road to Shangri-La. The famous Kuznets Curve to your right paints the picture. The implication is: don’t want poverty? Promote growth! This sounded good enough to survive for decades in academia, until Thomas Pikkety’s research in Capital in the 21st Century (along with Emmanuel Saez and others) blew it out of the water for good. Basically, Pikkety was able to definitively show that trickle down isn’t a thing. Rich people get richer under capitalism. That’s the design.
"Look Ma, no pollution!” For the environmentally concerned, mainstream economists pulled another rabbit out of the hat: the Kuznets’s Curve for the environment. The thought being that pollution goes up for a time (think 19th century Britain), but eventually the Market corrects itself and returns to sustainability. The problem is the pollution doesn’t end. It just moves somewhere else — to Mexico, then to China, then to the next aggressively industrializing nation — and carbon keeps pouring into the atmosphere.
“Free trade ensures world peace!” Except when it doesn’t, which increasingly seems to be all the time. The idea is that international economic entanglements make peace in everyone’s self-interest. In actuality, while we haven’t had another World War, there have been hundreds of wars and many millions of deaths since WWII, many of them internal battles fought by people groups with no relation to one another, forced together in the nation-state mold necessary in modern globalization. In an age of never-ending (and often never-declared) wars, terrorism, mass refugee crises, and increasing geopolitical instability, it’s hard to even take this one seriously (even though Toby pulls it out as his big ‘gotcha point’ against anti-free trade activists in The West Wing).
Capitalist mythologies continue to reign supreme thanks to a few well laid strategies. First, economists are blunt that their theories don’t have to correspond to the real world (if I was home, I’d pull some great quotes for you). Rather, they need only be “theoretically true” such that there’s an internal logical agreement to their abstract mathematics. Economics has turned into lots of logically consistent equations with very little relationship to their corresponding policies' impact on the real world. Economist Micheal Hudson calls this “as if” thinking.
Second, mainstream economics has a lock on the measuring tools we use to determine if the economy is functioning well. Since those tools only measure growth and exclude things like inequality, quality of life, health, expressions of community, environmental impacts, and whether or not people are actually happier, we keep being told by the experts that things are good when they really aren’t.
Finally, these ideas have a dogmatic lock on the airwaves. From top business, policy and economics schools, to the media, to politicians we hear these repeated again and again as the economic laws of nature — sure as can be and right as rain.
The Ascent of Neoliberalism
In the twentieth century, in the midst of the Cold War, people like Friedrich Hayek, Milton Friedman and others associated with the Chicago School of Economics began promoting an intensified version of capitalism that claimed any meddling by the government in the market (to which society was reduced) was the “road to serfdom.” Freedom was redefined as freedom from any government oversight or support (this, coupled with the “as if” theories of Austrian economists around the same time explains some of where Libertarian notions that “taxation is theft” come from). Supreme confidence in the self-regulated capacity of the market to produce all human needs led to several dangerous recommendations:
Privatization: "Anything the government is doing, the private sector can do more efficiently.” Government programs are cut dramatically, while monopoly services and other public resource are turned over — often far below valuation levels — to entrepreneurial investors. Loans from the IMF and World Bank require these so-called “austerity measures” for any creditor nation. Expenses typically go up for what were formerly social services, and a small minority that now owns these businesses become extremely wealthy (Carlos Slim gained his billions in exactly this way).
Deregulation (aka Liberalization): After placing all social functions back into the “Market,” neoliberals then demand a repeal of regulations — whether for human rights, environmental sustainability, ‘bubble’ avoidance, or anything else — on all business sectors. This is supposed to create more “perfect markets” or “efficiency” (read: growth maximizing capabilities). What results is a decline in human welfare, ecological health, and market stability.
Free Trade: These deals proliferate. National borders become more permeable to capital (by which I just mean ‘investment money’ here) and goods, and at the same time more rigid for labor — i.e. greater barriers for immigration. The net outcome is large capital gains for multinational corporations and an erosion of wages, bargaining power, and rights at work for working people on both sides of a border. NAFTA, for example, helped offshore middle-class industrial jobs in the US (yes, tech changed this sector enormously too), and at the same time broke agricultural communities of Mexico, driving people off the land into the new factories for low wages or into attempts to cross the border.
Financialization: Perhaps the most distinctive characteristic of the economy in the twenty-first century is the expanded power, volatility, and money generating power for a wealthy elite that’s now available through the financial sector. Neoliberalism is at times referred to as “finance capitalism” for this reason. As banks and stock markets are deregulated, a whole new slew of “financial innovations” enables bankers and investors to make mountains of money off other people’s money. At the same time, middle- and low-income families sink deeper into debt bondage under inflating student loans, mortgages, credit card debt, and predatory loans. Finance stops functioning as a support for the real economy, and comes to see itself as the primary growth engine despite adding no actual value. The extremely disproportionate wealth acquired by the “1%” over the past forty years has been derived through owning the financial sector (also sometimes called the FIRE sector for Finance, Insurance, and Real Estate, since these three areas are so deeply intertwined). The 2008 crash and subsequent recession was the predictable outcome of neoliberal financialization, and forecasted by many economists working outside the dominant ideology.
What role is left for the state in all this? It turns out, despite rhetoric to the contrary, a surprisingly significant function remains: protecting private property. This is why, at the same time Reagan rolled out neoliberalism, he ramped up military investment and vastly expanding the police state. Mass incarceration mirrors this economic timeline perfectly, and is an important reminder that while the “who” of oppression is largely defined by race, the “how” usually remains in the hands of economic policy.
Christians have to wring ourselves into knots to theologically justify promoting a system built on these values, getting these results. I’m sure I’ll dig more into the contradictions over the next couple weeks, but here’s some low-hanging fruit.
Making Virtues of Selfishness and Greed: At the heart of Christianity is the incarnated God who continually emptied God-self to become human, a slave, and eventually sacrificed for others in death — even death on a cross, says Phil 2:8. Continually Jesus’ exhortations are for the first to become last, for the wise to become foolish, for the children to lead, for the rich to be made low. We’re told that we cannot worship God and Mammon. Yet selfishness is the very fuel of capitalism, and the lust to maximize wealth is the driving force behind growth.
Radical Individualism and Competition: While scripture is continually attempting to form us for corporate and cooperative life in mutually affirming relationships with others, capitalism’s narrow anthropology celebrates the rugged individual's fight for survival. Capitalist values reject the communal and cooperative, turning a blind eye toward interconnectedness and interdependency with creation.
Commodifying Nature and Labor: Life, made from the love of God in the image of God, has limitless intrinsic value. All creation is good of itself. It is sacred, and need serve no other purpose than to express its design as an act of worship. Capitalism rejects this Christian cosmology, and subjects the value of all things to its price or productivity in the market. Creation becomes nature, a free storehouse of goods meant to feed the fires of growth. Humanity becomes labor, a cost to be minimized in pursuit of profit.
Erasing History: The Judeo-Christian tradition is one of remembering. Israel’s law is a function of their story with God. The law never exists in a vacuum, but flows from their history with God: “The Lord who brought you out of Egypt.” In the same way, every time Christians take the cup and break bread together, we do so in remembrance. We are called to be people who remember our stories for guidance on the ethical path today. Capitalism celebrates its success as the accomplishment of ingenious individuals and hard work. That belief is only possible if you refuse to remember our story: the expansion of wealth in America rests on free land stolen from Native Americans and free labor stolen from Black slaves, sharecroppers, migrant workers, human trafficking victims, and all workers denied a livable wage. We will hopefully look closer at the historical inseparability of capitalism, racism, and colonialism in the future.
Denying Limits: 3% yearly growth means a doubling of the economy about every twenty years. That kind of compound expansion is literally impossible to sustain within our planet's physical boundaries and finite resources. Dismissing limits rests on a spiritual self-delusion that refuses to admit to human mortality. God made us finite creatures, and that is good! It is our mortality and finitude that make us dependent. Without that dependence we would lose the greatest gift available: relationship with God.
Compartmentalizing Love: As Lutheran theologian Cynthia Moe-Lobeda argues, love by nature cannot be a private activity only. Justice, said Cornel West, is what love looks like in public. For the demands of love to be met, it must also be structural. A system incapable of producing the shared shalom God wills for his creation is not a system based on the triune love of God.
Idolatry of Market Growth: In the end, the Market becomes a god to whom the people sacrifice and give their worship.
Back on the Ground
In the US, real wages remained flat for the past 35 years despite massive improvements to productivity.
Eight people now own as much wealth as the poorest 50% of humanity. Wealth translates to power and so undermines the integrity of our democracies.
As inequality widens, we’ve also learned that relative poverty (wealth gap between richest and poorest) is as or more significant than absolute poverty (those living below an arbitrary number like $2.00 a day). More inequitable nations (those with the fiercest neoliberal cultures like the US and UK), perform worse across a host of quality of life indicators — including for the wealthy.
On top of all that, we’ve already careened past the amount of carbon in the atmosphere where limiting global temperature rise to 2C is a legitimate trajectory. Climate change has happened, would take decades of aggressive action to stabilize, and — as GDP growth dogma continues to reign supreme while fossil fuel consumption expands — we appear on the path towards potentially irreversible ecological catastrophe at the hands of which the poor will suffer most.
Along the way, mining, deforestation, fishery over-harvesting, and industrial agriculture are destroying habitats and sending God’s creation into extinction at a blinding pace.
As I wrap this up back on the ground in my room in Lusaka, I know the next glaring question is: if you don't like capitalism, what do you want instead? I’m reminded that almost forty years ago, with the Soviet block and communism in its final days, Margarett Thatcher declared over neoliberalism, “There is no alternative.”
Over the next two weeks, on this blog, and through the years of movement building to follow, we at the GEM School will prove her wrong.
We have to.